Top 10 2008 Predictions

or Register to post new content in the forum

14 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jan 19, 2008 2:03 am

1-Financials get attractive around April as they hit bottom.

2-Oil finishes the year @ 75$ a barrel
3-Dow finishes at 14000
4-Interest rates dropped by FED 125 bps by year end
5-Emerging Markets get hammered this year, falling sharply this summer
6-Dollar starts to strengthen 3rd or 4th quarter
7-Muni bonds will be the best performing fixed income asset class
8-Gold goes to $900/oz in a few months, only to finish the year around $700
9-Technology will be 2008's best performing sector
10-Average home price drops 7% by year end
Jan 19, 2008 11:22 am

I'm going to have to agree with these preditions.  However, I can predict, rankstocks, that I won't be on this message board at 1:03am on a Friday night!!! 

 
I'm hoping developed International won't get hurt like emerging markets might....
Jan 19, 2008 6:22 pm

I will agree with #5...good call

 
I would rethink 2,4,6, 8, and 10
 
are you serious about #7
 
MBIA, Ambac Bond Default Risk Exceeds 70%
 
were talking about massive defaults.
 
number 3....where? Lower..much lower. position yourself and your clients accordingly.
Jan 19, 2008 6:51 pm
Britney Spears will die very soon or at least wont live till age 30

2. I'll finally land a job as an I-Banker or so.

3.Oil prices will continue to go up

4. Inter-racial relationships will continue to be "in fashion"

5. The US dollar will go up a little

6. Pple here will finally respect Edward Jones

7.There will be a hurricane somewhere

8. The euro will still be stronger than the US dollar even if the US dollar goes up.

9. No cure for AIDS in 2008
Jan 19, 2008 9:46 pm
experts will question the value of globalization for the US

2. Hilary will win

3. Financial meltdown will end up worse than tech meltdown

4. fear will grip even the most disciplined investors

5. stock market will end up being in the biggest bear market ever, but immediatley after will be the begining of an unprecedented bull market that will last for 9 years

6. emerging markets will go down

7. Iraq will be contained

8   Citigroup (shitigroup) will realize that their conglomerate company is a disaster and will divide it up

9. Goldman Sachs and Capital Guardian (american funds) will be looked at as the only major investment firms with wise judgment as the rest of the industry will be looked upon as fools for "not seeing any of this coming" and investing heavily in garbage

10. Fed will lower fed funds all the way to 1%

11. National Debt will reach 11 trillion
Jan 30, 2008 9:37 am
Broker7:

I will agree with #5...good call

 
I would rethink 2,4,6, 8, and 10
 
are you serious about #7
 
MBIA, Ambac Bond Default Risk Exceeds 70%
 
were talking about massive defaults.
 
number 3....where? Lower..much lower. position yourself and your clients accordingly.
 
Broker 7, not trying to pick a fight here, but you are showing a fundamental lack of understanding of what's happening in the muni market.
 
MBIA/AMBAC and one or two others are facing ratings downgrades because of pressure put on them for their backing of Collateralized Debt Obligations (CDOs), which are in trouble. These companies, MBIA/AMBAC, are not in trouble because of problems in the muni market. It is, in fact, quite the contray. Because of the CDO problem, the AAA status of MBIA/ABAC is threatened putting the AAA ratings of bonds insured by these companies in jeopardy. That is driving down the price of insured issues, as well as reeking havoc in the new issue market. The fact is, the underlying credit of most insured munis is A or better. The ill advised decision by MBIA/AMBAC and other muni insurers to stray from their primary business of insuring only muni bonds and expand into the CDO business has NO EFFECT on the ability of the insured municipalities to pay their debt. No effect as in not related, as in none. This is a bond insurance crisis, not a muni bond crisis.
 
The MBIA/AMBAC/ACA debacle, combined with the Yen carry trade selloff in Aug 07, has created a huge buyers market for traditional muni buyers. Traditionally munis trade at about 85% of corp yields and 90% of treasuries. Today they are trading at over 100%. Is it time to buy? What do you think?
 
Will munis be the best performing asset class of 08? I don't know and it doesn't matter. Right now munis are the best deal in the bond market.
Jan 30, 2008 11:16 am

Bond Guy.. he must know this. I work at the same firm he does (EDJ) and they have been lighting us up with information on the downgrades and possible loss for our clients.

 
That makes me curious too.. Maybe he doesn't work at Jones??
 
Miss J
Jan 30, 2008 1:24 pm
MISS JONES:

Bond Guy.. he must know this. I work at the same firm he does (EDJ) and they have been lighting us up with information on the downgrades and possible loss for our clients.

 
That makes me curious too.. Maybe he doesn't work at Jones??
 
Miss J
 
That may be, however even the article he included is about the possible MBIA/AMBAC corporate default, not the default of the underlying muni bonds.
 
Its possible he knows, but many people including advisors who don't follow munis closely may not understand what is putting the pressure on MBIA/AMBAC. And just to be clear, its not the possibility of muni defaults.
 
That said, even at current levels a MBIA/AMBAC default would put more downward pressure on munis, but that's not necessarily a negative.
Jan 30, 2008 5:38 pm

Bondguy,

FGIC just got downgraded today. All the underlying bonds, regardless of quality get downgraded along with the insurer.  S and P just downgraded..ambac/mbia are near bankrupt...etc. If we have another flat market year..the muni's will be safe as far as income, but as far as liquid principle, the values may be significantly lower.
 
Also, remember california bonds..in a recession, many munis are not able to pay, it is already happening to utilities and schools munis throughout the nation.  The insurance has to kick in..what happens if MBIA is bankrupt?  There is many aspects one must consider in the bond market,  slow economy, weak dollar, strong gold...weak bonds.
 
Miss Jones,
I used to work for your company.  Im glad they are warning you on bond principle loss, I just hope the company buy and hold philosophy doesnt kill your clients this time!
Jan 30, 2008 10:04 pm

http://www.reuters.com/article/etfNews/idUSN3020977620080131


There's a first time for everything..history is being made,
Jan 31, 2008 9:21 am

Can't quibble with the top ten but would add...


11. Nikkei finishes north of 18K
12. Oil finishes south of $60/barrel thanks in part to a decrease in developed economy demand and also (finally) increased production from Iraqi oil fields
Jan 31, 2008 12:14 pm
rankstocks:

1-Financials get attractive around April as they hit bottom.

2-Oil finishes the year @ 75$ a barrel
3-Dow finishes at 14000
4-Interest rates dropped by FED 125 bps by year end
5-Emerging Markets get hammered this year, falling sharply this summer
6-Dollar starts to strengthen 3rd or 4th quarter
7-Muni bonds will be the best performing fixed income asset class
8-Gold goes to $900/oz in a few months, only to finish the year around $700
9-Technology will be 2008's best performing sector
10-Average home price drops 7% by year end
 
The question is, do you do anything with your clients based on your predictions?
Jan 31, 2008 12:17 pm
Broker7:

Bondguy,

FGIC just got downgraded today. All the underlying bonds, regardless of quality get downgraded along with the insurer.  S and P just downgraded..ambac/mbia are near bankrupt...etc. If we have another flat market year..the muni's will be safe as far as income, but as far as liquid principle, the values may be significantly lower.
 
Agree that downgrades will put downward pricing pressure on the muni market in general and specifically the insured market. To which I say so what!  At this point most insured paper is priced as if the insurance is worthless.  The bottom line is that its the underlying credit that will rule the day. For income/yield buyers the disarray in the muni markets is spelled O-P-P-O-R-T-U-N-I-T-Y. (Did I get that one right?)
 
Yes, those who bought insured bonds for the insurance are left without the comfort of that insurance. Traders who were caught out are the ones who are screwed. Buy and hold investors will be fine and those who buy today will profit.
 
Also, remember california bonds..in a recession, many munis are not able to pay, it is already happening to utilities and schools munis throughout the nation.  The insurance has to kick in..what happens if MBIA is bankrupt?  There is many aspects one must consider in the bond market,  slow economy, weak dollar, strong gold...weak bonds.
 
Ah, um, I'm not aware of mass municipal failures. Throughout the country you say? I am aware that the credit default swap market ,which is completely off the wall, is predicting a 30% chance of a California State GO default. Drink the Kool Aid if you'd like but the current problem is a Wall Street problem not a Main Street problem.
 
By the way, the historic default rate for BBB munis, the lowest investment grade, .6%. And that includes not only recession, but depression as well.
 
 
 
Miss Jones,
I used to work for your company.  Im glad they are warning you on bond principle loss, I just hope the company buy and hold philosophy doesnt kill your clients this time!
May 28, 2008 1:09 am

Halfway through, lets take a look at my predictions:

 
1-Financials get attractive around April as they hit bottom.
   -We'll see....
2-Oil finishes the year @ 75$ a barrel
    -way off so far
3-Dow finishes at 14000
    -We'll see....
4-Interest rates dropped by FED 125 bps by year end
    -way underestimated cuts
5-Emerging Markets get hammered this year, falling sharply this summer
    -too early to tell
6-Dollar starts to strengthen 3rd or 4th quarter
    -might not be too far off on this one
7-Muni bonds will be the best performing fixed income asset class
    -have a chance here
8-Gold goes to $900/oz in a few months, only to finish the year around $700
    -we'll see how close this call is
9-Technology will be 2008's best performing sector
    -Maybe?
10-Average home price drops 7% by year end
    -probably too conservative on this one