Danielle Park on the “secular bear market”
Irwin brought this presentation to my attention and I thank him for that.
I would be very curious to hear what you all think of her presentation.
I agree Irwin. I also liked Danielle’s presentation at VRIC 2012, and recall her past interviews on KER a few years ago. She’s no gold bug. I’m still a bit curious to hear Danielle explain how she might envision national debts and bond bubbles will reconcile, and through those, why precious metals wouldn’t be more of interest. Nonetheless, I like the stats she has researched, as they provide important counterpoints. Not everybody in the world does believes gold is worthwhile – finding out why is important. I don’t want to presume too much as I’ve not heard all of Ms. Park’s opinions of the above.
My fear is that Canadians feel we’re too high-and-dry, watching the world currencies atrophy their way towards nothingness. But Canada fared well, so the urgency and alarm of unsustainable deficits seem lightyears from reality to many Canadians. This mindset is particularly found on Bloor Street and Howe Street, although it’s started to change in the last 2 years or so.
She certainly does provide the other side of the coin.
I have to say again, Irwin, that I have a lot of respect for both her and her husband, Cory.
Best,
Big Al
It is refreshing to get a balanced view, I really enjoyed this interview, and she has some sound reasoning behind the case she makes. I am still bullish on individual stocks in the resource and energy sector because of their cash positions, managment, and growth, but overall concerned for the sector at large. I also have seen uber-bullishiness in the general stock market and w/ the S&P pushing all time highs, it seems like once it is over the 1520-1540 mark that it will be a good time to short the S&P as this peak does not match GDP growth, or the worldwide fundamentals that we are in a major mess. The debt ceiling and fiscal cliff “supposed deals” were nothing more than a band-aid and kicking the can down the road to May. We’ll see mid year what a real mess the US economy is in and how Japan/China/Europe are going to deal with their mess. Good luck to all and may you be nimble in your trading, pick quality companies, and watch out for the inevitable equity market dip that is coming in the summer.
Howdy Shad,
I do agree with your predictions regarding the S & P!
Thanks,
Big Al
I believe she is spot on with her presentation, and des an excellent job of supporting it. My own personal analysis after hearing and reading many great minds that seem to make excellent points in there own way, leads me to believe that they will break the old highs on the S&P and DIA,resest the old highs,consolidate about 10%,come in once again and push them up once or twice, and by the beginning of 2014 maybe Feb. March that final capitulation she is talking about could happen..somewhere in the low 8000 range on the S&P…I have been been telling family and friends since the 2009 debacle that i believe that 2014 could be the final blow endind in 16-18 months from its start..possibly late 2015..why isay that…just because of understanding the grat minds of cyclists.
Hi Deborah Lee,
I believe that most people on this site, certainly including me, would agree with you.
I can’t help but think; however, that smart money will continue in gold and silver.
We will certainly see, won’t we!
Big Al
If I understood her presentation right.I believeshe said that commodities will fall along with other equities in that third leg down in the secular bear..the reason i believe this to be so is because of the big boys hedge funds and alike dump their winners to offset their losses, when clients want redemptions, the same thing happened before. although this time round ihave heard people therorize that initially that could happen to the PM but they will come back to pick them up knowing thats the only true value there is in the endgame. I would also like to share some of Tom Fitzswilson,who is Citis top anayst,had some great techniqual charts that overlayed the 1974 bear with the current situation. I would recommend people to check them out on kingworldnews.com,I ersonally read everything on many sites every day. these other great thinkers tend to support Danielle Park, i read a lot and listen a lot but rarely express my views thank you.
a correction is needed in the abvoe post Tom Fitzspatrick not Fitzswilson sorry… both of these guys have been interviewed several times on kingworldnews, both have a lot to offer i got the names interwhined..thanks
Great points Deborah Lee
Even Peter Grandich says something similar to this, but his projection is that it actually begins something after the first quarter of this year, like May or June that starts as a slow grind down and we revisit the lows made in the S&P500 back in early 2009.
I have often wondered and pondered very hard to understand how this might play out along with many other very informed people.I would like to agree with Peter Grandwich on that time frame,but I personally don’t believe it will follow that time frame.The reason I think it starts to crack say the1st qtr of 2014 instead of sometime in 2013,is because China &Japan barely came to the party of QE’S,,so it can be streched further than we believe..I have heard some say this could be the start of a new secular bull,as if this now the stealth stage,because of some many have not joined the party..for that is how all new bulls start just like gold in 2001,but in this global mess and until all the debt is liquidated,when the big khan has been revealed for all to panic..I DON NOT BELIEVE THIS AS ANEW BULL. THANK YOU
And neither do I.
Please keep your comments coming Deborah Lee, as you seem to be quite an astute individual.
Best to you,
Big Al
Ijust got back from a long 12 hour day,and it actually made me think of how all this will play out which i have been spilling my thoughts out lately,, Well two things struck me today which is amazing after being this tired. the first is i would agree with some sort of mild correction around and center the debt ceiling debate, second and more important is that a major clue for knowing when the next major leg down in this secular bear will happen in my opinion could be given when oil breaks its old high of $147, which i think could happen, as i mentioned before in the 1st qtr of 2014. When i see oil burst above 4147 its old high, iamreally folding my cards. Jim Paluva on financialsense.com has been saying for quite a while that oil is the new feds fund rate, well i am going to add a new demension to that which means when oil breaks that barrier get out of Dodge..thats my prediction not for 2013 which i feel is still going to be safer even safer than 2012 for resource stocks(provided no black swans).MY SON KEEPS SAYING TO ME THAT THIS Catastrophe WILL HAPPEN TOWARD THE END OF OBAMAS TERM..I can”t discount his opinion 9i am laughing to myself) because he nailed the bottom in2009 by less than 20 points i had said it goes to 7500, he said emphatically to me no way 6500, well, we know where that went. thanks for all your kind words big AL.
sorry for the few mistakes in previous post. I meant to type low 8000 on theDIA
I agree with Ms. Park entirely on the contraction to come. It’s only a matter of time—it’s also something that I’ve been posting repetitively as regards cyclical bull markets in secular bear markets. We have one more significant wave down and should get back down close to 8000 on the Dow—–why?-because that’s about where the 25 year MA sits. My only question is what happens to PM metal prices and the corresponding stock prices. Will “Exter’s Inverse Pyramid” theory hold true for a deflationary collapse?——in his theory will the only standing giant in a world of increasingly illiquid assets be the PMs which offer liquidity and safety.
Good to “see” you here Richard.
If the ’08-’09 scene is replayed, the PM stocks won’t be spared in the third wave down.
As we likely all remember, the Gold Bugs Index (HUI) bottomed about 4 months before the S&P 500.
It isn’t easily seen on the chart linked below that HUI fell over 70% while SPX dropped nearly 60%. HUI had a better recovery though.
Note that in the 3 year period shown that HUI is actually up 9% while SPX is still negative 30%.
Companies & individuals alike need to be alert, taking profits off the table and managing cash positions to take advantage of the next major buying opportunity.
http://stockcharts.com/h-sc/ui?s=$HUI&p=W&st=2006-06-01&en=2009-05-20&id=p58176734436
Irwin, thanks for the comments. The HUI looks to be at a very important juncture. It could either be triple bottoming or breaking to new lows. We’ll know in the next 2-3 weeks. If you believe the S&P is topping, one has to be very nervous about metal stocks—-although in the 70s they had a nice run when the conventional markets went significantly south on one occasion.
Since Nov. 1, the HUI and general stocks have decoupled. The HUI is down 20% while the SPX is up about 11% since then. The two also decoupled in the second half of 2011. Between July and Sept 2011, the HUI went up 20% while the SPX dropped 15%. Then the HUI dropped 20% while the SPX rose 10%.
Without looking as far back as the ’70s, the longest, most dramatic decoupling occurred between the 4th quarter of 2000 and the 2nd quarter of 2002. The HUI more than tripled in that timeframe while the SPX plunged nearly 50%.
Considering the cyclical, technical, and fundamental picture for the two markets, respectively, there is good reason to think that the 2000-2002 period provides the history that the present is most likely to rhyme with. The SPX priced in gold is now just about touching the 233 wma. The last time it did this was in the 4th quarter of 2001. The SPX is overbought in both dollars and gold on the daily chart. On the weekly chart, the RSI is higher than it has been since 2000 – again, priced in gold. The Russell 2000 (priced in gold) appears to be breaking out of its downtrend that began nearly 3 years ago, but it is even more overbought than the SPX, so the breakout looks likely to fail. Meanwhile, the HUI (priced in gold) is oversold on the daily chart and nearly so on both the weekly and monthly charts. Conclusion: general stocks and gold/silver stocks are perfectly positioned to continue to move in opposite directions.
It is also worth noting that the senior gold stocks as a group doubled in ’93 and ’03. I don’t know what they did in ’73 or ’83, but it will be interesting to see what ’13 holds.
Yep Irwin, the key is definitely to be nimble!
Best,
Big Al
Richard, if we ignore the common stock (FRNs) of USA, Inc., as we ought to, Exter’s Pyramid has held true for the last 13 years. Only gold should be used for such accounting since no other “money” has such a stable long term value. The gold price reflects changes in the value of paper money – not the other way around.
The creation of FRNs has served to hide the deflation that began in 2000. It has worked remarkably well when you consider how few investors understand just how much VALUE they’ve lost in a stock market that appears to be up since 2000. In this environment, GDP is a better (inverse) measure of currency debasement than it is of economic growth.
In gold terms, the stock market has already lost nearly the same value as it did in the 1930s. Gold stocks did spectacularly for years after the Dow-gold ratio hit 1:1. Everyone talks about Homestake, but the juniors performed as they did in the ’70s and ’80s.
Howdy Richard,
I would bet that the pm’s will be the last man standing!
Big Al
Irwin great choice,
Al thanks for posting.
What I continue to struggle with is to the extent growth (GDP) is contingent upon a grotesque expansion of government debt as well as a Shadowstats.comesque concern that the CPI is grossly underreported…then what does it all mean.
Is it odd to even reference government stats when they amount to monetary chains.
Danielle P{ark has made more sense to me in 29 minutes than the sum of all the clowns and talking heads i have been listening to for the past 29 years.
What its disturbing in all this is that there are non productive organisations out there whose prime purpose and mantra is to take away the earnings of those people doing real work and trying to ensure a comfortable retirement for themselves and family only to have their hard earned savings stolen.
You think America is a free market capitalist society think again. The more and more you look at it it smacks of corporate greed and socialism. And guess what you only have yourselves to blame by subscribing to a narrow minded capitalist ideology and not knowing more about human nature and behaviour. Moreover, as a non US citizen I now have to suffer for the US systems ineptness.
Cheers
TonyW
Tony your comment……
“What its disturbing in all this is that there are non productive organizations out there whose prime purpose and mantra is to take away the earnings of those people doing real work and trying to ensure a comfortable retirement for themselves and family only to have their hard earned savings stolen.”
Made me think of the below conclusion written by Greenspan sometime before he met Andrea Mitchell:
“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Dennis – great quote from ‘Span the Man!
Now, to flip the coin about what I said above about taking profits, Jim Puplava has two great hours of programming this weekend and he thinks we’re good at least for the first 6 months of 2013. – FinancialSense dot com
Quoting from the FS website:
“Jim is pleased to welcome back award-winning technician Louise Yamada this week. Louise sees the possibility of a new secular bull market in stocks, driven by massive liquidity from the Federal Reserve. She is not concerned about the VIX index, as long as it stays below 20. Louise sees the industrials and energy sectors leading as the market advance broadens. She also sees the bond market as a major source of concern, with high risks to investors.”
And since it’s Sunday; some music from another Dennis:
http://www.youtube.com/watch?v=qdgd244H7oA
She has been bashing gold since $400.
I was wondering when someone would point that out. She’s a Keynesian.
Yep, she’s a shill for the establishment.
I heard her say once on an interview that “global warming may or may not be happening, but we need to do something about it”.
Huh?
She’s and establishment mouthpiece.
Har, Matthew and Silicon Valley Joe,
Are you referring to Danielle or Louise?
Best,
Big Al
Hi Al, I was referring to Danielle. I also disagree with here bearishness on China. She didn’t mention that Americans have about ten times the household debt. I guess that means I disagree with Doug Casey, too. I like Doug, but I’ve done well by taking the other side of some of his calls. Who knows, maybe I’ll be wrong this time. Sure wouldn’t be the first time.
I am going to interview Danielle tomorrow at 11 a.m. est and I will bring this up.
Thanks Matthew,
Big Al
IMHO what I think most analysts are missing is the fact that Natural Gas production has increased due to the US government turning a blind eye to the damage that fracking is doing. If your economy is in trouble lowering the cost of energy by relaxing the environmental concerns is like quantitative easing without inflation immediatly following it. Yeah, so you do some unseen damage underground, the next administration can worry about that.
Dan
Thanks for posting this, Big Al.
I need to watch it again, but if memory serves, she DID say that her scenario could take a year or more to unfold.
The reason I like to listen to Ms Park occasionally is that her view provides a balance to so much bullishness that I hear.
I recall in the final months of the dot com bubble, it seemed that everyone was “buy buy buy” all the time. It was only after the crash that the analysts & commentators started including disclaimers along with their recommendations, so that they couldn’t be held responsible for someone taking action on their opinion.