Top 10 Economic Predictions for 2008

[Retire Soon]

Global Insight just published its, "Top 10 Economic Predictions for 2008":

1. "U.S. growth will be the weakest since 2002, and possibly since the last recession."

2. "Most other regions of the world will also decelerate."

3. "There will be no significant cooling in China and the rest of Asia until late 2008."

4 "Oil prices will ease, but remain at high levels."

5. "Core inflation will edge down."

6. "The Federal Reserve will keep cutting interest rates."

7. "Housing sector activity will bottom out in mid-2008."

8. "The U.S. current account deficit will continue to improve."

9. "The dollar will reach a trough with some currencies in 2008."

10. "The U.S. growth rate barely positive through mid-2008, even a small shock will push the economy over the edge."

It would seem that if #5 and #6 turn out to be true and number #10 fails to materialize that 2008 could turn out to be a year of positive gains in the U.S. stock market. Do you agree or disagree?

http://www.globalinsight.com/publicDownload/genericContent/TopTenPredictions2008.pdf

 

[barbarus]

Bloody optimists!!!

 

[Spanky]

Jeremy J. Siegel thinks the market would return 8 to 10% this year.
My Forecast for 2008 - Kiplinger.com

 

[A854321]

Re: #10- What does "over the edge" really mean for the economy in an election year?

 

[Spanky]

Re: #10- What does "over the edge" really mean for the economy in an election year?

Recession?

 

[Lyle]

Since this is an election year you assume the people trying to get elected are doing everything they can to keep things looking rosy for Mr voter. What happens to the US/Global economy after the elections when they don't have to care as much?

 

[Spanky]

Per Presidential Election Cycle Theory (if you believe that), the market becomes weaker because of uncertainties of what the new presidency may bring.

 

[Arc]

Per Presidential Election Cycle Theory (if you believe that), the market becomes weaker because of uncertainties of what the new presidency may bring.

What does Pres Elec Cycle Theory about the period following the election?

 

[Retire Soon]

Re: #10- What does "over the edge" really mean for the economy in an election year?

Global Insight believes it will take two or more shocks to start a recession. They predict that if oil continues its slide to $75-$80 a barrel that we may escape a recession. However, the combination of higher oil prices and subprime/housing crisis may be enough to push us into a recession. They're giving the overall chances of recession at 35-40%.

 

[JPatrick]

I could quibble on a few points, but all in all that top ten list is probably right on..............They don't mention the stock market, so I will.
Major rally kicks off in 4th quarter and we celebrate New Years Eve up 15% from current levels.

 

[rs0460a]

My "prediction"...

I'll still be retired on Dec 31st.

That's all that matters to me ...

- Ron

 

[Spanky]

What does Pres Elec Cycle Theory about the period following the election?

The theory says that stocks decline soon after a president is elected since the newly elected president may take unpopular steps to bring inflation, government spending, and deficits under control. This theory, however, was proven wrong during the presidencies of Clinton and G.W. Bush.

 

[dex]

Are these really 10 or just Two that leads to the others i.e.

1. "U.S. growth will be the weakest since 2002, and possibly since the last recession."
Which will result in
2. "Most other regions of the world will also decelerate."

3. "There will be no significant cooling in China and the rest of Asia until late 2008." see #8

4 "Oil prices will ease, but remain at high levels." as a result of the us slowdown and since oil is one factor in inflation

5. "Core inflation will edge down."

6. "The Federal Reserve will keep cutting interest rates." As the US economy cools and inflation goes down
7. "Housing sector activity will bottom out in mid-2008."

8. "The U.S. current account deficit will continue to improve." because the economy cools we don't import as much but will be exporting technology to China & India

9. "The dollar will reach a trough with some currencies in 2008." After the market believe the FED has stopped cutting rates due to slow economy and lower inflation

10. "The U.S. growth rate barely positive through mid-2008, even a small shock will push the economy over the edge." Slowing economy again

Couldn't you have made the same predictions given what is in the news?

 

[Retire Soon]

Couldn't you have made the same predictions given what is in the news?

Yes, perhaps I could have made some of these predictions, but that would have involved w*rk.