HARRY DENT OF HS DENT ON NIGHTLY BUSINESS REPORT, BEARISH ON THE ECONOMY 29DEZ11

A very sobering outlook for 2012 from a guest on the PBS Nightly Business Report....I hope he is wrong.
GHARIB:   Our guest tonight is bearish on the U.S. economy and the
stock market for 2012 and he`s predicting a recession in the New Year. He`s
Harry Dent, president of HS Dent.  That`s an economic research firm. And
he`s author of the new book, "The Great Crash Ahead."  Harry, welcome to
NIGHTLY BUSINESS REPORT.  Nice to have you with us.

HARRY DENT, PRESIDENT, HS DENT:  Nice to be here.

GHARIB:   So you heard our report. There are some economic statistics
that have been improving but I take it you don`t buy that?   Why are you so
bearish?

DENT:  We look at demographics that really predict consumer trends
before they happen and not afterwards and the story has been baby boomers
would continue to spend more money in 2007 -- which they did -- they would
start to plateau in their spending, start to slow, 2008 and 11 but 2012 on
we entered a declining phase as peoples` kids are getting out of their nest
and they`re saving for retirement.  So this stimulus is not going to keep
the economy going and it`s already been struggling thus far. So, yeah, we
see, by the second quarter of 2012, the economy is going to slow again and
the stimulus back from QE2, which ended in June of 2011 is going to wear
off and we`re going to be back down to zero growth or lower.

GHARIB:   Would any kind of new stimulus from the Federal Reserve in
the New Year help?  A lot of investors on Wall Street are counting on that
to happen. Will it make a difference?

DENT:  It makes a difference immediately for the stock market. Stock
market here in QE3, they`re going to go up.   But the economy feels it
about eight to 10 months later if you look back at the past.  So if the Fed
does stimulate, let`s say in the second quarter, I think it will be that
long because the economy is stronger as we expected here, it will be too
late because it won`t hit until the end of the year after the election. So
I think the Fed is kind of trapped here. Europe is breaking down, moving
into recession. The Fed has been on hold on stimulus for now six months,
probably another two to three months. I think it could be too late by the
time they finally react.

GHARIB:   So what`s going to turn this around because you`re talking
about baby boomer demographics and a change in buying and spending habits.
That`s a real long-term trend so what can reverse this negative trajectory
that you`re talking about?

DENT:  You`re right, Susie, it is a long-term trend. We`re talking
2012 to 2020, trends slowing down an economy no matter what the Fed does.
One thing the government can do is to help restructure, encourage banks.
They only get assistance if they write down mortgages and business debt. We
have $42 trillion in private debt, three times the public debt, which most
people aren`t aware of.  If they write down that debt and get rewarded for
that, it would take a trillion, trillion and a half a year alone off of
consumers and business and that would free up purchasing power at a time
when demographics trends say we`re going to slow otherwise.

GHARIB:   Harry, let`s move on and talk about the stock market because
you`re also bearish about the outlook for 2012.  Tell us why.

DENT:  We`ve been seeing a Santa Claus rally coming here in late
December, maybe early January. We think we`re near the end of that and that
basically stocks are getting ready to crash again, like they did in late
2008, early 2009. Remember, last time we had a crash, there was a first
downturn, early 2008, a bounce, and then it fell apart. I think between
January and the summer, high chances of another stock crash. So investors
need to get out of the way, out of all the risky assets -- commodities,
gold, silver, stocks, here and around the world -- and get in the safest
investments you can.

GHARIB:   Let me get your definition of a crash over the first six
months of the year.  How bad are things going to get?   What do you mean by
that?

DENT:  I think this is going to take another couple of years. But I
think in 2012, we could see it worse, that we retest the lows in early
2009. So that`s like 6440 on the Dow. That`s a big downturn. It may not be
that low if the government reacts sooner than later. But I do think that if
we see growth collapse again, the market`s going to lose faith. And again,
Europe is already moving into recession. Banks are dumping more
foreclosures on the market because they`re in trouble and that`s not
keeping home prices down. Again, I think you`re talking a 30, 40, 50
percent downside in the next year. This is not something to sit through.

GHARIB:   That`s a very provocative forecast. We appreciate you coming
on the program. You`ve given us a lot to think about. Thanks so much,
Harry. Happy New Year to you. We`ve been talking with Harry Dent.  He`s
economist and author of "The Great Crash Ahead."