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Stock Ideas Investors Daily Edge What I See in 2008
Stock Ideas Investors Daily Edge What I See in 2008 
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| What I See in 2008 |
| Thursday, 03 January 2008 | ||||||||
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2008 is finally upon us. This is the year we elect a new president. It’s the year we find out how deep the housing crunch goes. And finally, we’ll learn if a recession really is coming or not. What do I think? I’ve never claimed to be a psychic. It was hard enough for me to figure out who Dr. House would pick as his next assistant in the TV show House. But the markets aren’t that hard. How could a market be easier to predict than a TV show? Let me explain. The whole function of the market is like a swinging pendulum, with one side being expansion and the other recession. The economy will ALWAYS swing from one side to another. So if you know what part of the pendulum the economy is at, then it’s easy to see what could happen in the year ahead. I say we’re swinging from expansion to recession. That’s why I expect housing to suck this year, too. And with the housing slowdown, expect unemployment to climb and banks to keep writing down losses. Will a major financial institution go bankrupt? I seriously doubt that. Foreign money will bail them out for the rest of the year. There’s also no doubt in my mind that oil prices will charge higher this year. Even with lower consumer spending, oil demand has risen in the U.S. by 0.5 percent. You can also expect inflation, gold, and silver prices to move higher throughout the year as well. There’s a lot of worthless dollars overseas looking for a new home. And back home they’ll come, to the U.S. I have to admit, though, I’m an optimist at heart. So I hate looking like a doom and gloomer. That’s why I’m not predicting the demise of the entire financial system, like PIMCO boss man Bill Gross. People have been predicting that since the markets began. Has it happened yet? So will anything good happen in 2008? Well, there are going to be pockets of strength. I don’t think the consumer is cashed out yet. And the economy won’t slow as much as some people expect. A year ago I told readers of INCOME that exports would grow during 2007 and actually help buffer us from a severe recession. I still view this as true. I’d hate to see where our economy would be without a weaker dollar making our exports attractive. A few more predictions. The dollar will move lower, but might show strength in the second half of the year as other nations begin dropping interest rates. And yes, interest rates will continue to drop in the U.S. My guess is at least one percent by the end of the year.
I also expect Hillary Clinton to be nominated as the Democratic presidential candidate (but I hope it’s Obama). And Mitt Romney should get the nod on the Republican side (let’s face it, Rudy has way too much drama to contend with). If Hillary gets the nomination, I have no doubt that she will become our next president. Whether I’m happy about that or not is a completely different story. Sure, she has the experience, but I’m not excited about a Bush/Clinton dynasty running the U.S. for 20 years. Hell, both families should just change their last name to Clint-ush. I can see it in American History books now - Chapter 12: ‘The Clint-ush Dynasty.’ How will Hillary affect the world? I guess we’ll worry about that in 2009. Good investing, Charles P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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