13 Bears Offer Dark Forecasts For The Markets And The Economy

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Photo: Flickr / Brian Digital

It has been a rough month for markets. Waves of bad news from Europe and weak data from of China have helped keep stocks low.What can we look forward to?

More of the same, and worse according to these 13 experts. 

Fleckenstein: We need a crisis before our leaders get their acts together

Bill Fleckenstein on MSNBC:

Unfortunately, we have elected officials who are completely incompetent, if not criminal, and the Fed is even worse. None of that is going to change until change is forced upon us (i.e., them) by a crisis.

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Fitzpatrick: Stocks will tumble, just like last year

Pento: Europe's demise will cause stocks to collapse this summer

Michael Pento on King World News:

What investors have conveniently overlooked is the fact that 40% of S&P500 earnings are derived from foreign economies. And the seventeen countries that make up the Eurozone have collapsed into recession. That wouldn't be so bad if EU (17) wasn't the second biggest economy on the planet...

Read our post here

Achuthan: All signs suggest the economy is getting worse

ECRI's Lakshman Achuthan to Morgan Stanley Smith Barney:

When we review the year-over-year growth rate of the US Coincident Indicator Index, which includes broad measures of output, employment, income and sales, we find it to be in a clear, cyclical downturn. That is an authoritative indication that overall US economic growth is actually worsening, not reviving.

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Bank of America: The Ichimoku clouds signal a storm is coming for stocks

From Bank of America's technical analyst report:

Putting these breaks together, along with the weaker cloud chart patterns for Europe, supports the case for a deeper equity market correction...our call remains for a continued correction with risk to 1300-1250 in the S&P 500, but we favour a summer rally and would look to buy dips.

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From John Hussman of Hussman Econometrics Advisors:

'On the basis of objective data, we estimate the prospective market return/risk profile to be in the most negative 0.5% of all historical observations.'

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Edwards: China's credit bubble will burst, the eurozone will fall apart, and the US will slip back into recession

Bill Gross in an FT column:

'Euroland is just a localised tumour, however. The developing credit cancer may be metastasised, and the global monetary system fatally flawed by increasingly risky and unacceptably low yields, produced by the debt crisis and policy responses to it.'

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Kostin: The S&P 500 will sink to 1250

Goldman's David Kostin on CNBC:

He broke his reasoning down based on three big trends: 1. Stagnating US economy. 2. Multiples are likely to stagnate 3. Earnings growth is slowing.

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Russell: Something big is coming our way

Richard Russell for King World News:

Stay in cash, because I intuit that something BIG is heading our way. After all these years following markets, sometimes I have the feeling that I've seen everything. But not this time. Hey, would you believe the Dow could go down 14 out of 16 sessions, and people would still be complacent? There are so many potentially bearish scenarios in the wind that my head is spinning.

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Rosenberg: The whole world sucks except for Canada

Economist David Rosenberg:

'You have to normalize gold against something. It's complexion has changed over time and it is trading less as a commodity and more as a currency.

The peak in gold will peak at $3,000 per ounce before the cycle is out or until the time I change my name from Rosenberg to Goldberg.'

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Schiff: We never had a real recovery

Shilling: Home prices have another 20% to fall

Gary Shilling in the Wall Street Journal:

'Additionally, our inventory estimate doesn't even include future foreclosures, some five million of which are waiting in the wings.

...Now that mortgage servicers have reached a $25 billion settlement with Washington and state attorneys general, foreclosures are likely to roar back. That likely will trigger the additional price decline, since the National Association of Realtors says foreclosed houses sell at a 19% discount to other listings, and sizable sales of real estate owned by lenders drag down the entire market. The total peak-to-trough decline in single-family house prices then would be more than 50%.'

Read our full post here

Some more things that should have you worried

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