Ian Gordon and his Dow 1000 forecast

[nero3]

Here: http://www.youtube.com/watch?v=PlkBo26OM-Y

This is really one for the ultra bearish. He sounds like he suffer from chronic depression, from listening to his voice, so his forecast does not surprise me.

http://longwavegroup.com/home.html

[ThePythonicCow]

Re: Ian Gordon and his Dow 1000 forecast

Hmmm ... he has some good points. :eek::eek:

Actually, if we don't get something like that, I fear it will mean we failed to clean our financial house adequately.

[nero3]

Re: Ian Gordon and his Dow 1000 forecast

Hmmm ... he has some good points. :eek::eek:

Actually, if we don't get something like that, I fear it will mean we failed to clean our financial house adequately.

I think that if you are not in the worst 10-15 % in how you managed your business or finances you will be fine through this. If he is right, then it will be more like everything that can go wrong, will go wrong, and then some.

[Sharky]

Re: Ian Gordon and his Dow 1000 forecast

I think that if you are not in the worst 10-15 % in how you managed your business or finances you will be fine through this. If he is right, then it will be more like everything that can go wrong, will go wrong, and then some.

Unemployment is already close to 20%, and most have very little savings. Hard to imagine them coming through this "fine," and unemployment isn't even close to peaking yet....

[charliebrown]

Re: Ian Gordon and his Dow 1000 forecast

this is probably just another interpretation of the real s&p on this web site, but it appears that over very long time periods., the s&p takes 20 years to double. If s&p was fairly valued (earnings are based upon a long term sustainable growth model without vodoo financing and accounting) s&p was 100 in 1960, then 1980=200, 2000=400, 2020=800, so 2010 value is around s&p 600. There is always the ability to overshoot. If 1000 dow is roughly 100 s&p then this number is probably too pessimistic.
Although the number may be too low, it does bring out the fact that this is not going to be a V shaped recession we have seen in 2000, and 1992.

[nero3]

Re: Ian Gordon and his Dow 1000 forecast

this is probably just another interpretation of the real s&p on this web site, but it appears that over very long time periods., the s&p takes 20 years to double. If s&p was fairly valued (earnings are based upon a long term sustainable growth model without vodoo financing and accounting) s&p was 100 in 1960, then 1980=200, 2000=400, 2020=800, so 2010 value is around s&p 600. There is always the ability to overshoot. If 1000 dow is roughly 100 s&p then this number is probably too pessimistic.
Although the number may be too low, it does bring out the fact that this is not going to be a V shaped recession we have seen in 2000, and 1992.

Just never understand why so many don't think the fed can pump up another liquidity bubble like the one from 2003, and that the debt deflation scenario is inviable like some predetermined disaster is about to hit, and even if it did hit, the dow would not go lower than 3500, absolutely not 1000. I think some of those uber bearish guys like Gordon, is more like a niche salesman, than a genuine forecaster.

[Ruy DelSambuco]

Re: Ian Gordon and his Dow 1000 forecast

Just never understand why so many don't think the fed can pump up another liquidity bubble like the one from 2003

I just never understand how you think it will happen.

[GRG55]

Re: Ian Gordon and his Dow 1000 forecast

Just never understand why so many don't think the fed can pump up another liquidity bubble like the one from 2003, and that the debt deflation scenario is inviable like some predetermined disaster is about to hit, and even if it did hit, the dow would not go lower than 3500, absolutely not 1000. I think some of those uber bearish guys like Gordon, is more like a niche salesman, than a genuine forecaster.

Surveying the landscape there seems a reasonable case for the cyclical bounce to continue and, yes, it's hard to imagine all the money pumping not having some effect [at least temporarily ].

• The VIX went below the Jan low this morning.

• The Fed's Thomas Hoenig is telling us in advance [!!] what the results of the hokey "stress test" is going to be:

“I would point out, first, that although the United States has several thousand banks, only 19 have more than $100 billion of assets, and that after supervisory authorities evaluate their condition, it is likely that few would require further government intervention,” Hoenig said...

• Wells Fargo "shocks" market by topping earningsestimates [can the other big banks be far behind, given the FASB rule change and the Fed's yield curve management?].
• Buy ‘Cyclical’ Stocks as Worst Is Past, Goldman Says
• Retailers' sales may signal shopper confidence
• Jobless claims ease, trade gap narrows sharply
• Summers says economic "free-fall" to end soon
• And Tiger is the favourite to win the Masters. :cool:

That's just a small sampling of the sunshine news from this morning. The Wall Street/D.C./MSM spin machine is at full throttle. The animal spirits have been let loose. What's not to like?

Looks to me like the long running "another week, another Trillion" stimulus announcement program, which closed with the G20 $Trillion encore and the entire cast taking a bow, has finally got some traction...at least in the minds of men.

S&P 1000 here we come...:p

[FRED]

Re: Ian Gordon and his Dow 1000 forecast

Just never understand why so many don't think the fed can pump up another liquidity bubble like the one from 2003, and that the debt deflation scenario is inviable like some predetermined disaster is about to hit, and even if it did hit, the dow would not go lower than 3500, absolutely not 1000. I think some of those uber bearish guys like Gordon, is more like a niche salesman, than a genuine forecaster.

You are invited to review old iTulip analysis and forecasts. This one is from Jan. 2008 when the Real DOW was around 13,000 as shown in Period I in the chart below.

Highlighted in bold below are our forecasts. Those parts that turned out to be incorrect are in black, correct forecasts in red, forecasts for periods that have not occurred yet are in grey.

We define the ten periods shown as compared to periods of inflation adjusted DJIA growth and decline as follows:

A. Globalization V1.0 and FIRE Economy V1.0.
B. Failure of FIRE Economy V1.0 and Globalization V1.0 (global economic depression and de-globalization).
C. World War II (drawn out and self-reinforcing global depression across election periods worldwide influenced national political outcomes).
D. Start of Globalization V2.0 (rise of the dominant US industrial economy).
E. Decline of US industrial economy in competition with recovering industries economies worldwide (US forced off the gold standard by foreign debts).
F. FIRE Economy V2.0 starts in 1980 (first crisis in real estate and S&Ls in early 1990s).
G. FIRE Economy V2.0 experiences first asset hyperinflation (equity market with concentration in tech companies 1996 - 2000).
H. FIRE Economy V2.0 second crisis (stock market crash 2000 - 2001).
I. FIRE Economy V2.0 second asset hyperinflation (debt financed in residential and commercial real estate, leveraged buyouts, emerging markets, and commodities.).
X. FIRE Economy V2.0 final crisis (real estate and general debt market crash.)

We have been since 2008 been in Period X".

Scenarios of the Real DJIA returning to the real 1.64% mean curve via rising inflation and nominal price declines are:

1. 2012 - Fast 50% real decline via very high inflation.
2. 2020 - Moderate 45% real decline via high inflation.
3. 2025 - Slow 40% real decline via very moderate inflation.

Looking out the next few years, here's how it looks.

1) Jan. 2008: We're in the early innings of the US debt deflation; think: Japan 1990.
2) Jun. 2008: The US is in recession and evidence mounts that the first true demand crisis in the US since the early 1980s is in train.
3) Jan. 2009:
- USA: Republicans blamed for the recession so a Democrat won the presidential election in Nov. Taxes are not raised. Government spending increases. Foreign lending has dropped, the dollar has continued to depreciate, import prices rise which increases inflation pressures.
- EU: Most of Europe is in recession. The ECB was slow to see the risks of deflation and worried too much about inflation, as the Japanese did in the early 1990s. Without a euro treasury department to inflate the euro through bond issuance and monetization, a deflation process takes hold and interest rates march relentlessly to the zero bound. The euro strengthens. At the same time, tension among UE members increases as recessions impact different countries in different ways. Countries such as Spain are under intense political pressure to enact stimulus that is contrary to ECB rules. Countering the euro strengthening trend are political stresses on euro zone unity.
- Asia: China's GDP growth slows to 3%. Feels to the average Chinese like a serious recession. Unemployment rises and with it political strife. The CCP clamps down hard on dissident groups. Increasing political instability feeds negatively back into financial markets and the economy. Other nations, such as Japan, that are dependents on China for demand enter deep recession and suffer political problems of their own.
4) Jun. 2009: Governments around the world cope with the first global recession since the early 1980s, with rising unemployment and political unrest. In some countries, bad ideas start to gain ground and are picked up by populist leaders looking to replace incumbents: protectionism in the US, counter-protectionism in Asia, Islamic militancy in the Middle East and parts of Europe, and so on. Initially, relationships between long standing contacts among central bank officials holds together. But as elections occur, CB officials that represented the previous administrations are placed with new faces. Soon a new regime is in place. (Note: not yet.)
5) Jan. 2010: A period of heavy global election activity occurred in the 2008 to 2010 period. If these elections occurred in an environment of ongoing or increasing economic and political trouble or even chaos, then the a De-Globalization process may begin.

The outcome of the process of debt deflation and recession depends on how deep the global recession goes and how long it lasts. If it goes on long enough to impact elections around the world, then we may begin a process of De-Globalization. If the recession is short, then the system holds with no major political and economic re-alignments. The process of globalization and de-globalization is apparent in immigration trends.

To answer your question, the FIRE Economy cannot be re-started, as it was in previous crisis episodes since 1980. We remain in a debt deflation as was the case in the 1930s in the US and in Japan since 1990.

[GRG55]

Re: Ian Gordon and his Dow 1000 forecast

...To answer your question, the FIRE Economy cannot be re-started, as it was in previous crisis episodes since 1980. We remain in a debt deflation as was the case in the 1930s in the US and in Japan since 1990.

Yes, but as iTulip predicted, there will be bounces. And looking at the news spin this morning, this first one that's been underway for a few weeks could be a doozy...

[FRED]

Re: Ian Gordon and his Dow 1000 forecast

Yes, but as iTulip predicted, there will be bounces. And looking at the news spin this morning, this first one that's been underway for a few weeks could be a doozy...

Hudson, Gross, Phillips, Janszen: The U.S. economy is based on finance.

+

Paul Volcker: “We’re in a government-dependent financial system; I never thought I would live to see the day… We’ve got to fight to get away from that.” – Paul Volcker, March 24, 2009

=

The U.S. economy is government dependent.

Didn't work for the Soviet Union. Won't work for us, either.

[GRG55]

Re: Ian Gordon and his Dow 1000 forecast

Hudson, Gross, Phillips, Janszen: The U.S. economy is based on finance.

+

Paul Volcker: “We’re in a government-dependent financial system; I never thought I would live to see the day… We’ve got to fight to get away from that.” – Paul Volcker, March 24, 2009

=

The U.S. economy is government dependent.

Didn't work for the Soviet Union. Won't work for us, either.

Okay, okay. Just so we don't all get too carried away with the "sunshine" announcements, thereby risking melanoma, here's some SPF45 + cloud cover from Kevin Phillips this morning, courtesy of a link from Jesse's Cafe:

http://tpmcafe.talkingpointsmemo.com...ancialization/

[nero3]

Re: Ian Gordon and his Dow 1000 forecast

You are invited to review old iTulip analysis and forecasts. This one is from Jan. 2008 when the Real DOW was around 13,000 as shown in Period I in the chart below.

Highlighted in bold below are our forecasts. Those parts that turned out to be incorrect are in black, correct forecasts in red, forecasts for periods that have not occurred yet are in grey.

To answer your question, the FIRE Economy cannot be re-started, as it was in previous crisis episodes since 1980. We remain in a debt deflation as was the case in the 1930s in the US and in Japan since 1990.

In my opinion the real dow, is no more truthful than the data used to create it. I think it's totally faulty. I am surprised itulip use it at all. I am totally against it The second up leg from 2003, on the itullip graph, is in reality a flat / down leg similar to what is seen at the replacement cost graph or at the dow/gold graph. And it was never so tall eighter. That's my opinion. I don't think sticking to a totally flawed CPI is a good idea.

I see the more realistic graph here:


And Here:

[goadam1]

Re: Ian Gordon and his Dow 1000 forecast

. If the recession is short, then the system holds with no major political and economic re-alignments. The process of globalization and de-globalization is apparent in immigration trends.[/B][/COLOR]
[/INDENT][/INDENT]To answer your question, the FIRE Economy cannot be re-started, as it was in previous crisis episodes since 1980. We remain in a debt deflation as was the case in the 1930s in the US and in Japan since 1990.

So for all the fuss around here, are you saying the screwed up system probably holds for quite a bit more? No wonder I come off so crazy to people. It's screwy but it works. Stay out of the market and have a sodie pop and relax.

[Guest]

Re: Ian Gordon and his Dow 1000 forecast

Ruy DelSambuco - is the blurry picture of Nero3's thesis coming a little more into focus here for you now? :rolleyes:

I just never understand how you think it will happen.
Quote:

Originally Posted by nero3 Just never understand why so many don't think the fed can pump up another liquidity bubble like the one from 2003