2009 Predictions

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Aardvarks in Alaska.

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What are your thought on what 2009 has in store for us?  International, national, state, county or city... doesn't matter.

A few predictions from no one important:

• Stock market will go down (again) once everyone realizes the economy won't recover in 2Q09 like the experts predict.  (Same experts who predicted in 2007 that "all will be well, no recession" for 2008.)
• Economy will continue to search for bottom.  We have to cut 10-20% (estimates vary) off GDP to account for growth due to too much credit.
• Unemployment will flirt between 10-13%.  (Experts claim max. 8%)  What unemployment figures don't say is how many are involuntarily working part-time or are seeing increase in employers reducing benefits.
• Hints of Deflation for a bit, then INFLATION will slam us.  Will the US consumer recover?
• Berwyn elections?!  Don't know enough to comment.

Have a great New Year folks!

It's not even year end already met the unemployment prediction.  Although, this prediction was reached earlier in the year but the current administration under counted using "birth/death rate" to prop up the number.

Little celebration since so many of our countrymen suffering for the sins of others.

You were pretty darn on the money for 2009.  Any predictions for the remaining 4th quarter?

It is a little harder to pinpoint what will happen in 4Q... there is a chance things will stay the same, or drop.  I know some people are forecasting a surprise jump in stock prices but I just don't see any positive change in fundamentals to justify it.

I'm betting my money on the following... Jan-Feb, companies will give out their 4Q results but more importantly, pontificate their 2010 earnings guidance.  Things could go very well or very bad, if companies don't meet Wall Street expectations.  Corporate executives, whose very jobs depend on giving accurate earning forecasts are a better gauge on the economy than bureaucrats who only gain from lying to the people.

If things do go south, it won't be so much a decline in fundamentals rather than overly optimistic expectations.  Also, even though the market dropped 30-40% in value, the lowest point weren't actually bargain prices.  PE ratio of 12 is a good value but not exactly fire sale prices that you see in a downturn (ditto for home prices).  Stocks are now going for 25 PE ratio... not overpriced but no cheap.  We have a lot of unknowns in potential tax increases, federal deficits, world's reaction to dropping dollar and job losses.

What people forget is Obama's 2010 budget foretasted a 4% GDP growth... if we don't see that growth, our budget deficit will reach nose bleed levels.  Remember the bank stress tests?  Those tests assumed a worst case scenario of unemployment at ~8% in 2009 and ~10% in 2010.  What happens to the viability of the banks now?

With that said, there are some sectors that just might be worth getting into regardless of the current price... oil, natural gas and alternative energy are just too good to pass up! :-)