Thursday, December 24, 2009

Predictions For 2010

It's that time of year again.

Time when we shop till we drop, attend Christmas functions
and entertain visitors, and then collapse in a heap until
New Years!

In that vein then, with the closing of the old year and the
ringing in of the New, I'm offering some "Predictions"
for the nation and the economy for 2010.

I do want to emphasize, though, that these are strictly
my own observations, with no guarantee that they will
actually happen!

In no particular order, then, here are my fearless predictions
and prognostications for 2010:

1) The Stock Market continues its steady upward climb all
through 2010, with the Dow reaching 11,500 by 3Q 2010.
The S&P 500 will remain in a range between 1100-1200,
while the NASDAQ rises above 2500, and the Russell
2000 index approaches 800-850. As funds flow out
of fixed income into equities, gold will continue to
drop to the 940-960 range, as gold investors take
profits and redeploy funds into stocks;

2) Despite the rise in the stock market, fundamentals
of the real economy remain weak, with unemployment
approaching 11% by 3Q of 2010. Capacity Utilization remains
below 70%, as increasing orders for durables and inventory
rebuilding leads to increased manufactured goods imports
from China. A second wave of mortgage foreclosures hits,
this time concentrated in the "Prime" and "Alt-A" credit
segments. Boosting the trend are an increasing number of
homeowners with good credit but "underwater" mortgages
who decide to "strategically default", further depressing

3) Commercial Real Estate loans begin to default in large
numbers, as borrowers who have remained current on
their loans can no longer re-finance due to depressed
property valuations. As many of these loans are held
by local and regional banks, the number of bank failures
in 2010 will more than double to over 300;

4) The CityCenter resort and casino development in
Las Vegas, a monument to gaudy excess and optimism,
fails to attract additional visitors to Las Vegas, instead
cannibalizing established properties up and down the Strip.
Even unheard-of deals at prime strip properties fail to
boost the visitor count. After splitting off its profitable
Macau properties, MGM Mirage files Chapter 11 in 3Q
2010, unable to keep up its debt service;

4) Despite the travails of the real economy in the
U.S., the dollar continues to strengthen as financial
problems in the Eurozone come to a head. Greece,
unable to resolve its fiscal problems as sovereign
debt approaches 100% of GDP, is saved from default
by a combined ECB-IMF intervention, with Spain and
Ireland following suit shortly thereafter. All this
leads to a flight back to the dollar, despite record-low
interest rates and continued Fed money-supply

5) Due to a strengthening dollar and a linked yuan,
China's exports to the U.S. resume growth once again
as a recovering US economy means more orders for
China's manufacturers. A strengthening dollar also
boosts off-shoring of remaining US-based manufacturing,
and U.S. manufacturing employment falls below 10% of
total employment for the first time ever;

6) The Democrats face huge problems in the November
2010 elections, as rising unemployment and increasing
social distress puts voters in an angry mood. The
Democratic majority in the Senate falls to 53-47, as
key incumbents retire and Majority Leader Harry
Reid is defeated for re-election. Republicans, however,
fail to take over the House of Representatives as
intramural squabbling permits many previously
endangered Democrats to squeak through.
Republicans are helped, though, by a dozen or so
Conservative Democratic Representatives (mostly
in the South), who defect to the GOP. In all,
Republicans pick up thirty seats, increasing
Obama's woes and making compromise more unlikely;

7) A major TBTF U.S. bank actually fails, due to losses
in Commercial and Residential Real Estate and huge
losses in its credit card portfolio. However, because
the machinery for resolution is now in place, the bank
is quickly nationalized, broken up and sold, with
minimal impact on the general economy. In conjunction
with the Fed and Treasury, Goldman Sachs orchestrates
the entire transaction, thus cementing its position as
the U.S.'s most powerful financial institution;

8) Elin Nordegren divorces Tiger Woods, getting
a significant portion of his assets and $2m plus
per year in child support, although significantly
less than originally predicted in the celebrity press.
Tiger, seeing his financial position deteriorate, returns
to golf with a vengeance, entering 25 tournaments,
winning 13 (including two majors), and establishing
an all-time record for money winnings in a PGA season.
Golf's TV ratings explode, and endorsements come
flooding back, making Tiger once again the world's
highest-paid athlete;

9) Sarah Palin, with a huge windfall from "Going Rogue"
and lucrative speaking engagements booked all year,
decides not to run for President in 2012. However,
her continued popularity leads The Fox Network to
sign her to her own daily talk show. Her show becomes
a huge hit, becoming the new "Oprah" for an increasingly
disaffected Middle Class;

10) The continuing drift in the economy leads to several
new "Third-Party" political movements, uniting disaffected
populists with independents and libertarians. Despite
differing ideologies and beliefs, many of these movements
come together to challenge ballot-access laws in many states,
which give a virtual monopoly to the two major parties.
Early efforts focus around building a "unity" 3rd-party ticket of
Ron Paul and Alan Grayson for 2012;


We'll be back with more in January......

The Thinking Nationalist.


  1. Those are pretty bold predictions, I agree with alot of them.

    Ron Paul with Alan Grayson for 2012? Sold! I'll vote for it instantly! Both Ron Paul and Alan Grayson are against the Federal Reserve. The Fed Stinks and we should end the fed but the Elites would fight hard to keep their money printing and rolling in. Maybe the Dream Ticket can do it.

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