White: Dow headed back to 7,000 by mid-summer
Here's the 2nd interview we've posted this week with someone predicting an imminent major crash in equities.
Joe Granville's record is good, but we're not sure about David White. In any case, it's an interesting interview.
These increasing severe bear calls are worrisome to us, but not because they might come true. In our view, the scenario of a Greek default followed by drastically rising, yes rising, stock markets becomes increasingly likely the more bearish people become. That would then require us to be bullish, which is much tougher in the current global economic environment than being bearish. Luckily we have our proven Indicators to guide us so we'll likely be properly positioned and profitable in any case, and no matter our personal biases.
It is worth considering that doomsayers have been dead wrong for many months now, even years, so maybe their time has come. We'll see.
For now, his closing assertion that we'll know when equities are safe again by the look of the economic landscape seems preposterous. There's been nothing but economic threats and unrest for years now and the DJIA is at its highest level of the past 4+ years, and not far off its all-time highs. The stock of Starbucks and Apple are at their all-time highs, as is IBM, CAT and CMG. GOOG is not far off all-time highs, and Ford (F) is at levels not seen for half a decade. This is hardly indicative of a terrible economy.
If correlations between markets and economic situations exist, we're hard-pressed to find them consistently in the extensive market history we've studied so we're highly dubious of anyone that makes such assertions. It's just never that simple.
That said, we hope he's correct in his predictions. We'd make a killing shorting and get that much further ahead of the typical investor or speculator as they have no real hedging strategies or diversification. It'd also result in far cheaper gold and silver, indeed most commodities and assets would cost far less, a great benefit for those who want to buy at lower prices and prudently preserved the buying power to do so.
