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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: ChanceIs who wrote (175446)1/6/2009 11:58:50 PM
From: XBritRead Replies (4) of 306849
 
<<Again I am in the Roubini camp.....bear trap rally here and then down another 15-20% on the broad equities.>>

Yup, me too. You mean "bull trap" by the way.

Actually at this point I've been obsessively reading every intelligent word written, and I think I have a crystal clear road map for the next 10 years.

2009 is a vicious deflationary recession, with a new bottom for stocks around 600 SPX.

2010, housing stabilizes mid-year. We have a year of flat GDP and increasing unemployment that still feels like a recession. CPI is flat. There is a short and tepid bull market, although the SP500 will remain capped at 1200 or so for 10 years thereafter.

2011 and forward, inflation gradually rises (as the dollar and long bond fall). We have inflation at 6-8%/yr for 10 years, which the Fed essentially engineers (they don't do anything to stop it). We re-live the 70's, with stagflation and a substantial decrease in living standards. But the trade deficit gets fixed and the debts are inflated away.

This must happen, because it's the only non-catastrophic way out for the US. At the end, we're all a lot poorer, but we're finally ready for another Volker and another Morning in America.

LOL, of course if it's that clear to me it's probably completely wrong.
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