Jackson Jambalaya

Wonder why I post so many items from Karl Denninger's website, The Market Ticker, or why Kim Wade has him on his show so much? Its because Karl's track record the last few years predicting the economy has been on the money (pun intended). Every January he makes his economic forecast for the next 12 months and sufficeth to say, he's usually right. He is one of the reasons many of us don't listen to the CNBC gurus anymore as they are known for consistently getting it wrong. Here is his mid-year check of his 2009 predictions:

"Let's take a look at the scorecard first from my 2009 Prediction Ticker, remembering of course that I have six months left!

1. The economy will not recover in 2009. No sign of it yet, "green shooters" be damned. I predicted that U3 would reach 8% by the end of the year, it has exceeded that wildly, and is now 9.5%. U-6 also has exceeded my predicted value already.
2. Deflation, not inflation, will become evident well beyond housing. Already has. CPI and PPI have come in with negative prints as has capital goods pricing.
3. Housing prices will continue to decline. Yep.
4. The Fed's attempt to "pump liquidity" will be shown to be an abject failure. I'll leave this one on the table for now; I believe the evidence is in, but I'm in the minority. Score this one as a "no result" as of yet.
5. GDP will post a 12-month negative number. 12 months aren't up yet, but we're working on it!
6. The Stock Market has not bottomed. Remember, this was made with the market around the 900 level. Major check; we declined to 666. My secondary prediction was a 50% trading range and a 5xx low; we missed that by 67 points, but I still have six months left. I'm sticking with this one.
7. Precious metals will not be a safe haven. Oh Jim Sinclair! Where's my $1,600+ gold price? (Or for some, their $5,000+ gold price?) Missing, that's where. I know, I know, its all manipulation (instead of debt deflation.) Check.
8. The Dollar will not collapse. Hasn't yet.
9. The pound or euro will be where the FX dislocation originates if it occurs. I predicted Par for both being a possibility, not happening yet. We'll see what the next six months bring.
10. The US Consumer will go from a negative savings rate to a seriously-positive one. I'm predicting 4% but it could go as high as 10%. Major double-check! We're up close to 7% now. That's a home run in any book.
11. Commercial Real Estate will effectively collapse. The REITs have not yet imploded but the pricing and occupancy look like something that came out of the back end of a horse. Anyone got a finger to lend to push this pile over?
12. Along with the above, expect 10% of retail stores to close. We're getting there.
13. Several states will get in serious financial trouble and outright default of one or more is possible. California anyone? Major check.
14. Mortgages are not done. Yep. Prime, OptionARMs, ALT-A.
15. If you want to refinance you may get one brief shot at it with long rates around 4%. Check again. Hope you took it.
16. Those who have said that the corporate bond market is being "unreasonable" in its expectation for defaults will start to look like the jackasses they are. Ding! Check CDS spreads the last few weeks? They're widening again. Even worse, the actual corporate default rates are getting rather nasty. This trend continues.
17. Calls for "more lending" to consumers and businesses will go exactly nowhere. Major check. The drunk who is passed out from intoxication can't lift the bottle. Nice try guys.
18. General Motors and Chrysler will wind up in bankruptcy. DING!
19. Protectionism and currency manipulation will rear their ugly heads. This has started but there's much more to come. Watch out; this has the possibility of igniting wars.
20. Commodities will appear to be headed for a new bull market but this will turn out to be a false hope. Attempts to manage oil output to prop up the price will fail. Crude just rolled over, in fact, and major agri commodities were lock-limit down on one day last week. Ding......"

So let's see - I have 25 predictions and of them I can score 13 "confirms", half the year is over, and no busts as of yet (although there is one, the Euro/Pound prediction, that is looking shaky.)" Rest of article

If you are interested, here are his 2008 predictions. When he made them, many thought he was nuts.