Posted: 1/6/2009 1:41:29 PM EDT
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2009 Predictions
We think we now have enough data from both the fundamentals and technicals to make some serious forecasts and predictions for 2009. While 2008 was a nasty year when lots of things imploded, they are far from being repaired. Treasury Secretary Paulson told us this week there are no more surprises, which tells me we haven't even discovered but a small portion of this monster derivative mess. His ripping-off of the taxpayers to the tune of $700 billion is only a warm-up. However, the larger question for traders and investors is what could happen next and when. In the following report we take the key global economic points and suggest the outcome for 2009. The most important news for 2008 was the destruction of the big global banks' net worth and their badly wounded ability to conduct normal business and make market-moving loans. Ben & Hank's bailout only helped the bad-boy banks reliquify themselves to remain somewhat solvent and stay in business. They are doing nothing to extend credit to any business enhancing western or global economies. The 2009 result will be no significant banker lending, taking more bailout money and sweeping additional bad loans of all stripes under the banker's rug and hiding the rest in back rooms. The largest surprise in our view was the massive disaster at insurance giant AIG. Despite numerous injections of bailout billions, AIG remains in very serious trouble hanging on by their proverbial fingernails. The 2009 result will be a surprise crash and failure of AIG frightening the world at large causing ripples of failures throughout western and Asian nations unable to conduct business without mandatory insurance policies. Most folks have no comprehension as to the monster fallout this will create. It is in our view literally immeasurable, and this is why Paulson handed them so much money. Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery. While some of his ideas are noble indeed the overall plan will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009. We think the worst of the worst hits in later September 2009. During the spring of next year we see: (1) A second larger wave of residential housing mortgage failures; (2) The first big wave of auto loan failures and repossessions; (3) Over $40 billion in credit card defaults, smashing the bank lenders; (4) The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; (5) And finally, the grand smashing finale of Credit Default Swaps (CDS) originated with no margin money or down payments! We heard today the total is $500 trillion! I cannot even fathom that number. These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600. Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found. The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world. Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009. Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash. How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections? Unemployment nationally in the USA is now touching 16%. The officially posted number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED. SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE. WE PREDICT REAL, USA UNEMPLOYMENT REACHES 30-40%. IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC. Several European nations have larger, more established social safety nets for the unemployed. In the USA, local, regional and national authorities are not nearly as prepared. The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed. This will be a Katrina event for the hungry citizens of the United States. Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable. The last report we've seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day. We suspect the true amount of those needing food help will rise to 35,000,000 with an untold tragic number of them being little, defenseless children. Governments remain in denial and are not prepared for this national emergency whatsoever. As things worsen, food riots and others with violence aimed at the "haves' are common. The number of bank failures over the next three years will be in the thousands. In addition, the US Dollar's valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012. Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy. It is simply not working even with the dramatically lower interest rates of late. Benny Bernanke is out of rate cut running room. Consumers are broke and going broker. Households of interrelated families are doubling and tripling up even with several employed members being under one roof. Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages. In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants. The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them. We are witnessing system breakdown. Municipalities and states are sinking into a spending, debt-ridden morass. It was reported today that 22 of 50 USA states are in serious budgetary trouble. California is one of those in terrible condition and Michigan is already technically broke as are many of her cities. Detroit will file bankruptcy in 2009 and there will many other surprises as well. There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and counties to borrow ever more. The shining light through all of this is the faster we find the bottom the faster we can recover. Sadly, the recovery process will take years. Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years. We see no recovery until 2015. Roger Wiegand Editor, Trader Tracks Newsletter & The Rog Blog at WeBeatTheStreet.com |
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Quoted:
2009 Predictions ... Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery the 2010 elections. While some of his ideas are noble indeed the overall plan will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009. We think the worst of the worst hits in later September 2009. ... I don't think Democrats care about anything else. |
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a hurricane will hit the east coast
i'll be drunk between now and,,,well.... i'll still have typos i wont like kifaru next year multicam will fall outta fashion and a new uber camo will flood the market...it will be called...... "poserflauge" it will fly off the shelves, it will be so popular that walmart even sells it.... thats my 09' predictions. |
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Good Read
However it causes the question to be a raised, will we end up in a depressed economy or an inflated economy? Inclining towards inflation, the .gov is bailing out firms and printing cash like mad, which will eventually catch up with us, ie Weimar Republic Or Inclining towards depression, there is no credit, no credit cards, no home equity and job loss. There is no money for the consumers to use to jump-start the economy. I am only a junior economist, but wonder which way it is going. Rush and Beck today were saying, hyperinflation of 15%-20%-25%. However, from the little I understand, you need consumers competing for these limited goods, so add in the dynamic, consumers who cannot compete for goods? Perhaps others have insight. (edited for spelling) ;) |
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With the gov printing money like there is no tomorrow and so many states in financial trouble, how can or better yet how will the give away programs remain in existence?
I just don't or can't fathom how this country will be able to support the sorry sob's that won't work. I think that this will be a very interesting year. as a foot note the county where I live has a current unemployment rate of 12% but the county council has passed another tax increase, what the hell are they thinking? More property available for those bas***ds to scoff up for the taxes owed. This country has gotten itself in one hell of a mess. |
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Quoted:
a hurricane will hit the east coast i'll be drunk between now and,,,well.... i'll still have typos i wont like kifaru next year multicam will fall outta fashion and a new uber camo will flood the market...it will be called...... "poserflauge" it will fly off the shelves, it will be so popular that walmart even sells it.... thats my 09' predictions. Blasphemy!! Burn the witch!!  
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Hippy bashing will continue.....
recomendations for taurus will continue to make me nautious..... Waldo will never buy another glock....... I'll continue to have an eternal conflict between 1911's and glock.... Halffast will entertain me with his writing..... I'll entertain a few with stories from a life that resembles a drunken poets dream I'll stop aging in 10 days 
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I'm thinking more along the lines that the
sun is going to continue to rise in the east and set in the west; water is going to still be wet, grass greeen, fire hot and winds still blow; Oklahoma is going to have some storms and tornados; tax payers are going to continue to bail out private industry; lots of people are going to be unemployed. and lots of other things are going to happen this year. 
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What I got out of this thread so far is that a lot of folks have no frigging clue about this economy.
Drive thru the St Louis-Kansas City- Denver I-70 corridor and look at the empty buildings with for lease signs. Not "For Sale" signs because the owners don't have a frigging clue what's coming because most have no understanding about economics except for their own little world. Just like here. Get off the interstate and go into an office park or an industrial park. It absolutely makes me want to cry to see the empty spaces and all the lost jobs and likely suffering by folks who don't work there any more. Go to Sacramento and look at the vacancies in the R&D/light industrial parks. Can you say Depression? About a year and a half ago I started cautioning about what was to come and was met with the same goofy responses [well a LOT more then] that you see in similar topics to this one. Slowly, one by one, people are coming to realize things aren't right but I guess they some take comfort in joking and not facing the reality that is now just around the corner ready to bite them. |
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Quoted:
What I got out of this thread so far is that a lot of folks have no frigging clue about this economy. Drive thru the St Louis-Kansas City- Denver I-70 corridor and look at the empty buildings with for lease signs. Not "For Sale" signs because the owners don't have a frigging clue what's coming because most have no understanding about economics except for their own little world. Just like here. Get off the interstate and go into an office park or an industrial park. It absolutely makes me want to cry to see the empty spaces and all the lost jobs and likely suffering by folks who don't work there any more. Go to Sacramento and look at the vacancies in the R&D/light industrial parks. Can you say Depression? About a year and a half ago I started cautioning about what was to come and was met with the same goofy responses [well a LOT more then] that you see in similar topics to this one. Slowly, one by one, people are coming to realize things aren't right but I guess they some take comfort in joking and not facing the reality that is now just around the corner ready to bite them. Most people here know what we are facing, but if you face it without a sence of humor you will be one of the folks taking a header off a tall building  so lighten up a bit
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Quoted:
What I got out of this thread so far is that a lot of folks have no frigging clue about this economy. Drive thru the St Louis-Kansas City- Denver I-70 corridor and look at the empty buildings with for lease signs. Not "For Sale" signs because the owners don't have a frigging clue what's coming because most have no understanding about economics except for their own little world. Just like here. Get off the interstate and go into an office park or an industrial park. It absolutely makes me want to cry to see the empty spaces and all the lost jobs and likely suffering by folks who don't work there any more. Go to Sacramento and look at the vacancies in the R&D/light industrial parks. Can you say Depression? About a year and a half ago I started cautioning about what was to come and was met with the same goofy responses [well a LOT more then] that you see in similar topics to this one. Slowly, one by one, people are coming to realize things aren't right but I guess they some take comfort in joking and not facing the reality that is now just around the corner ready to bite them. Yup. One of my coworkers took his kids on a little road trip across the U.S. last summer. When he came back and told us all about his trip he said the main thing that really stood out was all the vacant commercial properties in all the strip malls and business parks that he passed during the trip. It seems to me that most of the dire predictions that I've been hearing for several years have been coming true. I remember Warren Buffet warning five or six years ago that all the debt we were building up was leading to a catastrophe and that anyone who was smart should be adding gold to their portfolio. Peter Schiff (Dr. Doom) predicted the 2008 meltdown accurately. At every step of the way there have been numerous Polyannas and arfcom "expert" economists who have poo pooed all these warnings, but the doom sayers pretty much always seem to hit the nail on the head. I wouldn't bet against the OP in the above post. |
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Quoted:
Quoted:
What I got out of this thread so far is that a lot of folks have no frigging clue about this economy. Drive thru the St Louis-Kansas City- Denver I-70 corridor and look at the empty buildings with for lease signs. Not "For Sale" signs because the owners don't have a frigging clue what's coming because most have no understanding about economics except for their own little world. Just like here. Get off the interstate and go into an office park or an industrial park. It absolutely makes me want to cry to see the empty spaces and all the lost jobs and likely suffering by folks who don't work there any more. Go to Sacramento and look at the vacancies in the R&D/light industrial parks. Can you say Depression? About a year and a half ago I started cautioning about what was to come and was met with the same goofy responses [well a LOT more then] that you see in similar topics to this one. Slowly, one by one, people are coming to realize things aren't right but I guess they some take comfort in joking and not facing the reality that is now just around the corner ready to bite them. Most people here know what we are facing, but if you face it without a sence of humor you will be one of the folks taking a header off a tall building so lighten up a bit
Well, slap me silly and call me Sally, that's some good advice! 
Making a note now to stay away from tall buildings if the SHTF. 
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Quoted:
Quoted:
What I got out of this thread so far is that a lot of folks have no frigging clue about this economy. Drive thru the St Louis-Kansas City- Denver I-70 corridor and look at the empty buildings with for lease signs. Not "For Sale" signs because the owners don't have a frigging clue what's coming because most have no understanding about economics except for their own little world. Just like here. Get off the interstate and go into an office park or an industrial park. It absolutely makes me want to cry to see the empty spaces and all the lost jobs and likely suffering by folks who don't work there any more. Go to Sacramento and look at the vacancies in the R&D/light industrial parks. Can you say Depression? About a year and a half ago I started cautioning about what was to come and was met with the same goofy responses [well a LOT more then] that you see in similar topics to this one. Slowly, one by one, people are coming to realize things aren't right but I guess they some take comfort in joking and not facing the reality that is now just around the corner ready to bite them. Yup. One of my coworkers took his kids on a little road trip across the U.S. last summer. When he came back and told us all about his trip he said the main thing that really stood out was all the vacant commercial properties in all the strip malls and business parks that he passed during the trip. It seems to me that most of the dire predictions that I've been hearing for several years have been coming true. I remember Warren Buffet warning five or six years ago that all the debt we were building up was leading to a catastrophe and that anyone who was smart should be adding gold to their portfolio. Peter Schiff (Dr. Doom) predicted the 2008 meltdown accurately. At every step of the way there have been numerous Polyannas and arfcom "expert" economists who have poo pooed all these warnings, but the doom sayers pretty much always seem to hit the nail on the head. I wouldn't bet against the OP in the above post. Heading over today to a large city we haven't been to since last Spring to pick up a new SUV [prices are great, got to love "depressions" ––at first  ]. Will be interesting to see if there's a change in real estate sign 'population'. Will update.
And to cheer up everyone's day, here's an interesting site to track layoffs: http://www.layoffdaily.com/ |