It’s time for tea leaves and astrology in the 9th floor office of Thaler. I have a long standing policy of looking ahead for what I think may be coming in the month of November, before my mind is warped by tryptophan and truffles of the holiday.
The simple fact is, whether the future looks beautiful or bleak, during the holidays I am incapable of honest assessment, being all hopped up on jolly visions of a fat man in a red suit, and tidings of joy and God. I’m a fairly skeptical and down to earth person, ten months a year. But this final month and a half I just refuse to be in bad spirits.
Even when writing of starving hobo’s frozen in blizzards, as I was to be this time last year, I was in such a jovial mood and good spirits, a smile was on my face the entire time, and warm tidings in my heart. Not to mention spiked Egg Nog…
I wouldn’t have it any other way. Amen, and Merry Christmas.
Also, false confirmations will abound for the next few months. November is notorious for huge runs as coked-out shoppers stampede one another for half priced dish sets and automated hamsters. And December, the Banal Month, is never to be taken at face value.
So, if I’m going to be honest about things (even plain realistic about good things) I’d better do it before next week.
But first, a quick look back at last years predictions and how they faired:
1. Fed raises rates in March or April, in response to improving economic data.
In reality, the Fed raised rates sooner, but insignificantly. Incorrect.
2. Real estate will suffer from rate hike, dragging market into lower correction.
Real estate shored up, but seems to be in another run lower, unrelated to the small rate hike. Market wavered higher and lower in 2010, but not in response to anything I foresaw. Incorrect.
3. Bankruptcy filings will increase unexpectedly after Christmas.
Not noticeably, if at all; in fact, it appears they are about to increase now, having been staved off by various government fiddling. Incorrect.
4. Credit card companies and banks get hit after first of year.
Nope, they shot considerably higher. Incorrect.
5. Healthcare passed, no public option, costing more than $1 trillion.
Check. Even the cost is decidedly now more than $1 trillion; almost no need to hold off claiming that one.
6. SS, Medicaid/Medicare will be addressed.
It now appears that this will be issue of the next Congress, for 2011. I’m rolling this prediction forward. But, for the year, it was incorrect.
7. New standard currency for purchasing oil.
Didn’t happen this year, as Domestic currencies of any nations with the drive to push for this sucked far worse than the dollar. However, this is a must to further the agenda’s of non-US nationals. Look for it in the coming years. Incorrect, but rolling forward.
8. Democrats lose big in elections; Republicans take house.
Nailed that, especially by not predicting what would happen in the Senate. Also, local elections were a right wing flood, as I eluded to.
9. Recovery announced, with unemployment falling/forced below 10%.
Also nailed this one.
So, there’s my first year record. I’m rolling a number of those predictions forward, as specified. Remember, the objectives of major players in the world should always be considered before blindly analyzing data. A few of those former predictions are based on what some very influential people are going to want to happen, rather than what has happened or appears to be occurring now.
So, next year’s predictions:
- Fed will succumb to political pressure and raise rates towards the end of the year, (after housing has declined further?).
- Fed will cut short the $600 billion devaluation in direct response to overbearing pressure, but not until at least $300 billion has been released.
- The GOP will threaten to filibuster a raise of the debt ceiling to force concessions.
- In response to a combination of the last two points, and before/beyond the first, the dollar will decline by at least 20% more.
- Grain futures unexpectedly decline despite inflationary pressure, in response to production recovery in the Russian economy.
- Social Security, Medicaid/Medicare are addressed.
- New standard currency for purchasing oil (the whole world wants it but us).
- Chris Christie the GOP nominee for president. Barrack Obama the Democratic nominee.
- Elements of healthcare bill repealed, such as the new business tax filing requirement.
- Unemployment falls below 9% (as recorded) in positive response to gridlock in Congress, along with specific popular legislation which improves the atmosphere for business.
- Bankruptcy filings pick up as support programs fall to austerity. This means financials will face gruelingly uninspiring prospects for 2011.
- Home foreclosures pick up (now? Really, these people can’t afford these mortgages any more now than they could at 25% higher price valuations).
- Nasdaq keeps below 2650 (I’m giving a healthy range of upside now just in case people go ape shit in tech names for the holiday) on average for all of 2011.
Out of SCO for a small 3% gain.
Out of half of my shares of VZ for a 17% gain.
I look forward to the next months in this name, as the holidays bring increased Android OS phone sales, and VZ see’s huge increase in services going into the new year. Also, if rumors of Apple coalescence are true, my expectations will be themselves trounced.
But, I still feel better with taking half off the table.
Of my remaining margin, at this point 2/3 of it are attributable to FAZ, hedging me down. Upon a sale of FAZ, barring valuations, I’ll be sitting on a margin stake roughly 4% of my net holdings.
I will be looking to grind this down to par, with me holding only equity and no cash in my trading accounts.
This does not include my credit position on my silver holdings. However, I feel much better about that position than my stocks, at this point in time. And, even that is on notice. I will be looking to extinguish that debt when silver goes above $30 an ounce.