While many fund managers are celebrating the Dow Jones Industrial Average topping the 12,000 mark, David Tice, manager of the $682 million Prudent Bear Fund is sounding alarms, Forbes.com reports.
Tice points to the nation’s $70 billion deficit and falling real estate values. “I believe the credit expansion will end in tears,” Tice says, noting that many homeowners now have inflated mortgages. And those with adjustable-rate mortgages who are now being hit with rising interest rates face the potential for foreclosures.
If that happens, Tice says, the nation will fall into a deep and prolonged recession.
Sectors he is currently bearish on include technology stocks. Tice says the Nasdaq’s recent gains are unjustified and that the earnings growth of technology companies is likely to decline.
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