2009 Outlook

How about a free 2009 outlook.

S&P will bottom around 500 (give or take 50) - estimate based on corporate earnings decline. This will be via breaking 1000 to the upside though with a target of 1150 (50% retracement) due to the inauguration of Obama. And that - my friends - will be the mother of all shorting opportunities.

Government will continue bailing out everyone via the Japanese style of spend, spend, spend, which, by the way, will only exacerbate any future inflation. But, the inflation will be the way of deflation for nearly all of 2009.

Government intervention will not prevent a quasi - depression. Unemployment will continue upwards of 600,000 weekly jobless claims and get to double digit unemployment rate from BLS non farm payrolls. All of us will know someone that is seriously affected by the economy.

Government debt will exceed GDP in 1st half 2009. This is pretty easy - we are already at 11 trillion and GDP is around 14 (which includes a couple trillion of cooked numbers, but that is beside the point). GDP will decrease substantially in the next 6 months.

The "2nd half of 09" recovery will not occur. Housing will continue to tank and will not return for several more years. Individuals will continue to save and this will affect corporate earnings by less spending on "stuff." Businesses will shrink operations or fail.

Depressed yet - don't be - the best opportunities arise from bad times. New inventions, new businesses, etc...