Risk management firm Hedgeye.com today hosted its Q3 Macro Themes conference call with Keith McCullough and other analysts at the firm. They focused mainly on three topics: American Austerity, Housing Headwinds, and Bear Market Macro.
After a brief introduction, Keith went through the three themes and took questions. We’ve compiled a round up of Hedgeye’s general view of the third-quarter of 2010 and it’s certainly not pretty. Here’s what we took away:
- It’s all about policy. It’s hard to change the reality of debt because we’re perpetuating higher debts and deficits
- Implement a higher return on capital in American’s wallets.
- Fix tax revenue to fix spending
- Get ready for lower GDP growth
- Who is going to earn a return on 1% savings account??
- Taxes may have to go up a lot more in this country
- We are patriotic but the U.S. is a PIIG
- Short the S&P, Long gold
- Shadow inventory not being counted
- Price vs supply, price vs demand
- Mortgage applications are “abysmal”
- We’re back to 1995-1998 levels of demand; demand has consistently fallen since 2005 and is making new lows
- Housing prices can still slide
Bear Market Macro
- What is this ‘Bear Market Macro’? Chaos theory, essentially
- All major markets are bearish
- Unless the S&P breaks out above 1144, we’re staying Bearish
- Unless all sectors work together, the economies will falter
- Consumer leverage is BEYOND key in terms of GDP and growth
- The fiat fools are beyond ridiculous at this point
- David Rosenberg is gonna be right in regard to Treasury yields.
- Corn, grains good for the commodity plays, metals bad
- 1006, 1005 is the next support level for the S&P
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