Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
David Stockman, who had been budget director under President Ronald Reagan, created quite a stir when he predicted a stock market crash in an op-ed piece in The New York Times Sunday.
"Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash," Stockman, now an investment banker, wrote. "Sooner or later – within a few years, I predict – this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too."
Money Morning Chief Investment Strategist Keith Fitz-Gerald joined FOX Business Network's "Varney & Co." Monday to tell investors if Stockman's prediction is on point.
"If you look to Stockman's article … to me that's a huge contrarian signal," Fitz-Gerald said.
Check out this video to hear Fitz-Gerald on what investors should do now, what to expect from markets, and why this situation is so different from March 2009.
I love to watch the Stuart Varney show!! The "Stockman" interview in the short term is just crazy talk. In the longer term he is just explaining what we are in for. I set the traling stops on my Scott trades at 10%, my 401k may crash and burn again. why can't you have trailing stops on the company 401k holdings? The system is rigged. I can trade all my winnings out when I am scared. But thats what the rest do, and then the market rebounds and I need to wait 60 days to be able to trade the… Read more »
PREDICTIONS and TRENDS Dr. Walter Williams ( Economist, George Mason University) wrote last year that if we continue on the path we have chosen, then a financial collapse is probably unavoidable sometime in the next 10-20 years. David Stockman says we only have about three more years until it all implodes, wiping out investors large and small. Keith is correct in that nobody can time the market accurately to benefit in the short term, so he uses a technique that includes trailing stocks and conservative stock selection. I would say that the truly high net worth individuals have scaled-down their… Read more »
In the vernacular of the sage prophets of old "Watch your **** Here!" I highly respect the financial intelligence of David Stockman. I respect Jamie Dimon and his ability to have brought his firm through the 2007-2008 disaster practically whole while many pretenders, whose Banks went broke and are still in place and go on TV to tell people what to do in markets. I watch and listen carefully. I have conscientiously protected my currency for years because one only has to look at a long term chart of dollar value since the thirties to understand it's purchasing power to… Read more »