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Economic Trajectory and Capital Market Indices
By Roger Arnold On 4/24/2009
Topics: Housing,Interest Rates,Stocks
The US economy is now deflating; i.e. in aggregate prices are falling and economic activity is slowing.

The Federal Reserve is countering this by increasing the money supply and reducing interest rates but it is not working.

The result will be a continuation of the US and global recessions.

In the US stock prices and interest rates should continue to decline to record lows achieving their bottoms within 6-18 months.

The DOW Jones Industrial Average should decline to the 5,000 range and the S&P 500 to the 500 range; about 40% below current levels.

Long term US treasury yields should decline to at or below 2%.

Par 30 year fixed rate mortgage rates should decline to the 4% range.

Housing prices nationally should decline by about 20% more.

 
Recent Comments

Roger, has your position changed at all on the above based on any new economic data that has come out since April 24, 2009? Long term rates have risen significantly to over 4.5% on the 30 yr bond and close to 4% on the 10 yr T bill. IMF has recent report that shows the world eco. recovery is well under way, and GB shows signs of a rebound. Cramer has pronounced the bottom in housing is in.

By Ken from Philly on June 19, 2009 6:34:04 PM
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