That’s A. Gary Shilling, longtime economist and president of A. Gary Shilling & Co., again delivering a gloomy take on what’s next in a…
“Stocks are [behaving] very much like that rebound in 1929 where there is absolute conviction that the virus will be under control and that massive monetary and fiscal stimuli will reinvigorate the economy,” he said, adding that the market could drop as much as 40% over the next year.
So where should investors park their cash in this climate?
“I think we’re going to see downward pressure on prices and that works to the advantage of Treasury bonds, which have been my favorite since 1981,” he said.
Shilling laid out his prediction in more detail earlier this year, explaining in a Bloomberg News op-ed that while many economists are looking for a V-shaped, or quick, rebound to deliver a sharp recovery in the second half of the year, he remains much more skeptical.
“This pandemic is likely to be the most disruptive financial and social event since World War II with equally long-lasting consequences,” Shilling wrote, citing the stark unemployment numbers at the time. “Many will no doubt restrain spending in future years to rebuild savings, especially since the crisis caught them at a time of high debts and short financial reserves.”
No sign of a…
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