US - 2009 Predictions

[LenaHuat]

I'm picking up my train of thoughts in this thread.

The US is undergoing a structural economic change. We'll see worsening employment numbers because manufacturing will shrink further. The economy will be more dependent on the services sector.
It would be interesting to monitor developments at the Wal-Mart likes and the high-end Pixar-likes
Labor at the middle range will be severely squeezed until the next technological innovations breaks out and new manufacturing jobs are created.

Read this contrarian view in the LA Times on Wal-mart,
http://www.latimes.com/entertainment/news/la-ca-wal-mart16-2009aug16,0,7912684.story

Lichtenstein is a historian, and he does a beautiful job of putting Wal-Mart in its historical context. The glory days of Wal-Mart were the Reagan-Clinton-Bush years, the years of unions in retreat, global free trade, lax enforcement of labor laws, and, for most Americans, stagnating wages that led them to seek cheap consumer goods.

But that era has finally come to an end, and with Barack Obama in the White House, Lichtenstein argues. Wal-Mart faces "a day of reckoning": The Democrats will raise the minimum wage, encourage unionization, rigorously enforce laws governing wages and hours, and require employers to pay some of the health insurance costs of their workers.

Capitalist US no longer is in Obama-ga-ga mode. What does the future portend??

[kennynah]

hi L :

it was really a sage's call that you made when you began being bullish at the end of 1stQ....superb call...i really missed that out...i wasn't as optimistic as evidently bulk of market participants were..for that, i paid the price of an opportunity lost...

now going forward...my thoughts are rather simple... for discussion purposes..

for US indexes to plummet to where its lowest point was in Mar09, it would mean a total reversion of the then optimistic opinion and forward looking outlook... i think, this may not happen. not unless some real financial catastrophe occurs again...

the weaker earnings should be expected...the sustained low unemployment rate should linger.... the losing dollar against majors may happen... but these are obvious and the obvious can hardly move market indexes significantly...

if the market should tapper off its recent gains, it must be becos of an overextended expectations of growth recovery story...and that drop off perhaps may not be as steep....

my unqualified take would be for the US indexes to hover to lower in the next 3 months....with volatility remaining in the early 30s region...

thanks for starting this thread...and maintaining its currency as without any opinion, it would be hard pressed to follow through any trading/investing strategies...

[LenaHuat]

Hi K
Me, no sage at all.
There will be plenty of opportunities for all the young ones here. All of you are 'winged' with knowledge.

Investors are buying at the long end of the yield curves, and that means interest rates would stay subdued for a pretty long while. Given the still fragile state of global economic growth, low rates would be comfort feed.

I'm still looking for justification for the indices to trend upwards (DOW consistently above 9000). I don't like this dark mood amongst Americans, this 'deathers' and 'birthers' talk especially amongst the white middle-aged and elderly Americians. They are the ones with $$ to consume.

Good to read your post.

[OE2008]

Hi LenaH,

On predicting 2009 market direction, I heard a TA analysis on CNBC this afternoon, based on e-wave which says the S&P is on a 5-wave down leg which is the C of the ABC correction from Mar 2000. C started from Oct 2007. There is a bright side, the bottom is near. IMO, this is expected around May/Jun which should see a more sustained rally. So much for prediction

Picking up on the above posting made in Feb 09, Robert Prechter is now calling for his readers to take profits and speculators to consider scaling in short positions. He is hot and accurate in his recent calls. Do your own DD and take care.

I believe W posted a video link. Cannot locate it now

[iam802]

There is an article which briefly mention Robert Prechter here.

http://seekingalpha.com/article/155814- ... ne-bearish

Still trying to digest it.

[LenaHuat]

Dr Fallon on Prechter

So what Bob Prechter is suggesting is not a slam dunk.

On the negative side, a 'C' wave will mean an end to the bear-market-rally. But, on the positive side, there could still be plenty of juice in this rally.

The other positive is once an "ABC" correction completes it will have cleared the way for a new cyclical bull market 5-wave move.

There are no gurus in this market; just voices at points of reversal. It all plays like musical chairs rather than words from the wise.

I can't agree less with this "just voices at points of reversal".
The key point is to keep our ears open.
A good pair of ears are often the key to success. But I gonna say far too many locals are poor listeners.

[LenaHuat]

I've not gotten my morning coffee fix at Starbucks. Take off now.
Maybe I'll have more to say later in the evening abt " this point in time".

[LenaHuat]

Yesterday, Warren Buffett warned abt 'monetary medicine'.
Obama is pushing out 'socialized medicine'. Both are recipes for diaster.
The danger is that the political establishment (WH and Treasury) and the Fed are not taking the Chinese warning abt a weak USD seriously. I'm very concerned abt next year when the fin stimulus runs its course, household rainy day checks run dry etc. I don't see any 'uplifting' factors in the horizon. Equally worrisome is the dearth or rather absence of inspiring biz leadership in the US corporate landscape.

[LenaHuat]

I've juz finished reading Bloomberg's report abt the meeting at Jackson Hole. At the end of it, Meredith White was reported to have said this :-

Meredith Whitney, the analyst who predicted that Citigroup Inc. would cut its dividend last year, outlined one key risk to the recovery by predicting the number of U.S. bank failures will quadruple as lenders struggle with bad loans.

“There will be over 300 bank closures,” Whitney said in an interview with Bloomberg Television in Jackson Hole. “The small-business owner on Main Street continues to see liquidity come away.”

Let' see if she will get this prediction right.

[winston]

I think the FDIC Chairman did also say that there would be 500 more US bank failures ..