"Emerging Markets Appear Fully Priced"

From BCA Research: Emerging Markets Appear Fully Priced

Contrary to Nouriel Roubini or The Economist, I don't believe there are "asset bubbles everywhere". There are a few little bubbles here and there (some high end housing markets in fast-developing Chinese cities come to mind). "Fully priced" is more appropriate, and this means upside potential is very limited in most equity and bond markets, as well as some commodities (unless a full-fledged bubble develops, which is unlikely before the banking system starts lending again). It also means downside potential is very important, and we've had a taste of that last week in developed equity markets.

Household debt and stock prices

Although I would accept criticisms of data-mining concerning the following chart (the series are not stationary and so the correlation could be spurious), I still believe it is quite interesting:

Since it's going to take several years before U.S. household debt expands again, this is likely to damp down stock market performance in the meantime - ceteris paribus.