Here are some quotes from
this week’s Market Comment by John Hussman, PhD.
HUSSMAN ON RECESSION:
“The joint evidence
suggests that the U.S. economy has entered a recession that will later be
marked as having started here and now…”
HUSSMAN ON EUROPE: “The markets are gradually figuring out that
the near-daily "agreements" to solve the crisis there represent
nothing but words, as Germany is unwilling to provide endless transfers to
peripheral European countries.”
HUSSMAN ON FED ACTION: “It's
true that in 2010 and 2011, one or two quarters of support for GDP growth was
enough to push off emerging economic weakness for a while. At present, the
economic headwinds are much more serious, particularly given European strains.
So aside from the hope for transitory speculative benefits, it's not at all
clear that further quantitative easing would be effective in halting a U.S.
recession that, by our estimates, has already begun…”
HUSSMAN’S ESTIMATE OF
STOCK MARKET VALUATION: “…our own estimates of "fair value" are in
the 850-950 range for the S&P 500…”
The above quotes are from the Weekly Market Comment (25
June 2012), by John Hussman, Phd, from Hussman Funds at
I usually don’t quote this
much from Mr. Hussman, but this is an extraordinary market and an excellent
commentary from Hussman Funds. Check out
his commentary at the above link for additional analysis along with charts and
graphs. (Regarding today’s blog title, John
Hussman didn’t use the term "crash" in his commentary; but I think most would see
a 35% decline from today's S&P 500 level as a crash.)
BLOOMBERG: GREENSPAN ON
EUROPEAN DEBT
Greenspan, in a television
interview on Bloomberg Surveillance with Tom Keene…said he sees “global slack”
in the economy… In Europe, Greenspan said one of the central issues is that rather than
working toward solutions to close the fiscal deficit, world leaders are working
on funding it. “Until we shut off the
deficits themselves, debt by definition continues to rise,” he said. “The
general focus of policy” is “taking the
easy way out with very long-term negative consequences.”
http://www.bloomberg.com/news/2012-06-21/former-fed-chief-greenspan-says-economy-very-sluggish-.html
MARKET
Monday, today, the S&P
500 was down 1.6% to 1314. The VIX rose 13%
to 20.38.
NTSM
The NTSM analysis remained
HOLD today, Monday. VIX is again negative. All other indicators are neutral.
MY INVESTED POSITION
I remain out of the market…
I reduced my stock holdings
to 30% (0% in stock in the 401k) at S&P 1358 after the SELL signal on 9 May
2012. (See the page “How to Use the NTSM System” – the link is on the right
side of this page). I cut my stock
position to 15% on 17 May in order to maintain a 10% gain in a
trading/longer-term position I had in the QQQ.
