Financial astrologer Arch Crawford still negative on stocks and gold
Posted on 13 September 2010 with 2 comments from readers
In a wide ranging interview on Goldseek.com radio at the weekend the financial astrologer who caused a stir with his accurate negative predictions for August, former veteran Wall Street investment analyst Arch Crawford repeated his hugely bearish predictions for the stock market up to the end of October (click here), and is also negative about the outlook for gold in the short term.
After the worst August for equities in a decade Mr Crawford’s uncannily accurate predictions in mid-July caught the attention of Internet surfers around the world, but the mini-rally in September has appeared to scupper his general view of a fresh market low by later in October.
Hard facts supportive
On the other hand, the leading economic indicators that comprise hard data like shipping and trade as well as bellwethers like housing, are also pointing sharply down (see this article) so Mr Crawford’s astrological analysis has something to back it up much closer to the ground.
His short term view on gold also has some logic to it. Any major sell-off in global financial assets will be accompanied by a dollar rally as assets are generally priced in dollars and liquidated into them. And in a big sell-off gold will get sold to cover losses elsewhere by financial institutions, although probably not to the same extent as in 2008 (and Mr Crawford is a bull on gold for the longer term).
Forecasting record
Mr Crawford is one of those people who dares to stand up and say what he thinks is the truth but his eccentric methodology brings howls of derision. However, his accuracy as a financial forecaster over the past 30 years is a matter of public record, and his August call was spot on despite the derision of his critics.
If nothing else this ought to be a wake up call to any bears now being tempted to get back into stocks. The long rally must surely be almost over. The head-and-shoulders pattern in the stock charts is also a big warning. Another roll-over in the stock market has to happen before we reach the bombed out valuation levels of a market bottom.
For UAE stock buyers today that might mean that the rally after the Dubai debt announcement is short lived, although that might only take local equities back to their August bottom for a while before the real lift-off.
And we know that always happens in stock markets. You just have to ask the simple question: is this market heading up or down from here? And if you want a good reason for further downside you have only to look at the actual leading economic indicators, not the stars, although if they throw some light on this situation why not consider them too?
2 Comments posted by readers:
I think that the US stock market will continue to slowly go higher for the rest of THIS year unless : 1.) The official US unemployment rate tops 10%. or 2.) China has some BIG problem. or 3.) A GDP growth number near 0 is released by the US Government. I don’t see any of those happening this year. Plus, Basel III is giving the banks 9 YEARS to raise more reserves! And they can still use 14 to 1 leverage.
The coming victory of the Republicans in the US House of Representatives, IF combined with a takeover of the US Senate by the Republicans (Which I don’t expect, but is possible) could set off a 1,000 point DOW rally before the end of 2010. If makes no economic sense, but corporate America, and the super rich investor class, will feel that they are, once again, in near complete control of the US Government. They will bid up stocks for a while.The Republicans will, ’stop the spending spree’, which could backfire, big time, by the time the 2012 election rolls around. If a successful Republican attempt to cut Federal spending a LOT, under current economic conditions, doesn’t tank the US economy within a couple of years, I will be shocked. But I’m wrong a lot.
And can that Obama give a speech to a crowd, or what! Watch him work those key Electorial College States in 2012. He will wear Air Force One out. With that gift of gab, he will be a lot tougher to beat, than many people now think. He will drive those Wall Street guys crazy. I can hear Obama now if the Republicans gain control of Congress, “We were making good progress getting our economy out of their ditch. You all remember, the economy that I inherited in 2008 that was losing 700,000 jobs every single month. But as soon as they took charge, they drove us right back into the very same ditch.” It will be fun to watch, free entertainment. Hopefully, it will get very ugly. I would actually pay money to see several, free ranging, unmoderated debates between Obama and his Republican opponent in 2012. Like the debates the Brits have before their elections. One on one, man to man, in your face, REAL debates.
Too bad we outlawed dueling. We should bring it back, but only for politicians. Charging voters to watch would yield a big Federal budget surplus, in no time.
And, be warned, Obama has a mean streak in him. I have seen it on his face the few times he has been heckled. He is smart, but he is NOT one of the good old boy, upper crust, old money, social crowd, that the big money ‘powers that be’, are used to dealing with. They are finding out that Indonesia isn’t Long Island. So if he has to veto bills to protect his accomplishments, like health care & financial reform, he will do it, regardless of the economic consequences. The first black President will do all he can to leave “change” intact. You may want to keep that in mind, as you invest during the next two years.
Without question, the investment imperative over the next few years is, or should be, “Capital Preservation.”, with judicious investments in tangible stuff (e.g. gold, silver . . . not homes!).
@Bill Simpson:
Once again, I enjoyed your “rant” . . . Obama, whose net worth was very low prior to the Presidential elections, is now a wealthy man.
Before being elected as US President, he was deliberately inserted into the CCE (Chicago Climate Exchange) and the Joyce Foundation (which has funded the CCE) because of his rapidly growing political clout. He is now pushing hard on Congressional passage of a Cap & Trade bill, a “trial run” for which is already being done in the Northeast states.
Bottom Line:President Obama is trying to win legislation for CCE, which will make him a billionaire within 2 or 3 years (this sounds hard to believe, I know!). . . then he can “hob-nob” with the Uber Rich.