Markets can rise, but only for so long: Harrison

NEW YORK Wed Dec 9, 2009 2:45pm EST

Minyanville founder and chief executive Todd Harrison speaks at the Reuters Global Media Summit in New York December 9, 2009. REUTERS/Brendan McDermid

Minyanville founder and chief executive Todd Harrison speaks at the Reuters Global Media Summit in New York December 9, 2009.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Stocks and commodities can continue to rally for some time, but world economies must still come to grips with unsustainable debt levels before long, Minyanville Media Chief Executive Todd Harrison said on Wednesday.

"The credit markets are telling you markets can go higher ... this rally can last for a while," Harrison said at the Reuters Investment Outlook Summit in New York. However, he said while "the risk trade is back on, that, I would argue, is more bearish than bullish."

Harrison said many debt-related problems remain, and said there are three things that could trigger the next stage of what he sees as an ongoing financial crisis -- sovereign defaults, state bankruptcies, or trouble in the commercial real estate market.

Central banks and governments "saved the system," but he said he does not believe "the crisis disappeared. It simply changed shape."

Minyanville Media's flagship property is Minyanville.com, a financial news website with a number of contributors, including many professional investors across the spectrum of the markets. Harrison contributes to the site several times a day.

Harrison is also more bullish on the dollar after its prolonged period of weakness. "I think the dollar will rally," he said, in part because of "how universally hated it is."

However, he does not believe asset classes such as stocks and commodities will be able to sustain rallies if the dollar recovers.

"Be careful for what you wish for, for everyone who is saying, 'If only the dollar could strengthen,'" he said. "In this asset class, deflation versus dollar devaluation dynamic, I believe both can decline as we saw last year. But I don't foresee a scenario where both the dollar and asset classes can rise in sync."

(Editing by Jeffrey Benkoe)