1. The world and our economy is going to get uglier. The crushing debt will impact virtually every aspect of the economy. The market has been propped up but this will end. Stocks are a bad bet, SPY could hit 600 or lower. Cash is king and gold is good. Bonds are problematic. Hunker down, save all that you can; home repair and improvement is a good investment -- not for resale, but for your personal use and comfort.
2. Real estate will get worse. As leases expire, malls and commercial property will get darker. For example, I track the metro Atlanta area and it appears to have a 12- to 15-year supply of office property and 20% vacancy rates now. More stores will start to close after the January-February post-Christmas sales finish. Department store chains like Dillards and Macy's will start to consolidate stores believing that they can serve a metro area with six stores instead of twelve. In residential property, Fanny and Freddy are disasters and they will end up as government entities as will many banks. Residential remains ugly.
3. Health care will pass, at least in some form. And because the costs kick in immediately while benefits are delayed for four years, Democrats will suffer big losses in 2010. These, however, may still not be enough to shift control -- but the big trigger will be jobs. Another stimulus will not happen. All the state government jobs that were created will be eliminated since the states cannot afford to maintain them. Unemployment will worsen... but the government statistics will not reflect it. There are too many that are already not included in the metrics. Democrats will try to extend unemployment comp which is already at 99 weeks. That won't help. Democrats won't do what is needed to create jobs: suspend withholding, eliminate capital gains, etc. because the far left won't permit it. We will see at least 50% of the people not paying any taxes at all.
4. Lots of trade wars... and it will get ugly with China. On the plus side, we'll see a resurgence of small business manufacturing and entrepreneurship. It will be a great time to start a business. This will cause prices to rise but I don't see oil increasing much.
5. Terrorism is a real threat... the politics of Gitmo and Holder have had an impact on our entire security infrastructure. Terrorists think we are weak and our own citizens will ask, "what's the point?" If anything will truly impact the next presidential election, this and immigration will be the levers. Some jihadist will cross the border and commit a terrorist act and, all of a sudden, we'll realize we are vulnerable. Combine this with the fact that illegals are taking jobs... and you will see another backlash.
6. The issues with Iran... will be resolved either because they change internally (low probability) or the world steps in. Russia and China know out that if Israel goes to war, everyone gets involved. And we .....we do have 200,000 military close to the Iranian border.
With respect to politics, Papa B goes on to hope for some sort of "centrist consensus", but we all know that must be satire.
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