What are the "Water-shed" events we can expect over the year?

[Mega]

Gold to $3000?
Total Collaspe of America?
America to come apart like the USSR?
Southstates to become "Dixie Land" & vote into office David Duke?


Your thoughts?
Mike

[grizam303]

Re: What are the "Water-shed" events we can expect over the year?

Maybe CAD$3000. USD$ is like hitting a moving target.

A USSR-style dissolution might be interesting. It wouldn't surprise me to have different countries with different political ideologies. I'm just not sure where the bankers will get to live. Maybe we'll see a new banker-kennel industry!

I'm just joking of course. The angry, hungry mobs will take care of the bankers.

[don]

Re: What are the "Water-shed" events we can expect over the year?

On the serious side, what do you guys think is unfolding so far.

My take includes:

An obvious concentration of Big Bank Capital at the top. A few of the Big Boys getting swallowed, many smaller, regional banks to follow, we are told. Will they?

A concentration, typical of hard times, in many other fields. Big Pharma is an excellent example.

The crushing of what few effective unions remain, starting with the UAW. After 30+ years of unremitting labor bashing, this represents bayoneting the wounded. Expect nurses and school teachers to be added to the mix. Civil servants, especially on the federal level, I have my doubts. It was decided long ago that a mildly corrupt civil service was practically a necessity to govern with confidence.

Not least, the FIRE economy simultaneously fighting for its life and scarfing up any and all enhancements to its position on the fiscal high ground. Hudson's Debt Servitude comes to mind when reading Citi's foreclosure prevention plan. Keep an underwater lender in his outrageously overpriced abode forever, transforming him into a renter (never any equity) with full 'owner' liability. Taxes, maintenance, insurance, etc. Pride of Ownership.

Unremitting health insurance premium increases and more mandatory insurance coverage, not to mention tax increases when we all are called upon to "do our share in the emergency".

And apparently a serious funding effort for infrastructure projects, many with a green tinge. Another FIRE bonanza. We already have the template in Iraq with Haliburton/Kellog, Brown and Root, greased by christ's sake by VP Cheney. Domestically check the Gulf hurricane frauds, both in La and Tx. It's no accident that organized crime was deep into construction projects for decades.

Well. lads, what else do you see in your clouded crystal balls?

:eek:

[audrey_girl]

Re: What are the "Water-shed" events we can expect over the year?

dow 5000

then ...

dow 4000

then ...

dow 3000

[goadam1]

Re: What are the "Water-shed" events we can expect over the year?

People who talk about the break-up of the US are the ones who don't live here.

Get real.

Bad companies go bankrupt. Okay companies survive by firing everyone they can. People wonder why things have gotten bad. The starbucks across the street from the other starbucks closes. You don't go on vacation and you wonder how to pay the kid's dental bill. Someone sees the moment of weakness and blows something up. A surprising number of people die in the fighting that follows. People are surprised. Gas gets expensive again and people have to give up one of their cars. The home depot three miles from the other home depot closes. Sears closes. Barn's and Nobles closes 85% of their stores. Real estate agents offer to mow lawns. Dentist do the plumbers teeth in exchange for fixing the toilet. Vegas hotels close. etc...

No one leaves the union except maybe Alaska.

[*T*]

Re: What are the "Water-shed" events we can expect over the year?

S&P500 @ 4-500 ish.
US 10Y rates > 8%.
Gold up.

My predictions are always patchy though. Large pinch of salt required.

goadam1:

People who talk about the break-up of the US are the ones who don't live here.

True, but because we find the thought amusing, not because we really believe it.

[dbarberic]

Re: What are the "Water-shed" events we can expect over the year?

-Bankruptcy of >25% of retailers (big brand names would provide the most shock)

-Continued drops of the dow

-The return of inflation

[don]

Re: What are the "Water-shed" events we can expect over the year?

And speaking of state and local finances, what role is local government to play in Mr. Obama’s promise to rebuild infrastructure, headed by transportation? Given their strapped position, one is hearing a surge of Wall Street plans to spend enormous sums. Whereas Obama’s economic team made fortunes for Russian kleptocrats by giving them public-sector assets already in place, their American counterparts are going to have to get rich by actually building new projects. In such cases the benefits are as large as the total amount of money being spent – but not in the way that most people understand at first glance. Construction contracts for new public transport systems, bridges and roads and urban or rural modernization may be entirely honest and provided at a fair cost. But it is a byproduct of such investment that it creates an amount that is of equal or often even greater magnitude in the form of rent-of-location – that is, vast windfall gains for well-located real estate.


This is where Mr. Obama’s Chicago political experience comes in so handy. It is in fact a game tailor-made for his team. Hundreds of millions of dollars were made in gentrifying Chicago’s notorious but conveniently centrally located public housing for low-income families. The developments sponsored by Mr. Obama’s mentors, the Pritzker family, the University of Chicago and assorted real estate reverends opened up vast new land sites, with public support to boot. (The house where I grew up in Hyde Park-Kenwood, a block or so from Mr. Obama’s house, was torn down along with the rest of the entire block as part of Mayor Daley’s urban renewal program in the late 1950s – after the University’s block busters had run down the neighborhood, then panicked the whites into selling to the blacks at extortionate price markups and mortgage rate premiums, then tearing down the houses into which the blacks had moved. It’s an old real estate game that one learns quickly in Chicago politics.) As Thorstein Veblen noted, any American city’s politics is best understood by viewing it as a real estate development.



The gains from providing better transport infrastructure typically are so large that transportation investment could be self-financing by taxing these property gains – recapturing the added rental value in the form of property windfall taxes. London’s tube extension to Canary Wharf, for example, cost the city Ł8 billion – but increased real estate values along the route by some Ł13 billion. The city could have financed the entire project by issuing bonds that would have been repaid out of taxes levied on the windfall gains created by this public expenditure.


Likewise in New York City, the transport authority has just announced that subway and bus fares will be jacked up (adding no less than $10 to the monthly commute card) and services cut back sharply. Mayor Bloomberg has just stopped work on the 2nd Avenue subway, its completion will add at least as much to upper East Side property values as the subway costs itself. The city thus could finance its construction not by issuing bonds to be paid off by city and state taxpayers in combination with user fees paid as fares. Taxpayers wouldn’t have to pay, and riders could enjoy subsidized fares simply by taxing the real estate owners.


But I see no prospect of this being done. Real estate is still the name of the game, because it remains the largest asset category in every economy today just as much as under feudalism. The difference from feudalism is that whereas landlords received the rental value of their lands in centuries past, today’s property owners acquire ownership not by military conquest (the Norman invasion of 1066 in England’s case) but by borrowing from the banks. To a mortgage banker, a commercial developer or real estate company is a prime customer, the bulwark of bank balance sheets. It is hard to imagine a new American infrastructure program not turning into a new well of real estate gains for the FIRE sector. Real estate owners on favorably situated sites will sell out to buyers-on-credit, creating a vast new and profitable loan market for banks. The debt spiral will continue upward.


http://www.counterpunch.org/hudson11262008.html

[Munger]

Re: What are the "Water-shed" events we can expect over the year?

- Obama takes office, pushes through demand-side stimulus.
- Home prices bottom in mid 2009 as ARM readjustments peak.
- Consumer confidence continues to fall at the beginning of the year, especially when they realize the stimulus isn't an instant fix.
- Energy prices increase greatly; many in the US have trouble paying their heating bills; oil rises to $100 a barrel by year-end.
- The dow starts bottoms mid 2009 alongside the ARM readjustments
- Negotiations take place discussing a new Bretton Woods
- Commodities begin their long, slow rise
- Universal health care in the US passes, following large resistance by the GOP
- Health care stocks continue to outperform
- Gold middles along at $800 or so/oz
- Consumer confidence begins rising in 3rd qtr 09

[goadam1]

Re: What are the "Water-shed" events we can expect over the year?

kind of boring watershed. how about jets win superbowl over giants.

[grizam303]

Re: What are the "Water-shed" events we can expect over the year?

kind of boring watershed. how about jets win superbowl over giants.

Now I understand why you don't think it's going to get bad here. Because you heard it on TV!

[goadam1]

Re: What are the "Water-shed" events we can expect over the year?

oh yes, very bad. I just didn't thought the last post was a little dry. I think it will be bad. I just don't think it will be get out your guns bad. I think the worst of the seventies and a dash of thirties with a little terrorism and a broadening of the long war.

I still might win this thread.

MUMBAI: Terror struck the country's financial capital late on Wednesday night as coordinate serial explosions and indiscriminate firing rocked

Mortal remains of a taxi after terror attack at western express highway near domestic airport in Mumbai. (PTI Photo)
eight areas across Mumbai including the crowded CST railway station, two five star hotels--Oberoi and Taj. ( Watch )

At least 80 people were dead and 250 injured in the terror attacks, hospital sources said.

[c1ue]

Re: What are the "Water-shed" events we can expect over the year?

Bad companies go bankrupt. Okay companies survive by firing everyone they can. People wonder why things have gotten bad. The starbucks across the street from the other starbucks closes. You don't go on vacation and you wonder how to pay the kid's dental bill. Someone sees the moment of weakness and blows something up. A surprising number of people die in the fighting that follows. People are surprised. Gas gets expensive again and people have to give up one of their cars. The home depot three miles from the other home depot closes. Sears closes. Barn's and Nobles closes 85% of their stores. Real estate agents offer to mow lawns. Dentist do the plumbers teeth in exchange for fixing the toilet. Vegas hotels close. etc...

Adam,

So were Wachovia, Washington Mutual, Bear Stearns, AIG, Citibank, etc etc considered good or bad companies? :confused:

[Judas]

Re: What are the "Water-shed" events we can expect over the year?

This is what I guessed back in June:

"deficit spending and lots of inflation.

Lots of poorly managed, budget overunning projects in infrastructure farmed out to crony companies all over the country.

A series of mini-bubbles– instead of one large bubble like the tech boom or the housing boom, you will see sector (and subsector) bubbles in things like "green" technology, projects to facilitate less/more affordable commuting, certain farming sectors, etc.

MASSIVE increases in local and state taxation through taxes but moreso through fees, surcharges, etc. Local governments are still in the business of serving their public sector unions first, and a year from now will still be fighting to keep the bloat going as long as possible.

The Fed will have tried to raise rates, maybe a quarter point in a lackluster bluff, but then drops it down to 1% and it stays.

After the large number of bank failures there will be a large consolidation in the banking industry, with the big (and connected) fish eating up the little fish.

The new oil bourses in Russia, Iran, etc. will be running full steam, oil in dollars is crazy expensive but stabilizing in other currencies.

Dollars will be flowing back into the US with alarming speed. Lots of foreign ownership of US assets/companies.

Capital flight as new laws are put in place to get those pesky speculators, rich people, etc.

The move of Halliburton is just the opening shot in seeing companies move their headquarters overseas.

Increase of black and gray market activity due to the dollar, so draconian financial reporting laws will start being put into place.

Trade war activity. Tariffs are just the beginning- things like Canada and where its oil goes could be major points of contention."

[goadam1]

Re: What are the "Water-shed" events we can expect over the year?

Wamu, aig, etc.. were very bad companies. The bubble collapse isn't a force of nature or an accident. People either played chicken with a ponzi scheme or they followed a mob mentality with the scheme. I'm sure aig had an nice insurance set-up and wamu had some profitable parts of it's business. I'm sure some very nice, hard working people will lose their jobs. I feel bad for them. But the companies stunk. So did circuit city, dhl and gm.

I bet in 3 years I can walk into a tdbank north branch, get insurance, ship a package with fedex and buy a big tv at bestbuy.

I've noticed that business news reporters cover the collapse as a disaster like a plane crash. All I know is that I sold my wamu stock in 2006 when I heard about 110% arm loans. How could the business model end any other way? How come I saw the problem but they didn't? As for aig, I guess they can tar and feather those London cds guys.