My Predictions for the first 15-20 Days of 2009

Dec 31. 2009

My Predictions for the first 15-20 Days of 2009

By now, you may have realized from my predictions that I am a futurist but also a realist. As such, although I occasionally look in to future (as in 3-5-10 years ahead), I mostly look at events that will effect us within the next several months or 1-2 years.

This time, however, both in the honor of what I consider to be a tectonic turning of the old year in to the New Year and the undeniable underlying economic, national and geo-political currents,
I am focusing the scope of my forecast to a sharp and narrow first 3 weeks of the New Year 2009 – my so called pre Inauguration forecast.

And as you read on, I hereby remind you to mind me not as a pessimist but a realist, despite the tone this writing and its somber predictions. I sight this as you will never find a more optimistic individual and/or thinker than me, but reality is reality.

History shows us that those who deal with reality come out on top. Those who don’t, have their heads berried in sand. And if the US election results were any indication, Americans no longer wish to so. The question is the level of hardship they are willing to endure to set the fundamentals right.

So here are the facts as I see it:

The 70% GDP Economic Engine of the Country – The American Consumer, will bring its spending to a literal halt. Out of home-equity-line of credit "ATM machines", maxed out credits cards, dealing with unemployment or an uncertain employment outlook, consumers will sharply cut back expenditures on discretionary items, white goods, durable goods, retail, entertainment and travel.

Next, the American business engine – Small, Medium and Large Businesses alike will cut back on employment, expansion and capital investments. Every expense category from training, to marketing, to travelling, to conferences, to expense accounts, to geographical market expansion, to IT projects will be severely curtained. The one and only, bright spot will be the Federal Government and its steady expenditure levels on all fronts.

The outcome:

Severe lay-offs, bankruptcies and slow-down in retail, restaurant, hotel, airline, consumer electronics and enterprise IT systems businesses will prevail. I honestly believe many businesses have held back from action that set-out these activities during the holidays and X-Mas season to turn what may be a crash landing in to a semi soft DESCENT.

Massive injection of capital by the government in to the economic system to the tune of $1-2 trillion Dollars (the equivalent of 1/12 to 1/6 of our 12 Trillion Dollar economy respectively) will not help. These remedial actions only prolong the pain that must be dealt with. Case in point is the US auto industry: If your cars are lousy; you missed the boat on hybrids and fuel efficient gasoline engines; you have me-too design and manufacturing, all the subsidies in the world will not solve your key problem: the demand side favors your competitors. Hence how Toyota and Honda are winning over GM, Ford and specially Chrysler.

On another front, the geo-political events of the last few years prove that meaningless wars do not help the American economy or image. That "Image", in the current global world theater, is indeed the purveyor of perception hence the lack-of-desire for economic engagement (DFI) of sovereign states in the United States of America.

That is why I am delighted that an old hand like Joe Biden is the Vice President Elect. And that Barack Obama, the President Elect, is inherently, and by the severe global requirements and political dynamics of the current world stage, a balanced observer of global geo-political dynamics and our country’s need for immediate action in the global front.

My Prediction:

Massive layoffs in sectors sighted above will continue at a rapid clip

Bankruptcies in business sectors sighted above and in the consumer domain will intensify

Mortgages under water (where the note value exceeds the property's market value) will increase by 20-25%

The real estate and housing stock on the market (new and used housing) will increase to a 18-24 months supply thereby depressing the prices by another 25-35%

Car, consumer goods, luxury retail, white goods, electronics and IT (Software and Hardware) expenditures will shrink by 15-25%

War spending will shift to domestic expenditure on infrastructure, human needs and re-training/re-tooling of our work force

Humanitarian grants and aide for strategic projects and programs abroad, rather than war expenditures, will prevails while bulk of the expenditure will henceforth shift to domestic and national investments

Government, national, international and consumer belt tightening will become the norm

Healthcare expenditure by IDC-9 and ICD-10 codes will be reduced by 15-20% through regulation, cost control and reduction of SG&A expenditure inherent in the system by using IT, EMR and greater national expenditure and health trends visibility networks

Software and Hardware will shift to a utility oriented pay-as-you-go model a.k.a as SaaS – Software as a Service shifting competitive dynamics to the business model of the players rather than their IT infrastructure advantage – Intelligence is really about intelligence

A new Clinton era-like Renaissance will prevail albeit different in dynamics, burgeoning industries and the likely new winners

A bi-polar world will emerge where America will be the third fiddle struggling to find its posture and regain its economic and political dominance. Although we stand on good grounds.

Working from home (the proverbial tele-commuter) will prevail as the knowledge economy prevails, broadband infrastructure improves and dominates and the commercial real-estate lease prices, gas/fuel costs and the desire for a better home-work-life balance takes center stage

So looking in to the near future, you both need to ware shades (it’s so bright) and a life jacket (it’s so rocky and dangerous).

And, so, a rocky road with different promises and a very challenging and intellectual path to get there begins.

Happy 2009!

Kevin Curtis

571.439.6577 Mobile
http://www.kevinrcurtis.com/

kcurtis@mondointernational.net
krcurtis1@yahoo.com