Favorite 2010 Forecasts

[skidder]

It's that time of the year again so I thought I'd start a thread on any good forecasts that have been read by the "gang". Here is one from Jim Kuntsler that I found entertaining. Regardless of your opinion of him, he can sure turn a phrase.

http://www.lifeaftertheoilcrash.net/...lysis2010.html

Here's a favorite excerpt:

".........
One wild card is how angry the American people might get. Unlike the 1930s, we are no longer a nation who call each other "Mister" and "Ma'am," where even the down-and-out wear neckties and speak a discernible variant of regular English, where hoboes say "thank you," and where, in short, there is something like a common culture of shared values. We're a nation of thugs and louts with flames tattooed on our necks, who call each other "motherfucker" and are skilled only in playing video games based on mass murder. The masses of Roosevelt's time were coming off decades of programmed, regimented work, where people showed up in well-run factories and schools and pretty much behaved themselves. In my view, that's one of the reasons that the US didn't explode in political violence during the Great Depression of the 1930s - the discipline and fortitude of the citizenry. The sheer weight of demoralization now is so titanic that it is very hard to imagine the people of the USA pulling together for anything beyond the most superficial ceremonies - placing teddy bears on a crash site. And forget about discipline and fortitude in a nation of ADD victims and self-esteem seekers......."

[don]

Re: Favorite 2010 Forecasts

It's that time of the year again so I thought I'd start a thread on any good forecasts that have been read by the "gang". Here is one from Jim Kuntsler that I found entertaining. Regardless of your opinion of him, he can sure turn a phrase.

http://www.lifeaftertheoilcrash.net/...lysis2010.html

Here's a favorite excerpt:

".........
One wild card is how angry the American people might get. Unlike the 1930s, we are no longer a nation who call each other "Mister" and "Ma'am," where even the down-and-out wear neckties and speak a discernible variant of regular English, where hoboes say "thank you," and where, in short, there is something like a common culture of shared values. We're a nation of thugs and louts with flames tattooed on our necks, who call each other "motherfucker" and are skilled only in playing video games based on mass murder. The masses of Roosevelt's time were coming off decades of programmed, regimented work, where people showed up in well-run factories and schools and pretty much behaved themselves. In my view, that's one of the reasons that the US didn't explode in political violence during the Great Depression of the 1930s - the discipline and fortitude of the citizenry. The sheer weight of demoralization now is so titanic that it is very hard to imagine the people of the USA pulling together for anything beyond the most superficial ceremonies - placing teddy bears on a crash site. And forget about discipline and fortitude in a nation of ADD victims and self-esteem seekers......."

I enjoy Kunstler's turn of phrase and his passion as well. He can be misleading in citing '30's behavior, however. It was not a time of hands folded on the desk behavior. Americans sense of shared class interests were much stronger- brought on by both the workplace and a less effective general brainwashing/obfuscation we have today. Longshoremen led a bloody General Strike in SF, numerous factories were seized and occupied by organizing workers. Other bon-bons included the American Bund, US industrialists supporting Mr. Hitler's little project in Germany, organized crime antics that included throwing dynamite at rival cabbies in Chicago. (murders averaged 1 a day in Chi-town) Nostalgia has its place but not as a reliable gauge of our future. Better to look at the facts, and the lessons they hold.

[ggirod]

Re: Favorite 2010 Forecasts

Though not a forecast, Kunstler's statement of the problem is most clear.

I begin by restating my central theme of recent months: that we're doing a poor job of constructing a coherent consensus about what is happening to us and what we are going to do about it.

There is a great clamor for "solutions" out there. I've noticed that what's being clamored for is a set of rescue remedies - miracles even - that will allow us to keep living exactly the way we're accustomed to in the USA, with all the trappings of comfort and convenience now taken as entitlements. I don't believe that this will be remotely possible, so I avoid the term "solutions" entirely and suggest that we speak instead of "intelligent responses" to our changing circumstances. This implies that our well-being depends on our own behavior and the choices that we make, not on the lucky arrival of just-in-time miracles. It is an active stance, not a passive one. What will we do?

The great muddlement out there, this inability to form a coherent consensus about what's happening, is especially frightening when, as is the case today, even the intelligent elites appear clueless or patently dishonest, in any case unreliable, in their relations with reality.....

The problem is that we are all running around proposing solutions when we have no clear statement of the problem we are trying to solve. IMHO, when we, as people in Douglas Adams' books ask for the answer to life, the universe, and everything, we probably shouldn't be surprised when the answer, 42, is less than fully satisfying. I fear that quick hit solutions to problems as yet unspecified or unstated will make the situation much worse in the name of desperately trying to do something. Once you take the medicine you commit to side effects that can be worse than the disease.

[cjppjc]

Re: Favorite 2010 Forecasts

A few here were dismissed as crazy with those kinds of thoughts.;)

[raja]

Re: Favorite 2010 Forecasts

Past performance does not guarantee future results.

[doom&gloom]

Re: Favorite 2010 Forecasts

Sprott weighs in with an EJ thesis..

http://www.bloomberg.com/apps/news?p...d=aa85k1XdhVlg

Sprott Says S&P 500 Index Will Plunge Below March Low (Update3)
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By Matt Walcoff


Dec. 29 (Bloomberg) -- The Standard & Poor’s 500 Index will collapse below its March lows as an expected rebound in economic growth fails to materialize, according to hedge fund manager Eric Sprott.
The Toronto-based money manager, whose Sprott Hedge Fund returned about 496 percent in the past nine years as the S&P 500 lost 32 percent in Canadian dollar terms, said the index’s 66 percent rally since March 9 reflects investors misinterpreting economic data. He’s predicting the gauge will fall 40 percent to below 676.53, the 12-year low reached on March 9.
“We’re in a bear market that will last 15 or 20 years, and we’ve had nine of them,” Sprott, chief executive officer of Sprott Asset Management LP, which oversees C$4.3 billion ($4.09 billion), said in an interview Dec. 18.
Investors in Sprott’s funds have been rewarded by his holdings in gold, which has climbed 48 percent since the S&P 500 peaked in October 2007. The stock has since fallen 28 percent and declined 0.1 percent to 1,126.20 today for its first loss in seven sessions.
Sprott said the Federal Reserve has kept bond yields and interest rates artificially low through its program to buy agency debt and mortgage-backed securities. The central bank expects the securities purchase program to finish by the end of March.
Expiration of the program would reduce demand for fixed- income securities, forcing up bond yields and interest rates and hurting economic growth, Sprott said.
Loss of Faith
Should the Fed renew the programs while the U.S. government continues to run record deficits, investors will lose faith in the U.S. currency, he said.
“If they announce another quantitative easing, trust me, the gold price will go up another 50 bucks that day,” he said. Gold futures fell 0.9 percent today to $1,098.10 an ounce in New York.
Sprott has been bullish in gold and gold stocks, which are used as a hedge against inflation, since at least 2001, when the precious metal was trading below $300 an ounce.
Gold futures have slipped 7.2 percent this month in New York as the U.S. dollar has rebounded on data that signaled a recovery in the U.S. economy.
American payrolls fell by 11,000 in November, the fewest since the recession began, while retail sales gained 1.3 percent, twice the rate forecast in a survey of economists by Bloomberg, according to government reports released this month.
Unjustified Optimism
Sprott says investors have been too eager to see the data as signs of recovery. While the S&P 500 added 0.6 percent on the day of the employment report, a 23rd consecutive month of payroll contraction was no reason for optimism, he said.
“We don’t have employment gains,” he said. “We have less of a decline. That’s a sign of weakness. The data is weak.”
Sprott said gold is the only asset about which he remains positive in the short term. His C$1.42 billion Sprott Canadian Equity Fund -- which is up 23 percent in five months -- has 34 percent of its portfolio in mining stocks and another 39 percent in bullion as of Nov. 30.
He said though he has no target price for the metal he doesn’t think it has reached a ceiling after quadrupling over the past eight years.
“If you get into this thing where you’ve got to keep printing more and more and more, who knows about the price of gold?” he said. “It will be the new currency in due course.”
Growth Potential
Within the mining industry, Sprott prefers companies with smaller market capitalization, which he said have greater potential to grow.
Since last year, Sprott’s firm has become the biggest shareholder of Avion Gold Corp., which mines in Africa, and East Asia Minerals Corp., which explores in Indonesia. Avion is undervalued for its projected 2010 production, he said. According to a Dec. 16 note from analyst Eric Zaunscherb of Canaccord Financial Inc., Avion was trading at 2.9 times its estimated 2010 earnings, compared with a multiple of 10.5 for its peers.
Regarding East Asia Minerals, Sprott said, “I just get the feeling that these guys could find a multi-double-digit-million- ounce property.”
East Asia completed a 2,000-meter, 14-hole drilling program at its largest Indonesian property that Canaccord analyst Wendell Zerb called “encouraging” and indicative of a large zone of gold mineralization. Over the next two quarters, East Asia is to drill 45 more holes at the site and begin drilling in four more locations in the country, Zerb said.
Outside of the gold industry, Sprott owns shares of Wavefront Technology Solutions Inc., a TSX Venture Exchange- listed company whose products are meant to increase oilfield production. Its technology could be used on at least two-thirds of the world’s oil wells, he said.
Sprott, 65, founded his current firm in 2001 after divesting Sprott Securities, now Cormark Securities Inc., to its employees.
To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.
Last Updated: December 29, 2009 16:53 EST