Legendary market prophet, Gary Shilling, has issued a series of dire warnings to investors in a recent interview. Shilling predicted that stocks could crash by 30%, the US economy is heading towards a recession, and commercial real estate is on the brink of a bubble bursting. Shilling, a veteran economist known for accurately forecasting events such as the 2008 housing crash, also appeared on “The Julia La Roche Show” and predicted that the Federal Reserve will beat inflation and start cutting interest rates next year.
In a lightly edited list of Shilling’s quotes, Shilling stated that most forecasters on Wall Street are paid to be bullish, and that he believes stocks will decline about 30% to 40%. He also discussed the Federal Reserve’s late response to inflation and its current efforts to kill inflation, as well as the potential for a recession, citing indicators such as the inverted yield curve and leading economic indicators.
Shilling also reflected on the mid-2000s housing bubble and crash, where he made 20 times his money with the help of hedge fund manager, John Paulson. Finally, Shilling pointed out that he believes commercial real estate is the biggest bubble right now, particularly office buildings, hotels, and shopping malls.
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