Pfeil: October Market Crash Likely

Thursday, July 9, 2009 8:11 AM

By: Julie Crawshaw

Global stock markets could crash in October, said economist and investor Enzio von Pfeil, CEO of EconomicClock.com.

The primary reason for the crash will be that proprietary trading desks will decide to go short because the economic recovery will still be missing in action.

"People will finally accept that the unemployment rates will have to keep rising, that productivity will have to keep falling," Pfeil told CNBC.

“That in turn will make earnings expectations fall through the floor," with Western markets more affected than those in Asia, he said.

The big proprietary trading desks have been making money on a bull run, Pfeil said, but adds that "the only thing that is going to be out there is to have major, major short positions.â€