1. Next year at this time, I'll be:

A) In the same job making the same money perhaps moving up

B) Contemplating a job change

C) Unemployed and looking

2. Next year at this time, my 401(k) portfolio will be:

A) growing at the max contribution rate like it always has been

B) growing at a reduced contribution rate since I'll need more money due to inflation

C) reshuffled to include more bonds and conservative instruments to accomodate a changing economy

D) locked up 100% into Money Market Mutual Funds

E) cashed out and in a Sealy

F) non-existent

3. Next year at this time, home prices will:

A) have rebounded and will start a long recovery

B) have bottomed and are stabilized

C) be off their all time peak by 50% and still falling nation wide

4. Next year at this time, unemployment will be:

A) less than 6%

B) less than 10%

C) less than 25%

D) greater than 25%

5. Next year at this time, Iran will:

A) not have changed much

B) still be developing peaceful nuclear power

C) have detonated a nuclear weapon

D) be at war with Iraq or the US

6. Next year at this time, in the war on terror:

A) terrorism will be on the decline since America's influence in Iraq will be diminished and America will be tending more to domestic issues

B) terrorism will be on the rise since America is weakened and can not defend itself

C) overseas terrorism may or may not rise but there will be no 911 caliber attacks in the US

D) we will have a 911 caliber attack in the US

7. Next year at this time, the closest number the Dow Jones Industrial Average will be is:

A) 12,000

B) 10,000

C) 9,000

D) 8,000

8. Next year at this time, The GW Bush years will be:

A) a distant memory

B) the worst since Nixon

C) the good ol' days

9. Next year at this time, I'll get my food:

A) from the grocery store as always

B) partially from my garden to offset the high cost of food

C) from a soup line

10. Next year at this time, the price of gas per gallon will be:

A) $3.00

B) $4.00

C) $5.00

D) >$5.00

Put your answers here. Lock it up in the archives. Next year do a search on "Lansville's crisis poll" and see how you did.

My answers? We'll be somewhere between recession and depression. Iran will be worse than we expect (think of the surge working "beyond anyone's wildest expectations" and apply that magnitude to how dangerous Iran will have become). And The Dow will be around 9,000 (think about that for just a sec. That would be down over 35% from its high. Depression material. . .and we're not all that far from it now.).

1. A. This may be wishful thinking, but health care has come to occupy such a large portion of our economic activity that I think it will be slow to follow economic movements originating in other sectors.

2. C, with the addendum that its total value will probably be about half of what it is now.

3. Inadequate answers. I think home prices will plateau somewhat, as the Fannie/Freddie bailouts take effect and as bargain hunters swoop in on what they perceive as the bottom of the slump. Then, later in the year, I expect prices to head south further as the larger economic issues exert their influence. Still won't get as low as 50% of all-time high values, though.

4. B. I'd guess 8%, although that number will, as always, understate the true level of unemployment.

5. This one depends on what happens in November. If Obama gets elected, I anticipate a combination of A and B. If McCain wins, I don't have much doubt it will be D.

6. Probably C. I get the sense that OBL and others have been in something of a retrenchment mode and will need a bit more time to generate any big attacks here in the U.S. Probably 2011 or 2012, with something smuggled in on a container ship, since we can't seem to get our heads out of our asses on port security.

7. My give-a-shit is broken for that question. The Dow doesn't mean jack in terms of the state of the larger economy, so you might as well be guessing Powerball numbers.

8. I'd like to say A, but I expect that a steady stream of indictments and other postmortem scandals will keep the administration in the public consciousness.

9. A.

10. C. I think supply/demand issues will nudge the price toward even higher levels, but any sustained period of 5$+ gas prices will prompt sufficient public anger that Congress will enact some sort of price controls to placate voters. Chaos ensues, cue the gas lines and other flashbacks from the 70s.

for your opinion.

I think people are either afraid of their opinion or they don't even know what their opinion is.

I can't imagine apathy is the reason for only reply.

Having said that, I'm a bit more optimistic this morning.

1. A. My job is managing my portfolio. My goal is 6% to live on, plus the inflation rate to preserve capital.

2. Doesn't apply to me, but my children, who work in the American economy, were taught to max out whatever they can get matching on, plus whatever else it takes to total 20% of their take-home. They're taught to vary their allocations according to the position of the S&P relative to its 6, 10, and 20 month MA's. Basically get out of the market when the 6 closes below the 10, and the S&P closes below its 20 (which was in January this year), and vice versa.

Next year this time will be past the 19 month average for bear markets, so I'm guessing they'll be back in the market, but the last bear was 30 months, so who knows?

3. A

4. B

5. A & B

6. Depends. If the US is still trying to "fight terrorism" by military/social work operations in the muslim world, an attack in America is likely (though hardly 9-11 scale, unless the US police regress to being as incompetent as they were in 2001). The cause of suicide attacks against western targets is invariably perceived foreign occupation of the terrorist's homeland or holy land.

7. Hard to call the bottom on a bear, but 9000 or higher and hopefully ascending (the last one bottomed at 7600, down from 11500)

8. B. Bush will be living in Paraguay to avoid prosecution.

9. A

10. D

Honestly, I was a little embarrassed to put 8000 as a choice for the Dow a year from now in the top post. I thought, 8000? There is no way the Dow will be near 8000 before the beginning of October 2009. That's ridiculous but I'll put it in for the uber pessimists.

And we're almost there a mere two weeks later.

Are you all in cash? I'm in cash. And I've been there for several months. I thought some bargains of the century were just a day or two away but eff this!

The hedge funds have been getting phone calls from angry rich clients screaming at them

1) Get my money back now! And

2) You're fired!

And I don't think it will stop for a while. In fact, I'm thinking we might not see the bottom of this particular spike until institutions connected to said hedge funds float up to the surface bankrupt and bloated.

And then I wrote this just yesterday:

And so where's the bottom?

I figure 8500 unless of course we get there in the next two weeks.

And so with that in mind let's look a little ahead and a little in behind us. The last time the Dow saw 7000 (I'm trying to stay ahead of the curve here):

Bill Clinton was less than half way through his second term

Dot coms of any stripe were making money.

9-11 was almost 4 years in the future.

Puff Daddy (a.k.a "Diddiot") had the top single in Billboard

Tony Blair hadn't yet become Prime Minister of Great Britain

The comet Hale-Bopp had its closest approach to Earth just a month earlier.

and

Slate was almost a full year away from charging $19.95 a month.

So here's a final question to be tacked on to the end of the top post.

Will Slate be around a year from now?

The crazy thing is, I made answer 7D an option simply to cater to the ridiculously pessimistic reader. That was in the good ol' days of Dow >9000. Never did I imagine at that time a Dow below 7000 in a year let alone in 6 months!

For all you S&P folks, the S&P closed today right at 700. That's a reduction of about 55% from its high.

It's time to start buying stocks.

Jack

Really, just about every "guru" is saying, "This is just a bounce. Now is not the time to jump in. Wait until the lows are tested again," which is a strong indication of a real bottom and the lows will not be tested. I'm not in yet but I may be soon.

Some are calling it a Bear Trap, and saying it will go back down but I'm not so sure. I think Obama was holding it back with his doom & gloom message. As soon as he said it's not as bad as first thought, the index started moving up.

I started buying some stocks a while back. They all moved down for a while, after I bought in, but have now started to come back up. One is above where I bought it and two more are close. I also bought 1,000 shares of GM about 3 weeks agos or so at 1.77.

It may work for me or it may not. I think it's worth the gamble.

Jack