View Full Version : What the Bear Market Has in Store ?

12-01-2008, 05:01 PM
What the Bear Market Has in Store, Part 3
Read Bob Prechter's Forecasts in Finance, the Economy, Politics and Social Trends
By Susan C. Walker

Fri, 28 Nov 2008 15:15:00 ET

The developing bear market reflects and chronicles a social mood that has changed from positive to negative. Five years ago, Bob Prechter wrote down 100 forecasts for what would happen in the world around us as collective psychology turned from positive and bullish to negative and bearish.

He based his predictions on the Wave Principle, which views the markets and the social mood that guides them as part of a constant pattern of five waves up and three waves down.

This post includes the final one-third of his predictions that cover finance, the economy, politics and social trends, which he published in 2003 in his Elliott Wave Theorist. If you missed the previous two posts, please look for Part 1 here (http://www.elliottwave.com/freeupdates/archives/2008/11/21/Look-Ahead-to-What-the-Bear-Market-Portends.aspx) and Part 2 here. (http://www.elliottwave.com/freeupdates/archives/2008/11/26/What-the-Bear-Market-Has-in-Store-Part-2.aspx)

In classic Greek literature and mythology, the Trojan princess, Cassandra, the sister of Paris and Hector, was given a terrible gift by her spurned lover, the god Apollo. He made her able to foretell the future but cursed her so that no one would believe her.

Bob Prechter has experienced what it's like to feel like Cassandra. But now is the time to catch up with his predictions and realize how many of them seem to be playing out in current events. It begs the question: How many more will happen as he forecast?

- Market timing will come to be viewed as the best approach to investing in stocks, although investing in stocks in the first place will be considered foolhardy. “Buy and hold” will be denounced as a flawed and foolish approach to the stock market.

- The demographic argument for a continued boom fueled by baby boomer spending and retirement savings will be transformed (somewhere near the bottom of the decline) into an argument that the same portion of the population will be responsible for a continued bust.

- Many of the governments and corporate entities that have been bailed out by the U.S. government and the IMF over the course of the last 34 years will fail again, along with new ones. The IMF, World Bank, the Fed and other financing entities will not bail them out.

- The IMF, World Bank and the United Nations will be shut down.:lol:

- Existing high-yield “junk” bonds will fall to zero, and new ones will no longer be issued.

- After a period of exclusively derisive and negative popular allusions to the stock market, references to stocks in non-financial settings will become all but non-existent.

- Countless difficulties attending the above events will occur.

- Bearish speculators will make a lot of money, and safety-minded investors will see their purchasing power rise.

The Economy
- Affordable housing will become difficult to come by. Family members will move in with each other. Homelessness will increase.

- China will have a severe economic setback along with the rest of the world, but it will be a “wave 2,” from which the country will emerge as the economic leader of the world.

- Suspicion or hatred of foreigners will increase around the globe.

- Nations will tend away from liberal, representative governments and toward dictatorships.:eek:

- The Drug War will turn more violent. Eventually, possession and sale of recreational drugs will be decriminalized.

- Government will ration goods and services in which it is or becomes involved (such as gasoline, vaccines, medical care, electricity, water, food, etc.).

- International travel will be restricted, whether by statute or dangerous conditions.

- The U.S. and state governments will finish their takeover and demolition of the medical industry.

- Third parties will gain political clout and win local elections. Libertarians, greens and others will capture many local offices and probably at least one state government.

- At least one of the two major parties will disappear or re-form.

Other Social Trends
- Areas of cities will become dangerous places in which street gangs “rule” some neighborhoods.

- The number of Broadway shows will fall dramatically.

- Disney will close its NYC theater productions, and Times Square will become X-rated again.

- Well-off people will adopt fashions that conceal rather than accentuate their wealth.

- Gangsters, pirates and other outlaws will become popular folk heroes.

- Entertainment media will feature fewer heroes and more anti-heroes.

- The Olympic Games will be cancelled at least once, if not terminated altogether.

- Organized labor will grow and become more active. The number and severity of strikes will rise.

- Many amusement parks will close.

- The number of coffee shops in the United States will decline substantially.

- Per capita consumption of alcohol and other depressants will increase.

- Public art, such as sculptures and murals, will become ponderous and ugly.

- One or more of the sciences will go through a “paradigm shift.”

- Terrible secret activities that we could not even imagine will take place, some to be revealed only years or decades later. (It was revealed decades later that the U.S. government – allegedly for the greater good – conducted syphilis experiments on citizens beginning in 1932, the year that the Supercycle wave (IV) bear market bottomed. It was revealed only last week [October 2003] that from 1939 to 1941, in the final years of the Cycle wave II bear market, Nazi Germany – allegedly for the greater good – systematically killed hospital patients to unburden the state and “cleanse the gene pool.”)