LA bondfund manager predicts dow 5000. (I called 6000 in my earlier post) I know Prechter has been a bear for all his life so he has no accuracy nor credibility. A broken watch will be accurate twice a day.... However if you want to tune out the ever bullish - brainwashed administration tunes.... read this; cbs has put this article in it's archives, which you need to sign up to get....it's at http://cbs.marketwatch.com/news/story.asp?guid={6226C645-8C08-40A1-AE2B-850D518235F7}&siteid=mktw&dist=&archive=true SAN FRANCISCO (CBS.MW) -- Economic forecaster Robert R. Prechter is confident a global depression will wreak havoc with stocks, bonds, real estate and money markets. Prechter says a "deflationary depression" has already started and will gain momentum over the next 2 1/2 years as banks stop lending, borrowers default on their loans and an unprecedented expansion of worldwide credit stops in its tracks. MORE IN ORIG ARTICLE "Go ahead and panic, beat the rush," Prechter says. "If you do it early, you're not being paranoid. You're being prudent. We're only half way through this bear market." Don't trade just stay short and buy gold.....
He has a 50/50 chance of being right. If hes wrong everybody will forget about it. If hes right hes set for the next couple of years.
Regardless of his shortcomings as a market guru who can or can not call the next 5000 points in the major indicies, the guy has incredible insight into socio-economic trends. Whenever I read any of his stuff, I skip all the mumbo jumbo about wave counts and super cycles, but really find some excellent insight about the typical socio-economic trends of bear vs bull markets...And, to be honest, he is one of the most original thinkers on this subject...The concepts that fascinate this country in troubled times as opposed to the "boom times"....Everyday we see more of this phenomenon play out as once heralded "saviors" of capitalism get knocked to earth... Why not just look at Jack Welch as one example of this feeding frenzy that has taken shape over the past two years...Two years ago the guy was heralded as the "greatest" CEO of all time...Now, the NY Times is running features on how he was robbing the corporate piggy bank, how he cheated on his wife and all of his other extravagant behavior...Its all part of this shift in pop psychology...Very interesting stuff, IMHO...
yes, I read the Bill Gross article as well, but was commenting on Prechter... I agree with Bill Gross, but obviously anyone managing billions of dollars does not publicly comment on markets for the sake of having an opinion...Its just another way(much in the same manner that a Buffet or Soros would comment) to attempt to change public sentiment for his own benefit... His comments are absolutely correct, but the same could have been argued at any number of critical junctures in the markets over the past few years prior to a "re liquification" of available capital to stave off another liquidity crisis... Without a doubt, in the month of July as outflows spiralled to record levels, the corporate debt market went into a free fall...THere was no liquidity, there was no one willing to step into the market and be a buyer of last resort...Gross commented on this by saying if you buy corporate debt at best "you get your initial capital at back plus a nominal return, at worst you lose it all"...That basically sums it up and is a good indication of the mindset going forward...Who wants to be a buyer of this debt when it can be downgraded overnight for reasons that no one had foreseen...We all know there is no longer ANY transparency out there whatsoever...So his comments, more so than anyone else who makes his opinions public opinion, are worth listening to...And of course he has a bias to making the equity market look awful, but what he says is reality, not fiction...
Vulture, you've never had a bad post! I was thinking the same as you about Prechtor. Here is a guy who clearly thinks outside of the box. What he failed to "anticipate", and myself also, was the massive liquidity of the 90's. Asset classes that appeared "cheap" as inflation subsided, quickly became expensive as deflation became evident. The gasoline of credit expansion is spread by low rates vis a vis the same low growth environment that later causes defaults. In other words the great bull market of the 90's in equities , fixed income securities and real estate makes it more likely that the inevitable bust will be worse than if no boom had occurred. It's the old thing about rubber band economics. By the way when is Peter Lynch going to be exposed as the conservative investors Jack Grubman?
Pabst: Good points all around...Lynch has done a fantastic job of cutting back his media "exposure" over the past two years(lol)...He is very sharp at maintaining his media image and perhaps he knew that his typical "sales talk" for the masses had run its course sometime in 2001...Maybe I just dont watch enough financial tv, but I have not seen him in quite some time... Regarding Prechter and his failure to anticipate the credit expansion that fueled the final "blow off" top of 1999-2000; I think this sums it up pretty well...I think Doug Noland of prudentbear.com really has his fingers on the pulse of this economy...He consistenly backs up his analysis of economic trends with good, hard statistics that tell the true tale of the economic beast... He makes consistent reference to "re-liquification" as the main culprit in this ongoing saga of "recovery from the brink" in each episode of either a global or domestic crisis...The numbers support this theory...
how does he have a 50/50 chance of being right? if i make a prediction that nasdaq goes to 1, i don't think my chances are 50/50.
You could not possibly underestimate how much cheerleading is going on by gross and co. Its sickening to see mccauley and the rest of that group get on tv and talk their positions the way they do. Its been going on for a long time, especially now with possible potholes from telecom exposure on the corporate side. These people cant stand to/ or will not accept ever losing.