Just one week ago, European stocks had their best 1-day advance in over 8 months, celebrating the fact that ECB President Mario Draghi said he'd do "whatever it takes" to keep the Eurozone and its common currency intact. Whether it was a statement of the obvious, a calculated ploy, or a watershed moment of resolve is still being debated, but what is certain is that traders everywhere got a sudden case of the munchies when their appetite for risk came back with a vengeance.
As wonderful as this rally was to most investors, reliance like this on central bankers to solve our problems is just one of the reasons why Charles Biderman, founder & CEO of TrimTabs Investment Research, says he's "100% bearish" right now.
"Basically what I am saying is that the black swan is aloft and ready to pounce and kill the Bernanke put," Biderman says in the attached video. "We could be 200% bearish if I really thought the world would come to an end tomorrow."
Biderman is hardly a perma-bear but has come to the realization that rampant money printing, enormous government debt and deficits, and artificially inflated asset prices have fostered a system that's destined to implode.
"No one wants to think that we need to do something real other than just talk about printing money or easing or something," he warns, predicting that we're heading into "a very dark, uncomfortable, nasty place."
Cheerful stuff, but there's more.
"The federal government spends an extra $100 billion a month more than it collects in tax revenues," he points out, "and it prints or borrows the difference."
Even on the political front, signs of hope are not to be found with Biderman who says we'd see "very little will change whether a democrat or republican is in the White House."
That's probably enough gloom for one day, but remember, the next time you hear talk of another round of easing, another year of trillion dollar deficits or another growth plan or fiscal fix that seems a little too painless and easy, you might want to recall Charles Biderman's words before snuggling up with a rosy consensus.
- Politics & Government
- Charles Biderman