Wednesday, July 1, 2009

A Look Back on the 2009 Predictions

Well kids, it’s half-time for 2009. I made few predictions back at the beginning of January and I thought I’d take a moment and revisit those predictions to see how my Nostradamian abilities have fared thus far. And……away we go!!

Predictions

Bernie Madoff Ponzie Scheme will exceed $50B- As the final answer could take years to figure out considering if the value of losses should be based on actual investments or the valuations of the fake investments. Honestly, I’m not sure why they are even debating this, but it would seem the actual money invested should be the given valuation. So far, investigators and the SEC have increased the losses to $65B in the past couple of months. So far, I’m partially correct, but that could change either way.

Nationwide Increase in Tolls- A few states have announce state wide toll increases, however, the increases are nothing out of the ordinary and certainly not a nationwide epidemic. I assumed an increase would occur in order to offset tax revenue reductions from employment and sales taxes. Still six months left to change.

Worldwide Number of Billionaires Falls Below 1,000- Unless there is a massive rally in the markets around the world, I should be just fine. The number at the beginning of the year was about 1,125 and as during the month of May, it was announced the number fell below 800. I should be safe on this one.

The British Pound will fall below the US Dollar in value- It is a good thing I’m not trading in currencies. Yahoo Finance posted the exchange rate as $1USD equal to 0.681 British Pounds at the beginning of 2009. It has come down a little and currently sits at 0.610. The British Pounds has not nosedived (yet) and the US Dollar is sucking a little more than I thought. With no interest rate hike in the near future by the Fed., I will most likely be wrong.

The Dow Will Break Through 7,000 in the First 100 Days- I was very accurate with this prediction. I was scary accurate last fall when I said the DOW would bottom around 6,500 sometime during the late 1st Quarter of 2009. March 9th, it closed at a low of 6,440.08. It closed below 7,000 on March 2nd for the first time at 6,763. No magic formula for that prediction; just a gut feeling and a little bit of luck.

More Ridiculous Bailouts For Big, Stupid Companies That Suck- I’ve actually stopped keeping track. Unless you’ve been living under a rock for the past six months, you know this one is dead on. Anyone could’ve predicted that. The scary thing is the amount of money outlay has heighted the threat of inflation. The really scary thing is that the Fed isn’t going to hike the interest rate in the near future and they stated they do not feel inflation is a threat. Wow, wow, wow, wow, holy F’ing WOW!!

One of the “Big 3” Auto Companies Will Fail or File For Bankruptcy- In most cases, 2 out of 3 ain’t bad, but when we are talking about the Big 3 filing for Bankruptcy protection; well, it’s bad! I should’ve left the fail part out, because I knew the Gov’t wouldn’t let any of these idiot companies go out like Bear and Lehman, no matter how much money they had to print!

At Least One European Country Will Drop the Euro- No one yet, but I’m still betting on Italy to be the first and go back to the Lire. Don’t count out Spain, Germany or Ireland, either.

Predictions that Most Likely won’t Happen in 2009

England will default- If the British Pound goes down, this will happen, but no real danger, yet.

AIG will Fail- As long as the Gov’t is still handing out monopoly money quantities of bailout money, AIG should be safe.

Unemployment will reach 20%- As of now, we’re hovering in the 10% range, which most economists are saying will be the peak. Unless something huge happens or they start computing the rate the way it used to be prior to “Wild Bill” (Clinton), then this number is unlikely.

Oil will Drop Below $25- I was close just over $32 was the low. It is sitting at about $70 currently and should settle somewhere between $80-$90 by the end of the year, unless something very unexpected happens.

China’s Economy will Blow Up (Not in a Good Way)- I’m still convinced that China is the most overrated economic producer in the world. If the US Dollar experiences high inflation, you could see some black clouds hovering over China, since they are sitting about ½ Trillion in US Treasury Bonds. Their record keeping and earnings reporting guidelines are poor, which can lead to easy book cooking and other sketchy ways of reporting company financials.

Housing Market Recovers- At this point, it seems as though the housing market has stopped the freefall in prices, but a recovery of the losses sustained over the past 18 months is much further off. The market has basically stabilized and hopefully will resume the historic 6% average annual appreciation.

Oil Exporters will Figure Out how to Protect their Tankers from Pirates- I’m still sticking by my idea of Bo and Luke Duke riding shotgun on these things and when a speed boat approaches, they crank back their bows and blow these guys out of the water. I would have suggested the A-Team, but they apparently aren’t best shots around. How can it be that during the shows run, they failed to actually shot anyone despite firing about 2,000 AK-47 rounds per show at the bad guys? The only way they would work is that the sun glistening off of Mr. T’s gold chains might blind the speed boat driver and end up crashing into the side of the tanker. Face it (no pun intended), since Hannibal has been deceased for 15 years, no one is around to devise a solid plan to foil the would-be pirates. Even if he was still around, smoking cigars on an oil tanker is probably not the safest thing.

The National Debt Reaches $15 Trillion- Still not likely, but we are now sitting at a smidge under $11.5 Trillion instead of smidge under $11T. Unless a wave of massive bailouts happen, which is very unlikely, then we will not come close to $15T. Unless things change, we will reach that mark in the near future.

The Government Issues Another Stimulus Payout- No word on whether any payout will be given. The government is more concerned with keeping unemployment at bay, rather than giving out $600 checks to everyone in hopes that they’ll visit the mall and spend it.

Gold will Top $1,000 per Ounce- Gold is currently at about $940 per ounce. The price has been driven up due to investors using it as a hedge against inflation, rather than going with defensive stocks. This shows that until investors feel confident about the market, the price of gold could still go higher.


Keep an eye on these for the second half of 2009.

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