So I was talking to this economic analyst guy today...

A guy I know here in town works as an economic analyst. He's pretty smart for the most part, he studied at Stanford, but anyway, 60% of what he said I agreed with, but the other 40% I was like :wtf: :crazy:

We were talking about the outlook on the economy in general, and this is what he said that seemed as if it was based in reality.

- We are in what he calls a recession.
- Unemployment is going to get much worse. He agreed the real figure is probably more like 11% instead of the 5.1% government cooked number.
- Oil prices should hit around $135 at most this summer. They will drop back a bit in the fall, but we will NEVER see them under $100 again.

Now for the insane.

- We will see DOW 20,000 by the end of the year.
- The dollar will skyrocket in value, and will be even with the Euro by the end of this year, and surpass the Euro next year.

It was an interesting conversation to say the least.

Trust me, we ain't seen nothing yet.

Read the Peak Oil forum if you don't believe me.

nt

Sorry I wasn't more specific. :blush:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=266

There ya go! :)

he said oil would max out at around $135 this year. I'll have to ask him what he thinks beyond that. A $135 peak for 2008 doesn't seem too off base. '09 and '10 is where you will probably see it cross $150 or $200 I think.

in investing our Social Security in the stock market.
I used to think that was impossible...but who do we have that can really stop the train careening out of control that is the bush administration?

is if the Fed raises interest rates dramatically - and that ain't going to happen. They'll dump off all the hard work for the next president, who will be left with stagflation like Jimmy Carter was in 1977 - high inflation rates and low to negative growth. Unfortunately, that means at least a few years of raising interest rates to get inflation under control and the economy will sputter along until 2010, leaving McCain very vulnerable in the mid-term elections.

Heh. Got a crystal ball or something?

I'm a pessimist by nature. Back in 2004, I let the overlfowing optimism of DU override my normal instincts & look what happened. (and, don't give me that "it was stolen" stuff - Bush was the one that ended up in the White House)

I'd probably call it something else, personally.

"(and, don't give me that "it was stolen" stuff - Bush was the one that ended up in the White House)"

Yeah, wouldn't want to be prepared or anything to prevent elections being stolen by organized criminal thugs. Why even acknowledge the possibility? Better we pretend those things don't happen. :eyes:

after the stolen election of 2000 and nothing happened. We could have filmed Karl Rove personally hacking into voting machines and changing votes from Kerry to Bush, and it wouldn't have gone anywhere beyond Countdown with Keith Olbermann and The Daily Show.

Who's "we"? WTF are you talking about?

...leaving McCain very vulnerable in the mid-term elections. How sad that we allowed the corprat media whores to pick our unelectable front-runners. We were so played!

i'm a pessimist by nature. I think any of our candidates would have been vulnerable against "Free Ride" McCain.

Their production is declining, but they don't want that dirty little secret to get out, so they pull an Officer Barbrady and say "Nothing to see here, move along."

http://www.iags.org/n0331043.htm

sub prime market is played out..oil , food,and gold are the new game in town....http://www.forexyard.com/en/gold-silver-oil

the Euro, although his timing might be a bit early.

OK, he could be right about everything else too.

All companies have to do is lay off a bunch of workers and their stock soars...

I personally think oil could well go back to the $70-80 range, but only if there is a convergence of a strong dollar and worldwide economic slowdown leading to a significant oil glut.


His prediction RE dollar strength is a bit hard to swallow - the dollar has been losing value consistently for several years and that has only accelerated in the last year.

Our low interest rates, high current account deficit and budget deficits only serve to make the dollar more worthless. Rate increases may prop up the dollar somewhat, but it's hard to imagine it coming back to the same strength it used to have. Any strength it will gain VS the euro will be because of economic strife there, not because of intrinsic dollar strength. It will continue mostly losing value vs. the yen and yuan for some time to come, IMO.

We've been in a recessionary state in every way but the most narrowly defined conventional terms since 2002. So, his description of the economy is no revelation.

Unemployment is not 11%. Not even close. Historically, the real number is about 14% relative higher than the stated value. Even if, right now, it's 20% relative, that only raises the real number by a bit over 1%. It will get worse, but won't be catastrophic. There is no dataset in modern economic history to suggest that this economic condition is bad enough to trigger a catastrophic collapse of the core systems.

Oil prices will probably go up a little higher than that, but i don't see the pollyanna-ish drop in the fall. I think they'll remain static as long as China and India's growth rates continue in the 5 - 6% range.

The market will not hit 20k. That's simply preposterous. There is absolutely no historical basis for market speculation driving up prices during an economic slowdown. As recessionary effects bear down, profits fall. Stock prices of large companies go down, not up. Since the DOW is a predictor of overall market performance based upon the index of large corporations, then big companies will not inflate in value, even due to speculation, and drive that value that high.

The dollar probably will strengthen a bit, on the basis of a change in net exports into Europe. This has happened every time the NE changes by a statistically significant degree. (In both directions.) The "exporter" currency is always strengthened somewhat by a postive development in NE. So, the dollar is going to skyrocket anywhere. That's just silly.

It appears that Stanford doesn't teach the use of mathematical analysis in econometrics.
The Professor

The only way the Dow can stay above 12K is by constant help from the Fed. Even then, it's an illusion, created by a declining dollar.

There is no chance the Dow goes to 20,000 this year, and no chance the dollar advances significantly against other currencies. Not with the spend and borrow theme of this presidency.

Also I don't see a skyrocketing dollar, the Fed has been very clear that they like a weak dollar policy even if it means inflation.

Come on .... there's no WAY you just let him spew that w/o questions.

What in blazzes was his reason or backup on the dow at 20k?