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

To: ild who wrote (30889)	4/18/2005 12:58:17 AM
From: Roads End	Read Replies (1) \| Respond to of 110194

Belkin made a great call alright. So did Hussman. His Strategic Growth Fund gave up a whole 2 cents on Friday, well done indeed.

To: ild who wrote (30889)	4/18/2005 3:29:51 AM
From: NOW	Respond to of 110194

amazing calls: everyone of his calls to a T: pharma, emerging, etc etc I wish I had 36K to subscribe....anyone?

To: ild who wrote (30889)	5/8/2005 12:33:05 PM
From: orkrious	Read Replies (4) \| Respond to of 110194

Big deleveraging in process. Exactly as Belkin has said in interview posted here a week ago belkin update This Guru Remains Ursine By Jon D. Markman RealMoney.com Contributor 5/6/2005 3:00 PM EDT Click here for more stories by Jon D. Markman thestreet.com Several readers have asked for an update on the views of Michael Belkin, a forrmer Salomon Brothers analyst with numerous big calls in the past 15 years, who now runs his own analytical shop out of Bainbridge Island, Wash. Mike got very bearish again at the start of this year, and has remained so since. When I called him last week, he says in his usual easygoing way, "I'm all beared up!" He says his quantitative models look a lot like they did in mid-2000, when his short-term, intermediate-term and long-term indicators all pointed down. Last year, he noted, his intermediate-term view was neutral. Now it is negative. Belkin's primary view is that the economy is seriously softening due to higher energy prices' squeeze on lower and middle-income consumers. He notes that the 2000 downturn was primarily about technology, but this time "tech is weak but not the riskiest thing out there." His primary negative calls are on brokers and cyclicals, such as chemicals, containers, forest products, retailers, auto parts and machinery. "The liquidation is just starting," he said. "As the market trades down, consumption will soften, the earnings will continue to weaken, and the vicious cycle will repeat. There's no way out." He's positive, but only in a relative sense, on consumer staples, health care, utilities, and telecom services. In other words, he doesn't think those will go up much, if at all; they're only likely to go down less. Belkin, who publishes a weekly research report for institutions, points out that negative real interest rates last year penalized holders of Treasuries, so bondholders were squeezed out to the riskiest stuff on the market to get yield. The far reach for yield resulted in a major global leveraging in everything on the planet, from commodities to emerging market debt, he said, adding: "And now that all goes into reverse: A vast global deleveraging." In sum, he believes the market is headed back to the 2002 lows as the long-term bear market that began in 2000 resumes. He thinks the U.S. market today is much like Japan in the 1990s, in which there were tremendous 12-month bull cycles within a 10-year secular bear. He won't guess how long it will take, only emphasizing that he forecasts "a lot of downside risk." At least 40% down, he suggests, but not in a straight line. Who's Belkin? For readers unfamiliar with Belkin, he helped clients get the last penny out of the Nasdaq rally in 1999 and early 2000, and then insisted they get out in early March, just before the crash. He then stayed bearish until late October 2002, when he got bullish and remained so until late 2003. He was modestly bearish through 2004, but he got very bullish in mid-October 2004 and helped clients take advantage of last year's fourth-quarter rally. So he's definitely no permabear. Belkin's big-picture view of markets is that they are mean-reverting machines. In plain English, what goes up must come down, and in spades for groups, like small-caps and homebuilders that have run up to two and three standard deviations above their long-term norms. Close observers will recall that Belkin was bearish a bit too early in late 2003, but his big out-of-consensus bearish call on semiconductors -- which were riding high at the time -- has proven to be very prophetic. I'll check in with him again in six months.