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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (64821)	3/26/2007 7:24:24 PM
From: ajtj99	Read Replies (2) \| Respond to of 116555

I think we'll see the Fed Funds rate at 1.5% by early 2009, and 1% by 2012. That should be the end of cheap money for about 60-years. The TNX should hit 2.5% intra-day at the lows, allowing folks to get 3.5% 15-year mortgages and 4% 30-year mortgages. I also think the recession I anticipate in 2008-2009 will be brutal, the worst since 1981, but the weak recovery will make a stagnant period in 2010-2012 seem even worse even though it probably may not actually technically qualify as a recessionary period by the 2Qtr of negative growth definition. The good news is we should have a great market run from 2012-2016 that should take the SPX from 1160 to about 1720. That will likely be presided over by a Republican administration, which will likely follow a Democratic administration in 2008-2012. The Dems get the ramifications of the prior administrations actions, and that will make it a 1-term deal. Medicare, Social Security, Deficits, etc. will be top priority in 2008-2012 as there will be no avoiding them. The economic situation combined with these imminent issues will make it impossible for a 2nd term Democrat in the oval office in 2012-2016. The good news is whoever that Democrat is will probably make incredibly tough decisions that should pay dividends 10-years down the road and more. I think Obama is actually likely better suited to these issues as he may actually have the will to tackle these issues with a solution that's more than a band-aid. He'd also likely have more credibility in doing so than Clinton, as her last attempt at health care reform makes any reform she does now suspicious and likely DOA. I'm not trying to get into a whole political thing here. I'm just talking basic probability and outcome. Logically, the current field of leading Republicans all are weak national candidates when vetted in a national compaign. The Democratic candidates are both relatively strong nationally. Odds and the pending economic fall-out favor a Democrat.