David, you have to admit, the entire market looks bleak to extremely bleak. Job losses, retail down, bank failures, bailouts. It goes on and on. I think in a year, the Dow will be at about where it is right now. Any substantial increase will be mainly a reflection of the folks who buy and sell daily and not a true reflection of the economy in general.

Higher taxes, increased regulation, unfavorable foreign trade agreements, heavy handed environmental laws and the rest of Barry’s agenda will see to it that prosperity is a memory. Growth in GDP will be -1% to -2%, official unemployment will be greater than 9% (unofficially greater than 15%). CPI and DJIA are rigged, and are not worth predicting. But don’t worry, Barry’s Civillian Defence Corps (a “voluntary” program that will be required) will keep the unemployed from being idle.

What is more important than predicting the economic future is understanding what we can do as individuals and as a society to improve it. As a society, we are cranking up the money supply (which is absolutely correct) and planning more government spending. That is less effective, but OK if done on worthwhile infrastructure projects such as maintenance of existing bridges rather than construction of new bridges to the airports of small towns such as Ketchikan, Alaska, at a cost of around $60,000 per family living there.

What we can do as individual companies and workers is to reduce our wages and prices, so that people can afford to buy our products and keep us employed given their reduced purchasing power. If you protest that a reduced wage will reduce YOUR purchasing power, the anwswer is (1) if everybody follows this strategy, prices will drop to where you will be able to purchase just as much with less money, and (2) you are better being employed at a lower wage than unemployed at your same wage.

GDP: -1.6% in 2009. 1Q 2009, like 4Q 2008, is going to be a house-of-horrors type of number, H2 GDP shouldn’t be too bad because the government spigot will be turned on by then. This number is subject to what the government decides it will spend, as it can increase our nominal GDP at will.

Unemployment Peak: 8.9% in Dec. 2009. I think it goes over 9% in 2010.

Dow on 12/31/2009: 10,542. Markets always lead the economy out of a recession by 6 months…an economic recovery in early 2010 will be presaged by a stock market recovery in late 2009.

CPI change during 2009: -0.4%. Basically unchanged. 2010 or 2011 CPI might be ugly when energy costs spike back up because no one is investing big money in oil or alternative energy sources right now.

Saw the story in todays paper about the little white lie of the existance of Santa, why not start telling little white lies of how well the economy is doing?
I am a huge believer that all this negative talk and statistics feeds on itself and just makes things worse, a selfully phrophecy!
If the media started saying, unemployment is down, housing starts and sales are up, car sales are up, banks are making money again etc. etc. etc. I suspect that reality would follow the fiction.
I see it in my company, we are doing things now when they are not necessary because the powers that be believe all the negative talk and by their actions are feeding the monster. Is it good business planning or is it again that selfully phrophecy?

I think we’re going to have a mixed year. GDP will be down over 2% but Unemployment Index will decline slightly and DOW Industrials will be around 1000 points higher. CPI will decline. Unemployment Index will decline because many of the middle-aged laid-off will drop out of the job search or take part-time jobs. Stock market leads recovery and I believe it will begin in 3rd or 4th quarters 2009.
Economic forecasters are doing a miserable job. I keep reading in multiple sources that the boomers will continue to be in demand and employable. I don’t see it except as part-time. My company keeps it’s retirment age at 65 years, in spite of the fact the Social Security age is 66+ years. And, that’s saying there will be employees that old left to retire who aren’t senior management.

If you regress the change in pricing of real estate versus other cities (that have a correlation coefficient for the same variables, historically speaking), you’ll notice there’s a lag for the St. Louis area. Implement the lag into the regression equation and you have a pretty bleak picture for those needing to sell their homes in the upcoming months/year. Prices in the metro area are going to fall pretty hard, and I feel for the number of regional builders with debt payments coming up. Expect 2009 to be a shake-out for local builders with poor balance sheets; and there a number of them.

Count me with the people who think the media has a lot to do with the level of fear and dread out there. The Messiah won the election with a non-specific message of “hope” and “change”, and blaming the economy on the Republicans. The worse the economy is perceived to be, the better he will look after it turns around ON ITS OWN. Who wants to go in debt for a new car when there’s so much uncertainty out there? The media should start painting a brighter picture sometime after January 20. What we DON’T need is an FDR-like meddling that prolonged the Great Depression. Tell The One to keep his fingers out of the pie and let things happen naturally.

I see 2009 as a return to the early 1980s. Double digit unemployment and inflation. At some point we’ll need double digit interest rates to bring down runaway inflation. Will Paul Volcker still be around to pull us out of it again?

As for specific numbers, all the government statistics are rigged with statistical mumbo jumbo to distort the true economic picture. GDP is overstated, unemployment and the CPI are understated. Who knows what the true numbers are?

The Dow Jones Industrial average is also rigged. They dump the laggards and add stronger companies to keep the average juiced higher. With the government printing money to buy company stocks, this is all hallucinatory asset inflation.

Anybody who thinks they can predict the economic future of our country with all this going on is just kidding themselves.

GDP will decline at least 2%, Unemployment will rise 1.7% in Dec and even more in Jan. CPI is taking a 3% hit and dow Jones will have little change until after the new year. Think automotive-everyone is laid off right now at the big three and that means little spending or production. After Jan 31st dow will rally thanks to personal income tax time but the real test will be the first three months after Obama gets in - if he does something great stocks will rally and if he flops our economy will be sank for sure. Thank you media for dropping prices on everything without the sensationalism I would have not known the economy was in the tank.