Mid-Year 2009 Checkup - groups.Xorte.com

Home › Groups › misc.invest.stocks › Mid-Year 2009 Checkup

Number of messages in the thread: 1

1. Date: 2009-07-04 17:44:58
Subject: Mid-Year 2009 Checkup
From: Don Tiberone <s...@m...com> Search message by this author

http://market-ticker.denninger.net/archives/1178-Mid
-Year-2009-Checkup.html

Friday, July 3. 2009
Posted by Karl Denninger in Musings at 13:25
Mid-Year 2009 Checkup

It doesn't seem possible that six months have passed under the bridge
of time in 2009 yet, does it? Yet they have.

Let's take a look at the scorecard first from my 2009 Prediction
Ticker, remembering of course that I have six months left!

1. The economy will not recover in 2009. No sign of it yet, "green
shooters" be damned. I predicted that U3 would reach 8% by the end of
the year, it has exceeded that wildly, and is now 9.5%. U-6 also has
exceeded my predicted value already.
2. Deflation, not inflation, will become evident well beyond
housing. Already has. CPI and PPI have come in with negative prints
as has capital goods pricing.
3. Housing prices will continue to decline. Yep.
4. The Fed's attempt to "pump liquidity" will be shown to be an
abject failure. I'll leave this one on the table for now; I believe
the evidence is in, but I'm in the minority. Score this one as a "no
result" as of yet.
5. GDP will post a 12-month negative number. 12 months aren't up
yet, but we're working on it!
6. The Stock Market has not bottomed. Remember, this was made with
the market around the 900 level. Major check; we declined to 666. My
secondary prediction was a 50% trading range and a 5xx low; we missed
that by 67 points, but I still have six months left. I'm sticking
with this one.
7. Precious metals will not be a safe haven. Oh Jim Sinclair!
Where's my $1,600+ gold price? (Or for some, their $5,000+ gold
price?) Missing, that's where. I know, I know, its all manipulation
(instead of debt deflation.) Check.
8. The Dollar will not collapse. Hasn't yet.
9. The pound or euro will be where the FX dislocation originates if
it occurs. I predicted Par for both being a possibility, not
happening yet. We'll see what the next six months bring.
10. The US Consumer will go from a negative savings rate to a
seriously-positive one. I'm predicting 4% but it could go as high as
10%. Major double-check! We're up close to 7% now. That's a home
run in any book.
11. Commercial Real Estate will effectively collapse. The REITs
have not yet imploded but the pricing and occupancy look like
something that came out of the back end of a horse. Anyone got a
finger to lend to push this pile over?
12. Along with the above, expect 10% of retail stores to close.
We're getting there.
13. Several states will get in serious financial trouble and
outright default of one or more is possible. California anyone?
Major check.
14. Mortgages are not done. Yep. Prime, OptionARMs, ALT-A.
15. If you want to refinance you may get one brief shot at it with
long rates around 4%. Check again. Hope you took it.
16. Those who have said that the corporate bond market is being
"unreasonable" in its expectation for defaults will start to look like
the jackasses they are. Ding! Check CDS spreads the last few weeks?
They're widening again. Even worse, the actual corporate default
rates are getting rather nasty. This trend continues.
17. Calls for "more lending" to consumers and businesses will go
exactly nowhere. Major check. The drunk who is passed out from
intoxication can't lift the bottle. Nice try guys.
18. General Motors and Chrysler will wind up in bankruptcy. DING!
19. Protectionism and currency manipulation will rear their ugly
heads. This has started but there's much more to come. Watch out;
this has the possibility of igniting wars.
20. Commodities will appear to be headed for a new bull market but
this will turn out to be a false hope. Attempts to manage oil output
to prop up the price will fail. Crude just rolled over, in fact, and
major agri commodities were lock-limit down on one day last week.
Ding.
21. Sovereign debt defaults will number at least three. Not yet.
22. China will have its first large-scale rumbling of civil unrest.
Maybe. Scattered reports, but nothing confirmed. Let's call this a
"not yet."
23. Foreign uptake of Treasuries will be choked off. DING DING DING
DING DING DING DING DING DING! Treasury changes the definition of
"indirect bid" and then under the NEW definition demand appears to
have (just recently) collapsed. This, by the way, is double-plus
ungood.
24. "The City" will be recognized as getting it worse than we are.
No kidding? :)
25. Things will get "revolting" in a number of nations. Not yet on
any meaningful scale, unless of course you count Honduras and Iran.
I'll call it a "not yet" for now, as those weren't the areas I was
thinking of and I don't believe in "curve fitting."

So let's see - I have 25 predictions and of them I can score 13
"confirms", half the year is over, and no busts as of yet (although
there is one, the Euro/Pound prediction, that is looking shaky.)