A bearish view

Following a detailed analysis of the current situation, Dr. Hussman concludes:

"The evidence suggests that the worst of the credit problems are still well ahead."

"It would be naïve to accept that the amount of writeoffs taken to-date is anything close to what will be required – they are not even keeping pace with the accelerating pace of non-current loans. Financial companies should, and most probably will, get to the task of preserving capital, cutting dividends further, and raising new funds in the not-distant future. The markets probably will not like this, because it will be an admission that credit conditions are still deteriorating (http://www.hussmanfunds.com)."

In other words: there is more to come and a defensive investment strategy should be seriously considered at this time.

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977