…and a List of 2010 Predictions

As I sit here, enjoying the arils of a pomegranate and English tea brewed from loose leaf, I stare outward, despite all my energy peering within, lost somewhere behind vision but before dreaming.  It is here that we attempt to perceive what is coming in the future.

So I lay out for you now, my predictions for the next year.  Undoubtedly, they will change dramatically, as my predictions for this year have.  However, it is important that we work from some foundation.

There are many way to create predictions.  The majority on this site use technicals; predict the future from the past.  Some of you use fundamentals; all things must stay within their boundaries.  For judgment of stock picks, I tend to rely on functionality.  A system is bound by fundamentals, but its behavior within them is very much a relationship which, with experience and cleverness, can be reasoned out.  The probable, outward price valuation of any security is a distribution dependent on its components and their actions.

However, for anticipating the developments of a country in what is so frequently an irrational world, or for issues which cannot be reliably understood through math, there is a far simpler mechanism I employ; one which, sadly, has fallen from the grace of men long ago.

That is the consideration of objectivity.

Firstly, the Fed will not raise rates for at least another four months.  It is coming to winter, and, despite this sudden warm front we’re experiencing, at least where I am, it will still be a particularly cold one.  Raising rates would be a kiss of death to struggling families still holding onto the edge, correspondingly increasing their payments which are already being met only with much difficulty.

However, the Fed chairmen are not fools; they see the world besmirching the dollar and know full well that possessing the reserve currency is our most powerful distinction.  They will attempt to correct our path, likely in late March or early April, perhaps on the back of a report announcing an increase in jobs, by raising rates.  Real estate will suffer accordingly, maybe dragging the market into a slow, gradual retracement.

Bankruptcy filings will increase unexpectedly after Christmas.  Exhibit some empathy and ask yourself: you’re the struggling head of a household who can’t keep making payments on a house that’s underwater.  You have an untenable debt load.  Do you file for bankruptcy now?  Of course not, it’s the holiday season and low federal lending rates coupled with recently passed legislature have enabled you to finance your debt.  You can’t make headway on it, but you can just sort of coast onward.

You perhaps have a family, who you want to see happy, if even for a fleeting period of time.  So you go on one last spree to buy them some festive cheer and save the tough decision for after January 1.  I expect bankruptcy filings will appear diminished over the next two months, and will then creep back up in a small rush after the holidays.  Credit card companies and banks will get hit in the first month of 2010.

Healthcare will be passed, if not by year end then the beginning of 2010.  It will not contain a public option, but will cost more than $1 trillion, to be determined by the ages and not us here today.  Social Security and Medicare/Medicaid will be addressed next year, but I don’t pretend to guess whether they will be balanced for any permanent interval (greater than one or two years).

Next summer, leaders of foreign nations will band together and create a new standard for purchasing oil; talk suggests it will likely be backed by a basket of currencies.  Even if our currency appears to be rebounding, this will still likely happen.  It is a matter of principle that foreign nations do not wish to suffer having the United States holding our currency over their heads.  If our misstep can create a world wide financial crisis, can you imaging what our intentions could accomplish?  They will not risk a weaponized, nuclear, U.S. dollar in negotiations on America’s global policy.

Democrats will lose big in the November mid-term elections, with Republicans taking back the House.  I don’t know if they will also regain the Senate.  However, Republicans will prove most providential in local elections, gaining vast control of small offices.  Despite this large change, the election will still be associated with words like, “close”, “insufferable”, “aggravating” and, shortly thereafter, “pointless.”  Obamacare will not be rescinded.

Sometime next year, it will be announced that we have made it out of the recovery.  Employment will be forced below the ten percent point, if only through strategic manipulation of government data.

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