Gee, this doesn't seem like a bullish indicator. Bank of Montreal issues its third and final warning: go to cash. Now.

Via Zero Hedge, there's definitely no hedging in this strongly worded missive from the advisers at Bank of Montreal (BMO).

• Our call is to go to cash, or cash-like instruments to the maximum of your mandate. Consider this our third and final warning/escalation

• Our view is based on the past and present state of the market (facts), and on what we see as the near-future condition of the market, which until it is fact, will be regarded by the naysayers as fiction.

• The risk for an asset manager is that he/she considers the current state (facts) of the market as fictitious, or irrelevant...

• Our message of escalated concern may be summed up by one simple statement: If Asian credit moves with European credit, and the European credit story is not over, then the whole notion of Asian-led global growth goes out the window, as we will see capital flight away from Asia and out of risk assets in general...

...China needs to grow for the sake of social stability... China needs to grow for the sake of social stability (a standard PBOC fact line)... Asian growth needs to be funded, and yet escalating sovereign default risk has resulted in the closure of funding markets.

...The default risk of financial institutions is as great now as was the case during the Bear Stearns takeover and Lehman Brothers failure. In the months ahead, more banks will have deposited toxic assets into bad banks and/or government guarantee programs, effectively de-risking the corporations at the expense of the state and current shareholders who will see their stakes diluted.

...Sleep at Night Test: Can You Tell The Difference Between SocGen and BofA?

• ...we have banks that are too interconnected to fail, and yet in Europe, the policy makers are too disconnected to yield comfort.

• Banks, evil as they are portrayed, are conduits for funding.

• Funding markets are shut.

• Shut means no bid.

• No bid markets ≠ happy markets.

Fortunately, our well-managed federal government has socked away plenty of money in the national "rainy day" fund and not wasted it on "make-work" Stimulus packages, union payoffs, new entitlement scams and earmarks.