SubscribeAll Posts Tagged With: "2009 market outlook"
For the U.S. Economy in the New Year, the Pain Will Precede the Promise
If there’s a proverb that captures the outlook for the U.S. economy in the New Year, it’s the one that says: “It’s always darkest before the dawn.”
Regardless of any formal announcement of whether or not the United States drops into an actual recession, the ongoing credit crisis guarantees a contraction of the American economy by virtually every measure we know. That period of darkness will be marked by a dramatic slowdown in economic activity, as well as by rising unemployment, additional declines in U.S. stock prices, and constant volatility. It could last as long as 12-18 months.
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Unprecedented Volatility Will Continue to Rock the Stock Market in Advance of a Possible Rebound in Mid-2009
In the 20 years I’ve been creating stock-market forecasts, I’ve never seen such a contradictory set of forces at work in the markets all at one time. I could just as easily make the case that we’re finally nearing a bottom, as I could that we’re in for protracted downturn punctuated by sharp, quick drops.
The only question in my mind is what shape an eventual recovery will take, for I see three possibilities:
- A “U,” with a slow, methodical reversal that gradually transitions into a market rebound.
- A “V,” with a quick, sharp reversal that marks the start of a powerful…
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