Post by Bozur on Nov 7, 2008 22:47:10 GMT -5
10 market pros take on 2009
What's in store for your money next year? Here's the divided forecast from some of the nation's top money minds.
Half empty or half full?
Senior writer Janice Revell recently asked a bunch of big brains one simple question: "How optimistic are you about the economy - or the stock market - next year?"
She asked them to rank their optimism about 2009 from 1 to 10, with 1 being "The apocalypse is at hand!" and 10 being "What, me worry?"
Her findings: For the market prognosticators, the glass was half full; for the economic ones, half empty. Here's why.
By Janice Revell, Money Magazine senior writer
NEXT: Economy: Half empty
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Jared Bernstein
Economist, Economic Policy Institute
Optimism score: 3
"We got ourselves into a very bad mess, and it's going to take us some time to get out of it. Look for the economy to be either in recession or well below its normal growth rate at least through 2009."
Prediction: GDP will be flat for most of the year.
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Mark Zandi
Chief economist, Moody's Economy.com
Optimism score: 3
"The fallout from the current financial panic will weigh heavily on the economy through most of next year. The unprecedented policy response to the panic ensures that 2009 won't be even more difficult."
Prediction: The unemployment rate will peak near 8% by year-end.
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Thomas Atteberry
Portfolio manager, First Pacific Advisors
Optimism score: 4
"Consumers now have to cut debt. How do you do that? You either sell your house or spend less than you make. Either way, it's going to result in a slower-growing economy."
Prediction: GDP won't grow discernibly until the second half of the year.
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Maury Harris
Chief U.S. economist, UBS
Optimism score: 4
"If you define recession by the unemployment rate - which isn't the official definition but tells you a lot more about how people are feeling - you'll probably have to wait until 2010 for things to start improving."
Prediction: The consumer price index will grow by 2.1% in 2009.
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Diane Swonk
Chief economist, Mesirow Financial
Optimism score: 5
"The key question is, When will consumers start to feel really good about the economy again? And I think that's not going to happen until 2010 because it will take until then for housing prices to stabilize."
Prediction: Thirty-year fixed-rate mortgages could go below 5%.
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Jeremy Grantham
Co-founder, investment firm GMO
Optimism score: 5.5
"When the S&P 500 drops to around the 900-to-1000 range, as it has, that to me represents a very nice time to get into equities."
Prediction: He declines to make a specific prediction about the U.S. market.
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Ed Yardeni
Economist, Yardeni Research
Optimism score: 7
"The governments of the world are finally declaring total war on the global credit crisis, and I expect they will win it."
Prediction: If the government stimulus works, the S&P 500 will rebound to 1100 to 1200 by mid-2009.
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Tom Forester
Manager, Forester Value Fund
Optimism score: 8.5
"I think people are going to step back at some point and say, `You know what? The world's not falling apart, and there are a lot of good companies out there selling at unbelievable bargains.' "
Prediction: The S&P 500 will hit 1000 by year-end.
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Barry Ritholtz
CEO, research firm Fusion IQ
Optimism score: 9
"Sentiment is wildly, wildly negative right now, just horrific. And that's exactly the time when you have to just hold your nose, take the other side of the trade and buy."
Prediction: The S&P may gain up to 30% from its October 2008 lows.
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Brian Wesbury
Chief economist, First Trust Advisors
Optimism score: 9
"When the pessimism is so thick that you can cut it with a knife, that's when great fortunes can be made by people who are willing to be contrarian and invest in things that nobody else wants to."
Prediction: The Dow will hit 13,250 by year-end.
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