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Gary Shilling big call: Stocks down to 600 in 09

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  • Gary Shilling big call: Stocks down to 600 in 09

    Source: http://www.businessinsider.com/henry...g-gloom-2009-7




    • The economy won't start to recover until 2010 (versus the current consensus of now). It will recover because the government will be forced into a second stimulus.
    • The US consumer rules the world...and the US consumer is cutting back fast
    • Consumer spending will drop from 70% of GDP to 60% as consumers pay down debt and go on a saving spree.
    • Most recessions have a positive quarter or two of GDP, so if we get one, it won't mean anything.
    • The S&P will plunge 35% to 600 by the end of the year.
    • Buy Treasuries, Buy $USD
    No wonder Kudlow doesnt have him on the show any more !

    Gary Shilling is no fool, picked housing bust when no one would listen, is he correct again ???
    GaryShillingPresentation001.jpg
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    Have the CFOs and CEOs sbeen reading Gary's work ?

    Source: http://howestreet.com/articles/index...ticle_id=10333
    Last week the Vickers Weekly Insider Report listed current insider selling at 4.16 to 1. That means more than four times as many shares owned by insiders are being sold than bought.
    The last time this indicator was this high was the beginning of one of the biggest sell offs in history, October 2007, the top of the 2002-2007 bull market .
    Insiders are usually early and that's the good news. They're giving us another gift - an early warning. These are some of the best and brightest in the business world. If they're selling it's for a good reason.
    Remember the Insiders selling in the Housing sector, then month latter housing stocks plunged !
    Last edited by icm63; 08-04-09, 02:13 AM.

  • #2
    Re: Gary Shilling big call: Stocks down to 600 in 09

    I keep thinking the ONLY way "THEY" can prop up things is by adding inflation.....lots of it.
    Mike

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    • #3
      Re: Gary Shilling big call: Stocks down to 600 in 09

      I think this is inevitable. Previously, in the 90s, the Asian tigers together with Malaysia and Thailand only had a population of 200 million people. Today, the BRIC has a combined population of 3 billion. There will be no more jobs left in the US, UK and Western Europe once the transfer is completed.

      Comment


      • #4
        Re: Gary Shilling big call: Stocks down to 600 in 09

        It will be interesting to see if he can be right. He have one of the worst track records of all the forecasters out there. The one good call he made was the bull-market in treasuries in 1981, other than that, he have been consistently wrong in calling for deflation. 91-92, 98, 99 (calling for commodities to crash down at the time they was at the absolute bottom, it's on paper in his book deflation written at the time), 02-03, and in 2008, he is even still bullish on treasuries.

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        • #5
          Re: Gary Shilling big call: Stocks down to 600 in 09

          Originally posted by Mega View Post
          I keep thinking the ONLY way "THEY" can prop up things is by adding inflation.....lots of it.
          Mike
          I think you might be right in that. I think the theory of a echo housing bubble, is the way to go. When I see how the housing market is here (around all time high), I begin to think it's possible, I think the only difference to the US market is the lower building activity and lower inventory levels here, meaning the money printing have a more direct effect. The norwegian market is still around levels similar to the US market at the 2005 peak. It's possibly quite certain savings will go up a lot unless there is some new kind of bubble inside the US. I certainly think is a huge gap between the printing in the US, and where US house prices are now.

          Comment


          • #6
            Re: Gary Shilling big call: Stocks down to 600 in 09

            Gary's Shilling's forecast is exactly the same as EJ's forecast published in the current issue of Harvard Business Review, a decline in PCE from 71% to 60%.

            Our track record on the housing market and the timing of market downturns is far better than Shilling's:

            The reason is that our methodlogy is better.

            It doesn't work to mix minor and major league players in the same game. We like to hear from economists who have a record that is as good or better than ours but who have a different view of the world.

            Here is the qualified list of economists whose opinions we will consider and debate because they are in the same league.

            Shilling does not qualify. Moving to Junk Economics.
            Last edited by FRED; 08-04-09, 10:07 AM.
            Ed.

            Comment


            • #7
              Re: Gary Shilling big call: Stocks down to 600 in 09

              Originally posted by FRED View Post
              Here is the qualified list of economists whose opinions we will consider and debate because they are in the same league.
              you've had interviews with hudson and keen. how about doing interviews with the others? it would make a nice series. actually- there's a quick book. "who could have known?:forecasts from those who saw it coming."

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              • #8
                Re: Gary Shilling big call: Stocks down to 600 in 09

                Originally posted by jk View Post
                you've had interviews with hudson and keen. how about doing interviews with the others? it would make a nice series. actually- there's a quick book. "who could have known?: interviews with those who saw it coming, with forecasts."
                Excellent idea!
                Ed.

                Comment


                • #9
                  Re: Gary Shilling big call: Stocks down to 600 in 09

                  How about Dean Baker? Could iTulip do an interview with him? I've been reading his articles for several years and he's the type of interviewee that iTulip does best, he has a big-picture perspective.

                  And he something else in common with iTulip, in his column "Beat the Press", he continuously points out the poor financial and economic reporting in the mainstream media.

                  Comment


                  • #10
                    Re: Gary Shilling big call: Stocks down to 600 in 09

                    Originally posted by World Traveler View Post
                    How about Dean Baker? Could iTulip do an interview with him? I've been reading his articles for several years and he's the type of interviewee that iTulip does best, he has a big-picture perspective.

                    And he something else in common with iTulip, in his column "Beat the Press", he continuously points out the poor financial and economic reporting in the mainstream media.
                    yep... how about a follow-up interview...

                    Dean Baker, co-director of the Center for Economic and Policy Research.

                    Forecast: “Consumer spending has been driven by people borrowing against their home equity at record rates. They’ve borrowed for all kinds of things—for new cars and vacations in some cases, to make ends meet in others. As soon as they run out of cash, they borrow again as long as their house value keeps going up. That ends when prices start falling and a lot of people have no more to borrow.”

                    “Consumers are the bulk of the story—70 percent of demand comes from consumer consumption. Probably a third of that consumption is variable to some extent. People could change purchases such as buying new cars and furniture. A mass change in consumption would mean a recession, and it’s very likely to happen. People are going to hit the wall in terms of how much they can borrow with the housing market going down.”

                    Rating: 3

                    Can Anything Bring Down the Monthly Payment Consumer? Revisited - Eric Janszen

                    Comment


                    • #11
                      Re: Gary Shilling big call: Stocks down to 600 in 09

                      "how about doing interviews with the others?"

                      No, not just interviews - pick their minds clean, steal all their secrets! :cool:
                      Justice is the cornerstone of the world

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                      • #12
                        Re: Gary Shilling big call: Stocks down to 600 in 09

                        Personally and no offense, I think the profession of economics is a joke, born out of political ideology. There is no other profession were so many can be so wrong.

                        Interview market historians or 'street wise traders'!

                        Interview: Bob Hoye...or is that still falling on deaf ears.

                        Comment


                        • #13
                          Re: Gary Shilling big call: Stocks down to 600 in 09

                          Originally posted by icm63 View Post
                          Personally and no offense, I think the profession of economics is a joke, born out of political ideology. There is no other profession were so many can be so wrong.

                          Interview market historians or 'street wise traders'!

                          Interview: Bob Hoye...or is that still falling on deaf ears.
                          frankly... kinda mundane...

                          a dozen guys out there like him... jim rogers comes to mind. ej's interviewed jim but not lately. does jim count as a market historian? he's old enough

                          Comment


                          • #14
                            Re: Gary Shilling big call: Stocks down to 600 in 09

                            Originally posted by FRED View Post
                            Excellent idea!
                            Or in this case, "Capital Idea!"

                            Comment


                            • #15
                              Re: Gary Shilling big call: Stocks down to 600 in 09

                              Originally posted by metalman View Post
                              frankly... kinda mundane...

                              a dozen guys out there like him... jim rogers comes to mind. ej's interviewed jim but not lately. does jim count as a market historian? he's old enough
                              speaking of which, what happened to th Rogers interview?

                              Comment

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