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Hussman - Economic Downturn To Continue; Stocks Overvalued

By Implode-Explode Heavy Industries

``Based on the data that we've observed in recent months, my view remains that a fresh downturn in the economy remains a not only a possibility but a likelihood. Little of the economic improvement we've observed since 2009 appears intrinsic, but instead appears driven by enormous government interventions that are now trailing off... At a Shiller P/E of 21 and a historical peak-to-peak S&P 500 earnings growth rate of 6%, a simple reversion to the historical (non-bubble) Shiller norm of 14 would require seven years of earnings growth and yet zero growth in prices. Stocks are not cheap here.''

Full post as published by Mortgage Lender Implode-o-Meter on October 06, 2010 (boomark / email).