By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Big names like Nouriel Roubini, Jeremy Grantham and Bob Rodriguez are slinging around words like “disaster” in forecasting the stock market, advising extreme caution and defense strategies. Contrast that with hot headlines about the Dow “storming back soon,” soaring to the “Next Stop, Dow 20,000.”
Warning, folks, you’re in a new cycle of irrational exuberance.
Skittish investors have been dumping their holdings at the slightest sign of trouble, but Matt Phillips tells us why they shouldn’t throw the baby — or Treasurys — out with the bath water.
After losing an inflation-adjusted 20% the last decade, a prediction that the Dow will roar back 80% anytime soon is misleading, pure speculative hype. Reminds me of book titles like “Dow 36,000” and “Dow 100,000” back in 1999. And memories of those mutual funds selling with absurd multiples over 40, with annual returns in excess of 100%. Worse than the tulip-bulb mania of the 1590s.
[…]
Unfortunately, the next crash will be bigger. Wall Street and its puppets in Washington never learned the lessons of the 2008 crash. Today their lobbyists are spending hundreds of millions to kill reforms, keeping in place the same toxic, unregulated Reaganomics that triggered the 2008 crash, setting America up for another, bigger crash, kicking America’s problems down the road, one more time.
Except this time it won’t work. The public’s appetite for another $23.7 trillion in total bailout debt is dead. Of course Wall Street won’t stop. Their greed is so addicting they can’t see their death wish playing out. And won’t see it till too late, till the Great Depression 2 sweeps across America. Till then, Wall Street’s self-destructive addiction is unstoppable.
Full article here: Dow 20,000 next? It’s pure speculative hype Paul B. Farrell – MarketWatch.
