There are plenty of causes for concern in the upcoming year.
Chief among them are …
1. Britney Spears decides not to retire. Britney, pass the hat; we will pay for you to retire.
2. Adam Lambert decides to really cut loose.
3. The Yankees decide to increase their payroll. Hey, it could happen.
4. Michelle Obama decides her arms lack tone and intensifies her workouts. Then she beats the president on the basketball court.
5. Sarah Palin begins reading and is shocked to learn Russia was once part of the Soviet Union. Then she decides to move to a town with a library (better hope its not yours).
6. Dick Cheney says he will run for president if drafted and will put what is left of his heart into the race.
7. The big banks decide to forego lobbyists and opt to pay Congressmen directly from their bonus pool.
8. George Bush becomes a paid spokesman for the “nuculur” power industry. He takes speech lessons from Sarah Palin.
9. Nancy Pelosi starts a PAC that accepts coupons for Botox. Medicare then approves payments for Botox.
10. Brad and Angelina lobby the UN and are allowed to adopt an entire country; Madonna is named role model mother in chief.
OK, I thought I’d try to lighten the mood a little before I got into what is really scary about 2010. Because unlike the things above, there’s a good chance what I’m about to tell you could happen.
1. Official unemployment climbs to 12%; real unemployment at 20%-plus.
Forget the BLS statistics. Real unemployment is much worse than the “official” numbers states. Did you know that they added 800,000 jobs this year to the workforce due to “new business creation”? You’ve got to be kidding me!
2. Another 2.5 million home foreclosures.
And this time they won’t be homes purchased with subprime mortgages; it is the unemployed and those walking away from mortgages that are now much greater than the value of their homes.
3. Another 12%-15% drop in home prices.
With all those foreclosed homes hitting the market, homes prices ain’t going up. And, with that, the wealth of the average consumer goes down.
4. Up to $1.5 trillion in consumer credit lines vanishes.
The New Frugal consumer is a reality, not just due to falling income and unemployment, but the inability to borrow money.
5. Another 300 banks fail, including some big regional banks, and the FDIC requires more dough.
So far 144 banks have failed this year, and the real problems in commercial real estate mortgages have yet to be truly felt.
6. Citigroup comes back to the government for more money, Uncle Sam says no and breaks up the company.
This really could happen. Citigroup (C) has no short-term hope of raising more capital given the failure of the capital raise earlier this month. Stay tuned.
7. China refuses to revalue its currency and the current guerilla trade war gets hotter.
8. A nation defaults.
Estonia? Greece? Ukraine? Mexico? It will be temporary and the International Monetary Fund (IMF) or European Central Bank (ECB) will swoop in, but sovereign debt markets will be hit hard. (Learn why you shouldn’t write off a second financial crisis just yet.)
9. Iran announces a functioning nuclear weapon that, in reality, it does not have; oil goes to $125; Israel bombs Iran.
This is possible, but not probable in 2010. Longer term, barring regime change in Iran, it’s probable more than possible.
10. The impact of expiring tax cuts hits the market and a rational sell off to capitalize on lower tax rates becomes a rout.
Possible, but not probable. There will be a sell-off due to the expiration of the Bush tax cuts. It’s just a matter of how much, how fast and how far.
