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« First Look at 2010 Stocks | Main | Santa Rally Has Legs »

Sunday, January 03, 2010


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I am a little confused by your post. You say “so most of 2010 should be up” and yet you predict “Stocks peak in Q1, probably by early Feb, and retest the Nov08 (not Mar09) lows, and bounce”.

For most of 2010 to be up there has to be a quick drop to the Nov08 lows for a rapid bounce to take place so as most of 2010 is up. Am I interpreting your post correctly?


Yelnick - agree with much of your thinking but I would add probable Japan debt/currency crisis to the list for late 2010 or some time in 2011.


Please clarify for me the Summer of Disillusionment timeframe. Are you forecasting it for 2010 or 2011?


Craig, the Summer of Disillusionment is 2010. More on why here:


Steve, my comment "most of 2010 should be up" was referring to GDP not stocks


Looks like Neely continues to miss out on yet another big run to the upside.


Thoughts on gold?


Rich, the standard view is gold drops with deflation & the USD rising. Yet I see gold as a hedge against bad government, not just inflation. I have written how gold appears to be hoarded by central banks right now, and we have seen dramatic (for gold) sovereign moves to increase gold stocks (eg. India, China). Those two factors (hedge and hoarding) should keep gold buoyant against a rising Dollar.

This does not mean gold goes on a run again, at least not yet. Early in the year the USD needs to correct down to DX76 range, and then have a third wave up. Gold may rise in the short term and then fall with that third wave. Around the Summer of Disillusionment, when the US economic policies begin to falter (ie. Treasury has to raise rates to raise funds, Fed is trapped in its exit to begin to signal a short-term rate rise, US GDP begins to flatten after several good quarters, and unemployment remains stubbornly above 10%), gold will return as a buy even as the USD will continue rising.


Great post Yelnick, much appreciated.

Government activities appear to be working in the short term. I like your call on housing. 20 percent seems about right. Oil at 50$ seems low.

Here is a fairly downbeat forcast for 2010:

Thanks again for the insight,

stefano posted that the PIGS should be in the eye of the storm in 2010. I' m from Northern italy and to tell the truth I think that Great Britain is in a much worse situation. Northern italy is a train................without southern italy.............we would be like Switzerland, an economic heaven: If we can maintain southern italy which is a black hole of public money............we can get out of anything. GB instead is not used to the critical conditions which they are going to. And the USA too are not well positioned, imo, if some states are close to BK as someone says.


Stefano, agreed - if Milano and its surrounds could de-federate from the rest of Italy, it would a great economic engine .. it is the whole of Italy that earned it one of the I's in PIIGS. (Ireland is the other.) And with the excessive QE of Great Britain, maybe the PIIGS become PIIGGS. Or, if the US continues to go off the deep end of excessive debt, we can create a new category for US UK called USUK, pronounced "you suck". (The origin of the phrase 'to suck' comes from a '50s expression "to suck wind", meaning out of breath .. this actually seems to fit the QE countries, who will soon run out out wind in their sails of borrow & spend, and will watch their ship of state stall.)

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