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Economists Are Bullish! Should YOU Be?

November 03, 2011 - Economists Are Bullish! Should YOU Be? - By Elliott Wave International

Please read these financial news headlines and then take a guess as to when they were published:

Fed chief predicts economy will rebound despite housing woes (NYSE:AP)

IMF predicts an energetic world economy (

Job Growth Strengthens Economy (Washington Post)

Several Signs the Economy Is Reviving (New York Times)

Did they publish this week? Last week? Last month?


These headlines published in April-July, 2007 -- right before the 2007-2009 global financial crisis crushed the world markets. This DJIA chart (courtesy: Bloomberg) makes it clear just how mismatched the economists' expectations were with reality:

DJIA Weekly

"So what," someone might say -- "The economists blew it big time in 2007, but how's that relevant today?"

This quote from the current issue of our Elliott Wave Financial Forecast explains:

"...most [economists] still say there’s less than a 50% chance of a 'recession'... In recent speeches, Fed chairman Ben Bernanke has been careful to note that he continues to think that the American economy has a bright future."


"Despite the recent market decline...the bullish bias of investors remains solidly in place. ...this condition is readily apparent in the ICI mutual fund cash-to-assets ratio, which hit a 50-year record low of 3.3% in July. The torrential selling of early August barely reversed the needle, raising the ratio to just 3.4%. 'Money Managers See Opportunities in Stocks,' says a September 29 USA Today headline. In the latest poll, 57% 'see a buying opportunity.'"

To most investors, such bullishness is reassuring. But then, most investors have very, very short memories.

You don't have to be one of them.

Our most popular risk-free subscription package, The Financial Forecast Service, puts today's market sentiment in perspective.

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