<p>"He repeated says “home prices are down 50%” when what he means is “home equity is down 50%”.</p>
<p>??? There are numerous places where home values are down 50% and many homeowners’ equities are down 100% - that’s why they’re “underwater”</p>
<p>"Thats right. At the highs, home equity, the value of all homes minus all mortgages, was $13 trillion, and the value of stocks held by households was around $14 trillion. The most recent Fed Z1 reports that equity in all homes is about $6.6 trillion and total stocks held by households are about $13 trillion, just about double housing.</p>
<p>Im willing to bet very few of you know that back in 1982, the year before the 25 year bull market in stocks began, households owned about $1 trillion in stocks and $2.5 trillion in houses. What a turnaround. In 1982 stocks were 40% of the value of homes. Before the housing and stock bubbles burst, they were about the same. Now household home equity is half that of stocks."</p>
<p>I’m surprised that at that time there was that much in the market. That is around the time that 401k plans started taking off to scr** future employees out of their pensions.</p>
<p>I appologize if this has been discussed but I’m not going back through 148 pages to look:D</p>
<p>What are your thoughts about Harry Dent’s prediction of the Dow going to 3000 in 2013? I’m a little concerned. He was right about 2008 and add in the growing farm crisis, especially this year, the widespread drought and lost crops due to storms recently and it doesn’t paint a pretty picture. Thoughts?</p>
<p>Not going to happen but this is pretty scary: [News</a> Headlines](<a href=“http://www.cnbc.com/id/48193471]News”>http://www.cnbc.com/id/48193471)</p>
<p>SteveMA, I had to google Harry Dent. He made that forecast almost a year ago in Sept 2011, so he is already a bit behind schedule. Dow 3000 would need a major external event - a nuclear war perhaps? </p>
<p>DocT- interesting article. First thing I noticed
well, there’s a shocker! The author of a book about “The New Depression” is squawking about … The New Depression!</p>
<p>But this point he makes is so true:
</p>
<p>I don’t think that the author made that point but the other guy did. The author’s viewpoint that I also heard from Galbraith and Summers was that since interest rates are so low, the government should borrow tons of money to build infrastructure and start new technologies (like the space program did) to fuel growth in the future. At least with this we could stall off a depression for some number of years. Both of them however seemed to say no matter what is was inevitable.</p>
<p>I don’t know that a 3000 Dow is out of the question, even without nuclear war. It was down to 6500 just a few short (or long depending on how bad you were hit) years ago. I was watching all of that unfold from inside the financial industry, from which I have retired, but the guru’s in my old company are worried as well. I am not normally a “sky is falling” type of person but there is a lot going on around the world and environmentally that look an awful lot like the 1920’s-30’s.</p>
<p>Greece and Spain are somewhat like here in the 20’s and 30’s but we sure aren’t like that now. Of course even in those countries, there are safety nets in place that were nonexistant in the past.</p>
<p>True, but there isn’t much the financial markets can do if the farmers don’t have crops to sell…and typically that is where you see the start of any recession, at the farming level, then moving into the housing industry-which is so messed up right now, then into the financial markets.</p>
<p>
Some are. On <em>average</em>, not.</p>
<p>When someone says something like “If this credit bubble pops, the depression could be so severe that I don’t think our civilization could survive it.”, I just can’t take them seriously.</p>
<p>Biderman is a stock guy -(trimtabs.com) - there is nothing in what he said that implies that he’s talking about the average in the US.</p>
<p>
</p>
<p>From the article:
He’s talking about all mortgages, which is an average.</p>
<p>I don’t know what the average %age debt on houses is. But to pick a number, if the average mortgage was 60% of the value, meaning equity is 40%, and equity drops 50% on average, it means prices are down 20% on average.</p>
<p>Harry Dent. Lol</p>
<p>[Harry</a> Dent and Demographic Investing: Concept Better than Reality ? Investing Daily](<a href=“http://www.investingdaily.com/14750/harry-dent-and-demographic-investing-concept-better-than-reality]Harry”>Investing Daily -)</p>
<p><a href=“http://www.amazon.com/s/ref=nb_sb_ss_c_0_10?url=search-alias%3Dstripbooks&field-keywords=harry+dent&sprefix=Harry+dent%2Caps%2C402[/url]”>http://www.amazon.com/s/ref=nb_sb_ss_c_0_10?url=search-alias%3Dstripbooks&field-keywords=harry+dent&sprefix=Harry+dent%2Caps%2C402</a></p>
<p>You know…it is hard to sell books unless you say something that is way above the norm, either wildly bullish, or extremely pessimistic</p>
<p>If I say the Dow is going to close at 13,500 at the end of 2013, or 12,000 at the end of 2013, nobody is going to listen to me. And if nobody listens to me, I don’t make money.</p>
<p>If I say the market is going to 3,000, like Dent, I stand out. I get air
time. I can throw seminars. I can sell books. Newscasters that don’t understand the business can ask me questions. OMG. Is civilization going to end? What is going to happen to 401ks? Will colleges still exist?
No more Rice Krispies? </p>
<p>Dent’s track record is so bad, it can barely be explained by chance. He is an outlier…Mr Wrong Way.</p>
<p>Then we get the Lazlo Biriniys The Dow is going to 19,000 in a year. I looked at the data, and the last 3 times x occured the stock market ripped 80 percent. I don’t want to be too exuberent, so I am just going
to say 19,000 in a year. </p>
<p>“Oh. Maria Bartiromo. You want to interview me?”</p>
<p>“Yes Lszlo. We are so excited. A man of your track record says the Dow is going to go to 19,000. We have to tell our listeners. Of course, we don’t know what your track record is, but the viewers don’t know, so who cares. We have to fill 14 hours of business news, and we don’t know business or news. After you come on Lazlo, we are going to interview a dog that can smell market direction.”</p>
<p>By the way, that was Lazlo’s call last year.</p>
<p>Show me data backing your assumptions. The Case - Shiller index dropped 34% from 2006 through 2009 and is still down 30% from its peak ([United</a> States housing bubble - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/United_States_housing_bubble]United”>2000s United States housing bubble - Wikipedia)) and as I said there are many areas where it was down much more.</p>
<p>There is nobody who will consistently (year after year) predict the closing price on the stock markets correctly. That being said, it doesn’t mean they aren’t making money which is the only thing that matters.</p>
<p>
That’s a lot less than 50%.
There are many areas where it is down much less.</p>
<p>If you follow Dent you lost so much money so many times.</p>
<p>It’s like the guy who has 1,000,000 and loses 900,000 The next year, he doubles his money. </p>
<p>“Hey. I made 100 percent on my money. I am a great money manager”.</p>
<p>Yeah. I know some people would beg him to take their money. </p>
<p>Fools.</p>
<p>The guy lost 90 percent one year and made 100 percent the next year. He made 10 percent in 2 years. :)</p>
<p>The housing crisis is over. Home prices are stable and will begin increasing soon at a slow rate. That means no recession and employment will improve. </p>
<p>Harry Dent is ridiculous. I bought one of his books and it was so poorly written I could not finish it.</p>
<p>Check out the date of this article. </p>
<p>The guy is a broken clock. He is right twice a day.</p>
<p>[Call</a> It a Boomer Boom](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>“The Dow Jones industrial average’s bad behavior may give you cause to doubt the durability of the great bull market. Don’t worry, says Harry S. Dent Jr., the author, lecturer, and money manager. The bull market is as vast and powerful as the baby boomer generation, and the two are inextricable. The 80 million or so boomers–those born between 1946
and 1964–are hitting their peak earning, spending, and investing years, and that’s what’s driving the economy’s incredible performance and the stock market’s spectacular returns. His target for the Dow is 40,000–which he believes it will hit somewhere around 2008.”</p>
<p>I think 2008 was several years ago. I missed that 40,000. Must have been when Dent was correct in the middle of the night and I was sleeping.</p>
<p>Shucks.</p>