9 For '09

Here are my 9 economic predictions for '09:

Please no ridicule if my batting average is pathetic with regards to these predictions. Considering the fact that 70 to 80% of all professional mutual fund managers underperform the market each year, my rationale is that even if I go zero for nine, I will have plenty of company...


1) The most beaten down asset classes from '08 (housing, financials, emerging markets) will be some of the best performing in '09.

2) Oil prices, which have plummeted from $147 a barrel to just around $35 a barrel, will reverse course and revisit the $70 to $80 range in '09.

3) The unemployment rate which currently sits at around 7%, will top out at 11% in '09.

4) The stock market bottomed on November 21st @ 7,392 on the DOW. Although the real economy will not start to see recovery until late '09 the stock market lows of late 2008 will hold.

5) The big three automakers will be back in Washington asking for additional aid in '09. As time progresses it will become increasingly clear that although the company is weak, Ford is the strongest of the three companies. The electric car will dominate the discussion in '09 and will become a sustainable reality in 2010.

6) The Obama administration will hit the ground running with a massive stimulus package that attempts to address unemployment and the stalling economy. By the end of '09 talk will heat up about how the government has become too involved in the economy and calls for the "uncanny" power of free markets will return.

7) It will become increasingly clear next year that our world's most precious resource is not oil, but water. Today, almost one in eight people in the world do not have access to clean drinking water. By 2025, more than two billion people are expected to live in countries that find it difficult or impossible to mobilize the water resources needed to meet the needs of agriculture, industry and households. Going green will no longer be a buzzword, it will become our generation's race to the moon.

8) This amazing influx of government intervention will result in the inevitable uncovering of scandals and bribery with relation to the financial crisis. The programs have been thrown together, and oversight has been lacking, a recipe for disaster anywhere, especially in Washington.

9) The stock market volatility in '09 will pale in comparison to the volatility in '08. In the end the market will be positive for '09 in the realm of a 10-12% return on the Dow for the year.

Well there you go, 9 for '09. Feel free to add your own, economic or not.

This is my last post of 2008. Thanks to everyone who takes the time to read and comment. Keep the suggestions for the blog coming and have a Happy Holidays.