Bob Janjuah: Single Digit P/E Drives S&P to 700-900 in 2012

In Bob Janjuah's recent report, which is available at Zero Hedge, he predicts single digit P/Es will drive the S&P to 700-900 in 2012. However, he sees the possibility of a "counter-trend risk rally" between November 2011 and early 2012. He also thinks the 10-year Treasury yield will hit between 1.25-1.50%. It is currently at 1.85%. Janjuah is the co-head of cross asset strategy at Nomura.
"It is for these reasons that my secular view remains bearish. In or within a year from now I expect global equities to be 25% to 30% lower. My S&P 500 target for the low in 2012 remains 800/900, and I think an 'undershoot' into the 700s is entirely possible.

For the valuation-focused, assume S&P 500 EPS in 2012 of $90/$100, and P/Es in the 8 to 9 area – I see this kind of P/E as the new norm in the kind of world we are in." (more)