SEARCH BLOG: ECONOMY
Bill sent me another email yesterday:
DOW 6400 or lower
More Twists & Turns to Come?
Good video interview. I agree.DOW 4500 is my projected worst floor. DOW 6500 is likely to be a sure bet. Not much to keep the DOW from sliding that much during the next 12 months.
Think of the buying opportunities. [discussion about investments] Houses on the other hand....Now there are many calling for the bankruptcy of General Motors, Ford, and Chrysler. Again... be careful what you wish for....
It is possible that we might have a deflationary period given the energy price pullback and the collapsing consumer sector. Last November 29, I projected oil at $51 per barrel [and Goldman Sachs said $200]. It is now $53; an easy call. Good news for fixed income folks... assuming they keep their fixed incomes. Taxes will have to skyrocket after Obama's honeymoon is over.
The Dow is roughly where it was a decade ago when all of the bubbles began. We've added a few million people since then, so that tells me things are worse. We've had a decade of inflation, so that tells me that things are quite a bit worse. In real terms, the Dow is probably 40-50% less than 1998... maybe around 5000 in 1998 $. If it gets to 5000 in today's $, we are looking at a minimum of a 10-year recovery... which is why I have been comparing this to the Japanese recession in the 1990s...
Obama wanted to be president. Careful what you wish for; you might get it.