2009 – Financial Predictions

Posted by Sven

May 15, 2009

The newly elected USA president Obama is unwavering in his decision to make available up to one trillion dollars towards his formidable effort to recover the coughing economy of the USA. In spite of his commendable efforts, it is unlikely to have an effect on preventing or lessen the happening of the second Great Depression.

We can expect to experience stock markets to depreciate to a frightening extend in May and during September or October 2009 with the worst happening late September.

What lies before us?

Another large bulge of failure on residential mortgages
The commencement of large mortgage catastrophes on commercial property foreclosures such as shopping malls, mortgage failures on office buildings and other commercial properties.
The start of monstrous failures on vehicle loans and seizures.
A more than $40 billion hit on the nose for bank lenders due to credit card defaults.
The last part of the play; just before the final curtain drops – Credit defaults with no down payments in the vicinity of $500 trillion.These five factors tied together in one time frame at once could turn the 10800 flue cough of the Dow Jones into a more serious bronchitis situation of about 7250 down to even 5600.

In late September, early October, the effects could turn to other markets such as London, Asian and Tokyo including the New York markets to take a plunge second to none.

Currently the unemployment rate in the whole of the USA is close to 16%. Late in 2009, the real unemployment rate will touch the 25% mark as it was in the 1930’s Depression.

The good news however is that recovery is possible, but not before 2015.

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