Here is one educated and enlightened observer's view about the course of events on a number of topics, primarily economic, for the upcoming year of 2009.1) Unemployment will rise rather steadily through the year to an "official" government announced rate around 9.5 % to 10.8 %, but the number may decline very slightly by December of '09 if the stimulation legislation has any effect. The December '08 numbers that will be released in the coming days will show job losses similar to November '08 but more than October '08. But the February numbers will be utterly horrifying as between at least .5 and 1.5 million people will lose their jobs in January '09, starting a trend which will carry on for at least several months and probably beyond. Of course the real unemployment number will be between 17 and 20 %, perhaps more later by later in the summer and autumn, if all the citizens that have quit looking for work are included as well as those citizens who are working only part time (like me at least hopefully) because they cannot find any fulltime work. The number of adults between the ages of 18 and 65 working fulltime will fall below 58 %, probably more.
2) The GDP will decline between .8 % and 3.8 % in each of the four quarters in 2009. Inflation will be minimal and its likely most months of the year will actually show deflation overall and for many goods and services. Demand will continue to be soft at best, and nonexistent virtually for some goods and services. Most nonessential manufacturing will be all but completely shut down.
But an explosion in inflation is likely in the cards as soon as the fourth quarter this year with the massive deficit spending and all other economic dynamics in play.
3) The number of corporations declaring Chapter 7 and 11 bankruptcy will shock many Americans. Some of biggest venerable names in business will go belly up. Among those include General Motors, Chrysler, Sears Roebuck-KMart, Radio Shack, Burger King, and many others. The bloodbath of corporate deaths will be horrifying. Well over 250,000 businesses will cease operations this upcoming year.
4) Housing prices and home values are already down an average of 25 % from their peaks in the last one to two years in most places across the nation and the collapse will continue for all of '09. Expect the decline to reach an average of 33 to 40 % for the most part with exceptions such as Dallas, Denver, Houston, Albuquerque, Salt Lake, and many smaller communities primarily in the heartland and south. Areas where the collapse will even be greater and far uglier will include Las Vegas, Miami, Phoenix, San Diego, San Francisco, Los Angeles, and other sunbelt communities where values will drop from their peaks by 55 to 70 %. The numbers from Rustbelt cities like Cleveland, Dayton, Detroit, and elsewhere will be horrifying. Housing is in a depression already for about 3/4 of the nation and those not in it will be lucky not to join the already unfortunate in '09. Sales of new homes will be all but nonexistent, and existing home sales will struggle with a lack of credit availability, rising unemployment, and a reluctance to lend in an overall declining home values market. The residential and commercial construction sectors will be totally dead in the water, and will have to rely on a rapid implimentation of public construction projects resulting from the upcoming federal stimulus program to avoid a complete collapse.
5) Foreclosures are not declining whatsoever, and will likely increase even further in '09 with rising unemployment and declining home values. There are also a vast number of unconventional mortgages reaching a new much higher payment level which will only add to the numbers. Expect between at least two and four million homes to be foreclosed across the nation in the upcoming year. Rising unemployment will only add to the numbers substantively, as will continuing to mature subprime and discount mortgages already in place.
6) Foreclosures will not be just limited to residential real estate. Commercial and industrial real estate will also see huge increases in foreclosures and defaults in '09, and even properties where commercial tenants are doing okay will be seized and cause additional business failures. The once invincible shopping mall in many communities will become endangered, with some closures likely,
7) At least five to twelve states will require federal dollars at some point in the year in order to continue to make payments for unemployment insurance. Michigan, Ohio, New York, and South Carolina head the list of troubled states in this area. State budgets will be harshly slashed across almost all the nation, with the most profound effects on the poor, elderly, disadvantaged, handicapped, and children. Some state governments like California will have to all but completely shut down for a period of time in '09.
8) Oil prices will be all over the place in '09. Flareups and crises in the Middle East could cause a price spike back to over $100 per barrel, but its more likely the price will hover between $35 and $85 per barrel through the year.
9) The credit crunch shows no sign of abatement, and this is likely to continue into '09 for the most part. Money is still available from small lenders such as credit unions and small local banks. The problem will continue to prove to bedeviling to government and financial officials, as the monies fed to bank will largely just sit unused in most institutions.
10. The major financial indices will continue to drift in a somewhat downward direction through the year. The DJI will float between 6300 and 9800 for the most part. Other indices will be much the same way.
11) Like oil, other commodities will likely be down in both price and production for '09. The one factor that may minimize declines would be continued erratic and unexpected weather. Movement towards researching new alternative cost effective renewable energy sources will stagnate through the year, as well as production and implimentation of said programs.
12) 2009 will be a year where global warming becomes further apparent. The likelihood of a warmer than usual Spring following a somewhat mild winter is more than possible. Summer '09 will be much warmer than usual and increases in areas beset by drought are probable. Record heat waves will be a regular news item across many parts of the nation. There will be a greater number of tornadoes and hurricanes than usual. These same kinds of weather patterns will occur globally. The Arctic Ice Cap will set a record for shrinking to possibly its smallest size ever. Research will show further troubling information concerning glaciers globally, as well as the icecap in Antarctica.
13) Newly inaugurated President Obama will score some legislative successes with the 111th Congress, but the extent of the victories will not be as great as Progressives and Liberals desire. Tax increases for the wealthy and corporations will not occur in '09, and a federal health care plan that is enacted will leave much to be desired. Labor reform legislation will not be as satisfactory as needed.
14) Information will emerge about likely timetables for mass fauna and flora extinction in ecosystems globally. The end is near for several noteworthy species on continents across the globe, and optimism for conservation and preservation efforts to be successful will wane with continued climate change and economic upheaval.
15) While Barrack Obama hoped to focus much of his new administration's thrust and energy on domestic issues and problems, he will find his resources and focus increasingly focused on foreign affairs and international matters. These powerful distracting circumstances will result in a decline in the new president's popularity and effectiveness by years end.
16) The dollar will drift down in value to other currencies, primarily because of the exploding US federal deficit. The Obama administration will propose around a $900 billion stimulus package, but when Congress is through adding on its pork, the numbers will exceed $1.3 trillion dollars. The amount of spending by both the federal government and the Federal Reserve in particular will stagger the imagination. The decline in the value of the dollar may result in artificially increasing stock prices and their indices, as well as keeping commodities such as oil overpriced even in an environment of lower demand.
17) It is possible there will be a slight improvement in some sectors by next October or November, but a recovery back to the positive numbers that existed in late 2007 is not going to occur until well into 2010, or more likely, 2011.
All in all, 2009 is looking to be a worse year than '08, mainly due to all the problems that were created in past years and have been festering, waiting for right time to explode. Very few citizens will be able to avoid having mud land on them to at least a small extent, giving them great pain and increased hardship and tragedy.
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nraven's post on Wednesday 10 December in the blog 
