Notes From The Hedgeye Q3 Macro Themes Conference Call

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:

American Austerity

  • 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

Housing Headwinds

  • 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

 

HEDGEYE Bear Markets

Photo: Hedgeye.com

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