Prediction from Harry Dent - The Great Depression II

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PANDA_IHB

PANDA_IHB

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I am not saying i endorse this guy or find him credible as his prediction for 40,000 DOW in his latest book was a joke, however now he is saying that we are headed for the worst great depression since the 1930s. Men like Richard Russell, Jim Puplava, Jim Rogers, Marc Faber, David Walker, Richard Duncan, Ron Paul, and Peter Schiff all seem to conclude the same thing. Harry Dent however says that by mid 2009 we should be seeing a rally in the DOW where many Americans will start feeling that all the money pumped in by our government has started to pay off and then suddenly a sharp drop of the DOW to 3500 - 7000 at best.



He also says that the real estate market will be flat and we may even see a slight bounce back in 2009 from all of the government invention to save the real estate market. He warns to unload all your real estate by 2009 - 2010 (at the latest) as 2011 - 2013 we will see prices drop to 1996 - 2000 levels. I guess that he is implying that one would be able to buy a 2500 square feet SFR in Newport Coast for $700,000 by 2013.



This video did scare me a little if his prophecy comes true. He did predict that the real estate market will reverse by 2006 back in 2004 like Peter Schiff. Again, i do take his predictions as grain of salt. Peter Schiff also had some really great calls in the collapse of our DOW in late 2007 - early 2008, but had no clue in seeing the deflation and the unexpected rally of our dollar.



I just wanted to hear your opinion about what Harry is saying? Do you think he is full of crap or there is there some credibility to what he is saying?



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Irvine Renter.



Don't you think he is correct on the one year lag time from the time that the government pumps money into the system and the results afterwards? For example, if the mortgage rates remain at 5 - 5.5% for the first half of 2009, see a fake rally of the DOW which will not hit new highs (11k - 12k) in the first half of 2009, and government continues to bailout the people who are about to go into foreclosure, isn't it possible that the Irvine's real estate market will be either flat or even possibly see a slight bounce back right before it tanks from 2011 - 2013. Do you think that the bottom of housing at 1997 - 2000 levels is impossible or highly unlikely?



I try not to listen to just one person like Schiff or Rogers, but try to find a correlation and similarities among a group of economists.
 
This guy is like Gary Watts. His prediction is right once and wrong once. So it's even. I beleive the intention of his predictionis to sell his book. I mean he could be right or he could be wrong. 50% chance,
 
I've remember reading his book, "The Great Boom Ahead" before (I think); the premise of that book was that economical cycles are based upon generation cycles. Did anyone catch what his prediction are based upon? Is the slow down based upon the Baby Boomers retiring?
 
[quote author="PANDA" date=1227842033]Irvine Renter.



Don't you think he is correct on the one year lag time from the time that the government pumps money into the system and the results afterwards? For example, if the mortgage rates remain at 5 - 5.5% for the first half of 2009, see a fake rally of the DOW which will not hit new highs (11k - 12k) in the first half of 2009, and government continues to bailout the people who are about to go into foreclosure, isn't it possible that the Irvine's real estate market will be either flat or even possibly see a slight bounce back right before it tanks from 2011 - 2013. Do you think that the bottom of housing at 1997 - 2000 levels is impossible or highly unlikely?



I try not to listen to just one person like Schiff or Rogers, but try to find a correlation and similarities among a group of economists.</blockquote>


I don't think a bear rally in Irvine house prices is very likely, particularly with the economy suffering. The pricing at the bottom will depend on many factors including interest rates. If we overprint money over the next few years, and interest rates go sky-high to combat inflation, then house prices will crash very hard.
 
[quote author="no_vaseline" date=1227871309]<a href="http://en.wikipedia.org/wiki/Arthur_Dent">Arthur Dent?</a></blockquote>


Give me a Pan Galatic Gargle Blaster... please.
 
Panda, instead of reading people who have books to sell or funds for you to invest in, might I suggest a few alternatives that will only have opinion bias vs. income bias? You seem to get sucked into these guys who have something to sell, when you should be analyzing the data yourself and coming to your own conclusion. I know you don't like those boring data filled books, papers, or blogs, but that is where the meat of the data is. You have said you analyze the micro and macro data, but from your posts I have yet to see it.



First, I think you need to read <a href="http://calculatedrisk.blogspot.com/">Calculated Risk</a> and <a href="http://www.ritholtz.com/">The Big Picture</a> everyday. Both have remained unbiased, and both have been right for the last three years I have been reading them. While Barry at the Big Picture does have something to sell, he never lets that have an influence on his posts. He might mention his services, and show you where he was right, but he will also show you where he was wrong. As can be <a href="http://www.ritholtz.com/blog/2008/06/lehman-brothers-20-price-target-complete/">seen here</a>, (where I made a chunk of change buying puts on Lehman), <a href="http://www.ritholtz.com/blog/2008/11/fusioniq-research-hit-list/">and here</a>. Here is a quote from that post...

<em>

Note: In all fairness we had some calls that did not work out such as BUYS on WU @ $ 26.00, LZB @ 10.15. However EVERY recommendation that is published comes with a defined stop loss or drawdown point so even the bad recommendations get wiped out quickly and with minimal damage.</em>



You should also read on a somewhat regular basis <a href="http://economistsview.typepad.com/">Dr. Thoma's blog Economist's View</a>, the <a href="http://macroblog.typepad.com/">Macro Blog</a>, Brad Setser's <a href="http://blogs.cfr.org/setser/">Follow the Money</a>, Mish's <a href="http://globaleconomicanalysis.blogspot.com/">blog</a>, and of course <a href="http://www.rgemonitor.com/">Roubini's blog</a>. You should also check on <a href="http://www.wilmott.com/blogs/satyajitdas/">Satyajit Das's blog</a> to see if he has a post.



You should also be reading the <a href="http://www.economist.com/">Economist</a>, the <a href="http://www.ft.com/home/us">Financial Times</a>, and <a href="http://www.portfolio.com/">Portfolio magazine is a must read</a>.



I read all those sources regularly, and I gather the info needed and form my own opinion. I don't always agree, I have been wrong, but I have learned a ton to make me more right and money than being wrong.
 
Mish's blog...my favorite. If you like doom and gloom like me, then you'll like it. If you don't like reality and like a peachy world its not for you.
 
He is a no one who is stabbing in the dark and hoping that one of his silly predictions come true so he can continue to self promote himself and sell more books. They say that those who can't play, coach, and those who can't coach sit shirtless 30 rows back yelling obscenities painted orange. Keep yelling Harry...
 
I agree with all the posters who say this guy is full of it. But...



We are in for a Depression.



The premium for moderately risky business borrowing over safe borrowing has been 3 times what it was in the 1973-75 recession. That predicts that businesses will fail at three times the rate of the worst post-Depression recession. Shipping fees are lower than they've been for over 25 years <b>even without correcting for inflation</b>. Shipping in the largest boats is down about 1/3rd. The 30 year bond is now at an unbelievably low 3.19%. All these indicators are unambiguously at depression levels. Had you asked me, three months ago (pre-Lehman) whether these kinds of numbers were possible I would have said "No".



Yeah, he's talking from where the sun don't shine, but even a stopped clock is right twice a day. (How's that for the muddled metaphor index? :-P)
 
[quote author="FairEconomist" date=1228340321]I agree with all the posters who say this guy is full of it. But...



We are in for a Depression.</blockquote>


With 20%+ unemployment? I don't think so!



This will be ugly, but that's insane.
 
[quote author="no_vaseline" date=1228347940][quote author="FairEconomist" date=1228340321]I agree with all the posters who say this guy is full of it. But...



We are in for a Depression.</blockquote>


With 20%+ unemployment? I don't think so!



This will be ugly, but that's insane.</blockquote>


No, starter houses for 1 million was insane. This would be extreme. :-P



Anyway, depressions don't require unemployment of 20% plus. Both the 1873 and 1893 depressions had unemployment in the teens. A naive interpretation of the risk spreads is that we'll get 3 times the unemployment increase of 73-75 (4%, tripled to 12%), which on the base of 4-5% going in would put us at 16-17%. That's probably a bit high, because current gov't interventions are exaggerating the spread some, but I figure at least 13%. And trust me, that will feel like and be called a depression.



The "standard definition" of a depression, insofar as there is one, is 8 quarters of declining GDP. With 4 quarters under our belt, and monster problems remaining in CRE and autos for starters, I'd say we're more than likely to make that definition too.
 
I don't have any doubt we'll get 8 quarters of negative growth.



If that's the definition of "depression" sign me up. You have a cite for the critera for calling a "depression"? I'd be interested to see it.
 
For those of you who held 100% of your money in the U.S. Dollar and the Japanese Yen in 2008. Panda says Congratulations. I believe every other asset class is down this year. Any of you guys want to take some stabs on some 2009 predictions.



I still believe that the U.S. equities will rally from now until first quarter of 2009. Possibly 9200 - 9600 DOW by year end.
 
[quote author="no_vaseline" date=1228362198]I don't have any doubt we'll get 8 quarters of negative growth.



If that's the definition of "depression" sign me up. You have a cite for the critera for calling a "depression"? I'd be interested to see it.</blockquote>


No Vas

<a href="http://www.321gold.com/editorials/russell/russell120308.html">Read This</a>
 
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