Mr. Boater

When Will the Dow Jones Reach a Bottom?

A "temporary" bottom may be found for a short while before continuing to the bottom of 4000-5000.

The next downdraft--I call it Real Estate Crash 2, will start slowly in May 2009 and continue till mid year 2012. Possible the markets will try for a bottom early 2012 in anticipation of the end of the RE collapse.

The subprime mess was caused by 615 billion in loans buried in derivatives--I am guessing about 20-25% of those loans went bad. Many of those people are trying desperately to keep their homes.

The next session will incorporate 1.1 trillion of option and interest only ARMS held by thinly capitalized speculators who got in too late and got trapped in upside down loans. They are screwed. I think over 50% of these loans and their derivatives will go bad--2009-2011 will be very bad years for the housing market, labor, and the consumer. I see gold and the Dow meeting at 4000-5000, Bonds will be crushed.