ARCHIVED COMMENTARY
Hard-Core Bear:
'No Depression'
For edition of September 11, 2006
Is the Second Great Depression on its way? Not according to Bob Bronson, whose downbeat quantitative forecasts have been featured here often. Bob predicted the current housing bust fully two years earlier than most of his colleagues, and I don’t mean to suggest that he was premature. In fact, using rigorous analysis, Bronson Capital Markets Research saw a topping pattern in real estate that most other observers either failed to notice or regarded simply as a bullish plateau in a more or less endless boom. Along with my friend Jas Jain, Bob has been among the most bearish seers around, a K-Wave proponent who sees deep recession persisting until at least 2009.
(Click on chart to enlarge)
So why does he believe the property bust currently gathering force will not lead to a full-blown depression? Well, it depends on how one defines a “depression”. Bronson notes that the 1930s downturn was very severe by anyone’s reckoning: “The consumer price index (and the GDP deflator) declined by 24 percent from August 1929 to March 1933, after having been virtually flat from 1921 to 1929. This decline was accompanied by a fall in real GDP of almost 30 percent” and unemployment of almost 25 percent. Now, he says, “although we’re in the next K-Cycle Winter, our work shows that the coming severe recession and its after-shock one(s) will reach only a fraction of those extremes.” By this, he means an approximate doubling in severity of bull-cycle recessions, though no depression.
I Expect Far Worse
Long-time readers of Rick’s Picks will already know that I am expecting far worse, for several reasons. For one, the world had a sound money system when the stock market plummeted in 1929; this time around, all of the major currencies are very nearly worthless. Second, the U.S. economy was based on the production of real goods, not ethereal financial products such as are keeping the global economy afloat nowadays. Finally, neither public nor private debt was anywhere near today’s levels.
Even so, most economists evidently believe that the world’s central banks possess sufficient monetary “flexibility” to head off a deflationary collapse. For an excellent summary of this position, check out a relevant report by the IMF by clicking here. My take is that there is simply too much debt to be monetized away. Moreover, even if the cental banks were inclined to bail out debtors by effectively destroying creditors as a class, it would require nothing less than a ruinous hyperinflation to do the job. Once you've read the IMF report, then browsed the Rick’s Picks archive on the topic of deflation, you may be better able to judge for yourself.
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Vancouver Seminar
Registration forms for this October 28-29 event at the Fairmont Waterfront will go out within the next ten days, so if you haven’t yet let me know of your interest in attending, please do so as soon as possible by clicking here. Here are some further details:
FAQ
When will the Hidden Pivot Seminar be held?
There are four seminars scheduled over the next four months, all on weekends. The first will be in New York City on October 14-15; the second, in Vancouver on October 28-29; the third, in San Francisco on November 11-12; and the last, in Sydney on December 2-3.
The class takes two full days, then?
Yes, from 8:30 a.m. to 5:00 p.m. on Saturday and Sunday. After an on-site brunch the second day, the remaining hours will be devoted to an informal Q&A session.
Can I take the course online?
We do not offer an online seminar at this time, but this may change if demand warrants it.
Is the seminar open to those who do not subscribe to your Rick’s Picks advisory service?
The course is open to subscribers and non-subscribers alike. However, I encourage all seminar students to subscribe to Rick’s Picks, if only for a month or two, so that they can become familiar with my methods and trading style. Also, the archives and educational pages offer a useful resource for learning about my proprietary methods prior to the seminar.
How can I sign up for the seminar?
You can request a registration form by clicking on the blue hypertext line under “Last Call!” above.
How much does the seminar cost?
Tuition for the two-day event is $1,500, This covers course materials and extensive post-grad mentoring in a real-time chat-room held during market hours.
When is the money due?
A deposit of $300 is due with the registration form. $100 of it would be non-refundable, and the remaining $200 would become non-refundable six weeks prior to the session.
How about the remaining balance of $1,200?
It would be payable by two weeks prior to the session and would be refundable. A check is preferred, but you will be able to use a credit card for an additional administrative fee of $50.
What will I learn?
The goal of the course is to enable students to master the Hidden Pivot method and to use it to forecast price reversals at least as accurately as experts who do it for a living. In addition, you will learn to use some basic risk management strategies and to leverage swing points with puts and calls. If you’re interested in what my subscribers have said about hidden pivots, click here.
Can someone who knows little about trading or technical analysis benefit from the seminar?
Although many professionals have taken the course, it is an ideal place for the novice to start, since it offers a relatively simple, stand-alone method of forecasting and trading. No prior trading experience or knowledge is required.
