And more clips.. bearish, but worth the read.. (has Bill Bonner ever been bullish?!! LOL!)
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This morning, we got a call from a reporter. "How long do you think this rally will continue," she asked. "Why do you think it won't last?"
"As to the first question, we have only an intuition...based on very few historical precedents. When you get a crash as big as we had until March...you can expect a rebound for 3-6 months after. The current rebound is now almost exactly 3 months old. By our guess it could run 3 months more...which takes it to September. But it's very dangerous. If you're playing this rally, be sure to use tight trailing stops...the next leg down could be worse than the first. Remember, after the Crash of October '29 the market rallied until the following May. Then, it went down. And it didn't bottom until 1932.
"As to the second question...why can't the rally become a real boom?...the answer is very simple. Debt is either expanding. Or it is contracting. When it gets to an extraordinary high...it tends to go down. Because it can't go up any more. That's where we are now. Since consumer debt can't increase - and since consumer incomes are definitely not increasing...especially not in Britain and America - there is no way that a consumer economy can expand. Since it can't expand, it must contract. You can't have a boom in a consumer economy when consumer credit, consumer incomes, and consumer spending are all going down. Forget it."
