<blockquote>'..By starving investors of safe return, activist Fed policy has promoted repeated valuation bubbles, and inevitable collapses, in risky assets. On the basis of valuation measures having the strongest correlation with actual subsequent market returns, we fully expect the S&P 500 to decline by 40-55% over the completion of the current market cycle. The only uncertainty has been the triggers.
..
In 30 years as a professional investor, I’ve watched many of those dilations in real time, including those that followed the 1987, 2000 and 2007 peaks. What happens is this: as the scale dilates, investors seem to mentally cling to their experience of smaller fluctuations, so the large initial declines of a bear market are frightening, but also seem extremely enticing, because the rebounds after those initial declines also tend to be large and encouraging. That’s often why investors are lured into “buying the dip” early in a bear market. Those initial declines can end up looking quite small once the full scope of the market loss unfolds.'
- John P. Hussman,
Risk Turns Risky: Unpleasant Skew, Scale Dilation, and Broken Lines, August 24, 2015</blockquote>
Context<blockquote>
(Global Credit) - Nazism - ''Nazi-inspired' .. group becomes Sweden's most popular party..' - '..Mises as the sworn enemy of national socialism..''I have forgiven the Nazis and everyone who has hurt me.' - Eva Kor, Holocaust survivorFirst Ever Debit Card Backed by Gold in Real Time</blockquote>