Why the economy might bounce back in 2009

[MikeNY]

Why the economy might bounce back in 2009: Energy prices and mortgage rates are dropping, and the Fed is making sure money is available. Plus, America's competitive strengths remain intact; article.

http://articles.moneycentral.msn.com/News/5-reasons-the-economy-might-recover-faster-than-you-think.aspx

While screening for stocks I see a change in the Market for the better. As a teen I caddied for Millionaires at a Exclusive Golf Club and use to listen to what they talked about. They invested differntly than Main Street; used simple metrics. In a downturn or recession they were buyer's and when P/E's were high they bought Bonds and put new investment money into old fashioned Bank Accounts and stayed in Cash, or sought good business oppertunities for investment. The difference between the Rich and Main Street is the Rich always had income flow from Business or Investments. Each Recession the Rich are the buyers as Main Street Panics.

The Rich now are moving assets out of the USA. It is illegal just to move money outside the US but is legal to buy homes, Real Estate Investments or Businesses outside the US. That movement of capital means the US is not considered the safe haven it once was and our Rich are starting to think like the Rich in unstable Nations and preparing assets and security outside thier homeland.

[MikeNY]

Here is another article with a differnt point of view, entitled "An ugly, unrecognizable recession
Most of us haven't seen an economic decline like this one before, and as the slowdown gets slower, few will be unaffected. Are you ready for the 'frugal future'?".

http://articles.moneycentral.msn.com/Investing/SuperModels/an-ugly-unrecognizable-recession.aspx

[gruntbrain]

A no frills, hyperfrugal approach is a good option no matter what scenario occurs. This way of livin' does not have to involve deprivation of joy or health.& can give you the sense of being holier than thou.

[Andy62]

Predicting the future is difficult. There are all kinds of predictions out there. One thing is for sure and that is that we are going into a period of change the likes of which we have never seen. "Change causes stress." There will undoubtedly be targets of opportunity, however, it is hard to see how the majority of people will not be affected adversely. I agree with Gruntbrain-keep your costs down and keep you options and your flexibility open. By all means build you NERVE FORCE and your creativeity and intuitive ability to maximize changes you may personally face.

[gruntbrain]

Hot stock tips & other predictions of the future are often very convincing. However, the focus on the positive is presented without the concurrent negative; note this need not be intentional but just ignorant.

[John Peterson]

Hey Guys,

I agree that the future is hard to predict. A little earlier today i took my wife's car and filled it up with gasoline. The price was $1.55 per gallon. This past summer I literally paid more than $3.55 per gallon. If someone had told me back then that oil would come down to less than $40.00 a barrel or that I'd be paying $1,55 at the pump in December, I would have told them that they were dreaming. My point is, who really knows what will happen next or why with the economy? It seems that the rules have all changed and everything is is a period of extreme transition. One thing for sure though, I'm sure that new laws will have to be instituted with the stock exchange after the Madoff Scandal.

---John Peterson

[Andy62]

I have been reviewing the book that Gruntbrain recommended - "The Drunkards Walk" which is about randomness. There are events that happen that nobody cannot predict such as the current worldwide economic collapse. To me the answer is to use all of your instincts and creativity to try and predict what is coming and when the event comes, whatever, it may be -adapt to it. Swoboda would love it!

[Alan_OldStudent]

Hi Brothers and Sisters,

Well, here's one Russian academic's prediction (http://online.wsj.com/article/SB123051100709638419.html) for the USA, as recounted in the Wall Street Journal. This is a good one for the conspiracy theorists among us

Regards,

Alan

[Andy62]

Alan, that is an interesting article. I don't think that the US will disappear,but it is obvious that we are going into a period of great change and nobody can precisely predict the future. There are also those predicting that if gas prices stay down that Russian will collapse by the end of 2009 as their cash reserve will be depleted. With Putin in charge I can't see Russia going out without a fight. It is going to be a tumultuous period by any measure both domestically and internationally. Keep your NERVE FORCE strong.

[Alan_OldStudent]

Hi Andy,

My crystal ball is a bit foggy, but I don't expect the United States to fall apart, either,

.....wait!....wait!

I think something is coming into clarity in my crystal ball right now, as we speak!!!

Oh yes!

I see it now!!!

(Tah-dah!)

Igor Panarin's book is a best seller and he makes all the Russian Sunday morning talk shows for a couple of months.

http://www.alanstancliff.com/images/icons/cowblink.gif

He's the toast of the town from Moscow to Simbirsk!

Regards,

Alan

[Andy62]

Allan, You know the first thing that I think of when somebody comes out with one of these fantastic theories is when is his book coming out?

[gruntbrain]

Andy
One takeaway from the Drunkard's Walk is to "stay in the game"; don't give up cuz of failure from your failed predictions.

[Andy62]

Gruntbrain I agree. You have to keep looking for the opportunites. It sure is exciting.

[Andy62]

The latest forecast from CNBC: 73,000 retail stores are predicted to close in the first 6 months of 2009.

[gruntbrain]

Even armed with "educated" predictions, I would not bet the farm. Not many predicted the huge move in treasuries; by luck, I have a decent amount of 'em to help offset my equities declines. The "smart money" has been predicting treasuries are in a bubble for quite awhile( so much for the smart money)

[Andy62]

There are no educated predictions because all of these guy try to project the past into the future and this is different really different. With all of the huge budget deficits being forecast nobody is figuring in the rampinging up of terrorism around the world and the increased cost of that. It will make Iraq look like chump change.

[John Peterson]

Hey Guys,


One thing that could totally change every dynamic worldwide would be a major war in the middle east. That would disrupt the flow of oil and cause catastrophic difficulties worldwide with the economy. And I would not be surprised to see it happen sooner rather than later. At some point someone is bound to 'lose their cool' and set things into an irreversible momentum that will lead to catastrophic consequences. That my friends is one of those 'curve balls' that none of us can predict.

---John Peterson

[MikeNY]

There is another book, much like "Drunkards Walk"; called Fortune's Formula: The Untold Story of the Scientific Betting System that Beat The Casinos and Wall Street by William Poundstone. The crazy Russian might be right, but I see the USA breaking apart in 15 to 25 years and possibly a Civil War, wish I didn't think that.

[gruntbrain]

Fooled By Randomness & Black Swans make the case against a predictable, deterministic view of the world. Such works can be disturbing when they declare randomness MAY trump your best laid plans, However, acknowledging the unpredictable is prudent

[John Peterson]

Hey MikeNY,

I agree. There are factions at work in the USA that did not exist when we were growing up. It could literally cause a civil war. Or possibly worse.

---John Peterson

[MikeNY]

John your so right, the USA of our youth is gone, a differnt day, in many ways better than what we have. The 1960's were a great time to become a teen in the USA, a simpler and kinder time in many ways.

My Iranain born friend is now a Christian here in the USA and he tells me of Militant Islam's Plans for using Immirgration and our lack of Border Control for thier benifit. As I've said he reports that the Islamic Press advises people in Africa, N. Africa and the Middle East to move to the USA or Europe to tap into the Social Services and to have children in the West. They are advised how to get Social Security Disability, SSI and Retirement without documentation here in the US and also in Europe. At one time 50% of Muslims that came to the USA were abandoning Islam; there was an article in the NY Times. My friend tells me that trend has ended with intimidation of new comers by Militant Islam here.

A War in the Middle East is just one of many probelms we face. I'd like to see real Reform in the USA that would make life better for all.