Leader Capital's John Lekas Sees 4,200 On Dow By Q2 2011, Interest Rates and LIBOR Higher (CNBC Video)

Like David Tice who runs the Prudent Bear Fund, Leader Capital's John Lekas is one of the rare ones calling for a 50% decline from here on the Dow. He sees the Dow hitting 4,200-5,000 by the second quarter of 2011.  He said increasing LIBOR, interest rates and lower earnings (S&P EPS $85 to $55) will be the catalysts.  The Dow closed at 10,043 today.  In October of 2009 on CNBC, John was calling for 6,900 by the end of 2009 (which didn't pan out) and 4,200 by the end of 2011.

He even said municipalities would merge, which was interesting.  If Lekas is right, 2011 DIA or XLI out-of-the-money puts between Q2-Q3, aka collapse insurance, would make decent coin (depending on premium paid and strike risk).  If the Dow skis back to 14,000 those puts would be write offs.  Below is a CNBC video from last week featuring Lekas.  He runs a short term bond fund (LCCMX), so he probably wants you out of equities, out of long term bonds and into his fund! Which could be a decent play, we'll have to see.

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