Not to incur your wrath, Russ, but the attached site is a second hand account of the Bank Credit Analyst forecast of the economy:
profutures.com
I think your reservations about BCA relate more to their value as forecasters of stock market direction rather than of economic projections but the two are somewhat related (note, however, Mauldin's work pointed out that the annual rate of earnings growth in the 1966-1982 time frame (a bad investment period for most U.S. stocks), was double that of the 1982-2000 time period).
Their forecast of 3%-4% second half GDP and similar growth for 2004 does jibe with 2003 2Q market action, and is consistent with the all clear in the markets by Hussman, Russell, Ned Davis, Stack and the Lowry's statistics (my investment "Group of 5"). BCA's work (based upon second hand Hallberg disclosure) tends to indicate that the party will be over at the end of 2004 (my interpretation... I believe that BCA is too mainstream to offer a doom and gloom story).
So maybe the lack of values in stocks is not fatal for a number of months more. This is not inconsistent with the Japanese Nikkei 1989 - 2003 experience. Hypothesize that the economy guts it out until year end 2004. The stock market, looking out 6 months, begins to fall apart by June 2004. That would be a 20 month rally off the October lows. There were many (6) bear market rallies of more than 25% in the Nikkei and at least one bear market rally which lasted about a year and a half (late 1998-early 2000). Most of the others lasted about a year.
I used to think that the only market in which you could take a position, sit back, and rest was to short the dollar. That still may be the case but the recent rally off the .92 Dollar Index lows is making me hedge my bet there just a tad. Long term, a well margined short on the dollar has to be a high percentage and fairly restful bet. |
