Money manager, economist and AdvisorOne contributor Gary Shilling is out with another bold prediction, one that might have legs. Shilling spoke about the outlook for the U.S. economy with Bloomberg Television Wednesday and said that the S&P 500 will drop 43% from its recent level this year.
Shilling said, “the analysts have been cranking their numbers down […]. I think that is true because you have foreign earnings that don’t look good because of recession unfolding in Europe, a stronger dollar, […] and a hard landing in China.”
Shilling, (left), also said that, “in the U.S., we could see a moderate recession led by consumer retrenchment.”
For those who might think the prediction is a bit too outlandish, consider that the World Trade Organization announced Thursday that global trade will slow to 3.7% in 2012, after 5% growth in 2011 and 13.8% in 2010.
“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile,” WTO chief Pascal Lamy said, in words that made Shilling sound positively bullish. “The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods.”
Shilling on his report that the S&P will drop 43% from its recent level: