One set of predictions for 2010

Not mine, but the forecast of an economist whose blog I read regularly: Scott Grannis, a.k.a. Calafia Beach Pundit. He did very well in 2009 as far as the crystal-ball gazing biz goes — see his recap of his 2009 predictions and results here — so it will be interesting to see how he does in 2010.

In short, he’s more bullish, and expects more hawkishness, than most economists seem to be right now. He expects the economy to grow twice as fast, for instance, as the forecasts given by S&P and UGA economists earlier this month. But, like them, he points out that this growth will be slower than the usual rebound from a deep recession.

I’m a little more bearish than Grannis, but who knows? Who out there is bullish about 2010?

22 comments Add your comment

Intown Lib

December 30th, 2009
10:01 am

I followed conventional wisdom and was bearish about third and fourth quarter 2009 and was wrong. I bet on inflation. Danggit! So, might as well buck conventional wisdom and be a bull in 2010.

Democrats are Corrupt, Repukes are Lying Scum

December 30th, 2009
10:18 am

Try this for a prediction for 2010: A return to the DRAFT. I still believe the neocon scum aided and abetted 9/11 to advance their perverted goals in the MiddleEast, not the least of which is an expansion of Israel to include all of Lebanon and much of Syria. This ObamaCare scam is a smoke screen to allow the feds to cut Medicare spending and collect more taxes prior to the 2013 implementation date of this ABORTION. The funds collected under ObamaCare between now and 2013 will be used to offset the loss of the former Social Security Surplus that was used to fund the Federal government, thus allowing a BANKRUPT NATION to continue the illusion of prosperity and wage four wars simultaneously. Social Security will collect less this year, 2009, in taxes than it pays out in benefits. This will make the Federal budget deficit much worse, hence the need for the ObamaCare taxes. I believe Obama has been taken in by the neocon lies, and is expanding the war against Islam to include Yemen and Iran. If I am correct, get ready for a return of the DRAFT, as an AmeriKan war of aggression in four countries cannot be waged with only a volunteer army. Never underestimate the power of the pro israel lobby in WashingAss, the scum own that worthless city and the press. You will never know the truth by reading the main stream american media, or watching the american boob tube, and certainly not by listening to talk radio. Any and all criticism of Israel and neocons will be labeled anti semitism, and discredited and/or deleted. Try reading the comment sections of the Washington Post for a true view of the pro israel lobby, the federal workers in Washington are well aware its control of the Federal government, and their comments reflect their frustration with this one way street of American wealth and military equipment and technology flowing to Israel, with nothing coming back except demands for more. No longer satisfied with vast amounts of American wealth, military equipment, and technology, the pro israel lobby has long wanted American boots on the ground in the Middle East. That goal achieved, they now seek expansion of that war to ALL Arab and Muslim countries in the region, and that demands a return to the draft. Oh yeah, you can also say goodbye to any social security benefits you planed to collect after 2013, the nation will be completely bankrupt.

Jess

December 30th, 2009
10:52 am

The economy depends on people spending money. For this to happen there has to be jobs. Small businesses provide most of the jobs in the US. In the last year small businesses have seen a large increase in minimum wage, have been told their tax breaks from the Bush admin. will go away, thus resulting in one tax increase, are facing the potential of being forced to provide health coverage of face a fine, and there have been hints of further tax increases to pay for new entitlement programs.

Given this, and the uncertainties created by an anti business administration on a spending spree, I think the recovery will be slow. Consumers and employers are in a hold pattern until they can figure out what on earth is going on.

Horrible Horrace

December 30th, 2009
11:24 am

Completely pessimistic. Obobo’s failings will be the underlying cause of some form of terrorist attack be it blown up buildings or planes falling from the sky. Once this occurs the big money will run for cover as the DJI tumbles to between 5000 and 6000. This will cause an ensuing panic amongst the business leaders and lead to more layoffs followed by a slowing economy. An overall price drop will then occur leading to some initial spending yet followed by more layoffs while inflation and interests rates continue their upward spiral.

Finally, Iran will get the bomb and launch said bomb on Jerusalem. At this point the world will descend into all out war with the markets tumbling into the 2000’s and 25 to 30 percent unemployment following close behind. Soon afterwards China will invade the middle east and takeover Iran and its oil wells. The US and Britain will invade the middle east taking over Saudia Arabia and Kuwait which will be the beginning of the rebuilding process.

2010 promises to be quite the year!

Ragnar Danneskjöld

December 30th, 2009
11:28 am

I see zero economic progress, not even reaching the level the republicans left the economy when democrats took over in 2006. My forecast assumes our leftist friends decline to reverse course on several fronts.

A rational overlord would divert less capital into the unproductive economy, and would leave more capital within the productive economy. As we do not see our leftist friends as “economically rational” we expect more government spending, thus choking the private economy.

A rational overlord would remove government constraints on the productive economy. Our leftist friends, far from eliminating worthless restrictions, seem to be fully engaged in imposing additional and incredibly expensive constraints, primarily in health-care and banking. No, no real outlook for meaningful improvement.

Jess

December 30th, 2009
11:29 am

Another drag on the economy as it tries to recover will be the price of oil. If anyone pays attention at all they will see that the price of oil is tied to the economy. As the economy improves, the price goes up. This in turn cools the economy. Since our government has an irrational fear of allowing oil to be produced in the US, this will strengthen the economies of those who supply us, and increase their influence on us.

It should be noted that other oil producing countries, regardless of how green they claim to be, continue to explore and produce their own oil. Our irrational fear seems to be unique.

Logical Dude

December 30th, 2009
11:30 am

Prediction: I don’t think I’ll get laid off this year like I was last year.
Otherwise, more people will be getting hired, and spending money to catch up. They won’t spend as much because because they are saving more. They also won’t spend as much because what credit they had is now more expensive (next line)
Credit Card companies who have jacked up their rates big time will be highly criticized, but they won’t change their ways until forced.
Overall, the economy will improve. My hope is for significant improvements to rebuild my nest-egg. Otherwise, the unforeseen explosion or death could turn it all back down again.

JF McNamara

December 30th, 2009
1:31 pm

Jess,

We are an exporter of technology, so small business is not the only way to promote growth. Exporters sell products over seas, import the cash, and they pay U.S. employees. The U.S. employees will support small business.

The Obama administration can hardly be considered anti-business. They bailed out the banks, insurers, and the auto industry. They dropped rates to near zero to encourage exports and allow the banks to make high profits to get out of debt. The only industry with any beef is health insurers, and they don’t have a big one. Its hard to be more pro big business than they have been.

The primary factors in oil’s pricing are the dollar and demand. The dollar is near the expected lows and demand for oil is weak. There is plenty of excess supply out there, so rising oil likely won’t be an issue.

While we are an oil producing company, we consume more than we produce. Hence we are an net importer of oil. That’s why we have an “irrational” fear. If we can’t import oil, our country will shut down.

Horrible Horace,
LOL, hopefully you are right.

Jess

December 30th, 2009
1:55 pm

JF,

Small businesses employ 70% of the private workforce in the country. The attack on their bottom line will have a much larger impact on the overall economy than the the remaining 30% can make up.

They didn’t just bail out banks, auto companies etc., they essentially took them over. At the auto companies they fired the chairman, completely wiped out invested bond holders, and gave the unions, who were not invested’ billions and a seat on the board. At the banks they have capped salaries, forced them to make unwise loans, and added massive regulations. If that is what you call business friendly, then we see the world through completely different glasses.

There is indeed plenty of oil out there. We however have put ourselves in a position of relying on other countries to put that oil on the market. Supply is not what is in the ground. Supply is what OPEC and independant producers see fit to say it is. As we have learned during the last decade, they have found holding down supply and keeping prices high is easier than producing. The irrational fear I spoke of is the idea that production of oil is more harmful to the environment that shipping it in. Much more oil is spilled from tankers than from production.

JF McNamara

December 30th, 2009
2:46 pm

Jess,

I don’t follow your logic on small business. Maybe I didn’t take the example far enough. Exporters sell products over seas, import the cash, and they pay U.S. employees. The U.S. employees will support small business.

In addition, the U.S. large companies that export order parts from mid sized companies suppliers who pay their U.S. employers. Those mid sized companies order supplies from small companies who pay their U.S. employers. In addition, the U.S. employees from the large sized, mid sized, and small companies now have the money to support our service industries.

That’s how the economy works, and I thats why things are improving. Companies of all sizes are getting orders because of our exports.

The government didn’t take over anything but General Motors and maybe Citigroup (depending on how you look at it). The most I ever saw them owning in Chrysler was 8%.

The banks got pay restrictions because they were owned by the government. That’s their just reward for doing such a poor job that they needed to be bailed out. As the owners of the companies, the government could do what they wanted. Just about every bank with pay restrictions has given the money back, so there is not point there anyway.

GM is really your only point, and firing the CEO is what they were in their rights to do as owners. If I owned a failing business, I would fire the CEO too.

Your assertion that they forced them to give bad loans is flat our wrong. As far as I can tell there haven’t been any regulations levied on businesses by the Obama administration (other than pay). Can you post a link to this legislation because I don’t believe it exists? I’m not being smart with this, but I really don’t think there are any new regulations.

They are business friendly because for all they did to save these companies they got relatively little in return and primarily let the companies run as they would otherwise. You don’t think getting bailed out is business friendly? You don’t think dropping the rates to zero was business friendly? Letting them fail is business unfriendly. Leaving them on the brink of death with high rates is unfriendly.

OPEC lives by the supply and demand curve just like everyone else. If they drive the price goes too high, people stop buying. When it got to $120, we saw people cut back. They know what they can do with the price. It they limit supply too much, they will lose money due to conservation.

I didn’t know there was an irrational fear of oil production. I’ve heard nuclear, but not oil. My bad.

BS

December 30th, 2009
2:47 pm

Kyle, at the end of 2010 we will have 2.7% growth in GDP and the unemployment rate will be 7.6%. I’ll buy you a beer if I’m wrong.

F-105 Thunderchief

December 30th, 2009
3:12 pm

All politics and economics is local. Here in Carpetland, the customer base has no money, because of no work for months on end. That is bringing down the retail and service industries down, too. It’s a huge, mega-cluster collapse in Carpetland. We are all doomed.

Chris Broe

December 30th, 2009
3:22 pm

Prediction? For the GOP in 2010? Yeah, I gotta prediction:

PAIN!!!

Jess

December 30th, 2009
3:37 pm

JF,

Your economic model still relies on companies who employ 30% of the private workforce providing a trickle down benefit to companies which hire 70% of the employees. This is also the segment of our economy who is going to experience a 5.4% tax increase in 2010 due to the roll back of tax cuts, and in the house version of health care reform another 5% increase to pay for reform. Large and medium size companies will not see these as they have different accounting rules. In addition, they have just had to eat an increase in minimum wage, and under any version of health reform, they will be penalized. This is not business friendly.

My take on GM is they should have been allowed to fail. The only reason they were bailed out as far as I’m concerned is payback for union support during the election. So now we have a government run and financed auto company, competing head on with a private auto company. This is not business friendly. I agree the bank bailouts had to happen, but it is obvious that the banks should have been broken into smaller units which could be allowed to fail. As it stands the government controlls banks which hold 40% of the nations financial capital.

$120 per barrel oil is what OPEC figures the market will bear in a strong economy without adverse affect on demand. This would however have an adverse affect on our economy as the extra money spent for fuel would not go back into our economy, but rather to OPEC.

Chris Broe

December 30th, 2009
3:45 pm

Greenspan sez that the bottom was reached last June. So this is 6 months into the recovery. These are the good old days.

The stock market is predicting a robust economy for 2010. The market is never wrong. The banks are honest. The insurance industry is virtuous.

America is in good hands.

Sell.

Intown Lib

December 30th, 2009
3:51 pm

DCRLS: how did this turn into a condemnation of zionism in general? And doesn’t this sentence from the very quote you cited refute a yor condemnation of Zionism and Israel: “Most of the Jewish community was horrified at the deed, and the Jewish Agency sent a telegram of apology to King Abdullah of Trans-Jordan.”

Kyle: can’t you screen out wacko comments?

Kyle Wingfield

December 30th, 2009
3:56 pm

Yes, Intown, and it’s down now. DCRLS, please stick at least loosely to the topic at hand.

Hillbilly Deluxe

December 30th, 2009
4:00 pm

I don’t know any more about the economy than an economist does and Lord knows he don’t know nothing. (Apologies to Will Rogers for stealing his line). I’d be surprised if things improve much until 4 or 5 years down the road.

Bart from Buford

December 30th, 2009
4:01 pm

I predict some redneck girl will make me a honest man in 2010!

Hillbilly Deluxe

December 30th, 2009
4:02 pm

Greenspan sez that the bottom was reached last June. So this is 6 months into the recovery.

Ain’t he the genius who was totally shocked by the meltdown?

JF McNamara

December 30th, 2009
4:20 pm

Jess,

Yeah, my model relies on the 30% supporting the 70%. Thats the way economics work.

Is there another minimum wage hike coming? The last one only made a difference to 4% of the population. That doesn’t seem like a large effect for small business to me.

http://economix.blogs.nytimes.com/2009/07/24/who-is-affected-by-todays-minimum-wage-hike/

I’m pretty sure that the companies can handle the rollback of the tax cuts. The Clinton years were some of the most prosperous times in American history and that’s where the tax rates were. What’s different now that they can’t be profitable.

We’ll see on health care reform. But again, thats the same point I gave into last time. The healthcare plan is really the only business unfriendly item this administration has ever passed.

GM was saved because we were already having massive layoffs and it would’ve been much worse had they failed. Not only would GM workers have flooded the market, but their suppliers also would have had to lay off. It would’ve devestated the service economies in those cities as well because the GM workers wouldn’t have had any money. The bailout was a jobs program, and it was made because it was the cheapest (and most palatable) option available.

I don’t believe the statement below, but it could well be true. They don’t even control 40% of Citigroup…and by control you can’t mean operational control since they aren’t giving input. They are also allowing the companies to pay the money back when they are stable. Can you give me a link as proof of the statement below?

“As it stands the government controls banks which hold 40% of the nations financial capital. ”

OPEC knows what you just said about $120 oil. That’s why it won’t go to $120. They rely on us as customers and if we cut back, we may find permanent alternatives.

Here’s a question to you? What would OPEC do with the oil money?

A. Put it in the bank. The bank would lend it out for a higher rate of return where it would return into the world economy.
B. Buy stuff…from another country (U.S.) since they don’t produce anything but oil.
C. Help provide higher profits to companies like Exxon and Halliburton which would trickle into the U.S. economy.
D. All of the above

The money will make it back to us. Maybe not all of it, but we have the technology they need.

Jess

December 30th, 2009
5:00 pm

JF,

Sorry, I’m not buying your economic story. Small businesses will be greatly harmed by the increases in taxes and cost increases forced on them by the government. If cap-and -trade passes, large businesses will also be dragged down, with all the extra costs eventually finding it’s way to the consumers.

Saving GM was a mistake, and definately not business friendly. It was union friendly first and foremost. By the way, the bailout was not a jobs program, the stimulus was supposed to be a jobs program, but thus far has proven to be a failure.

What would OPEC do with the money?….lend it to the US. You may have heard, we are in the market for lots and lots of cash.