I had all but forgotten this guy after chalking him up to just another seal performing to the audience for his next bucket of fish. But yesterday, again on stage at Financial Sea World, Belski was at it again. I am truly astonished by the integrity of some analysts (and I use that term loosely here). So last year Brian and I had a good discussion about his call in 2014 for a 20 year bull run, being 6 years into it by the summer of 2014.
It came about after I called Belski out for being disingenuous to the mom and pap investors out in TV land who actually believe television pundits on face value. After exchanging some emails and reviewing some of BMO’s underlying research that Belski furnished me I still saw nothing to back up his claim for a 20 year bull market. Now normally it doesn’t irritate me as it did with him. But he was asking investors to stay with US equities because “the American consumer is as strong as it’s ever been”, and for some reason that set me off.
Belski’s 20 year bull run is based on an expectation of a capex and manufacturing resurgence here in the US. I explained to him that the exact opposite was actually happening. And not only happening but that the operational contraction was accelerating with capex and labour being forsaken for profit. I showed him the proof in the data. At that point the discussion ended.
The key to guys like Belski (and again I’m using Belski as a proxy for many of these banking television pundits whose job it is to keep client money invested) is that they are paid to have a particular perspective. So you cannot simply trust what they are saying but have to look at it critically. Now I’m not suggesting they are necessarily lying but when you are paid to believe something, over time you tend to find faith.
In September of last year, as the market looked very sick, Belski was on television again touting his 20 year bull call. Again telling investors to stay calm, have a breather and keep their money in equities. He made a very bold call that there would be a grand rally in the 4th quarter taking the S&P to 2250 by year end. Well we all know how that worked out for Belski. But then just yesterday this guy was back on stage giving the exact same message. “Stay calm, take a breather” and keep your money with us professional managers.
Belski is still calling for some massive resurgence in US manufacturing despite the onslaught of trade agreements taking shape. Remember trade agreements (nothing free about them) are simply legal contracts that allow the free flow of capital from developed (high cost) nations to undeveloped (low cost) nations. The caveat being the developing nation agrees to give up their autonomy to create policies that may benefit their citizens but would hurt profits of foreign multinationals. The contract is enforced by International courts. Free trade would have both free flow of capital and regulation, not just capital. And this necessarily prevents a capex and manufacturing resurgence in the US.