Talk of Worst Recession Since the 1930s

After what Los Angeles money manager Arnold Silver called "a brutal
three days," the question is: What now for the market?

A Wall Street superstar this year who runs Balestra Capital Partners,
Jim Melcher, says he's "worried about a recession. Not a normal one,
but a very bad one. The worst since the 1930s. I expect we'll see
clear signs of it in six months with a dramatic slowdown in the gross
domestic product."

Balestra Capital, a $350 million New York hedge fund, was up 3% for
the past three market sessions, when the Dow Jones Industrials,
spearheaded by widespread declines in financial stocks and fears of
more billion-dollar-plus asset write-downs, tumbled more than 677
points, or about 4.5%. The Nasdaq fared worse, skidding about 7%,
triggered by across-the-board declines in those fast-stepping
technology stocks.

Balestra has increased in value by 175% so far this year, Mr. Melcher
tells me. A 9-year-old fund, it has posted compounded annual growth of
about 30% since its inception.

Mr. Melcher, a market bear, had some pretty discouraging words. "What
I think is not good for the country, but good for me." he says. His
basic advice to the country's roughly 80 million stock players: Run
for the hills - the worst is far from over. An investor's stock
portfolio now, he believes, should be only about half of what it might
normally be.

With the housing market in a state of collapse - and he says he
believes it is far from over - Mr. Melcher argues that average
homeowners will not be able to withstand the kind of recession he
sees, given the added burdens of rising energy and food costs, and
continued deterioration in the credit markets.

Noting that consumption is already slowing, Mr. Melcher figures
sharply rising unemployment is inevitable. Another of his worries is
that central banks around the globe, America's included, are debasing
their currencies, which is setting the stage for a new round of higher
inflation. Our bear figures the next six to 12 months will be awful
for investors as the market goes down "pretty substantially." His
frightening outlook calls for an additional 20% to 30% decline from
current levels. A drop of that magnitude would put the Dow down in a
range of roughly 9,100 to 10,400.

Asked how he could conceivably give credibility to such an ominous
forecast, Mr. Melcher observes: "I've never seen a market with more
risk and what's significant is that risk is not yet priced in."

Given his grim expectations, he says there is no equity market in the
world he would play right now. "When the American market goes down,
other equity markets around the world should follow," he says.

As of now, his portfolio is pretty much devoid of stocks, save for an
exchange-traded fund focused on leading companies in oil services,
which he regards as an ongoing growth industry. The ETF, the Oil
Services Holders Trust, trades on the American Stock Exchange under
the symbol OIH. Although enthusiastic about the industry's growth
prospects, Mr. Melcher says he would be reluctant to recommend oil
services stock because he believes the price of oil could easily drop
50% in the recession he envisions.

Another danger he sees for the market is the prospect of huge
withdrawals of funds from America by foreign investors due to the
falling dollar, the credit crisis, and a slowing economy.

At the moment, Mr. Melcher's chief investment strategy is shorting
stocks and certain bonds, notably mortgage-backed and junk bonds,
through the use of derivatives, put options, and credit default swaps.
He is also short ABEX, an index of residential mortgage-backed
securities.

His short strategy is largely responsible for his super performance
this year, as are his holdings in gold. The fact he's sticking to this
strategy is evidence that he firmly believes the chaos in the
financial markets is far from over. Mr. Melcher is also gung-ho on
several currencies, particularly the Swiss franc and the Japanese yen.

The average investor, he believes, should seek to protect his assets
by raising cash, putting money to work in short-term treasuries, and
buying some gold (notably through StreetTRACKS Gold Trust, an ETF that
tracks the price of the precious metal and trades on the Big Board
under the symbol GLD).

Is the world coming to an end? I asked our bear. "I don't think so,"
he replied, "but as I mentioned, the ingredients are in place for the
worst kind of a recession, which means it's the wrong time to own
stocks."

http://infowars.com/articles/economy...ince_1930s.htm

YTR wrote

Talk of Worst Recession Since the 1930s

Plenty have run that mindless claim before.

Plenty have mindlessly claimed that the world will end too.

So long as the yanks still have their guns and the support of the rest of
the world they will pull through.............Oh!......................
OK So long as their big companies such as Ford and GM are doing better than
the others..............................Oh!........... ............
Well at least they still make their own cars, trucks, ships,
locomotives....................................... ......................Oh!.......................
Well so long they they have their homes and cheap
fuel.............................................. .....................................Oh!.......... .............

Never mind they still have lots of guns and thats all that bothers them.


"YTR" wrote in message
ps.com...
Talk of Worst Recession Since the 1930s

After what Los Angeles money manager Arnold Silver called "a brutal
three days," the question is: What now for the market?

A Wall Street superstar this year who runs Balestra Capital Partners,
Jim Melcher, says he's "worried about a recession. Not a normal one,
but a very bad one. The worst since the 1930s. I expect we'll see
clear signs of it in six months with a dramatic slowdown in the gross
domestic product."

Balestra Capital, a $350 million New York hedge fund, was up 3% for
the past three market sessions, when the Dow Jones Industrials,
spearheaded by widespread declines in financial stocks and fears of
more billion-dollar-plus asset write-downs, tumbled more than 677
points, or about 4.5%. The Nasdaq fared worse, skidding about 7%,
triggered by across-the-board declines in those fast-stepping
technology stocks.

Balestra has increased in value by 175% so far this year, Mr. Melcher
tells me. A 9-year-old fund, it has posted compounded annual growth of
about 30% since its inception.

Mr. Melcher, a market bear, had some pretty discouraging words. "What
I think is not good for the country, but good for me." he says. His
basic advice to the country's roughly 80 million stock players: Run
for the hills - the worst is far from over. An investor's stock
portfolio now, he believes, should be only about half of what it might
normally be.

With the housing market in a state of collapse - and he says he
believes it is far from over - Mr. Melcher argues that average
homeowners will not be able to withstand the kind of recession he
sees, given the added burdens of rising energy and food costs, and
continued deterioration in the credit markets.

Noting that consumption is already slowing, Mr. Melcher figures
sharply rising unemployment is inevitable. Another of his worries is
that central banks around the globe, America's included, are debasing
their currencies, which is setting the stage for a new round of higher
inflation. Our bear figures the next six to 12 months will be awful
for investors as the market goes down "pretty substantially." His
frightening outlook calls for an additional 20% to 30% decline from
current levels. A drop of that magnitude would put the Dow down in a
range of roughly 9,100 to 10,400.

Asked how he could conceivably give credibility to such an ominous
forecast, Mr. Melcher observes: "I've never seen a market with more
risk and what's significant is that risk is not yet priced in."

Given his grim expectations, he says there is no equity market in the
world he would play right now. "When the American market goes down,
other equity markets around the world should follow," he says.

As of now, his portfolio is pretty much devoid of stocks, save for an
exchange-traded fund focused on leading companies in oil services,
which he regards as an ongoing growth industry. The ETF, the Oil
Services Holders Trust, trades on the American Stock Exchange under
the symbol OIH. Although enthusiastic about the industry's growth
prospects, Mr. Melcher says he would be reluctant to recommend oil
services stock because he believes the price of oil could easily drop
50% in the recession he envisions.

Another danger he sees for the market is the prospect of huge
withdrawals of funds from America by foreign investors due to the
falling dollar, the credit crisis, and a slowing economy.

At the moment, Mr. Melcher's chief investment strategy is shorting
stocks and certain bonds, notably mortgage-backed and junk bonds,
through the use of derivatives, put options, and credit default swaps.
He is also short ABEX, an index of residential mortgage-backed
securities.

His short strategy is largely responsible for his super performance
this year, as are his holdings in gold. The fact he's sticking to this
strategy is evidence that he firmly believes the chaos in the
financial markets is far from over. Mr. Melcher is also gung-ho on
several currencies, particularly the Swiss franc and the Japanese yen.

The average investor, he believes, should seek to protect his assets
by raising cash, putting money to work in short-term treasuries, and
buying some gold (notably through StreetTRACKS Gold Trust, an ETF that
tracks the price of the precious metal and trades on the Big Board
under the symbol GLD).

Is the world coming to an end? I asked our bear. "I don't think so,"
he replied, "but as I mentioned, the ingredients are in place for the
worst kind of a recession, which means it's the wrong time to own
stocks."

http://infowars.com/articles/economy...ince_1930s.htm

"nick hull" wrote in message
.. .
In article ,
"Rod Speed" wrote:

YTR wrote

Talk of Worst Recession Since the 1930s

Plenty have run that mindless claim before.

Plenty have mindlessly claimed that the world will end too.

But yet there was a depression in the 30s and history will repeat
eventually

Free men own guns - www(dot)geocities(dot)com/CapitolHill/5357/

Well at least when you lose your homes, jobs, cars, money, etc you will
still have your guns, I hope they make good shelters or are edible.

In article ,
"Rod Speed" wrote:

YTR wrote

Talk of Worst Recession Since the 1930s

Plenty have run that mindless claim before.

Plenty have mindlessly claimed that the world will end too.

But yet there was a depression in the 30s and history will repeat
eventually

Free men own guns - www(dot)geocities(dot)com/CapitolHill/5357/

nick hull wrote
Rod Speed wrote
YTR wrote

Talk of Worst Recession Since the 1930s

Plenty have run that mindless claim before.

Plenty have mindlessly claimed that the world will end too.

But yet there was a depression in the 30s

There were lots in the century before that too. And not one since. Funny that.

and history will repeat eventually

Nope, we wont see a return to absolute monarchys
or the US and Canada at war with each other either
or slavery in the first world either.