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Back on 24 November 2008, I wrote the following:
We might have already reached the low end of the Stock Market’s value, which I’ve predicted on Coast-to-Coast Am and other shows as far back as January 2008, is somewhere between 7,000 to 7,500.
I predict the worst blows of this economic storm are bearing down on us to dominate our lives for the next two years, I hold to the intuition that we now have touched the bottom of this market, somewhere in the lower 7,000s. We’ll go down into that muddy place more than once in the future 12 months, but not deeper into the bed rock stocks under 7,000.
Hitting the Stock Market Bottom
(24 November 2008)
I made that observation almost exactly three months earlier. At the time, the previous Secretary of the Treasury Paulson of the Lame Duck Bush administration tinkered and flailing with the market help it plummet to 7,400 points on Friday 21 November. It jumped 500 points in the plus on 24 November after Paulsen tried another “experiment” throwing $20 billion after the $25 big Bs at the struggling CEO sharks running the foundering Citicorp Bank.
Three months later, rumors of a partial nationalization of the same Citicorp yesterday with a rumored bank bailout plan to socialize 40 percent of Citibank dropped the Dow Jones very close to my predicted bedrock bottom. The market foundered to a 12-year low closing at 7,115 points. Yet today the monetary speculation rally monkey skedaddled up the math pole 236.16 points on the feel-good projections of bankers hearing the head of the Fed. Ben Bernanke’s calming words. Nationalization of the banks would be something warmer and cuddly sounding, a twilight zone that’s neither completely nationalizing Citibank and the other surviving bank monopolies, nor wholly free market fierce enough to let the banks go down like Darwinian dinosaurs in abject failure. Bernanke also made a cautious prediction that recovery from the recession could come by end of the year. In other words, he was trying to capture the distant light at the end of this current deep recession tunnel saying it might be found to flicker way down this rabbit hole about 12 months distant if the badger of economic surprise doesn’t chew on it.
Hedging his prediction of an economic turnaround, Bernanke said it would depend on the success of the Fed and the Obama administration getting credit and financial markets to thaw and invest.
“Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Bernanke said.
In my book of predictions for the coming year, I make it absolutely clear, beyond the fog and cuddly flip-flopping of Bernanke and Obama: the president WILL nationalize the banking system in 2009. He’ll postpone the unavoidable as long as possible but it is coming:
Just legislating change won’t make it so. It may require hands on nationalization of the investment banks “and” the financial banks, literally taking over their chairmanships, or the threat of such, to get them off their butts and moving currency because credit is the oil that fuels the investment expansion of the economy. Without this lifeblood, the economy’s heart will remain stilled in this Great ‘Dead’-pression.
I have written as well as said on radio shows that the only factor that might drop the market below the bedrock of 7,000 points would be the complete collapse of a major industry, such as US Automobiles. The nationalization of the banks might see the market temporarily drop deep into the 6,000s but once all of us get acquainted with the era of the economically unthinkable — socialism — the market will stabilize in the low 7,000s again and Wall Street will hang there like a bottom feeding flounder for a long time to come.
John Hogue
(24 February 2009)
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