Worth reading: latest from Robert Prechter

[paramount]

It sounds like most here believe we are Heading for a HeartBreak (remember that awesome Winger tune?) one way or another (inflation or deflation).

Given those probable realities, I guess the next step is to prepare:

1. Capital preservation

2. Food stores

3. Strategic default

etc, etc….

[stockstradr]

I should have noted earlier in this thread that I currently do NOT have a single dime of my portfolio short any stock or stock index.

I’m noting this to ensure nobody gets impression from this Prechter thread that I’m heavily short this stock market.

I did short the market in April as the S&P500 neared 1200, and I did make money when I closed that position in May (prematurely).

Market days like today are exactly the reason I liquidated that short position. There are still too many people expecting markets to crash or head south NOW, even after markets had fallen 20% (off the April highs). I agree that Prechter showing up in the NYT is a contrarian indicator.

I’m on the sidelines waiting for another little bear market fool’s rally to squeeze the shorts out of the market, and lower the prices on put options (on the indexes) that I want to (re-)buy. When that happens I’ll go short again, because generally I believe Prechter’s predictions for a depression-style stock market crash.

[stockstradr]

I should have noted earlier in this thread that I currently do NOT have a single dime of my portfolio short any stock or stock index.

I’m noting this to ensure nobody gets impression from this Prechter thread that I’m heavily short this stock market.

I did short the market in April as the S&P500 neared 1200, and I did make money when I closed that position in May (prematurely).

Market days like today are exactly the reason I liquidated that short position. There are still too many people expecting markets to crash or head south NOW, even after markets had fallen 20% (off the April highs). I agree that Prechter showing up in the NYT is a contrarian indicator.

I’m on the sidelines waiting for another little bear market fool’s rally to squeeze the shorts out of the market, and lower the prices on put options (on the indexes) that I want to (re-)buy. When that happens I’ll go short again, because generally I believe Prechter’s predictions for a depression-style stock market crash.

[stockstradr]

I should have noted earlier in this thread that I currently do NOT have a single dime of my portfolio short any stock or stock index.

I’m noting this to ensure nobody gets impression from this Prechter thread that I’m heavily short this stock market.

I did short the market in April as the S&P500 neared 1200, and I did make money when I closed that position in May (prematurely).

Market days like today are exactly the reason I liquidated that short position. There are still too many people expecting markets to crash or head south NOW, even after markets had fallen 20% (off the April highs). I agree that Prechter showing up in the NYT is a contrarian indicator.

I’m on the sidelines waiting for another little bear market fool’s rally to squeeze the shorts out of the market, and lower the prices on put options (on the indexes) that I want to (re-)buy. When that happens I’ll go short again, because generally I believe Prechter’s predictions for a depression-style stock market crash.

[stockstradr]

I should have noted earlier in this thread that I currently do NOT have a single dime of my portfolio short any stock or stock index.

I’m noting this to ensure nobody gets impression from this Prechter thread that I’m heavily short this stock market.

I did short the market in April as the S&P500 neared 1200, and I did make money when I closed that position in May (prematurely).

Market days like today are exactly the reason I liquidated that short position. There are still too many people expecting markets to crash or head south NOW, even after markets had fallen 20% (off the April highs). I agree that Prechter showing up in the NYT is a contrarian indicator.

I’m on the sidelines waiting for another little bear market fool’s rally to squeeze the shorts out of the market, and lower the prices on put options (on the indexes) that I want to (re-)buy. When that happens I’ll go short again, because generally I believe Prechter’s predictions for a depression-style stock market crash.

[stockstradr]

I should have noted earlier in this thread that I currently do NOT have a single dime of my portfolio short any stock or stock index.

I’m noting this to ensure nobody gets impression from this Prechter thread that I’m heavily short this stock market.

I did short the market in April as the S&P500 neared 1200, and I did make money when I closed that position in May (prematurely).

Market days like today are exactly the reason I liquidated that short position. There are still too many people expecting markets to crash or head south NOW, even after markets had fallen 20% (off the April highs). I agree that Prechter showing up in the NYT is a contrarian indicator.

I’m on the sidelines waiting for another little bear market fool’s rally to squeeze the shorts out of the market, and lower the prices on put options (on the indexes) that I want to (re-)buy. When that happens I’ll go short again, because generally I believe Prechter’s predictions for a depression-style stock market crash.

[CA renter]

IMHO, the next leg of the downturn will be the most severe. During the first part of the downturn (which began in 2000, IMHO), the Fed/govt had some leverage and were able to drop rates and push debt onto an unsuspecting public via artificially higher home values. People had some cushion from the stock market run-up in the mid-late 90s, and while the tech industry took an enormous hit, many other people still managed to stay employed in other fields.

Fast-forward to today, and there is no more buffer: stock values are flat/down compared to a decade ago, wages are down/stagnant for the decade, pensions have been decimated in the private sector, and the public sector will probably see it next. People have used up all their savings (including their retirement accounts, in many cases!) during this downturn, and have run up all their credit cards. Some people were smart enough to tap their HELOCs one last time in late 2007/early 2008 when they saw the writing on the wall — a lot of them used this money to hold on during the downturn…this money is now largely gone or significantly less than it once was, and it has to be paid back.

We are entering the next leg down with fewer resources, fewer jobs, less money, but still higher-prices (housing, education, medical care — the stuff that counts), which puts us in a much worse position than in 2008. When the collective masses begin to realize that this downturn will not just last a few months (or even a few years), we will see tightening up like nobody’s ever seen before, IMO.

To top it all off, the govt/Fed have spent so much in trying to delay the deflation, that there will be precious little ammunition left for them to fight the next wave. The govt will have to rein-in spending while increasing taxes because there is no other way out.

I could be wrong, but have a very bearish view of the next decade or two (or three…).

[CA renter]

IMHO, the next leg of the downturn will be the most severe. During the first part of the downturn (which began in 2000, IMHO), the Fed/govt had some leverage and were able to drop rates and push debt onto an unsuspecting public via artificially higher home values. People had some cushion from the stock market run-up in the mid-late 90s, and while the tech industry took an enormous hit, many other people still managed to stay employed in other fields.

Fast-forward to today, and there is no more buffer: stock values are flat/down compared to a decade ago, wages are down/stagnant for the decade, pensions have been decimated in the private sector, and the public sector will probably see it next. People have used up all their savings (including their retirement accounts, in many cases!) during this downturn, and have run up all their credit cards. Some people were smart enough to tap their HELOCs one last time in late 2007/early 2008 when they saw the writing on the wall — a lot of them used this money to hold on during the downturn…this money is now largely gone or significantly less than it once was, and it has to be paid back.

We are entering the next leg down with fewer resources, fewer jobs, less money, but still higher-prices (housing, education, medical care — the stuff that counts), which puts us in a much worse position than in 2008. When the collective masses begin to realize that this downturn will not just last a few months (or even a few years), we will see tightening up like nobody’s ever seen before, IMO.

To top it all off, the govt/Fed have spent so much in trying to delay the deflation, that there will be precious little ammunition left for them to fight the next wave. The govt will have to rein-in spending while increasing taxes because there is no other way out.

I could be wrong, but have a very bearish view of the next decade or two (or three…).

[CA renter]

IMHO, the next leg of the downturn will be the most severe. During the first part of the downturn (which began in 2000, IMHO), the Fed/govt had some leverage and were able to drop rates and push debt onto an unsuspecting public via artificially higher home values. People had some cushion from the stock market run-up in the mid-late 90s, and while the tech industry took an enormous hit, many other people still managed to stay employed in other fields.

Fast-forward to today, and there is no more buffer: stock values are flat/down compared to a decade ago, wages are down/stagnant for the decade, pensions have been decimated in the private sector, and the public sector will probably see it next. People have used up all their savings (including their retirement accounts, in many cases!) during this downturn, and have run up all their credit cards. Some people were smart enough to tap their HELOCs one last time in late 2007/early 2008 when they saw the writing on the wall — a lot of them used this money to hold on during the downturn…this money is now largely gone or significantly less than it once was, and it has to be paid back.

We are entering the next leg down with fewer resources, fewer jobs, less money, but still higher-prices (housing, education, medical care — the stuff that counts), which puts us in a much worse position than in 2008. When the collective masses begin to realize that this downturn will not just last a few months (or even a few years), we will see tightening up like nobody’s ever seen before, IMO.

To top it all off, the govt/Fed have spent so much in trying to delay the deflation, that there will be precious little ammunition left for them to fight the next wave. The govt will have to rein-in spending while increasing taxes because there is no other way out.

I could be wrong, but have a very bearish view of the next decade or two (or three…).

[CA renter]

IMHO, the next leg of the downturn will be the most severe. During the first part of the downturn (which began in 2000, IMHO), the Fed/govt had some leverage and were able to drop rates and push debt onto an unsuspecting public via artificially higher home values. People had some cushion from the stock market run-up in the mid-late 90s, and while the tech industry took an enormous hit, many other people still managed to stay employed in other fields.

Fast-forward to today, and there is no more buffer: stock values are flat/down compared to a decade ago, wages are down/stagnant for the decade, pensions have been decimated in the private sector, and the public sector will probably see it next. People have used up all their savings (including their retirement accounts, in many cases!) during this downturn, and have run up all their credit cards. Some people were smart enough to tap their HELOCs one last time in late 2007/early 2008 when they saw the writing on the wall — a lot of them used this money to hold on during the downturn…this money is now largely gone or significantly less than it once was, and it has to be paid back.

We are entering the next leg down with fewer resources, fewer jobs, less money, but still higher-prices (housing, education, medical care — the stuff that counts), which puts us in a much worse position than in 2008. When the collective masses begin to realize that this downturn will not just last a few months (or even a few years), we will see tightening up like nobody’s ever seen before, IMO.

To top it all off, the govt/Fed have spent so much in trying to delay the deflation, that there will be precious little ammunition left for them to fight the next wave. The govt will have to rein-in spending while increasing taxes because there is no other way out.

I could be wrong, but have a very bearish view of the next decade or two (or three…).

[CA renter]

IMHO, the next leg of the downturn will be the most severe. During the first part of the downturn (which began in 2000, IMHO), the Fed/govt had some leverage and were able to drop rates and push debt onto an unsuspecting public via artificially higher home values. People had some cushion from the stock market run-up in the mid-late 90s, and while the tech industry took an enormous hit, many other people still managed to stay employed in other fields.

Fast-forward to today, and there is no more buffer: stock values are flat/down compared to a decade ago, wages are down/stagnant for the decade, pensions have been decimated in the private sector, and the public sector will probably see it next. People have used up all their savings (including their retirement accounts, in many cases!) during this downturn, and have run up all their credit cards. Some people were smart enough to tap their HELOCs one last time in late 2007/early 2008 when they saw the writing on the wall — a lot of them used this money to hold on during the downturn…this money is now largely gone or significantly less than it once was, and it has to be paid back.

We are entering the next leg down with fewer resources, fewer jobs, less money, but still higher-prices (housing, education, medical care — the stuff that counts), which puts us in a much worse position than in 2008. When the collective masses begin to realize that this downturn will not just last a few months (or even a few years), we will see tightening up like nobody’s ever seen before, IMO.

To top it all off, the govt/Fed have spent so much in trying to delay the deflation, that there will be precious little ammunition left for them to fight the next wave. The govt will have to rein-in spending while increasing taxes because there is no other way out.

I could be wrong, but have a very bearish view of the next decade or two (or three…).

[sdrealtor]

Credit card balances are actually down nationally. In my world I see people buckling down and living more simply. They have jobs, savings and intact retirement accounts. The last few years were a wake up call for everyone. Its no longer about bigger and better everything. Its now about living within your means, security and spending more time with family.

Prices have been flat to down on most things resulting in “real” deflation. Relatively stable nominal prices going forward will continue resulting in more “real”: deflation but little nominal inflation. In the next 3 to 5 years we will see wage inflation and soon enough we will be back in balance. A little of this and a little of that. The gov’t and bulls will claim victory despite “real” declines in home prices of greater than 50% while bears cry they didnt get enough. Just another bearish view but far less so.

[sdrealtor]

Credit card balances are actually down nationally. In my world I see people buckling down and living more simply. They have jobs, savings and intact retirement accounts. The last few years were a wake up call for everyone. Its no longer about bigger and better everything. Its now about living within your means, security and spending more time with family.

Prices have been flat to down on most things resulting in “real” deflation. Relatively stable nominal prices going forward will continue resulting in more “real”: deflation but little nominal inflation. In the next 3 to 5 years we will see wage inflation and soon enough we will be back in balance. A little of this and a little of that. The gov’t and bulls will claim victory despite “real” declines in home prices of greater than 50% while bears cry they didnt get enough. Just another bearish view but far less so.

[sdrealtor]

Credit card balances are actually down nationally. In my world I see people buckling down and living more simply. They have jobs, savings and intact retirement accounts. The last few years were a wake up call for everyone. Its no longer about bigger and better everything. Its now about living within your means, security and spending more time with family.

Prices have been flat to down on most things resulting in “real” deflation. Relatively stable nominal prices going forward will continue resulting in more “real”: deflation but little nominal inflation. In the next 3 to 5 years we will see wage inflation and soon enough we will be back in balance. A little of this and a little of that. The gov’t and bulls will claim victory despite “real” declines in home prices of greater than 50% while bears cry they didnt get enough. Just another bearish view but far less so.

[sdrealtor]

Credit card balances are actually down nationally. In my world I see people buckling down and living more simply. They have jobs, savings and intact retirement accounts. The last few years were a wake up call for everyone. Its no longer about bigger and better everything. Its now about living within your means, security and spending more time with family.

Prices have been flat to down on most things resulting in “real” deflation. Relatively stable nominal prices going forward will continue resulting in more “real”: deflation but little nominal inflation. In the next 3 to 5 years we will see wage inflation and soon enough we will be back in balance. A little of this and a little of that. The gov’t and bulls will claim victory despite “real” declines in home prices of greater than 50% while bears cry they didnt get enough. Just another bearish view but far less so.

[Author]

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