Monday, November 10, 2008

Looking Back - Predictions from 07 - did they materialize

I am reading through some of the older blogs i have on this site, it is interesting reading as we are now a year on and can look at the accuracy of the predictions:

Tuesday Sept 11th 2007

Don’t be surprised to see a bank failure or something close spark the next stock market crash, QIV may well be the cause of financial illiquidity of a medium sized banking institution
Expect to see more mortgage originators file for bankruptcy (possibly even Countrywide to clear off some debts)
Countrywide pretty much went, Wachovia and WAMU too

Real Estate:
The real estate bubble is bursting, expect to see significant price decreases and increased foreclosure over the next several years
Foreclosures should hit over 1m

i am predicting a 500+ (probably 1-2,000 point drop) towards the end of October...caused by a liquidity short fall by a major bank, Countrywide becoming insolvent (or admitting it is) a major house builder filing for bankruptcy or someone finding out that the banks are carrying in excess of $250Bn of off balance sheet debt that they need to do something about and can't!!!
Bailout is $750Bn and climbing, market has lost closer to 9,000 points, too many house builders have gone to name

Wednesday September 12th 2007

P.S The car industry will be the next to suffer as dealers give away cars with huge incentives and ultra low financing (even Honda the most frugal of all companies) to clear inventories ready for 2008 models!!!
GM, Ford and Chrysler are after $75Bn in goverment money to stay afloat, GM and Ford have both said they will run out of money in late 08 or 09

P.P.S By the way if you haven't realized all this spells the way for a recession of "Great Depression" portions
It has arrived

Sunday October 21st 2007

It is only a few month since I was discussing the impact of credit card and consumer debt on the economy and that everyone saying American Express etc would not be impacted by the sub prime meltdown was crazy. If you aren't paying your mortgage and are establishing bad credit , why would you pay your credit card bill. If you are going to go bankrupt as a method to protect any money you do have, why not throw the cards in it.
Amex was at around $70 and is now $24

Sunday November 4th 2007

1) Bank stocks look cheap, buy them now!!!I say don't bother, they still haven't priced in the full extent of the crash yet as no one realizes how bad it will be.
I hope you didnt buy bank stocks

4) Oil at over $100 a barrel.I think this is price gouging, whilst supply is not indefinite, $65-70 per barrel is a real figure.
Wow oil is now around $65 a barrel

Monday December 3rd 2007

Firstly, we live in an age where Google (goog) is quoted at some $681 at time of writing which gives the company a valuation of approximately $213Bn. This is for a company that if my memory serves me correctly has about $11Bn of revenue and $4Bn profit.Do I use google every day, resoundingly YES,Do i think that Google has a fantastic search algorithm, again YES,Do i believe that the company is worth 20 times its revenue and more than 50 times its profit, one second, did i just say 50 times their profit...something must be wrong with my calculator, maybe i have time warped back to 1999 and we are pre millennium and euphoric with Greenspans low interest rates!!!
Wow google is now at $314

Monday December 10th 2007

These companies stock will in my estimation drop a minimum of 60% during 08 – I am expecting to see a $10-$13 GM share price during 2008. I am further expecting to see their Bonds drop down to a B- or junk bond rating.
GM is now at $3

Copyright Jonathan Rose 2008 - Creative Commons License

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