Tweet
Here's what looks like an optimistic forecast for 2010 from Accrued Interest. Summary: inventory rebuilding followed by business investment boom will return US economy to robust growth.
-
-
Re: Another forecast for 2010
Good news. Maybe everything will work out. -
Re: Another forecast for 2010
2010 outlook - Wall street banksComment
-
Re: Another forecast for 2010
Here's my two cents based on everything I've been reading lately:
1. Decent growth H1 2010 then the economy hits the skids as the stimulus wears off.
2. Per Krugman and others, the uptick in manufacturing in Q3 and Q4 was primarily due to "Cash for Clunkers" and inventory replenishment. Expect continued contraction.
3. 2010 will be the test for sovereign defaults. Countries most at risk include Greece, Spain, Ireland, and several in Eastern Europe (e.g. Ukraine and Baltic states). Dubai was just a harbinger of things to come. Wait and see how markets will be rattled when a major economy goes under.
4. The Fed is in a pickle and they know it. They'd love to stop printing but can't due to an ever widening $700 Trillion derivatives blackhole/moneypit. Fed and Treasury are both looking to provide basically a blank check to both the GSE's (i.e. Fannie an Freddie) and the Fed is wanting to issue its own debt to purchase more MBS garbage and backstop further losses for their Wall Street buddies. There may even be an intentional crash of the equities market to push money back into Treasuries and bonds thereby enabling the Fed to keep interest rates low.
5. China has just successfully inflated one of the largest asset bubbles in existence (outside of the one in America). At some point in the near future, it is likely to pop much like the Japanese in the late 1980's. When that happens, stand back because all hell is going to break loose. Don't expect the hundreds of millions of Chinese savers to stand idly by while their life savings evaporates into ghost malls and unoccupied cities. It'll be pitchforck and torches time. This WILL be the economic/political event of the coming decade when it happens.
6. Peak Oil/Peak Everything lurks silently in the background waiting for the first hint of a rebound. Remember summer 2008? Remember the food riots, shortages, etc.??? Just wait until oil hits $200+ per barrel. All we need is one geopolitical flashpoint that even hints at potential oil production disruption.
Lots of landmines left out there. Don't expect any improvement anytime soon.Comment
Comment