A legendary market forecaster has predicted that the S&P 500 could fall 30%, that a US recession may already be underway, and that the Federal Reserve is unlikely to reduce interest rates before the summer.
In late December, Gary Shilling, the inaugural chief economist of Merrill Lynch prior to establishing his own consulting firm more than four decades ago, provided a pessimistic forecast during a Rosenberg Research webcast. He issued a dire forecast regarding company earnings, prioritized government debt over bullion, and anticipated a surge in layoffs in the coming months.
Previous decades have been marked by a number of accurate predictions by Shilling, but in recent years, the economy and financial markets have disproved his pessimistic forecasts. Here are ten of his finest webcast quotations, edited slightly for clarity and length:
1. “I think we still can have a 25% or 30% decline in the S&P.”
(Pressure on corporate profits and the delayed effects of interest rate hikes by the Federal Reserve threaten to drive the benchmark US stock index to its lowest level since the fall of 2020, or 3,300 points, according to Shilling.)
2. “I have a preference for Treasury securities. Their credit is essentially the best in the globe. One should consider purchasing gold ingots, an AK-47, and a cave if they are concerned about the federal government insolvency.
3. “Gold has simply never piqued my interest.” Numerous factors influence its price, including mining operations, political risk, inflation, deflation, and the actions of central banks, among others. Frequently, these forces must essentially nullify one another.
4. “I believe we are currently experiencing a recession.” NBER will delay until they have received all the data, revisions, and other necessary components. “By the time they contact you, it is essentially a pocket in your underwear.”
