2010 - One Man's Opinion (Part I)

1.) Dramatic increase in bank failures – the FDIC is hiring over one thousand new employees. Are they getting prepared?

2.) Several municipalities could declare bankruptcy, and several states, led by California and New York, may be in technical default. I believe expenses will continue to outpace tax revenues, and April 15th will be D-day. Havoc could be the word for the municipal bond market.

3.) Leveraged commercial real estate continues its path to implosion. But the big surprise, residential housing, which started it all, will resurface as a significant problem. A tsunami of mortgage resets will occur over the next 24 months, including subprime, prime, Alt-a, and Option ARM.*

4.) Americans go further into debt (if that’s possible) as the government encourages more cash-for-clunkers type programs. Yet bankruptcies, credit card defaults, and housing foreclosures continue rising.

5.) Real unemployment continues to accelerate toward 25%. Emergency Unemployment Compensation (EUC) keeps climbing as non-government job creation is nonexistent. However, the government and mainstream media will continue to focus on first-time unemployment claims, thus massaging the numbers.

Tomorrow – Part II….it doesn’t get any better.

Till next time,

Bill


*Bloomberg


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