An economic superpocalypse is coming, probably next month, people say.
But long term? What’s really ahead for America in 2014? Warning, something bigger is hiding in the deep shadows of our collective brain. At a recent lunch with an old friend, one of the world’s more successful commodities traders, he confirmed that “something” was dead ahead. But not just another brief statistical shift in sentiment. Not a medium-term volatility shift. America, the world, are in a historic transition, a paradigm shift, a mysterious upheaval that few will grasp till it moves further along.
More losses? How bad? Worse than 2000 and 2008? Yes. Wall Street, Main Street, Washington, the global economy, will all be knocked off-center. Traders are focusing on St. Patrick’s Day for guidance, below S&P 1,850, Dow 16,400, with a downturn accelerating after a macroeconomic news event in mid-April. For Wall Street’s short-term thinkers, all easy to dismiss, they make money on the action, up or down….
“With a global recession depressing corporate revenues, unsustainable profit margins and currency translation losses spawned by a robust dollar.” In early January Shilling saw “S&P 500 operating earnings … a quarter below Wall Street consensus. Throw in a bear market P/E low of 10 and the S&P 500 Index drops to 800, a 42% decline….”
“Stop the Fed from micromanaging the economy,” said Stockman in March: “No more cheap money, debt buybacks, investing in private companies.” Restore “Fed’s original mission: to provide liquidity in times of crisis … get out of the markets, hide out in cash….”
Euro Pacific Capital CEO Peter Schiff, author of “The Real Crash: America’s Coming Bankruptcy,” is “not backing away from doomsday predictions” wrote MarketWatch’s Greg Robb. A week earlier Schiff warned: “I am 100% confident the crisis that we’re going to will be much worse than the one we had in 2008.” Yes, 100%.
New doomsday poll: 99.9% risk of 2014 crash [MarketWatch]