The Chances of a Double Dip
by ilene - September 18th, 2010 5:47 am
The Chances of a Double Dip
Courtesy of John Mauldin at Thoughts From The Frontline
I am on a plane (yet again) from Zurich to Mallorca, where I will meet with my European and South American partners, have some fun, and relax before heading to Denmark and London. With the mad rush to finish my book (more on that later) and a hectic schedule this week, I have not had time to write a letter. But never fear, I leave you in the best of hands. Dr. Gary Shilling graciously agreed to condense his September letter, where he looks at the risk of another recession in the US.
I look forward at the beginning of each month to getting Gary’s latest letter. I often print it out and walk away from my desk to spend some quality time reading his thoughts. He is one of my "must-read" analysts. I always learn something quite useful and insightful. I am grateful that he has let me share this with you.
If you are interested in getting his letter, his website is down being redesigned, but you can write for more information at insight@agaryshilling.com. If you want to subscribe (for $275), you can call 888-346-7444. Tell them that you read about it in Thoughts from the Frontline, and you will get an extra one month on your subscription. And now, let turn to Gary.
The Chances of a Double Dip
By Gary Shilling
Investor attitudes have reversed abruptly in recent months. As late as last March, most translated the year-long robust rise in stocks, foreign currencies, commodities and the weakness in Treasury bonds that had commenced a year earlier into robust economic growth – the "V" recovery.
As a result, investors early this year believed that rapid job creation and the restoration of consumer confidence would spur retail spending. They also saw the housing sector’s evidence of stabilization giving way to revival, and strong export growth also propelling the economy. Capital spending, led by high tech, was another area of strength, many believed.
Not So Fast
But a funny, or not so funny, thing happened on the way to super-charged, capacity-straining growth. In April, investors began to realize that the eurozone 
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SHILLING: WE’RE IN A WORLD OF “CHRONIC DEFLATION”
by ilene - August 12th, 2010 11:46 pm
SHILLING: WE’RE IN A WORLD OF “CHRONIC DEFLATION”
Courtesy of The Pragmatic Capitalist
Few people have nailed the deflationary environment as well as Gary Shilling. Shilling was one of the few people who foresaw the housing crisis and the equity market catastrophe in 2008 and although he remained bearish in 2009 he has been largely correct with regards to the macro picture. He believes we’re in for a prolonged bout with deflation and says Obama’s economic policies are only making matters worse.
Part 1:
Part 2:
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Gary Shilling Says Yuan Move Is Risky
by ilene - June 22nd, 2010 8:17 pm
Gary Shilling Says Yuan Move Is Risky
Courtesy of Edward Harrison at Credit Writedowns
Gary Shilling talked with Bloomberg about the implications of China’s recent currency move and the European debt crisis. True to form, he is bearish – both on the Chinese move and on the European debt situation. His view is that the Yuan move comes at the wrong time given that the European debt crisis and fiscal austerity is already poised to slow global growth.
While I agree with his comments on the risks to the Eurozone and the Chinese economy, I will defer to Marc Chandler’s views on China’s forex move who has fewer negative things to say about the move.
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GARY SHILLING’S FAVORITE 2010 TRADES
by ilene - January 13th, 2010 12:26 pm
GARY SHILLING’S FAVORITE 2010 TRADES
Courtesy of The Pragmatic Capitalist
Gary Shilling has become infamous in the last few years for predicting the credit crunch and the bear market. The bearish investor still believes deflation is the dominant force at work and that the credit crunch is in the process of unfolding. But he isn’t bearish about everything. The following are his 6 buys:
- Buy treasury bonds – the safehaven
trade will return.- Buy income-producing securities – high quality dividend names will be a safe place to hide.
- Buy consumer staples and foods – consumers won’t stop buying the necessities.
- Buy ’small luxuries’ – consumers are trading down.
- Buy the U. S. dollar – still the world’s safehaven currency.
- Buy eurodollar futures.
Unfortunately for market bulls Shilling is generally bearish about
- Sell U.S. stocks in general – U.S. stocks are just too expensive.
- Sell home-builder and selected related stocks – home prices will fall 10% in 2010 and the stocks will tank with it.
- Sell big-ticket consumer discretionary equities - consumers aren’t buying luxury goods due to the trade down.
- Sell banks & other financial institutions – the days of big bank profits and bailouts are over.
- Sell consumer lenders’ stocks – consumers will continue to deleverage.
- Sell many low- and old-tech capital-equipment producers.
- If you plan to sell a home or investment house, do so yesterday.
- Sell junk bonds.
- Sell commercial real estate – the real estate bubble is a slow motion train wreck.
- Sell most commodities – the dollar rally will crush commodities.
- Sell developing country stocks and bonds – there will be no decoupling.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
