Mid-Year Predictions
What do you predict for the housing bubble and economy? A few from 6 months ago: “Everyone still tries to kick the can down the road. In Europe it does not work anymore. No more bailouts or stimulus in the US. The US goes into recession. Obama loses. Not by much. More war in the middle east. This time the US is not involved Housing continues to slide. China/Australia/Canada hit the wall. The US Dollar actually climbs quite a bit. Stocks get hammered. Cash (USD) is king. States actually take on insane public unions and win (they actually have no choice so this is an easy prediction). Manufacturing actually starts to come back to America. Solar and the green energy industry implode (again – easy prediction as they were never economically viable in the first place).”
Another posted, “I foresee the year of the default, with municipalities and pension funds throwing in the towel in a massive pile-on. We’ll see civil service strikes and marches, most likely joined by a second wave of OWS/TP sympathizers. Increasingly, the country will turn vegetarian as cattle and feed prices soar due to drought, corporate price fixing, and crop diversion to bio-fuels. Fast ‘food’ franchises will begin offering veggie burgers, curries and chilis in addition to whatever-it-is they pawn off on the oblivious feeder as ‘meat’ products.”
“Housing prices will continue to drop, though not as rapidly as in recent years. The underground RE economy will flourish and gain a certain legitimacy, as zoning laws are flouted and rental scams abound. Rental REITs will make a comeback after some enterprising syndicate touts it as an investment for Everyman and advertises it heavily in secondary markets a la Countrywide/Cash for Gold/cancer lawyers.”
“Chinese PACs will sway the Republican nomination toward Huntsman, but he’ll end up as the Secretary of State in the new Obama administration after Romney/Palin lose in a landslide. Or something.”
And another. “Very bad year in the EU zone. Possible breakup of the currency or massive monetization. Bad year in China. Desperate efforts to have an unsustainable thing going but basically fail. Commodities crash. Very bad year in India. Basically fail at every level. Moderately bad year in Russia. Moderately bad year in Brazil. Everything looks OK but the first derivative still portends doom for 2013. Especially bad year in Australia. Total crash. Bad year in Canada (you get to hear ‘we’re different’ more than a few times) and then you get a very bad 2013. Oddly enough, the US kinda muddles through it fine. (Logic is based on the ol’ ‘if you’re gonna devalue, devalue first.’)”
Then this, “Canada’s real estate continues into it’s bubble bursting. Mining hits a wall; commodity prices dive. Keystone gets the green light (or else Kitimat is approved). USA’s North Dakota becomes an energy giant. Five megawatt windmills start replacing 1.5 ones. Europe prints and prints and prints - inflation. US realizes it hasn’t been their domestic globals improving. New technologies show just how vast the offshore BC oil field is. First Nations people advance long term ownership of reserve based projects to 51% and do so by paying 51% of development costs. I hope someone eventually finds a solution to the housing crises. Not only Realtors will be called skallywags: so will Stock Shovellers.”
One said, “One thing I can say for sure is that it will be another year spent trying to find out how much debt governments can rack up without causing economic collapse. Another year spent trying to protect flawed debt markets which make so much money for politicians via their big donors. Will this be the year of the Black Swan? Stay tuned.”
And finally, “Once again, I’ll guess, they’ll do the things that will make things absolutely worse.”
From the weekend topics. “The White House wants us to share this. Key point: We’ve been talking to you about President Obama’s plan to cut through the red tape keeping millions of responsible homeowners from refinancing their mortgages, but we want to make sure your friends get the message, too. So we’ve put together a graphic that boils the President’s proposal down to the five things that everyone should know, and the information is all right here.”
“To which I say: Here in good ole Tucson, a lot of the responsible homeowners are also underwater on their mortgages. If they’re deeply underwater, they’re channeling their inner Nancy Sinatra and singing ‘These boots are made for walking, and that’s what they’re gonna do…’”
“In previous posts, I’ve noted the prevalence of ‘we’ll pay you a few thousand bucks to vacate’ notices on local houses that have been vacant for several months. In other words, day late, dollar short. Or, to use an agricultural analogy, barn door closed, horse gone.”
