Dogs and Cats, Living Together … Stephen Roach Turns Bull

Venkman: Human sacrifice, dogs and cats, living together… mass hysteria!
— from Ghostbusters

It’s like something from Bill Murray’s speech in Ghostbusters: Dogs and cats, living together … economist Stephen Roach turned bullish! From a recent speech by Morgan Stanley’s house perma-bear:

[Economic and policy inputs] now point to a more benign strain of global
rebalancing than I had previously thought.

…No, the world has not been healed of all that ails it. But because
the powers that be have concluded that imbalances still matter, the
urgency of global rebalancing is now center stage in the global
policy arena. Call me less of a pessimist, or even an optimist if
you wish, but that’s the best news I’ve heard in a long time.

Whoa, easy there Steve. I have visions of you skipping down the street while whistling a happy tune, and that just won’t do.


  1. The interesting and unanswered question for me (as a Morgan Alum) is what changed in the datapoints? Did Hu stop by on his latest visit and wink to Steve that all would be “ok”???
    Otherwise not much has changed except interest rates (though that is huge in Steve’s eyes) and though they are not nearly as high as would be needed to support a change in his previous thesis (we have the numbers) I am sure something did….inquiring minds would love to know.
    Of course Steve is one of the greatest wordsmith’s known to man (besides Meeker, that is how Morgan hires analysts) so I am sure it sounded great whatever the reason was;-)

  2. I’ll be more worried about cats & dogs & mass hysteria when Paul K. posts about an economic indicator that is NOT a tell-tale sign of a market bubble.
    We kid because we love… :)

  3. John — I’m nothing if not thematic here. I save all my non-bubble-spotting posts for my other blog, Infectious Benevolence :-)

  4. Zack — The main thing that Roach cites is the joint communique of the G-7 and IMF on 21 April. He says, “Suddenly, the case for global rebalancing was legitimized.”
    I think Steve’s overdoing the IMF/G-7 influence along the way to justifying his decreased bearishness, but that’s fine.

  5. E-Jay Ng says:

    Stephen Roach called the top almost to the exact tick.