A PART OF NY A Macro View on the minutiae

[Originally written Feb 2010]

Overall I am very very Bearish for 2010.   Most of my calls are going to be for tops and short opportunities.

Seven Themes that I foresee for 2010-2013

1.   Populism

A politicians primary goal is to be (re)elected. When the public-at-large has very strong feelings opposite to the politician then the politician either has to change the public’s mind or change his view – otherwise he will not get re-elected. It is easier for a politician to change his view than get the public to change their’s.  Currently the public has some strong views regarding the government spending money like a drunken sailor on crack, unemployment being too high, Wall St ripping off Main St, distrust of the Federal Reserve.  I expect Politicians to switch their views to match that of the public.

2.   Anti-China

The US gave up its Manufacturing jobs and everyone became Realtors, bankers, Management Consultants and Consumers.   China became the manufacturer for the world.   Now the banking, Real Estate and Consulting jobs are disappearing and consumerism has been severely reduced.   Americans now want their manufacturing jobs back, however its too late to do this naturally, therefore they will start to dislike China.  I expect to a lot of anti-china sentiment by both the public and the government.  Protectionism will continue.

3.   Political Unrest

Obama was elected because he wasn’t George W Bush.  His problem now is that he has become George Bush.  Gone are the days of “Yes We Can” -  Now its “I’ll try”.   What he will do is raise more taxes, on everyone, even if they are not called taxes.  If it moves it will be taxed, if it doesn’t move then it will be kicked until it moves.  People are getting disillusioned by politicians (Dem and Rep alike) and would love to vote for a 3rd party (The Tea-Party). I expect a lot of protests, some of which will turn violent.

4.   Financial Collapse

The governments of the world tried to save the financial system of the world by moving the risk onto central bank balance sheets.  Now the weakest central banks are having problems.   These weak countries are requesting that more solid central banks take their problems and put them onto the remaining solid balance sheets.   Polluting the Balance sheets of France and Germany could be the first step to Financial Armageddon.   Greece may be saved (it is the  Bear Stearns of 2010), the next country (UK, Spain, Portugal, Ireland) may not be (The Lehman of 2010).  If the Central banks fail then there will be nobody left to bailout the banks – thus collapse.

Once a central bank fails we will find out who wrote the Credit Default Swaps.  Heaven help us if it was AIG and Goldman.

5.   European dis-unity

Once Germany and France realize that they are financing the whole of Europe then they will depart from the Union and then Europe will collapse back to individual countries. Eastern Europe may move back to more of a Russian influence.

6.   Fall like a BRIC

These countries have a lot of history of political unrest.  Nobody seems to remember this.

7.   Government Statistics and green shoots

….Are being falsified

My Overview for the next few years can be seen in my 5 year projection

Interesting Times

[This page is a work in progress]