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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 335.99-1.1%Dec 12 4:00 PM EST
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To: marc ultra who wrote (6507)10/16/2011 8:18:33 PM
From: marc ultra2 Recommendations  Read Replies (1) of 10065
 
This is really Lakshman versus Bob Thunderdome battle part deux and part 1 happened in March of 2008 and after Lakshman and Bob entered the one man leaving (still alive if you never saw Mad Max Beyond Thunderdome) was Lakshman.

The ECRI made their recession call in March 2008. I hate to sound like the bashers but I do still have a copy of the March 2008 Marketimer and the parallels to today are great. We just came off what seemed like a spectacular test of what at the time looked like the intermediate term correction low and Bob had switched to an attractive to purchase in the area of the S&P low 1300s area of the correction lows from I believe a dollar cost average recommendation for new money.

Of course we now know the market dropped almost 50% t he 666 lows from there and the recession that the ECRI called at the time proved to be what investors needed to heed. Bob had noted the first two quarters could possibly end up slightly negative making for a very mild recession while today he seems to think growth will remain at about 1% or above.

While I'm not looking for another 2008 style collapse and mega-bear from here, I do think the economic and political factors have left us in poor shape to handle a new recession and and the possibility of a new shock that could make a bear far worst is definitely something to worry about. The Fed has little or no tools left compared to 2008 and the political and fiscal situation is toward austerity rater than stimulus which also makes any fiscal response near impossible given current budget issues in the EU and Europe. Also something as minor as China slowing more than expected is a threat in this environment.

So while the ECRI recession call and my current switch to bearish may prove spectacular blunders I will continue to expect a recession that will definitely lead to a new bear market. I won't try to guess the magnitude of the recession or the bear but I think there is good reason to get out ot the way of what could become much uglier than current thinking.
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