SocGen's Edwards: US equities could bring down the 'pyramid of piffle'

US equity valuations are not consistent with low inflation expectations and any negative data could quickly cause another steep sell-off, according to Societe Generale's Albert Edwards.

The infamously bearish strategist said most risk assets, especially equities and corporate bonds, are still expensive, and contrasted the nascent global recovery with persistently low inflation levels. "The global economy resembles a knackered old V8 engine which is now only firing on one cylinder (US)," Edwards said. "Hence, any data suggesting that the US economy is now also flagging was always likely to cause a meltdown as investors feared the imminent arrival of Japanese-style outright deflation." Equities have been recovering ground this week after an aggressive sell-off at th...