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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: RealMuLan who wrote (20177)1/2/2005 8:56:58 PM
From: mishedlo  Read Replies (3) of 116555
 
Mish Fearless Forecast 2005

5 predictions for China 2005
I do not know enough to make any more China forecasts
1) No hard landing for China in 2005, 2006 might be a different story
2) Housing prices in China bust late 2005
3) China net steel exporter for 2/3 of the year
4) No float of the RMB
5) Demand for most commodities drops, demand for food rises

22 worldwide predictions
1) The EU enters a recession April-May 2005
2) The UK enters a recession June 2005
3) The US enters a recession late in 2005
4) The FED pauses in February for at least 2 meetings
5) The US$ goes on a roller coater down up down and finishes the year close +- .05 from here. Best guess 1.32 on the Euro
6) Gold and silver bulls get tested with one more huge dip. No specific targets.
7) The Bank of England cuts 2-3 times in 2005
8) The EU remains stubborn on rate cuts forcing the Euro to 1.38-1.42
9) The EU finally gives up the ghost in late 2005 (sept) and cuts once. The US$ stages a rally in advance starting with the first or second cut by the BOE
10) The US stock market peaks in January and does a double top when the FED pauses. There is a brutal decline in Feb-March but a rally that brings out all the bulls in April or May. Sell in May and go away works for the first time in quite some time.
11) Foreign demand for treasuries declines but US demand picks up. We do not however rally past levels reached in 2004. There is no refinance boom to be had.
12) Home prices hold up reasonably well in all but the most bubblish areas. California gets hit particularly hard.
13) Although home prices hold up well (on average) home building collapses. Lets say down another 25% on top of the 14 % drop we saw in Nov. Home prices really get their due in late 2005 or 2006.
14) Retail store building continues around the bubble areas until about May. When it stops, jobs and economic activity drops.
15) Silver and gold bottom in mid-summer 2005 (it might be a higher low) and go on a virtual rampage for the rest of the year even as the US$ rallies against the Pound. BUY and HOLD gold and Silver. As the US$ stabizes gold finally rallies against all currencies.
16) Soybean rust hits the southern states and Brazil. Wheat prices and soybean prices take off like a rocket. Farmers in northern states make out like bandits as they do not get hit with rust.
17) There is no big flue pandemic. The flue season will be the mildest on record.
18) Blowup at PBGC with more corpoarate bankruptcies
19) The junk bond market collapses in April
20) If Bush does not get SS reform passed by February market collapse it does not get passed at all
21) Oil stays in a reltively tight range $38-$48 for most of the year but does put in a temporary peak at $52 near memorial day.
22) US GDP falls to 2.2% but will be revised lower in 2006
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