Gary Shilling has often been way ahead of the crowd in forecasting some of the recent significant trends in the economy and stocks.  In the late 1990s, he predicted the demise of Internet stocks leading to a U.S. and global recession.  He made these forecasts at a time when the U.S. economy was booming and the stock market was soaring.  In November 2000, he forecast that the Dow would eventually drop below 8000, the Nasdaq would lose 70% to 80% of its value and the S&P 500 would be cut in half.  The 2000-2002 bear market dropped the Dow 35%, the Nasdaq, 78% and the S&P 500, 49%. And, of course, Gary was nearly alone for several years in recognizing the looming meltdown in housing, led by troubled subprime mortgages. 

When it came to the housing collapse, Gary Shilling told you so. Everyone else just told you what they wanted to hear.
July 2002 Insight: Housing "has taken on self-feeding, bubble dimensions that will sooner or later collapse."

January 2004 Insight: "When house prices return to earth—and price declines of 20% in the U.S. and 30% elsewhere are warranted—the effects on the global economy will be serious.... Subprime loans are probably the greatest financial problem facing the nation in the years ahead."

June 2004 Insight: "Housing is the most vulnerable segment of the economy."

July 2005 Insight: "Signs of a peak in housing are significant and growing.....extreme speculation and excessive investment may finally sink the housing ship."

September 2005 Insight: "The housing bubble, more inflated now than early this year, is even more likely to burst."

December 2005 Insight: "Evidence that the housing balloon is leaking lots of air is legion."

January 2006 Insight: "Evidence of the housing bubble’s demise is mounting." A 20% decline in prices nationwide "is not a wild forecast, and may be optimistic." "The subprime mortgage market, into which many lenders have rushed as they strain for yields, is showing signs of strain." "A severe housing bust will be detrimental to the earnings and stocks prices of homebuilders, building materials producers, mortgage and subprime lenders and related entities like Fannie Mae and Freddie Mac."

June 2006 Insight: "The speculative housing bubble is beginning to crash from its own excesses, similar to stocks in the early 2000s. The bubble’s break will cause widespread pain...and be much worse economically than the 2000-2002 bear market."

September 2006 Insight: "especially hard hit by falling house prices will be the subprime borrowers."

November 2006 Insight: "We continue to forecast a 25% fall in median single-family house prices nationwide."

January 2007 Insight: The bubble "appears big enough and the speculative overhang so large that sellers won’t be able to wait out the weakness, and a major price drop is likely." "Trouble in subprime mortgage land may well spread to many other areas whose inherent riskiness is suddenly unmasked," such as commercial real estate, real estate mutual funds, junk bonds and private equity.

February 2007 Insight: Investors and hedge funds who bought CDOs "will be shocked! shocked! over their losses."

April 2007 Insight: "Those who hoped the plague would be confined to subprime mortgages are being disappointed."

May 2007 Insight: The misery "will spread not only as mortgage rates reset as house prices fall, but also as lenders tighten credit standards and rating agencies belatedly wake up to reality."

July 2007 Insight: In this report, written a few days after news broke that Bear Stearns had to bail out two of its subprime debt-laden hedge funds, Gary predicted big trouble for speculative areas propelled by ample global liquidity—in other words, a credit crunch. "The biggest jolt from the Bear Bust is the realization that CDOs and other derivatives are illiquid, trade infrequently and therefore are not easily subject to market-determined prices."

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President of A. Gary Shilling & Co., Dr. Shilling is well known for his forecasting record.   A poll  conducted by Institutional Investor magazine twice ranked him as Wall Street's top economist. Dr. Shilling has been a Forbes columnist since 1983,  and his articles have appeared in The Wall Street Journal, The New York Times , and other well known publications.   He appears weekly on CNBC's "Kudlow & Company."

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*His Investment Recommendations for 2008

*What a U.S. recession will mean for the global economy...

*...and stocks, both U.S. and overseas 

*What about the dollar?  U.S. Treasurys? 

These and other issues were explored in recent issues of INSIGHT , a unique planning tool to help you formulate a successful strategy for your business and your investment portfolio. 

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And when you order a one-year subscription to Insight, you will receive a free copy of A. Gary Shilling's recent book, Deflation, in which he forecasts the demise of the Internet bubble and the resulting bear market in tech stocks.  Gary also examines 14 deflationary forces and advises investors, businesses and consumers how to thrive in the deflationary years ahead. More.
 

A. Gary Shilling & Co. manages assets for individual and institutional clients. The firm's investment strategy is based on the themes that are developed by our economic, political, and financial market research. 

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A number of leading corporations and institutional investors rely on A. Gary Shilling & Co. for economic consultation.  Our typical client has a personal, in-depth relationship with Dr. Shilling at the senior management level and a deep interest in major economic and financial themes that affect its portfolios or business in the long and short runs. Clients have direct access to Dr. Shilling and our staff, and normally receive two to four visits in their offices from him each year. 

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