Hussman: Recession Now “Virtually Certain”

Fund manager John Hussman says a new recession — and a Greek debt default — are now “virtually certain”. In his latest market commentary, Hussman says that the markets seem to be viewing the current situation as a replay of the 2010 correction, and are holding out hope that the Federal Reserve will launch another round of “monetary intervention”, as it did when growth slowed in 2010. That won’t help matters, however, he says. “While we have to allow for the possibility of a knee-jerk speculative response in the event of further Fed intervention, it is also much clearer now […]

Hussman: It’s Still a Secular Bear

Top fund manager John Hussman remains quite bearish on the broader market, saying that investors who try to ride the market’s recent momentum are getting close to “ensur[ing] themselves maximum damage”. “We’ve certainly made our own adaptations to improve our ability to ‘go with the flow’ with a greater frequency, even in markets that appear objectively overvalued from a long-term perspective,” Hussman, who has a strong long-term track record but has missed out on much of the current rally, writes in his latest market commentary. “Still, whatever constructive opportunities there might have been in 2009 and early 2010 are now […]

Broader Outlook Gloomy, but You Can Still Make Money, Hussman Says

Fund manager John Hussman says the broader market is priced to return significantly less than its historical average for the next decade — and says the government’s huge bailout of financial firms was not, as many believe, the reason the U.S. avoided a redux of the Great Depression. In his latest commentary, Hussman lists 12 “Things I Believe”. Among them: “Based on a variety of valuation methods that have a strong historical correlation with subsequent long-term market returns, we estimate that the S&P 500 is presently priced to achieve a total return averaging just 3.6% annually over the coming decade.” […]

Hussman on Why QE2 Misses the Point

Stocks have been on the rise recently, thanks in large part to speculation that the Federal Reserve will engage in more quantitative easing to spur the economy. But fund manager John Hussman says there’s just one problem with “QE2”: It addresses issues that aren’t actually the cause of the economy’s problems. In his latest market commentary, Hussman says further easing is presumably designed to lower long-term interest rates and drive real interest rates into negative territory, which would theoretically stimulate loan demand; and to increase the supply of reserves that banks could lend. But Hussman says the current problem isn’t […]

Economy Isn’t Out of Woods, Hussman Warns

While the National Bureau of Economic Research recently declared that the so-called Great Recession ended in June of 2009, John Hussman says that doesn’t mean the economic pain is over. In his latest market commentary for Hussman Funds, Hussman says that data cited by NBER itself shows that we may already be headed back into another recession. “If we had good reason to expect positive economic tailwinds, we would be less concerned about the present deterioration” in economic indicators, Hussman says. “Unfortunately, my impression is that the bulk of the growth that we did observe coming off of the June […]