What to expect in the first half of 2011

[Magox]

Now that the midterm elections are over with and it appears that the Federal Reserve will be throwing in the kitchen sink in attempt to stimulate the economy, I expect that economy is going to gain some traction in the first half of next year.

 

1) Housing demand will remain depressed, but I do expect existing home sales to increase above the annual rate of 5 million a year. Right now it is at about 4.5 million. However I do expect prices to continue to fall during this time period.

 

2) Jobs. I expect that we will be creating 150,000 - 250,000 jobs a month during this period. The climate for jobs is more favorable now that there is more of a push for the president to move to the center. I expect that the Bush Tax cuts will be extended and that Obama will soon make a proposal that conservatives have been asking for which is to either reduce Corporate taxes or maybe some sort of Payroll tax holiday. He understands that he needs to move more to the middle and extending an olive branch to the business sector will help bring out the "Animal spirits" that have been sorely lacking through out his presidency so far. Corporations are flushed with cash, and there is a lot of potential stimulus that the private sector can unleash if the president decides to be more "business friendly". I fully expect him to.

 

3) I expect many companies will be increasing dividends, share buybacks and M&A activity during this time period.

 

4) GDP Growth rate will most likely be above 3.5%

 

5) Trade deficit will most likely not increase too much from here, and very well may decrease. The value of the dollar will serve as a boon for our exporters and this will help in closing the trade gap.

 

6) Talk of inflation will heat up. Oil I believe will be somewhere in between $90-$105 a barrel. It will be interesting to find out at what level oil prices will have to reach before it begins to be a negative for the economy. My guess is somewhere around $100 a barrel.

 

7) China and the rest of the EM markets will begin to overheat and I expect them to desperately try to slow down their overheating economies through higher rates, additional taxes on capital inflows and higher banking reserves.

 

8) competitive devaluation of developed nations currencies such as Japan and England. I also expect their to be tensions between the Euro zone and the U.S over the Federal Reserves policies of currency manipulation and how it is unfair for their exporters.

[/dev/null]

8) competitive devaluation of developed nations currencies such as Japan and England. I also expect their to be tensions between the Euro zone and the U.S over the Federal Reserves policies of currency manipulation and how it is unfair for their exporters.

 

Like so?

[pBills]

Now that the midterm elections are over with and it appears that the Federal Reserve will be throwing in the kitchen sink in attempt to stimulate the economy, I expect that economy is going to gain some traction in the first half of next year.

 

1) Housing demand will remain depressed, but I do expect existing home sales to increase above the annual rate of 5 million a year. Right now it is at about 4.5 million. However I do expect prices to continue to fall during this time period.

 

2) Jobs. I expect that we will be creating 150,000 - 250,000 jobs a month during this period. The climate for jobs is more favorable now that there is more of a push for the president to move to the center. I expect that the Bush Tax cuts will be extended and that Obama will soon make a proposal that conservatives have been asking for which is to either reduce Corporate taxes or maybe some sort of Payroll tax holiday. He understands that he needs to move more to the middle and extending an olive branch to the business sector will help bring out the "Animal spirits" that have been sorely lacking through out his presidency so far. Corporations are flushed with cash, and there is a lot of potential stimulus that the private sector can unleash if the president decides to be more "business friendly". I fully expect him to.

 

3) I expect many companies will be increasing dividends, share buybacks and M&A activity during this time period.

 

4) GDP Growth rate will most likely be above 3.5%

 

5) Trade deficit will most likely not increase too much from here, and very well may decrease. The value of the dollar will serve as a boon for our exporters and this will help in closing the trade gap.

 

6) Talk of inflation will heat up. Oil I believe will be somewhere in between $90-$105 a barrel. It will be interesting to find out at what level oil prices will have to reach before it begins to be a negative for the economy. My guess is somewhere around $100 a barrel.

 

7) China and the rest of the EM markets will begin to overheat and I expect them to desperately try to slow down their overheating economies through higher rates, additional taxes on capital inflows and higher banking reserves.

 

8) competitive devaluation of developed nations currencies such as Japan and England. I also expect their to be tensions between the Euro zone and the U.S over the Federal Reserves policies of currency manipulation and how it is unfair for their exporters.

 

 

Now will the jobs that were created be labeled as a success of the President? I think they should.

[Magox]

Now will the jobs that were created be labeled as a success of the President? I think they should.

You mean the jobs that were created over the past 6 months or so?

[pBills]

You mean the jobs that were created over the past 6 months or so?

 

 

If we see jobs growth... 125,000, 140,000 per month should the President be able to take credit for it?

[Magox]

If we see jobs growth... 125,000, 140,000 per month should the President be able to take credit for it?

Not completely or for that matter, not even a good portion of the credit. The Federal Reserve's QE policies in the short-term are going to be a major boost for the economy. Also, 125,000-140,000 jobs a month is NOT GOOD! Just to keep up with population growth you need 125,000-150,000 just to keep the unemployment rate where it is.

 

I will give him credit if he does extend the Bush Tax cuts for everyone (although I disagree with it), and I will give him credit if he moves more to the center and allows a corporate tax rate cut or a payroll tax deduction. THis would most likely bring in a flurry of hiring over the next 6-9 months.

 

His policies have created uncertainty over the past 18 months, which is A reason why corporations have been sitting on tons of cash on the sidelines. As I pointed earlier, if he can tack more to the center, which I believe he will, then he can help unleash the "Animal Spirits" of our free enterprise system, which will lead to more growth.

[pBills]

Not completely or for that matter, not even a good portion of the credit. The Federal Reserve's QE policies in the short-term are going to be a major boost for the economy. Also, 125,000-140,000 jobs a month is NOT GOOD! Just to keep up with population growth you need 125,000-150,000 just to keep the unemployment rate where it is.

 

I will give him credit if he does extend the Bush Tax cuts for everyone (although I disagree with it), and I will give him credit if he moves more to the center and allows a corporate tax rate cut or a payroll tax deduction. THis would most likely bring in a flurry of hiring over the next 6-9 months.

 

His policies have created uncertainty over the past 18 months, which is A reason why corporations have been sitting on tons of cash on the sidelines. As I pointed earlier, if he can tack more to the center, which I believe he will, then he can help unleash the "Animal Spirits" of our free enterprise system, which will lead to more growth.

 

 

True those numbers are not good for job growth, however it's a step in the right direction.

 

I do hope that he will lean more towards the center. It is the only way that things can move forward. I think Pelosi and Reid may have screwed up his brain in the first half of his Presidency. Hopefully they will stay out of the way... not likely though.

[Magox]

This is partly what I was talking about.

 

http://www.cnbc.com/id/40070270

 

Fed Policies, GOP Victory Put Markets In 'Sweet Spot': Pros

 

Published: Monday, 8 Nov 2010 | 11:56 AM ET

 

Federal Reserve pump-priming and likely policy changes coming to Washington have market pros scurrying into bullish positions for the days ahead.

 

 

The Fed's planned injection of at least $600 billion into the system through its money-printing Treasury-buying program has increased expectations for a prolonged risk-on trade, while Republican gains in the midterm elections have spurred hopes that Washington will stay out of Wall Street's way.

 

Similarly, the Fed's policies are convincing more and more market participants that the central bank's policies, though posing dangers over the long run, are at least supportive for the near term to stock prices.

 

"Fighting this trend is a fool's game," hedge fund manager and The Gartman Letter author Dennis Gartman wrote Monday morning, even while calling the Fed's posture "heinous and inflationary and ill-advised."

 

Equity research firm TrimTabs changed its market position from "cautiously bullish" to "fully bullish" on the grounds that "the Fed is determined to manipulate stock prices higher and is blowing up a multi-trillion dollar bubble."

 

 

 

The firm's analysts note "we are concerned about the long-term effects of this intervention on interest rates and inflation. Nevertheless, the Fed's money printing is supportive for stock prices in the short term."

 

While the Fed's easing and the electoral changes have spiked enthusiasm for stockseven though the market was lower Mondayothers are seeing fundamental changes as well.

 

 

Ian Shepherdson, chief US economist at High Frequency Economics, said in a New York Times interview that commercial and industrial bank lending is improving slowly, which he thinks could cure a variety of economic ills including unemployment.

 

"My overwhelming condition for things to get better in the small-business sector is credit, so the positive data are a hugely exciting development," he said. "I don't think we will see all these gaps close by December, but over the next 12 months I think we will see a transition out of a sluggish 2 percent economy to a real, properly growing recovery."

 

Such upward momentum would spread through the entire economy, not just stocks, Citigroup economist Steven C. Wieting said in a research note.

 

"Political cohesion and even new uncertainties on the level of discretionary spending present obstacles," Wieting wrote. "But further clarity on policy in the coming month or so would more likely than not suggest upward revisions to our 2011 outlook. Real businesses, not just financial markets, should take increasing comfort."

 

This article was written after my post and it basically states some of the things that I mentioned, which is more certainty for business because of the elections and QE policies are most likely going to stimulate the economy in the short-term.

 

Long-term I think it is a bad strategy, however bubbles can sometimes grow for a very long time before they burst. Clinton was lucky that the DOT com bubble didn't burst during his watch, the question is will Obama be lucky enough to be out of office before this all comes crashing down?

Edited November 8, 2010 by Magox

[OCinBuffalo]

The Bills drafting #1?

[TPS]

Now that the midterm elections are over with and it appears that the Federal Reserve will be throwing in the kitchen sink in attempt to stimulate the economy, I expect that economy is going to gain some traction in the first half of next year.

 

1) Housing demand will remain depressed, but I do expect existing home sales to increase above the annual rate of 5 million a year. Right now it is at about 4.5 million. However I do expect prices to continue to fall during this time period.

 

2) Jobs. I expect that we will be creating 150,000 - 250,000 jobs a month during this period. The climate for jobs is more favorable now that there is more of a push for the president to move to the center. I expect that the Bush Tax cuts will be extended and that Obama will soon make a proposal that conservatives have been asking for which is to either reduce Corporate taxes or maybe some sort of Payroll tax holiday. He understands that he needs to move more to the middle and extending an olive branch to the business sector will help bring out the "Animal spirits" that have been sorely lacking through out his presidency so far. Corporations are flushed with cash, and there is a lot of potential stimulus that the private sector can unleash if the president decides to be more "business friendly". I fully expect him to.

 

3) I expect many companies will be increasing dividends, share buybacks and M&A activity during this time period.

 

4) GDP Growth rate will most likely be above 3.5%

 

5) Trade deficit will most likely not increase too much from here, and very well may decrease. The value of the dollar will serve as a boon for our exporters and this will help in closing the trade gap.

 

6) Talk of inflation will heat up. Oil I believe will be somewhere in between $90-$105 a barrel. It will be interesting to find out at what level oil prices will have to reach before it begins to be a negative for the economy. My guess is somewhere around $100 a barrel.

 

7) China and the rest of the EM markets will begin to overheat and I expect them to desperately try to slow down their overheating economies through higher rates, additional taxes on capital inflows and higher banking reserves.

 

8) competitive devaluation of developed nations currencies such as Japan and England. I also expect their to be tensions between the Euro zone and the U.S over the Federal Reserves policies of currency manipulation and how it is unfair for their exporters.

The only point that goes out on a limb as a prediction is your GDP growth; everything else is in process.

[Magox]

The only point that goes out on a limb as a prediction is your GDP growth; everything else is in process.

yeah yeah yeah

[drnykterstein]

I like how in this thread he says Obama will be centrist but in the other thread he says Obama will be partisan. Go Magox!

[Magox]

I like how in this thread he says Obama will be centrist but in the other thread he says Obama will be partisan. Go Magox!

Once again, you miss the point dumbass

 

Anyway, here is what I said, and I only do this to further embarrass you

 

 

I will give him credit if he does extend the Bush Tax cuts for everyone (although I disagree with it), and I will give him credit if he moves more to the center and allows a corporate tax rate cut or a payroll tax deduction. THis would most likely bring in a flurry of hiring over the next 6-9 months.

 

His policies have created uncertainty over the past 18 months, which is A reason why corporations have been sitting on tons of cash on the sidelines. As I pointed earlier, if he can tack more to the center, which I believe he will, then he can help unleash the "Animal Spirits" of our free enterprise system, which will lead to more growth.

 

Your ability to not be able to comprehend anything you glance over is at an ignorantly blissful level.

Edited November 9, 2010 by Magox

[IDBillzFan]

Your ability to not be able to comprehend anything you glance over is at an ignorantly blissful level.

He can't even comprehend anything HE posts. How the hell can you expect him to comprehend what other people post?

[Dave_In_Norfolk]

How long can this voo doo economics last? Bush started it with the massive tax cuts which fueled the global economy, but still only got us down to 5.5% unemployment. That stimulous was then increased with war spending which further busted the budget, but the free market with all this gasoline tossed on it still couldn't create the jobs. Gees, wonder why there was a housing bubble? Toss in more health care spending stimulous/welfare with Bush's aid to older Americans and then Tarp, and Obama's temporary stimulous and you have got to ask, what if all this was cut off?

 

Seriously, are we stuck on stimulous?

[Magox]

How long can this voo doo economics last? Bush started it with the massive tax cuts which fueled the global economy, but still only got us down to 5.5% unemployment. That stimulous was then increased with war spending which further busted the budget, but the free market with all this gasoline tossed on it still couldn't create the jobs. Gees, wonder why there was a housing bubble? Toss in more health care spending stimulous/welfare with Bush's aid to older Americans and then Tarp, and Obama's temporary stimulous and you have got to ask, what if all this was cut off?

 

Seriously, are we stuck on stimulous?

Yeah, and you can add in the Federal Reserves cheap money policies in with that. I see massive bubbles being created throughout the world, larger than the tech bubble. I just don't see how this will end well, I really don't.

[/dev/null]

How long can this voo doo economics last? Bush started it with the massive tax cuts which fueled the global economy, but still only got us down to 5.5% unemployment. That stimulous was then increased with war spending which further busted the budget, but the free market with all this gasoline tossed on it still couldn't create the jobs. Gees, wonder why there was a housing bubble? Toss in more health care spending stimulous/welfare with Bush's aid to older Americans and then Tarp, and Obama's temporary stimulous and you have got to ask, what if all this was cut off?

 

Seriously, are we stuck on stimulous?

 

I bet that even conner knows how to correctly spell stimulus

[Magox]

I bet that even conner knows how to correctly spell stimulus

Only if he googles it.

[Dave_In_Norfolk]

I bet that even conner knows how to correctly spell stimulus

Nice argument

[....lybob]

Now that the midterm elections are over with and it appears that the Federal Reserve will be throwing in the kitchen sink in attempt to stimulate the economy, I expect that economy is going to gain some traction in the first half of next year.

 

1) Housing demand will remain depressed, but I do expect existing home sales to increase above the annual rate of 5 million a year. Right now it is at about 4.5 million. However I do expect prices to continue to fall during this time period.

 

2) Jobs. I expect that we will be creating 150,000 - 250,000 jobs a month during this period. The climate for jobs is more favorable now that there is more of a push for the president to move to the center. I expect that the Bush Tax cuts will be extended and that Obama will soon make a proposal that conservatives have been asking for which is to either reduce Corporate taxes or maybe some sort of Payroll tax holiday. He understands that he needs to move more to the middle and extending an olive branch to the business sector will help bring out the "Animal spirits" that have been sorely lacking through out his presidency so far. Corporations are flushed with cash, and there is a lot of potential stimulus that the private sector can unleash if the president decides to be more "business friendly". I fully expect him to.

 

3) I expect many companies will be increasing dividends, share buybacks and M&A activity during this time period.

 

4) GDP Growth rate will most likely be above 3.5%

 

5) Trade deficit will most likely not increase too much from here, and very well may decrease. The value of the dollar will serve as a boon for our exporters and this will help in closing the trade gap.

 

6) Talk of inflation will heat up. Oil I believe will be somewhere in between $90-$105 a barrel. It will be interesting to find out at what level oil prices will have to reach before it begins to be a negative for the economy. My guess is somewhere around $100 a barrel.

 

7) China and the rest of the EM markets will begin to overheat and I expect them to desperately try to slow down their overheating economies through higher rates, additional taxes on capital inflows and higher banking reserves.

 

8) competitive devaluation of developed nations currencies such as Japan and England. I also expect their to be tensions between the Euro zone and the U.S over the Federal Reserves policies of currency manipulation and how it is unfair for their exporters.

wildly optimistic GDP unless inflation is not counted.

 

My predictions for the the first half of 2011

1) People will finally start to understand that they have been robbed and that neither Bush or Obama stopped a financial crisis they merely postponed it and at the same time transfered huge amounts of money from Mainstreet to Wallstreet the bailout was a tiny part of the robbery, Fed action through buying bad assets at full value, near zero credit to bond arbitrage , and QE transfered much more wealth. The next wealth transfer will be from the upcoming stock bubble and the carry trade. Oh and don't feel picked on, they are trying to rob the whole world not just Joe working slob American.

 

2) People will be shocked by the combination of high inflation and low interest return- money will be moved from bonds into stocks and most will be crushed when the bubble bursts

get in before mid January at the latest and out before late March - the in the know money has been in for 9 weeks already.

 

not an investment guy but depending on how much you got I'd say invest in lowering your energy usage if you can get off grid get off grid, buy physical silver, start exchanging US currency for Canadian currency and buy farm land.