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"Everyone Is So Bullish": Why Peter Boockvar Is Still Bearish on America

Posted Aug 03, 2009 07:30am EDT by Peter Gorenstein in Investing

The International Monetary Fund may be predicting a gradual economic recovery for the U.S. but there's nothing gradual about the way stocks are rallying. The Dow Jones Industrial Average just capped its best monthly gain since 2002 and the S&P 500's rallied more than 12% since July 10th.

Have we gone too far, too fast?

Peter Boockvar, equity strategist for Miller Tabak thinks so. "Right now everyone is so bullish after a 50% rally. That should be concerning," he says.

He's bearish on the U.S. markets for two primary reasons:

  • Too much debt both at the consumer and federal level will stunt growth.
  • The eventual unwinding of our current fiscal policy will be painful. In the meantime, that same fiscal policy has the ability to prop up the market. As he puts it, "when you’re in a money printing world we’re in right now asset prices can lift."
Boockvar favors international markets. "I've been bullish on commodities, emerging markets that produce commodities and Asia - particularly China, that has driven the rally in commodities," he says. Admittedly, China may be due for a pullback after an 87% run up in the Shanghai Composite this year. If that happens Boockvar's confident the "U.S. will be following."
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237 Comments

Tom
Tom - Monday August 03, 2009 07:49AM EDT

As soon as he said he was bullish on commodities and China, I knew he was a shameless pumper. China is a basket case and commodities aren't going to be a good investment until the global economy turns around.

Yahoo! Finance User
Yahoo! Finance User - Monday August 03, 2009 08:02AM EDT

Better cash in and make a few bucks while this 'ponzi' scheme lasts!

Yahoo! Finance User
Yahoo! Finance User - Monday August 03, 2009 08:07AM EDT

I agree that this run up in the market is not good. Had we gotten to 9000 by next April or May, this would have been healthy. I know that a few companies beat greatly lowered expectations, but right now the only reason the market is going higher is because fund managers are afraid of missing out. The market is forming another bubble that will eventually burst, but until then, wall street's motto of greed is good continues.

Jez
Jez - Monday August 03, 2009 08:09AM EDT

EDT, I conquer.....SPXU is a great buy right now!!!!

Earl
Earl - Monday August 03, 2009 08:10AM EDT

I think we have seen the calm before the storm. Whats we have on the way is the "storm of the century" . The 30's was a cake walk compared to whats coming. All you american sheep better get ready.

Michel
Michel - Monday August 03, 2009 08:12AM EDT

This is supposed to be the worst crisis in the last 50 years, but the financial markets are recovering faster than they did in 2003. How does this make any sense? This recovery is well overrated, because it is based on trillions of borrowed money. Sure, it feels nice while you are spending it, but what happens when you'll have to give it back? Another crash?

Earl
Earl - Monday August 03, 2009 08:12AM EDT

I think we have seen the calm before the storm. Whats we have on the way is the "storm of the century" . The 30's was a cake walk compared to whats coming. All you american sheep better get ready.

Mike
Mike - Monday August 03, 2009 08:13AM EDT

Until employment stabalizes housing will not recover - SEVERAL ARM's out there to reset... wave two of THE GREAT RECESSION! It's moving in a good direction, and those who have held and bought over this last 9 months will recover quicker, but I don't think anyone thinks it's over. Well, the suckers do... and there are plenty of those out there. Deleverage and invest!

Yahoo! Finance User
Yahoo! Finance User - Monday August 03, 2009 08:13AM EDT

Obama lies while the economy dies. Obama has lost all credibility. Socialism does not work. The stimulus was simply a give away to his cronies. His policies will deliver slow growth for many years.

Zeon
Zeon - Monday August 03, 2009 08:14AM EDT

Commodities have been gaining for a while. It's been a good place to be. Who can argue about China? Both have been good bets. And finance lately. It's not about where the market will be next month or where it was last month. It's where it's at today, and today the bulls look ready to run. I'll be selling to them, just like I bought from them when they were selling. Go, Bulls!

James
James - Monday August 03, 2009 08:16AM EDT

The Govt continues with itseasy money policies. Does anyone else think that this cash for klunkers non-sense is just another money printing scheme? When does this all stop? Housing is still overpriced vs incomes in most markets still cuz the politicians sell out to special interest groups. The excesses are never allowed to correct within the economy so we continue down our merry way of building an economy focuses mainly on debt expansion and consumption. WHERE IS THE ORGANIC GROWTH IN THIS ECONOMY?????? Any new innovations or industrial/mfg growth or export growth? It is one big ponzi scheme that can continue as long as the fed can continue to monetize and print money. When does foreigners stop buying our phoney paper? It is frightening how our leaders can saddle future generations in debt up to their eyeballs or lower their standard of living to continue this scheme.

James
James - Monday August 03, 2009 08:17AM EDT

The Govt continues with itseasy money policies. Does anyone else think that this cash for klunkers non-sense is just another money printing scheme? When does this all stop? Housing is still overpriced vs incomes in most markets still cuz the politicians sell out to special interest groups. The excesses are never allowed to correct within the economy so we continue down our merry way of building an economy focuses mainly on debt expansion and consumption. WHERE IS THE ORGANIC GROWTH IN THIS ECONOMY?????? Any new innovations or industrial/mfg growth or export growth? It is one big ponzi scheme that can continue as long as the fed can continue to monetize and print money. When does foreigners stop buying our phoney paper? It is frightening how our leaders can saddle future generations in debt up to their eyeballs or lower their standard of living to continue this scheme.

Yahoo! Finance User
Yahoo! Finance User - Monday August 03, 2009 08:17AM EDT

Just moved into stocks today after being in cash for most of the last 8 months. Knowing the potential for rapid growth in BRIC's and other underdeveloped nations, I am bullish too. I am just a common investor.

Mike
Mike - Monday August 03, 2009 08:17AM EDT

We here in the US are burdened by incredible debt - in some cases YEARS worth of future descretionary income has been spent - getting out of debt is not a 'sexy' way to invest... but there are VERY few investments out there that can pay you 23%! If you are 'investing' and carrying EXCESSIVE charge card debt you are a fool... and in this economy foolishness is bad.

James
James - Monday August 03, 2009 08:18AM EDT

The Govt continues with itseasy money policies. Does anyone else think that this cash for klunkers non-sense is just another money printing scheme? When does this all stop? Housing is still overpriced vs incomes in most markets still cuz the politicians sell out to special interest groups. The excesses are never allowed to correct within the economy so we continue down our merry way of building an economy focuses mainly on debt expansion and consumption. WHERE IS THE ORGANIC GROWTH IN THIS ECONOMY?????? Any new innovations or industrial/mfg growth or export growth? It is one big ponzi scheme that can continue as long as the fed can continue to monetize and print money. When does foreigners stop buying our phoney paper? It is frightening how our leaders can saddle future generations in debt up to their eyeballs or lower their standard of living to continue this scheme.

da
da - Monday August 03, 2009 08:19AM EDT

High debts and more and more spending with higher taxes to come. What is not to like?

Mike
Mike - Monday August 03, 2009 08:20AM EDT

It's all about deleveraging now... being debt free is the only way to live (which I can not say I do honestly), but we are working that direction. Our only priorities are retirement saving and deleveraging... without both you'll be in bondage. Just the way the Democrat's want it.

Yahoo! Finance User
Yahoo! Finance User - Monday August 03, 2009 08:21AM EDT

It is crazy to expect market to keep going up. We are heading for a painful crash soon.

Jack
Jack - Monday August 03, 2009 08:22AM EDT

The emerging countries will continue to grow. Ignore them at your own peril.

qdog112
qdog112 - Monday August 03, 2009 08:23AM EDT

The economy is poised to turn around. The efforts by the president are working. The jobs are going to be slow in coming, but typically they lag. You can sit on the sidelines if you want to.

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