"Hard-core pornography," said former U.S. Supreme Court Justice Potter Stewart in 1964, is hard to define but "I know it when I see it."
Same with financial pornography. You can't define it, but it is easy to spot--the prediction so raw and shocking you are left panting. In late 1999 and early 2000, when the Dow had soared above 11,000 and the Nasdaq was jetting toward 5,000, when tech IPOs were 10-bagging on no profits and scant underlying revenue, porn was all about new paradigms. It was the financial equivalent of a free love revolution, without cost to body or soul.
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Today's financial porn--Prechter's predictions of a 1,000 Dow, with everyone urged to head for the back woods, rifle in hand--is at the other end of the porn scale from those Caligulan romps of yore. Those delicious but so wrong old calls for a Dow 36,000 almost look innocent now. Today's stuff, by contrast, is pure S&M, bondage, pain and slavery. Today's pornographers--they're all men, and old ones at that--seem to love dishing it out.
Here is my list of the Top Five Financial Pornographers of 2010:
Robert Prechter, president of Elliott Wave International
Sample here and below:
The Dow ... is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash "extremely grateful for their prudence."
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