It's not the first time Michael Hartnett has called the end of US exceptionalism (see "How To Trade The Coming End Of US "Exceptionalism" from late February), but unlike the last few times the BofA CIO declared the end of the status quo - when his view was decidedly non mainstream and quite contrarian - his perspective is becoming increasingly accepted.
That's why he starts of his latest Flow Show report to the point: "US exceptionalism" is ending, "US repudiation" starting. To Hartnett this means the end of the era where the “US buys the Rest of the World's goods - Rest of the World buys US Treasuries” and the start of a "Buyers strike of US assets."
Which is a problem for the US since foreigners own 33% ($8.5tn) of US Treasuries, 27% ($4.4tn) US corp bonds, 18% ($16.5tn) of US stocks. It's why the US dollar finds itself in secular bear market, why US yield curve set to steepen, old S&P 500 valuation “floor” of 20x is now the new “ceiling”
