An Early Christmas Present For Detroit
Dec 22nd, 2008 | By Rick Pendergraft | Category: Financial NewsAs I write to you this week, I am back at my parent’s house in Indiana. I have written before about New Castle and the struggles the town went through back in the ’70s and ’80s. Kind of ironic that I am here when President Bush announces that the automakers are getting a $17 billion bailout.
I think about this action and how New Castle doesn’t have any auto plants anymore, but there are so many retired Chrysler workers here that it will certainly affect the local economy. Many of the residents rely on the pension program of Chrysler to maintain their lifestyles and had Chrysler gone under, New Castle would have taken several steps back.
The town has grown in the past 10 years and as we drove in from Indianapolis last night, I couldn’t help but notice the new stores and restaurants. There are three hotels now instead on the one that we used to have. There is a new Steak N Shake and a new White Castle. These may not be the highest paying jobs in the world, but it shows that the town is growing and attracting new business.
As I look forward to 2009 and what I would like to see, I guess my Christmas wish list would be for the economy to improve. In an appearance on CNBC’s Closing Bell the other night, I predicted that 2009 would be a good year for stocks. Maria Bartiromo was shocked when I said the market could be 20-30 percent higher next year.
The bailout of the automakers will help stem the tide to some degree. Unlike the financial bailout, this one is a more direct bailout of the middle-class. Hopefully we will see the labor market start to stabilize.
I have mentioned before in IDE that the market tends to improve before the economy and the economy improves before the labor market.
I have been looking at historical charts of the Dow and I found out something interesting the other day. I didn’t realize that from 1932 to 1935, in the heart of the Great Depression, the Dow moved from around 44 to up over 170. Did anyone else know this? This just goes to show how the market and the economy are not always in sync.
The job losses will likely continue through the first quarter at the very least. The recession will likely continue through the first quarter as well. But that doesn’t mean that the stock market will be lower for the first quarter.
As I was preparing for the interview on CNBC, I had a thought about how much fear there was towards the stock market. How telling is it that people are pouring money into treasuries when the yield on the 10-year note is right at 2.0 percent?
The old saying that “the market likes to climb a wall of worry” doesn’t begin to capture the pessimism we have right now. It is more like a mountain of fear than a wall of worry.
I would like to wish all of you a happy holiday season and may 2009 bring all of you massive profits in your investments.
Source: An Early Christmas Present For Detroit
Advertisement
Wall Street wants you to believe that you have to entrust your money with the professionals and all their skills, resources and systems, if you want to make money in the markets. It’s what these guys do for a living! How could you possibly beat them?!
Nothing could be further from the truth. In fact, I have used an embarrassingly simple secret to make $15,048 in just 30 days... and boost my overall account balance 152% in less than a year.
Keep reading to learn how you could join me each month...
Rick is currently the Editor-in-Chief of The ETF Options Trader and the Triple Wave Investor. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. He lives near Delray Beach, FL with his wife and three children.
