Cloudy forecast for 2008
I wrap up my winter solstice festivities with New Year's Eve and New Year's Day. Tonight I review the past year and list goals for the coming year. Tomorrow I strip our Christmas tree (which was already too dry when we put it up), put away all the Christmas decorations and start looking forward to the Super Bowl.
About the new year, let me say up front that I am no psychic. I'm worthless at predicting the future. In fact, if you want to get in the fastest line at Trader Joe's or make money in your 401(k), just do the opposite of what I do. So instead of making predictions for 2008, I'll mention some of the possibilities and refer you to other sites.
The big question, at least for me, is what will happen with the economy. Will we have a recession? Or worse?
If you want a positive outlook, follow Lawrence Yun, National Association of Realtors chief economist. Today's NAR article, "Existing-Home Sales Rise in November, Market Likely Stabilizing," uses him as the authority and claims "disruptions in mortgage availability and pricing peaked in August." What?
Has he seen Figure 1.7 in Chapter 1 of the International Monetary Fund's October 2007 Global Financial Stability Report? The chart, credited to Credit Suisse, shows even more subprime loans resetting in 2008 than in 2007. If that is accurate, isn't it premature to talk about recovering from the mortgage crisis in 2008, much less seeing the peak a few months ago? The chart shows a relative lull for 2009 and then similar amounts of option ARMs resetting in 2010 and 2011.
There's a mainstream forecast at marketwatch.com that makes sense to me but is worrisome: "U.S., world look at rebalancing act" (sorry, I couldn't get a direct link to the article to work). It says the markets will be "choppy" at least through the first half of 2008 but calls global growth a "silver lining"—if a U.S. recession doesn't impact it. It quotes various experts predicting a recession.
If you want a worst-case scenario for 2008 (or a good laugh depending on your point of view), check out George Ure's Urban Survival blog for today. (I don't think he uses permalinks, so for the rest of the week you'll have to scroll down to the Dec. 31 entry; after this week you'll have to go to the archives.) His theme is "crashcade," and he predicts the value of the dollar being halved or quartered, the government suppressing dissent on the Internet, millions marching on Washington and state capitols by mid year, cities burning and oil at $10,000 a barrel (if you read to the end). You might not be surprised to learn he includes survival tips in his blog. You might not be surprised, either, that the people providing the tips sound eager to begin eating all the canned butter and powdered milk they've hoarded, lighting fires with dryer fluff (which they saved when there was still power to run dryers) and shooting strangers who show up when they see the smoke from their fires.
The calmest, most encouraging prediction I've found is in Robert Kuttner's blog at The American Prospect. He says America faces a "perfect storm" (his cliche): "a weakened financial system, diminished consumer purchasing power, a swooning dollar and rising inflation." But "I'm not predicting another great depression," he says. "Happily, the people who kept insisting that private business could regulate itself did not repeal the entire New Deal." Seriously, that makes me feel better. He concludes, "The eventual recovery will require a repudiation of free-market economics, as bold as the New Deal. But like so much else about the Bush legacy, recovery will be far more agonizing than it had to be." Now, there's a prediction I believe.
Other than the economy, what can we expect? A new president by the end of the year, for one thing. It won't be soon enough. More deaths and injuries in Afghanistan and Iraq. Broken weather records. An end to the writers' strike?
In the very near future—this weekend—we're supposed to have a big storm or series of storms. Yesterday we were hearing it could be one of the biggest events in the past 50 years, but they already seem to be backing off on the predictions. I enjoy the drama and beauty of a big snowstorm (as long as I don't have to drive in it), but I've learned that the more forecasters hype a storm the less likely it is to arrive. I'll go out on a limb and predict that there's a 50-50 chance we'll have more than an inch of snow on the valley floor by the end of the weekend.
No matter how all the predictions turn out, I wish everyone reading this a happy, peaceful, prosperous 2008!
About the new year, let me say up front that I am no psychic. I'm worthless at predicting the future. In fact, if you want to get in the fastest line at Trader Joe's or make money in your 401(k), just do the opposite of what I do. So instead of making predictions for 2008, I'll mention some of the possibilities and refer you to other sites.
The big question, at least for me, is what will happen with the economy. Will we have a recession? Or worse?
If you want a positive outlook, follow Lawrence Yun, National Association of Realtors chief economist. Today's NAR article, "Existing-Home Sales Rise in November, Market Likely Stabilizing," uses him as the authority and claims "disruptions in mortgage availability and pricing peaked in August." What?
Has he seen Figure 1.7 in Chapter 1 of the International Monetary Fund's October 2007 Global Financial Stability Report? The chart, credited to Credit Suisse, shows even more subprime loans resetting in 2008 than in 2007. If that is accurate, isn't it premature to talk about recovering from the mortgage crisis in 2008, much less seeing the peak a few months ago? The chart shows a relative lull for 2009 and then similar amounts of option ARMs resetting in 2010 and 2011.
There's a mainstream forecast at marketwatch.com that makes sense to me but is worrisome: "U.S., world look at rebalancing act" (sorry, I couldn't get a direct link to the article to work). It says the markets will be "choppy" at least through the first half of 2008 but calls global growth a "silver lining"—if a U.S. recession doesn't impact it. It quotes various experts predicting a recession.
If you want a worst-case scenario for 2008 (or a good laugh depending on your point of view), check out George Ure's Urban Survival blog for today. (I don't think he uses permalinks, so for the rest of the week you'll have to scroll down to the Dec. 31 entry; after this week you'll have to go to the archives.) His theme is "crashcade," and he predicts the value of the dollar being halved or quartered, the government suppressing dissent on the Internet, millions marching on Washington and state capitols by mid year, cities burning and oil at $10,000 a barrel (if you read to the end). You might not be surprised to learn he includes survival tips in his blog. You might not be surprised, either, that the people providing the tips sound eager to begin eating all the canned butter and powdered milk they've hoarded, lighting fires with dryer fluff (which they saved when there was still power to run dryers) and shooting strangers who show up when they see the smoke from their fires.
The calmest, most encouraging prediction I've found is in Robert Kuttner's blog at The American Prospect. He says America faces a "perfect storm" (his cliche): "a weakened financial system, diminished consumer purchasing power, a swooning dollar and rising inflation." But "I'm not predicting another great depression," he says. "Happily, the people who kept insisting that private business could regulate itself did not repeal the entire New Deal." Seriously, that makes me feel better. He concludes, "The eventual recovery will require a repudiation of free-market economics, as bold as the New Deal. But like so much else about the Bush legacy, recovery will be far more agonizing than it had to be." Now, there's a prediction I believe.
Other than the economy, what can we expect? A new president by the end of the year, for one thing. It won't be soon enough. More deaths and injuries in Afghanistan and Iraq. Broken weather records. An end to the writers' strike?
In the very near future—this weekend—we're supposed to have a big storm or series of storms. Yesterday we were hearing it could be one of the biggest events in the past 50 years, but they already seem to be backing off on the predictions. I enjoy the drama and beauty of a big snowstorm (as long as I don't have to drive in it), but I've learned that the more forecasters hype a storm the less likely it is to arrive. I'll go out on a limb and predict that there's a 50-50 chance we'll have more than an inch of snow on the valley floor by the end of the weekend.
No matter how all the predictions turn out, I wish everyone reading this a happy, peaceful, prosperous 2008!
We love George Ure!
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Hmm . . . are you defending him or agreeing with me that he's pretty interesting? Everything he says about the current economy makes sense to me, but he loses me when he starts talking about web bots, time monks and linguistic predictions. Of course, I keep reading. It's all interesting!
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