I look into the glow of my iPhone and this is what I see. It’s not pretty
It is hard to predict good things when:
• Unemployment up 24% in the last year
• Housing starts are down 20% in the last year
• Industrial production is down 6% in the last year
• Consumer Sentiment is down 24% in the last year
So let’s get through the bad news:
• The economic carnage will continue. More job loss and lower GDP especially in the first half of the year. Bankruptcies from all sectors of the economy will skyrocket on a business and personal level. Unemployment will hit almost 9%.
• Real estate values will continue to sink and mortgage defaults will rise as other adjustable rate mortgages come time to adjust and owners are unable to requalify.
• Health premiums will sky rocket to an average increase of 35%. The Obama administration will be focused on other areas and will not have time to focus on reform here.
• Obama will not offer the auto industry a further bailout. The Big Three will be, well somewhat less than three.
• The US will draw down its forces in Iraq as the year progresses and but will send more troops to Afghanistan.
Now, the Good News
• The stock market will stabilize by the middle of the year and will have a 10% return finishing close to 10,000 for the year.
• Banks will be forced to lend the money they have from the government which will return more liquidity to the market. If you can qualify for credit, there will be very low rates to buy homes or expand your business.
• Obama will implement a jobs and infrastructure program which will have an effect by the end of 2009.
• Obama will not raise the capital gains tax or income taxes on the wealthy as he discussed in his campaign.
• Applications for advanced education degrees and recruitment in the military will rise as people seek shelter or retraining as a result of the recession and nigh unemployment.
• Industries that will remain strong are health care, legal, military contractors, government, and construction infrastructure.
