Urbane Gorilla!

2009 Market Outlook: I'm Taking the Middle Road

jdett:

More foreclosures will have pin-action (to borrow from Jim Cramer). Obviously, it will impact financial institutions as well as reinsurers. There will be more impact on 'credit default swaps, which will hit the bottom line of retirement funds, endowments, cities, states and insurance companies that have invested in them for the 'big returns'.

Because lenders will have to clean their inventories of foreclosures, expect a further drop in home prices. As home prices are hammered, expect that people can borrow less and lenders will become tighter in their standards. Expect a further reduction in borrowing for cars, boats, vacation homes, vacations, major appliances and remodels, etc..

That would indicate further slowdown in manufacturing, installation, sales and the like. Ergo, more unemployment.

More unemployment... More foreclosures.... If you're trying to catch the brass ring as this merry-go-round continues to pick up speed, consider shorting companies that will suffer, or cautiously use inverse ETFS like SRS or SKF... And maybe look at companies that will benefit from lower commodity prices as consumption drops further.

Happy motoring! Gee! You're doin' a swell job Dubya!

jegan ;-)