Albert Edwards: a bruised but persistent bear
Societe Generale's Albert Edwards is particularly worried about the eurozone, with Italian banks merely a symptom of the problem.
Albert Edwards, global strategist at Societe Generale, may be a "bruised bear", but he's not backing down from his famously pessimistic positions. Currently, Edwards is particularly concerned about the eurozone. Problems with Italy's banking sector are merely a symptom of the real problem the fact that Italy's economy has stagnated since it joined the eurozone, while unemployment in the entire region, apart from Germany, has soared. Unless radical reforms are carried out, and countries like Italy are allowed to leave the single currency, the entire euro area is "toast".
Europe is not the only place where the population is unhappy. Discontent with globalisation has risen sharply around the world polls suggest that a majority of people in most countries believe their nation is "on the wrong track". Even before Donald Trump's victory in the US presidential elections, protectionism had been rising across the globe. The US alone has imposed more than 650 protectionist measures over the past nine years. Unnervingly, investors seem to be ignoring all this. Global policy uncertainty is "at an all-time high", yet this isn't reflected in credit markets or share valuations.
Closer to home, British property is in a very dangerous position, says Edwards. A combination of "excess of demand over supply" and "loose money" has pushed the ratio of house prices to income to "ludicrous" levels, particularly in London and the southeast. This isn't down to a physical shortage of houses rents have risen far less quickly than prices. Instead, the government should focus on demand-side measures, such as preventing non-resident foreigners from buying property.
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