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Obama to Change His Tune: Get Ready For A Second Stimulus, Shilling Says

Posted Jul 15, 2009 12:37pm EDT by Peter Gorenstein in Investing, Recession
Related: ^dji, ^GSPC, QQQQ, ^tyx, ^tnx

There was a great clamor last week for a second Federal stimulus - because the first one wasn't working. President Obama threw cold water on that idea over the weekend, when he rejected calls for a second stimulus and suggested that we need to be patient and give the first stimulus time to work.

Well, President Obama will soon be changing his tune, says our guest Gary Shilling.

By the third or fourth quarter, Gary says, the government will launch a second stimulus. Next year is an election year, and despite ballooning deficits, politicians won't sit idly by and watch themselves not get re-elected because the economy has failed to recover.

The second stimulus will finally trigger an economic recovery...but it won't happen until next year.

In the meantime, Gary thinks, the stock market will crash again, with the S&P dropping 35% to 600.

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