David Tice, the well-known and seemingly perpetual stock-market bear, sees five years of economic pain ahead.
He even uses the dreaded “d” word -- depression.
Tice is an adviser for the $1 billion Prudent Bear Fund and for the $500 million Prudent Global Income Fund.
“Stock prices still have a long way to fall because they have not fully transmitted the problems we’re facing,” Tice said in a conference call on Thursday, after the Senate voted to pass the $700 billion Wall Street bailout.
“There will be year-over-year declines in credit extensions, and a severe recession is inevitable. And that easily could turn into a depression.”
The bailout bill, due for a second vote in the House on Friday, simply doesn’t matter, Tice contends.
“Credit will be restrictive no matter what happens with the bailout package,” he said.
“There will be a significant decline in real estate, and we believe we are only starting to see foreclosure activity.”
A recession would not be the worst news for investors, says Jim Jubak, senior markets editor for MSN Money.
“A real recession would quite likely end the current bear market in stocks, just as in 1974, when a recession arrived to put an end to a savage bear market,” Jubak writes.
“So as perverse as it may seem, I'd say to investors: ‘Cheer up. The economy is about to go into a recession, and good times are on the way.’”
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