- Net earnings on the S&P 500 to be $50.
- State and local governments will be reducing spending significantly unless they get bailed out.
- A $500 billion fiscal stimulus package that focuses on rebuilding the US.
- Whatever solution the Fed comes up with, they will overdue it, but not before it’s too late.
- The government will continue to react to problems instead of anticipate them.
- Markets usually bottom when there is absolutely no hope left.
- Retailers, homebuilders, mortgage insurers, insurance companies (think annuities), banks, casinos and car manufacturers all going bankrupt at the same time, their stocks and bonds go to zero, and they start over.
- Highly dilutive secondary stock offers of which the proceeds will be used to pay down debt.
- Home prices to continue declining
- Increased savings. Obviously you then have decreased spending.
- GDP to decline 5%
- Unemployment to rise to 9% (That is a HUGE number)
- No IPO’s
- No Private Equity buyouts
- Limited corporate bond issuance
- A secular shift towards frugality
Things To Anticipate Over The Next Year
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1 comments:
Let me disagree with you on the IPOs part.
First. Investors that pulled out of the market and don't want to get back in are going to start investing in small companies that they can grow and take public themselves. They are sick and tired of companies that grew too much. They became inefficient large and bloated companies that are about to collapse. (Some already did)
There are seismic shifts in the economy but it won't disappear and it's not all doom & gloom.
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