Jubilee Prosperity

“The rich” may be vilified, and their property and wealth may be increasingly taxed and seized. Regulatory and legislative reforms may limit, curtail or ban a number of structures facilitating speculation, such as options, futures, margin lending, hedge funds, mutual funds, IRAs, 401Ks and shorting. Fannie Mae and Freddie Mac may be shut down. Financial news networks may change formats or go off the air. Despite attempted manipulations by Russia, OPEC or other nations, the world price of oil may decline. (Exceptions may occur if production facilities are destroyed or shipping halted during wartime.) The debt forgiveness movement in the third world may eventually move to developed countries to see many of its goals realized. The price/earnings ratio for the S&P 500 may hit single digits (falling below 6), while the annual dividend yield on the Dogs of the Dow and S&P may rise into double digits (perhaps rising above 17 percent). Market timing may come to be viewed as the best approach to stocks, although investing in stocks may become considered foolish. Buy and hold may be denounced as a fatally flawed approach to the stock market as the 20th Century Bull market becomes the 21st century Bear. The demographic argument for continued boom fueled by baby boomer spending and retirement savings may transform somewhere near the bottom of the decline into an argument the same baby boomers demanding social services are responsible for continued bust. Many of the government and corporate entities bailed out by the U.S. government and the IMF over the course of the last 34 years may fail again, along with new ones. The Fed, IMF, UN, World Bank and other financing entities including Foundations may not bail them out. Corporations, Families, Fortunes, Foundations, IMF, World Bank and the United Nations may shut down or go offshore to find there is no place to hide. Existing high-yield “junk” bonds may fall below zero, and new ones may no longer be issued. After a period of derisive and negative popular allusions to the stock market, references to stocks in non-financial settings may become all but non-existent, considered as impolite conversation. Bearish covert private secret speculators may make a lot of money and keep it. Safety-minded investors with gold and silver may see their purchasing power rise.

The Economy Trilateral, tricontinental and even regional or state free trade may fail as rust-bucket social welfare city economies implode. The trend toward economic contraction that began in 2000 may continue to develop into the greatest depression. The unemployment rate in the U.S. and in most countries around the world may rise and eventually exceed 25 percent. A record number of companies in the USA and world may fail. Governments may adopt numerous trade restrictions, import taxes, protectionist measures like income, internet, price, transaction, wage and wealth controls, fees and taxes. Big brother may watch all emails, listen to all telephone calls and record private conversations of parties of interest, to make examples of those who resist or do not subscribe. Consumer and corporate confidence may fall to record low levels. The number of new skyscrapers may decline dramatically as others like the World Trade Center or Sears Tower are abandoned. Affordable housing may become difficult to come by. Family members or neighbors may move in with each other. Homelessness may increase. Brazil, China and India may have a severe economic setback along with the rest of the world and then recover sooner. Brazil, China or India may emerge as the new economic leaders of the world. Politics Government political leaders, Congress, President and Supreme Courts may suffer record non-compliance and unpopularity. Future Presidents may be from different Political Parties. Many entities privatized or deregulated during the bull market may attempt to re-nationalize and re-regulate. Governments may lose enforcement, judicial and legal authority and resort to criminal domestic military Posse Comitatus acts like the Chicago 8, Elian Gonzalez, JFK, Kent State, Martin Luther King, Ruby Ridge or Waco. The bear market in social mood may afflict multiple presidents or dictators. The occupation of over 700 foreign military bases may progress from boosting the local economy at the expense of taxpayers to quagmires to economic, financial, political and public relations disasters as the USA may be asked to leave countries it occupies. Terrorists may again attack the U.S., like the Murrah Building in Oklahoma City, TWA 800 and the World Trade Center missile and truck bombings. Separatist movements may gain momentum. Many regions may establish new geopolitical entities like ABC and Kris Kristofferson’s 1987 Amerika watched by 100 million people and not shown again.

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This entry was posted on Tuesday, March 17th, 2009 at 11:40 pm and is filed under Market Psychology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.