Filed under: Forecasts, Consumer experience, Economic data, Housing, Recession
George Soros, the billionaire money manager, claims to be old and wise, and able to guess the market’s turns better than most. Given the compensation he has collected on Wall Street over his lifetime, it is hard to quarrel with that.
Soros, who still manages several hedge funds, says that the U.S. is in a “bear market rally,” according to The Wall Street Journal. Like many pundits, he stakes his claim primarily on the American housing market. If home prices keep up their sharp decline, how, he reasons, can the rest of the economy do well?
He may have a point. Much of what economists have said recently is based on a recession being avoided because consumer spending has slowed but not halted. People are still going to Wal-Mart (NYSE: WMT). Thank goodness for that.
But Soros and his intellectual allies look at a housing market that will continue to decline into 2009 and say that this must force a deeper and deeper downturn.
No one wants to believe Soros. The thought is too grim. But the logic is hard to dispute.
Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.
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