I firmly agree with David Tice's assessment of the economy and stock valuations. Stocks are at extreme levels and are destined to crack sooner rather than later. Make no mistake. There is no economic recovery despite the sharp stock market rally for the past 6 months. Contrary to the financial analysts on CNBC, the belief of a V-shape recovery is nonsense and has no fundamental basis. As this credit crisis unwinds, consumers are severely tapped out, unemployment continues to skyrocket, and housing prices continue to plummet. There is no end to this until the government accepts the fact that we cannot buy our way out of this mess (i.e., corporate bailouts, cash for clunkers, housing rebates, etc). With that said, there is no doubt in my mind that we will see all-time lows in the stock market breaking the 660 level on the S&P and perhaps go all the way down to 400. That is a 40-60% drop from here, folks. Still want to contribute to your 401K? Well, good luck.
Related Posts:
The Great Recession Ain't Over Yet And Will Deepen (Aug 2009)
When Will The U.S. Economy and Stock Market Bottom (Nov 2008)
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