LONE BEAR LETTER #14

WHAT STARTS A BEAR MARKET?

I have been writing about a new Bear Market, since the Dow broke above 18,000. Yes I was wrong and maybe I am still wrong. However, all the negatives I have seen since Bear Market Letter # 1 are more prevalent now than ever. I have consistently been saying, that I don’t know what will start a Bear Market, but when it comes it will be one of the worst in our history. Now with the coronavirus, our economic weakness will be exposed. What is worse, is that we have used all our ‘bullets’ to prop up the economy. The Federal Reserve and the federal government cannot use the normal monetary and fiscal stimulus to offset a recession, because interest rates are already low, taxes have already been cut, the annual budget is already at a 1.5 trillion dollar deficit and unemployment is at record lows.

Rather than repeating myself about the problems, look at my previous ‘Posts’ about the corporate debt bubble,’ problems in China, lower GDP forecasts at 2% etc. and all the ‘Pages’ Lone Bear Letters 1-13, Downside Projections, etc.  All can still apply, only worse.  Because the markets went so high for 10 years without a correction, the current correction, I believe, will be devastating.

Remember ‘Don’t grab a falling knife.’  Hopefully there will be a lot of rallies. Use them to sell and go short. First objective 22,500!

Carl M Birkelbach

2/25/2020

Dow 27,128

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com