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Varchild2008 (84.02)

How the economic turn-a-round will unfold from now to 2011

Recs

3

April 25, 2009 – Comments (4)

1)  Financials to include Banks, Life Insurance/Car Insurance companys, credit unions, etc.  Bottom out Q1 2009.  That happened....  Lots of caveats but the caveats are specific stock based caveats.  It's a huge sigh of relief when problems in the banks are isolated to specific banks and not the industry as a whole.

(particular strength in Regional Banks motivated me to Dump BAC when it struck $11 a share in favor of TCB for example).

2)  Housing Bottoms Q3 2009.   We will see sporatic signs of strength in Q2, but the real evidence of a recovery is Q3.

3)  Consumer Spending Q4 2009.  It will take the Christmas season to resurrect Consumer Spending from the on-going declines.  What looked like a rally recovery in first week of April for consumer spending as quickly crashed per www.gallup.com  tracking polls.   Consumer spending has fallen like a rock of late.  The bottom has not been reached.

4)  Unemployment Q1 2011.    Unemployment bottoms Q1 of 2011.  This occurs for a number of reasons to include steady improvements in the Auotmotive Sector mixed with the strength of Silicon Valley.  The falling dollar will motivate a political debate based on off-shore drilling all over again.  The election results, if they favor Pro Off Shore Drilling candidates, could motivate a spike in energy companys deciding to employ people... they don't have to hire... just declare their interest in hiring once off-shore drilling is permitted by the Courts.

Enough companys by Q1 2011 will have restructured their debt to please Perma-Bears like Alstry.
(just kidding Alstry)

Simplifying the Tax Code will also result in some benefits for Corporate America, as long as Republicans gain enough seats in the 2010 election.  President Obama may want to start fixing the Tax Code this year, but it will take 2 years or more before the tax code is done and approved.
It is millions of words in length and thousands upon thousands of pages.

5)  M&A  bottoms Q2 2011.    There are signs that point to a massive M&A activity in 2011.... But all of that is based on election results in 2010 favoring Republicans.

4 Comments – Post Your Own

#1) On April 25, 2009 at 4:53 PM, ralphmachio (25.70) wrote:

Varchild, been reading your stuff for a while and I think you definitely got a better grasp on the economy than most, and definitely myself. Barring any incident that would cause a sharp deviation from the norm, I could easily see your theory up here play out, except how could the banks have bottomed when real estate hasn't, and retail real estate hasn't fully crashed, because the retail market hasn't crashed completely?

 The incidents, such as oil skyrocketing, Iran, Pakistan, N korea, going to war, China dumping dollars, Iran selling oil in euros, Russia China and Iran joining together with France and others to demand the end to the dollar as reserve currency, and that's without even scratching the surface of the scope of whacky conspiracy inference. ('theory' makes it seem like their are no facts to back it up)  

 

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#2) On April 25, 2009 at 5:05 PM, djkumquat (49.48) wrote:

2012: world explodes!

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#3) On April 25, 2009 at 5:49 PM, dudemonkey (38.86) wrote:

2012: world explodes!

The Mayans were the original permabears.  Not even Marc Faber is as bearish as they were.

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#4) On April 25, 2009 at 10:24 PM, soycapital (< 20) wrote:

Good thoughtful post but wake me up when this happens: 

"Simplifying the Tax Code will also result in some benefits for Corporate America, as long as Republicans gain enough seats in the 2010 election.  President Obama may want to start fixing the Tax Code this year, but it will take 2 years or more before the tax code is done and approved.
It is millions of words in length and thousands upon thousands of pages."

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