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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (3480)	12/16/2003 5:40:48 PM
From: austrieconomist	Read Replies (1) \| Respond to of 110194

Message #3480 from russwinter at Dec 16, 2003 4:38 PM <The bloom has come off the consumer, and I think it's naive to assume we are going to have a big inventory and capital spending recovery without them.> Per Russell on 12/12/03 -- Economist Gary Shilling My friend, A. Gary Shilling is a smart guy and a bit of a maverick. By that I mean that Gary doesn't follow the herd of analysts. He thinks for himself. Gary has a fine investment service, and he also writes a column for Forbes magazine. How's this for a contrary opinion (from Gary's latest Forbes column), "The jump in mortgage rates this summer terminated the mortgage refinancing and home equity loans that have tided people over. . . The big bulge in Iraq spending, $52 billion during the two-month long hot war phase is history. "The consumers who have kept the economy going are not going to be in the checkout lines. Their new-found zeal for savings will pinch spending further. The spillover to housing will break that bubble and seal the case for 2004. "The result -- I foresee a profit decline next year with the S&P 500 operating earnings down 9% to $49 per share and reported earnings down 13% to $39. What a blow to investors who believe S&P estimates of $62 per share for operating earnings next year and $56 for reported earnings. I hate to be the bearer of bad tidings. But if you expect the economy and the market to keep climbing next year, you will be sorely disappointed."