Zeev's Turnips Patch-No Politics (ZEEV)

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Mlsoft - your predictions:

===The economy is slower than most currently believe, and is continuing to deteriorate. I look for that trend to continue and for the Fed to be unsuccessful in reflating the economy to stave off a recession, which will be upon us by the end of the first quarter. I continue to believe that the recession will be global and will take a long time to recover from, with unemployment continuing to rise in Japan, Europe, and the US (I look for US unemployment to get well over 7% this year.)===

I think the U.S. economy will, on average, continue to deteriorate for another five years, minimum, and that it will be twenty, at best, before things get back to the 2000 level (I'm referring to the economy, not the Market, which is much less predictable). I betting on 8% unemployment in 2003, unless they lie even more than they have been.

===Real profits will continue to decline and valuations will sooner or later begin to reflect reality as the rampant optimism currently holding the markets up will collapse without active Fed/PPT/EFS intervention.===

Yeah, or with it.

===I look for the primary indices (DJ, NAZ, S&P, and SOX) to be sliced by 40-60% before the end of the bear, but I tend to doubt the bear will end this year. My best guess for this year would be a drop of 25-40% with the DJ suffering the least damage. Most of the damage this year should come in the first half, but I do not look for a sharp recovery after that - no "v" bottom.===

Agree on all points, although I'd add that the 60% is more likely than the 40%.

===The $USD will continue to decline (that seems to be the unofficial policy of the Treasury/Fed) and gold will continue to rise - I believe gold will easily top $400 before the year is out.===

That depends on Iraq, IMO. I don't know that people will realize the real value of gold so soon as this year. Right now, they're buying because of "global uncertainties" more than they're buying because of the Kleenexization of the Dollar.

===As for risks causing accelerated downside action - I have serious concerns that Iraq will not go as well as most folks think, with a lot of different possibilities for bad news there and that could be very bad news for the markets.===

You know my opinion on that, but I certainly agree that things COULD go an awful lot worse than expected, maybe a 20% chance.

===The same is true for a potential financial collapse in Japan, which I view as very possible. Other nations, like Korea and even China, may well try to take advantage of our spreading ourselves too thin, so that could also be a problem.===

If Bush backs down in Iraq, as I'm predicting, I'm sure the Chinese will see that as an opportunity.

===For the upside "risks", the biggest is for continued aggressive direct intervention by the Fed/PPT/ESF, but I have serious doubts as to how effective that could be for any extended period. The unexpected overthrow/abdication/assassination of Saddam would give a sharp rally, but I think it would be short lived.===

Those two factors combined, along with the usual hope and greed, could postpone real collapse until after 2003.