From Tyler Durden and Fred Hickey at zerohedge.com:
Once upon a time, the “Tech Strategist” Fred Hickey used to be part of Barron’s Roundtable. Alas, the famed newsletter writer, who accurately predicted the bursting of the 2000 and 2007 bubbles, was deemed too bearish and was cut from the magazine whose hyperbolic covers have long been used as contrarian inflection point signal by the markets.
How bearish? As the following excerpt from his latest excellent monthly newsletter titled “Last Gasps of a Dying Bull Market (and economy)” reveals, the answer is “about as bearish as Hickey has ever been.”
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Last Gasps of a Dying Bull Market (and economy)
Deteriorating market breadth and herding into an ever-narrower number of stocks is classic market top behavior. Currently, there are many other warning signs that are also being ignored. The merger mania (prior tops occurred in 2000 and 2007), the stock buyback frenzy (after the record amount of buybacks in 2007 buybacks were less than one-sixth of that level at the bottom in 2009), the year-over-year declines in corporate sales (-4% in Q3 and down every quarter this year) and falling earnings for the entire S&P 500 index, the plunges this year in the high-yield (junk bond) and leveraged loan markets, the topping and rolling over (the unwind) of the massive (record) level of stock margin debt… and I could go on.
It was very lonely as a bear at the tops in 2000 and 2007. I was just a teenager in 1972 so I was not an active investor, but just a few days prior to the early 1973 January top, Barron ‘s featured a story titled: “Not a Bear Among Them.” By “them” Barron ‘s meant institutional investors. I do vividly remember my Dad listening to the stock market wrap-ups on the kitchen radio nearly every night in 1973-74. It seemed to me back then that the stock market only went in one direction — and that was DOWN.
The global economy is in disarray. It’s the legacy of the central planners at the central banks. China’s economy has been rapidly slowing despite all sorts of attempts by the government to prop it up (including extreme actions to hold up stocks). China’s economic slowdown has cratered commodity prices to multi-year lows and helped drive oil down to around $40 a barrel.
To continue reading: Last Gasp of a Dying Bull Market
