top ten predictions for 2009

Posted on December 21, 2008 by bethesdafrog

here are my top ten predictions for 2009 in no particular order…

1) china to implode: real estate investing growth will slow down further. a prolonged global recession will keep aggregate demand down. the communist party will not be able to switch from a production to a consumer economy in time. implosion will be the result. think riots, chronic lack of stability, high unemployment, social discontent. the works.

2) re-emergence of the united states: president obama is indeed the savior. he will reinvent how the united states interact with the world, make the world believe again. the united states will be viewed more positively and be more opened to collaboration as opposed to a “go it alone” attitude.

3) social media goes global: marketing, pr, advertising will go “e” and with the help of social network platforms and social media tools, individuals/consumers will start wrestling more power from corporations/organizations. corporations/organizations will listen and take note and interact with all of us via social media.

4) recession lasts longer than most pundits think: forget short and shallow. think long and deep. credit card debt will be the next implosion, followed by further bank failures, regional and super regional. then further real estate pricing declines. higher unemployment will be the last straw.

5) goodbye laptops and desktops, hello mobile computing: you will spend more time on your phone. your phone will be smarter. you will be able to do much more on your phone. you new phone will not be just a phone anymore. welcome to the world of mobile computing.

6) back to basics: simplicity and authenticity are back in style, greed and ostentatiousness recede. the damages of debt, spending more than one makes, financial speculation will awake individuals to the virtues of thrift, hard work, the power of team collaboration vs extreme individualism.

7) globalization 2.0 is over (outsourcing, low cost, delocalization…): we shall enter globalization 3.0 (green, nano-technologies, new technology boom based on social media ,see 3) above)

8) world to tackle global warming seriously: with a new us administration, greater cooperation in europe, all players will be ready for further collaboration and concessions. technology breakthroughs, nuclear and non-traditional energy project innovations will all help to make 2009 the year when earth woke up.

9) re-inventing the state and regulation: governance of government will be revolutionized thanks to social media, new technologies and a slow uncoupling of government from lobbies, financial donors and special interests. a new dawn for individual or collective activism thanks to social media will rise, reinforcing the role of the state and the belief in that role. regulation and oversight will be the flavor of the week. no more laissez-faire, the state/regulation construct will be a necessary tool used towards efficiency in free markets.

10) continued rise in volatility and risk: think more risky conflicts, more resource shortages, more rogue events such as disruption in basic services/products/eco-systems (internet, access to water, food, power grids, wild and destructive weather patterns.)

11) i will be wrong on at least one of the above predictions

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4 Responses

  1. Vadim, on December 22nd, 2008 at 4:00 pm Said:

    Good list, Pascal, but it seems #2 and #3 contradict each other, don’t you think? If Obama is a “savior”, but the recession is going to be characterized by long and painful falling into financial / real estate / credit abyss — what is he “saving” then? US reputation? After the last 8 years, even a Mickey Mouse can do a better job on this one by simply not insulting and/or bombing the rest of the world… IMHO.

    Also, not sure would agree with #1. China has a large number of levers at its disposal (unlike the US) to soften the blow — e.g. it has almost $2 trillion in cash reserves (~50% of GDP – this is like US would have $7 trillion stashed away to bail out everyone and his rich grandmother), also domestic consumption has been growing at double-digits and now accounts for 4 basis points of GDP growth (out of 10), with investment accounting for another 4bp and exports for 3bp. So, exports, that will suffer could shave off 2% of GDP, investments, especially from global majors, would probably shave off another 2% of GDP, but Chinese can start spending a portion of their $2 trillion to prop up consumption and domestic investment and still grow economy at 6% or better. With external and internal debt hovering at $300B or abouts (10% of GDP), they can borrow in external markets another $1-2 trillion to add to their $2 trillion in cash and would still have a debt burden less than the that of the US today. Finally, they can do what the US has started doing (since the US now has no other “levers”) — print money…

    But your #10 was RIGHT ON!!! ;-)

  2. bethesdafrog, on December 22nd, 2008 at 4:24 pm Said:

    good points vadim. you mean my #11 is right on, correct?!!
    as for #2 and #3, contradicting one another, you mean #2 and #4 no? and if so, then i should have made myself clear i think: the global recession (usa included) will be longer and deeper than most pundits foresee, and i should have included more global reasons why. one can have a re-emergence of the united states on the international/diplomatic arena compared to the last 6 years, and that re-emergence can occur with economic weakness in the background, especially with the united states being further along the recession curve compared to other international players.

  4. Vadim, on December 26th, 2008 at 9:43 pm Said:

    Good correction, yes, I did mean #2 and #4. Sorry, should stop drinking that much… :)

    re the recession, I am afraid I agree with you that this is going to be much worse and much longer than most people anticipate. I have been reading on the Elliott Wave theory lately (Robert Prechter) as well as on some other predictions of what’s coming. With the current fundamental problem in the credit market and the underlying real estate / CDA / CDS valuation slump, $50T debt people and businesses hold in the US, $100T in derivatives held by US banks, $80T liabilities held by the US government, etc., the domino effect will most likely lead the globe to deflationary depression, lasting 4-5 years or longer (most of those who are not saying “we’ll bail out everyone” say this is going to be much worse than the Great Depression).

    I am sure on the diplomatic arena, the US will do better than in the last 8 years. As I said, it is hard to imagine for anyone, but neocons a la McCain to do worse. Unfortunately, I think Obama will not enjoy his honeymoon for too long — watch his approval rating slump to below Bush’s 29% by end of 2010 when Americans, who expect him to create miracles, will get disappointed when unemployment hits 20% and GDP is down 20-30% from today. Not Obama’s fault, the current situation is actually a “gift” to Americans by their “hero” R. Reagan, when he fired a wise and cautious Volker and hired Greenspan, who has been happily pumping quadrillions of dollars of free credit into the economy since 1987.

    I am hoping some of the predictions I am reading will be wrong, but the economic fundamentals are just not supporting any counter-arguments, at least I cannot think of many…

    Happy New Year, Pascal (I know, sounds like an oxymoron at this stage)… :)

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