2010

The January Indicator
The average index gain in years with a positive January close is 12.9%. In negative January years the index has averaged -2.8%.

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2010 Bears to BULLs 5 to 1
Now that the month has passed and we've officially exited "prediction season," what did I discover from this process? Bottom line - bearish predictions outnumbered bullish predictions five to one.

What is noteworthy and unusual about this observation is that following strong performance years, that doesn't typically occur. In fact, the more the market is up in the prior year, the more bullish the predictions tend to be for the next. Recency bias at its finest. But, that was not the case for 2010.

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Themes For 2010
http://www.thekirkreport.com/2010/01/themes-for-2010.html
For the past month I have been collecting posts regarding what others think are themes that we're likely to see play out in the year ahead. While most of these will probably miss the mark (they always do), you may find it of interest to see what others think we should be watching for this year. Enjoy


THE ULTIMATE GUIDE TO 2010 INVESTMENT PREDICTIONS AND OUTLOOKS
We’ve compiled many of the very best outlooks from various analysts, gurus, hedge funds and investors. We hope you find the list helpful in mapping your successful 2010:


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Deutsche Bank
Changing it up a little is Deutsche Bank as they make their scenario assessment from the big fence that they’re sitting on.

Probability: 15%, Total equity returns: 34% – This is the super bullish scenario. Stimulus continues to impact markets to near perfection. Reflation continues to work and money pours out of low risk assets and into high beta assets. Stimulus continues to pour into the system as the long-term repercussions of stimulus are ignored in favor of short-term gains. Rates stay low as a goldilocks scenario unfolds. Equities outperform and credit spreads continue to tighten.
Probability: 50%, Total equity returns: 20% – This scenario is characterized by a gradual easing in stimulus and easy money policies. As some momentum begins to grow in the first half of 2010 policy makers are comfortable beginning to tighten around the globe. In this scenario risk assets still outperform, but are muted by rising bond yields. Fixed income underperforms.

Probability: 25%, Total equity returns: -11% - Under this scenario bond yields spike sharply higher. The mountain of debt issuance and the end of Quantitative Easing programs fail to bolster the necessary demand. Inflation becomes a growing concern and the potential for sovereign debt problems increase. This is the Julian Robertson higher rates scenario. Equities and bond both perform poorly.

Probability: 10%, Total equity returns: -26% – This is the absolute nightmare scenario where deflation reasserts itself and a double dip becomes evident. The catalyst would be new banking scares, increased government regulation, sovereign debt scare, stimulus withdrawal. A flight to quality ensues and fears of 2008 become all too familiar. Stocks perform very poorly.

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Financial Bloggers Make Their 2010 Projections
The Bespoke Investment Group just posted a killer 2010 Roundtable, including the views of some of the best financial bloggers out there. I was honored to be included along with Eddy Elfenbein, Paul Kedrosky, Bill Luby, Michael Panzner, Mebane Faber, Charles Kirk and all the rest.
-- see detail answers for each of them

JPMorgan Sees S&P at 1100 by end of 2009

May 8 (Bloomberg) -- One of Wall Street’s most optimistic equity strategists told clients that the Standard & Poor’s 500 Index may rise even more than he expects this year.

“There is actually upside risk,” JPMorgan Chase & Co.’s Thomas J. Lee, wrote in a report yesterday. He expects the S&P 500 to end the year at 1,100, or 21 percent higher than yesterday’s close.

The CHART OF THE DAY shows how his estimate, which he has left unchanged all year, compares with the average projection of strategists in a Bloomberg survey. Lee is tied with David Bianco of UBS AG for the highest year-end number.

The S&P 500’s last close before Lehman Brothers Holdings Inc. filed for bankruptcy in September is included in the chart. Declines in share prices and the U.S. economy “snowballed” in the wake of the firm’s collapse, Lee wrote. “At that time, many would argue, stocks reflected a 2008/2009 recession.”

Stable retail sales, a pickup in pending home sales, and other indicators signal the recession may hit bottom by midyear, leading to higher share prices, the report said. The S&P 500 rose 34 percent from its March 9 low through May 8 yesterday’s close (exactly 2 months).

“We want to become ‘slow buyers’ of stocks,” he wrote, citing the likelihood that prices will drop below their March lows before rising anew. This so-called retest would serve as a trigger to buy “in a larger way.”
asr: what this analyst is saying they buy slowly at this already hiked S&P level and expects to test March low of 650 , once it touch March lows of S&P then they buy in a big way .
asr: who do not buy big way if S&P touch 650 which give 35% return on 650 to 890 , that is the precise reason why it won't fall down to 650 coz every body saw this 2 month pick from 650 to 890 so the very recent memory ( to peopel and fund managers ) of this quick spike won't let it fall to 650 ..

2000 to 2002 bear market drawdown 44.12%

when looking at the current drawdown period -- the decline in value of the Dow Jones Wilshire 5000 from its peak to its trough -- the most recent drop is about 41.5%. That's less than the 44.12% drawdown experienced during the 2000 to 2002 bear market, said Krein.

While only time will tell whether the bottom has been hit, a 40%-plus decline is significant, to the degree historical trends hold, said Krein.
Timing is everything
"If we happen to be at the bottom now, maybe history will hold and maybe it won't, but it still takes a multiple of the period of decline to recovery. It's that buildup that investors do not want to miss," said Krein.

Time to jump in?
Housing prices are down, and mortgage rates remain low, but potential buyers should be cognizant of being in it for the long haul, as MarketWatch's Amy Hoak reports.

The market took about three and a half years to recover after the 2002 bear market, yet the market rebounded 14.86% in the year following the trough date.
"If you expand this out to two or three years, the market has rebounded 28.28% and 48.29%, respectively," Krein said.

Historically, the recovery takes about twice as long as the decline. But for those "with the stomach and capital to wade back in," investing at market lows in the past has translated into gains of 40% and more for those who buy and then wait out the bounce back, Krein said.

"If you're a long-term investor, I think stepping in even at this point in time would be a good move. Economies don't stay weak forever, so it makes sense to position for a turnaround that we see happening sometime next year," said Pavlik.

GOLD FORECAST

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asr: GOLD vs. silver 5 year return, interesting after losing 30% in 2008 , it gained 50% in 2009 so from DEC 2008 to DEC 2009 the gain is 80% wow.
- see the chart pattern , after out performing GOLD 3 years in a row , it lagged gold 2 years in a row , then again 80% in 2009 .
- good chart patterns to watch in hardassets , it seems in 2009 JAN it is is less risk trade to buy silver given it lagged gold in 3 years in a row

asr: have this kind of charts in JAN and JULY of every year ( once in 6 months ) for all hard asserts like copper, stockindex, GOLD, sivler, crude oil, oil cracks, agri soy bean/oii/meal vs. corn see if you get some good trade ideas like those silver/gold patterns . may find similar in soy/corn , copper vs. xxx

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asr: this is 11/11/09 article
Mr. K reported same, seems got it from Realmoney.com

Gold prices could reach as much as $1,200 a troy ounce by the end of the year if ten-year U.S. Treasury Inflation Protected Securities yields, or TIPS, remain at current weak levels, Goldman Sachs said Tuesday.

The bank noted the continued weakness in real interest rates continues to provide strong support to gold prices over the medium term.

"The yield on the 10-year U.S. TIPS remains under 1.50%, which continues to suggest upside risk to our $960/oz forecast," said the bank, which sees gold at $960/oz on a three-, six- and 12-month basis. "Should 10-year TIPS yields remain at these levels, we would expect gold price to move to $1,150-$1,200/oz."

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Gold Price Won’t Drop Below $1,000 an Ounce Again, Faber Says
asr: this is 11/10/09 while gold is at 1100 , this is bloomberg article , so some credentials for the forecaster. So central banks ( US etc..) are expected to print more so more inflation so he expects to raise.

“We will not see less than the $1,000 level again,” Faber said at a conference today in London. “Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold.”

China will keep buying resources including gold, he said.

“Its demand for commodities will go up and up and up,” he added. “Emerging economies will grow at the fastest pace.
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Goldman Sachs lifts gold price forecast to $1,000/oz

asr: 2/5/2009 article (see link) , so from 2/5 gold incresed from 900 to 970 ish then maintained at 900 level for some time and reached 1000. so Gold man forecast of 1000 ( from 900 ) in 3 months time is not bad .

SINGAPORE, Feb 5 (Reuters) - Investment bank Goldman Sachs
(GS.N) raised its forecast for the price of gold to
reach $1,000 an ounce in the next three months from its
previous forecast of $700 due to rising investor demand for
safe haven assets.

"The gold price rally has been driven by surging demand for
gold in all forms: physical gold, exchange-traded funds (ETFs),
and futures contracts as investors seek 'a safe store of value'
amid the financial distress and inflation risks," it said in a
report.

It also noted that a strong relationship between the price
of gold in U.S. dollars and the exchange rate of the dollar
agsinst other currencies has begun to break down. Gold was
trading at $903.15 an ounce by 0038 GMT, down $1.70 from New
York's notional close.
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Gold was down some 5.5% last week on options expiry, year end profit taking and tentative dollar strength and oil weakness.

asr: this GOld man forecast of SELL GOLD in 12/2007 did not do well , gold raised next 6 months ..
Goldman Sachs Group Inc. is recommending that investors get out of gold and lock in their gains just two months after it suggested they buy. Goldman Sachs recommends in its top 10 trades list for 2008 that investors short gold next year. However, there appears to be dissent in the Goldman camp as only a few days ago another Goldman analyst, Oscar Cabrera, said that the average price of gold will increase to $800 an ounce in 2008, up from $687 in 2007.

asr: good snaptshot to see where prices are in 12/2007

Oil price forecasts

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$90-a-barrel 2010 price forecast for West Texas Intermediate crude futures,
- Dec 3, 2009

NEW YORK, Dec 3 (Reuters) - U.S. investment bank Goldman Sachs (GS.N) maintained on Thursday its previous $90-a-barrel 2010 price forecast for West Texas Intermediate crude futures, but predicted the NYMEX crude futures would rise to $110 a barrel in 2011, on rising demand from emerging markets.

In a research report, Goldman Sachs lowered its 2010 price forecast for NYMEX natural gas futures to $6 per million British Thermal Units (MMBTU), down from a previous forecast of $7.30. The bank expects natural gas prices to rise to $6.50/MMBTU in 2011.

"Overall, we leave our 2010 WTI crude oil forecasts largely unchanged at an average price of $90/bbl, but with lower prices at the start of the year and higher prices at the end," the bank said in a report.
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these came from these URL , this is PDF of 10/13/09 , link from Mr. K posts ..
http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch

asr note: interesting GOldman "BUY 2009/sell 2011 " initiated in FEB/2009 gave profit of $3.5/bbl in 8 months.
- many entries in these PDFs are what Goldman gave outside release for OIL esp. 2009 year end traget $85 and 2010 target $95









http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch

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Goldman raises oil-demand forecast - 9/23/09
Analysts at Goldman Sachs raised their forecasts Friday for global oil demand for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.

"The permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base," wrote Jeffrey Currie and other Goldman analysts in a research note.

At the same time, Goldman maintained its price forecasts, saying that higher anticipated demand has been met by stronger supply, particularly out of Russia and the rest of the former Soviet Union.

As a result, Goldman raised its global supply forecasts by an amount similar to its global demand forecast.

Goldman kept its end-of-year target for benchmark crude prices at $85 a barrel, along with an average 2010 price forecast of $90 a barrel and its end-of-2010 target of $95 a barrel.
( asr: this $85 year end target was issued in june/2009 with this issue OIL touched from dropped 70 to 75 see notes below.)
asr: i think today price of $66 is one of the last oppertunities to get OIL for rest of 2009 , I belive for next 3 months OIL will maintain above 70 avarging around 73-78 range)


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asr: these 2 reports are released on June 4 , 2009 , after a June 3 drop from 69 to 66
see these timing of the report , Gold man waited to for a prefect day of down price to issue to 75 from $52 .
asr: It seems this $75 is near term target ( read 3 months) and $85 is year end target .
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what a play by Goldman Sachs and other funds!

http://www.elitetrader.com/vb/showthread.php?s=&postid=2453874#post2453874

First the complete lack of buying yesterday (read VSA) caused market to drop $4 from its highs. As it was dropping Goldman and other funds were buying. When Goldman completed its buying at EOD it issues a report for $85 oil! and then market jumps $4 today....

New money and small account holders wiped out!

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Goldman Sachs lift oil price target to $75

http://www.marketwatch.com/story/goldman-sachs-lift-oil-price-target-to-75

LONDON (MarketWatch) -- Goldman Sachs lifted its target on light sweet crude oil to $75 a barrel from $52. "The recent rally in WTI prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity. In all, we expect the rally we have just observed to be followed by three more stages, creating a four-stage rally in oil prices in 2009 and 2010," the broker said
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Goldman raises end of 2009 oil price target to $85

LONDON, June 4 (Reuters) - Goldman Sachs raised its end of 2009 oil price forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95, the U.S. bank said in a research note.

Goldman said the recent rise in U.S. crude prices was likely to be the first stage in the oil price rally that it expects will accompany a recovery in economic activity.

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this post was around Jan 15 , 2009

Goldman Sachs said Monday the price of oil could fall below $30 a barrel in the short-term before rising to $65 in the fourth quarter.

Jan09 contract end date 12/18/09 3 rd FridaY

here is all oil 2009 forecasts ( see posts for details )
1)
JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.
2) Goldman sachs $32-$40
3) Dutch bank $40
4) Merrilinch $25

Oil prices stabilized Friday as the White House's $17.4 billion auto industry rescue package gave Wall Street a boost and the dollar strengthened against the euro.

Light, sweet crude for February delivery rose 69 cents to settle at $42.36 a barrel on the New York Mercantile Exchange. In London, February Brent crude rose 64 cents to settle at $44 a barrel on the ICE.


The extreme volatility in energy markets this year has seen crude pushed from $100 to nearly $150 between January and July, and back down to the $30 to $40 range this month.

Peter Beutel, an analyst with Cameron Hanover in New Canaan, Conn., said he sees a lot of factors that should be leading to a bullish market, but they're not getting any traction because of the weak economy and falling demand.

"Until people can just take their eyes off of the demand for five seconds, it doesn't seem like this market is going to have an easy time moving higher right away," Beutel said.

The January 09 contract, which expired Friday, fell $2.35 cents to settle at $33.87, the lowest close in nearly five years.
----------------

What we may have to see before oil prices really carve out a bottom is evidence that crude inventories have stopped rising or a sustained rally in equities," Hassall said. "The focus of the market has been almost purely on the demand side."

Hassall predicted prices could fall as low as $25 a barrel next year before rising to as high as $60 if the global economy recovers in the second half.

"Prices could dip into the 20s for a time, and then there will likely be fairly choppy, sideways action in the first quarter," Hassall said.

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asr: Feb09 contract closed this same expiration Friday at 42.87 so that is $9 spread , 20 days ago the spread may be $1.5 max.
- what is great strategy "Near Short/Far Long " when OPEC cuts have planned announcements.
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Analysts largely discounted the January price, with the volume of the next month contract trading at 3 times the volume. Yet analyst Jim Ritterbusch said pre-expiration lows ( of Jan09) do provide a downside target to the next contract (Feb09).

Ritterbusch, president of energy consultancy Ritterbusch and Associates, said the market is sending strong signals that an oversupplied market will remain in place for some time.

"I think it's going to work its way down to today's lows in the January futures," he said.

The January contracts were at steal at that low price, Beutel said, but the question is where are you going to keep it. Rising stockpiles in Cushing, Okla., have put storage space at a premium.

"If you could find storage for it, it's a way to get rich real quickly," Beutel said.

Oil producers have leased supertankers to store crude at sea while they wait for prices to rise.

At an energy summit Friday on London, British Prime Minister Gordon Brown warned that a failure to stabilize oil prices could cost the global economy trillions.

"Wild fluctuations in market prices harm nations all round the world," Brown said. "They damage consumers and producers alike."

OPEC Secretary-General Abdullah El-Badri acknowledged the problem.

"We all know that extreme oil prices whether too high or too low are as bad for producers as they are for consumers," El-Badri said.

Meanwhile, Zeljko Bogetic, the World Bank's chief economist in Russia, told investors that the oil-rich nation would come under crippling financial pressure and may need to take out loans if crude prices do not rebound.

"If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Bogetic said.

Russia, which has used oil profits during the past eight years to pay down most of its foreign debt, could turn from creditor to borrower if current trends continue.

At $50 a barrel, Russia could drain much of its reserve funds and run budgetary deficits, Bogetic said.

Earlier this week, the 13-nation Organization of Petroleum Exporting Countries slashed its output quota by 2.2 million barrels a day in a bid to bolster prices that have slid about 70 percent since July.

Still, crude prices tumbled this week amid a bevy of dour economic reports suggesting demand for energy will continued to erode.

"The cut had been priced in," said Clarence Chu, a trader with market-maker Hudson Capital Energy in Singapore. "If OPEC hadn't cut that much, the price would have fallen even more."

Stephen Berman, an analyst with Pritchard Capital Partners, said OPEC may meet again in Kuwait on Jan. 19 to discuss further production cuts.

Analysts say disciplined compliance by OPEC members is key to market reaction and the stabilization of oil prices in the near future. Some OPEC members have a history of ignoring quotas, allowing oil power house Saudi Arabia to carry most of the burden of production cuts.

"Perception of progress is key to the movement of the oil price in the next few months," KBC Market Services in Britain said in a report.

JP Morgan on Thursday cut its 2009 price target for oil to $43 a barrel from $69.

The national retail average price for a gallon of regular gas rose three-tenths of a penny to $1.673 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 37 cents a gallon below what it was a month ago and more than $2.43 below where it was in July when prices peaked at $4.11 per gallon.

In other Nymex trading, gasoline futures rose less than a penny to settle at 96.93 cents a gallon. Heating oil gained nearly 2 cents to settle at $1.392 a gallon while natural gas for January tumbled 21.4 cents to settle at $5.334 per 1,000 cubic feet.

Associated Press writer Alex Kennedy in Singapore, Pablo Gorondi in Budapest, Hungary, Emily Flynn Vencat in London and Catrina Stewart in Moscow contributed to this report.

Oil could fall to $40/bbl in 2009: Deutsche Bank

NEW YORK (Reuters) - Oil prices could fall to as low as $40 a barrel next year as more efficient refining capacity comes online and production costs for some regions fall, Deutsche Bank said in a Wednesday research note.

"The most underappreciated issue is the combination of
a) poor demand with
b) major new refining capacity additions and the extent to which that will undermine light sweet crude prices," the bank said in the note outlining the downside risk to its 2009 oil forecast.

"We believe that cash production cost 'floors' for the oil price are shrinking target (lower costs, stronger U.S. dollar), which imply a 'V' shaped downside to $40 a barrel crude around April 2009."

Oil prices have tumbled from a record over $147 a barrel to below $54 a barrel on Wednesday as demand from large consumer nations across the globe wilts due to the economic crisis.

The bank said the new refining capacity additions will use 20 percent less crude to make gasoline and distillate than older capacity, cutting the need for crude and pressuring prices.

In addition, the research note said healthy supply increases from non-OPEC sources should also weigh on oil.

"Given the weak demand we see versus relatively healthy supply levels, we seek the cash break-even cost of marginal production as the floor for oil prices," Deutsche Bank analyst Paul Sankey wrote, adding this floor was a "shrinking target".

"As oil falls, costs fall, the U.S. dollar strengthens, further causing local (Canadian, Russian) break-evens to fall."

OPEC members, feeling the squeeze of falling oil prices, will also face increased pressure not to cut production due to shrinking revenues, the bank said.

(Editing by Christian Wiessner)

Heroes and Zeros of 2008

Hero: Nouriel Roubini
Economics professor, New York University

For the next 12 months I would stay away from risky assets. ... I wish I could be more cheerful, but I was right a year ago, and I think I'll be right this year, too." -- Fortune, Dec. 10, 2008

Roubini is on this list for one reason, and it's a big one: He was one of the first people to warn about the impending financial crisis.

Back in 2006, his public predictions that a real estate bust along with a surge in oil prices and a shopped-out consumer would lead to a recession by 2007 were met with deep skepticism. As we know all too well, much of his dire forecast came to pass in 2008.

He's not too rosy about the future, calling for the most severe and protracted economic downturn since World War II. But we can all take comfort that Roubini is forecasting the economy to begin recovery by the end of next year, and for GDP growth to turn positive in 2010. --D.R.

OPEC Favors Cut to Trim Stocks, Expects Russian Help (Update3)

Kuwait Push

OPEC, which agreed in October to reduce production by 1.5 million barrels a day from Nov. 1, has implemented 75 percent of the cut, said Khelil, who is also Algeria’s oil minister. Algeria has lowered production by 90,000 barrels a day and is producing 1.3 million barrels a day now, he said.


World demand will fall this year for the first time since 1983 as the global recession cuts fuel consumption, the International Energy Agency said last week.


OPEC will probably lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg. Kuwait’s Oil Minister said the country will push for a cut at the meeting.

OPEC is “very pessimistic about demand” next year, Khelil said, adding that current stock levels are five days higher than the five-year average of 52 days.

Oil consumption will fall by 200,000 barrels a day in the first quarter of 2009, and a further 1.2 million barrels a day in the second quarter, before rising again in the second half of the year, he said.

The group will meet again in March and start to gather more frequently, Khelil said.

World oil demand is likely to fall by an average of 500,000 barrels a day next year because of high crude prices and slumping economies, the Centre for Global Energy Studies said in a report today.

Goldman's revision : 2009 Oil 42

Goldman's revision
Goldman Sachs has slashed its average price forecast for West Texas Intermediate crude for 2009 to $45 a barrel, down from $80 a barrel previously. This stands in stark contrast to Goldman's prediction earlier this year that oil prices may hit $200 a barrel.
Goldman also lowered its three-month oil price target, to $30 a barrel, as well as its six-month target, to $42, and its 12-month target, to $65.

"The collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified now threatens to push oil prices below $40 a barrel in the near term, as the impact of the global economic recession has swung the oil market from pricing demand destruction in 2008 to pricing supply destruction in 2009," the commodities research team at Goldman Sachs led by Jeffrey Currie said in a report dated Thursday.

The Goldman analysts expect oil demand to decline by 1.7 million barrels a day in 2009.

In addition, they said that an additional 2 million barrels a day of OPEC supply cuts will be required in 2009, along with a reduction of 600,000 barrels a day in non-OPEC production, in order to rebalance supply and demand in the oil market. End of Story

50% in CA Who Sold Homes in Past Year Lost Money, Zillow Saysin

what is causing deepening the housing recession ( keep house prices falling )
1) Stricter mortgage standards and ( 25% downpayment and 6% interest rate for 5 year ARM)
2) record foreclosures ( there are so many foreclousure home on sale at lower prices, genuine non-foreclousure seller is forced to lower his price to match 'foreclosure' price in-order to sell )
3) amid climbing unemployment. ( 6.3% , causing 'more sellers' and 'fewer buyers' even employed propspective buyer with decreasing confidence delays/postpones buying decision )

California had 14 of the 17 markets( like San jose, SF , LA ) where more than half of homes sold were sold at a loss, according to Zillow.
asr: meaning 50% sold are people who bought houses from 2005 to 2007 which resulted in loss in todays prices , other may be houses bought earlier that is prior to 2004 ..

U.S. payrolls fell for a 10th straight month in October and have dropped by 1.2 million so far this year, the Labor Department said last week. The jobless rate is at a five-year high of 6.3 percent.

The 30.2 percent of homeowners who sold at a loss at the end of the third quarter compared with 23.7 percent at the end of the second quarter, Zillow said. Almost one in five transactions were foreclosure sales.

California had 14 of the 17 markets where more than half of homes sold were sold at a loss, according to Zillow.

Forecast 2009: Your home

(Money Magazine) -- Forget the old saw that all real estate is local. What's pummeling housing prices in your nabe is the same thing that's hurting them around the country: the credit crisis.


Home prices in the nations 10 biggest metro areas are projected to keep falling in 2009, with Miami and Los Angeles suffering most.

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Source:Moody's Economy.com
Notes: Prices are projections for the end of 2009. Change is from the end of 2008.

Metro area 2009 median home price 2009 change
Dallas $155,645 -1.0%
Houston 147,549 -1.8
Atlanta 150,092 -2.5
Chicago 239,359 -5.3
Philadelphia 201,151 -9.8
Boston 295,918 -12.5
New York 393,210 -13.7
Washington 261,411 -17.1
Los Angeles 269,614 -17.2
Miami 214,551 -18.8
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You know the drill - banks' troubles have made it harder for many home buyers to get mortgages, and those who do qualify have to pay more. A borrower with good credit and a 20% down payment recently got charged an interest rate of 6.7%, on average, according to HSH Associates.

It's true that this rate is not historically high (rates often surpassed 9% in the early 1990s). But it's more than the 6.2% that the same borrower would have paid at the beginning of 2008.

The fact that mortgage rates have remained stubbornly elevated despite the government takeover of Fannie Mae and Freddie Mac leads some experts to believe that those rates are not headed down anytime soon.
Talkback: What's your forecast?

Then look at the fact that 18.6 million homes in this country are now sitting vacant, more than at any other time since the Census Bureau began tracking that figure in the 1960s. And that 2.8% of U.S. mortgage loans are now at least three months in arrears, up from 1.4% a year ago. That rate is projected to peak in early 2009.

But if a recession lasts for three-quarters of the year, as some economists are predicting, the number of foreclosures could remain high longer. Add it all up and you have another lousy year for real estate.

Home prices are down 20% nationwide since their peak in July 2006, according to the S&P/Case-Shiller home price index. Economist Nouriel Roubini of New York University, who accurately predicted the housing slide and credit crisis, expects another 20% decline in home prices next year. Patrick Newport of economic forecasting firm Global Insight projects a 15% drop.

The damage will likely hit even areas that have so far escaped many problems, such as New York City (see the chart on the previous page). "We don't see the market turning until late 2009," says Newport.
The wild card

* How much home values fall early in the year

If they go so low that investors can start renting out homes for enough to cover their mortgage payments, we could see a wave of people snapping up bargain houses in 2009 - which could push prices higher by the time the next 12 months draw to a close.

Lawrence Yun, chief economist of the perpetually optimistic National Association of Realtors, says he expects prices to rise 2.8% in 2009.
The action plan if you're selling:

* Wait it out

In 2010, real estate should be stronger, with fewer homes clogging the market. So if you can wait until then to sell, do it. "I would," says Barbara Brin, a real estate agent in Minneapolis. And if even realtors are saying that...

* Make your place shine

In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home.

To convince buyers that your house is worth paying up for, make sure that it's in move-in condition (foreclosures almost certainly won't be). Point out unusual qualities like wide-plank floors or stained glass that cookie-cutter new construction lacks.

* Price it below market

Go to Zillow.com to see how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.

Sound painful? A recent study by a New Jersey appraiser found that houses priced below market ended up selling for more than similar houses listed above market. That's because lower prices attract more buyers.
If you're buying:

* Look for homes that have been sitting around

In many areas of the country, such as Phoenix, San Diego and Washington, D.C., it's common for perfectly good homes to linger on the market for six months or more. So start your search by looking for properties that have been up for sale for at least three months: At that point most sellers will be willing to deal.

Drive a hard bargain when you find a house you're interested in. Sellers know you have a lot to choose from. They also know that if they wait they will probably get less. So offer less now.

Barry Miller, a buyer's agent in Denver, suggests you make your first offer as much as 13% below the seller's asking price. "You might not get the house for that, but it's a good starting point," he says.

* Improve your credit score

More than ever, that three-digit number could cost you. Lenders have begun imposing fees for everyone who doesn't fall into the top tier of credit - and that's a whole lot of people.

"Let's say 680 got you the best rate on a mortgage 24 months ago," says John Ulzheimer, a credit expert with Credit.com. "Today you need to shoot for 780 to 820 to get the best deal."

Boosting your credit score from 660 to just 740 can lower your mortgage rate by a quarter of a point. To improve your score, focus on paying down debt, which will bring your crucial debt-to-credit ratio down. To top of page

Market Commenatry / News Letters

Forbes News Letters
http://www.newsletters.forbes.com/DRHM/servlet/ControllerServlet?Action=DisplayHomePage&SiteID=es_764&Locale=en_US&Env=BASE

- see all the Gurs at the bottom , and letters on left side

Shortex
Located at the top of each issue, this section provides the base on where the market currently stands, including advisors' bearish vs. bullish ratios, put/call trading value ratio, Gold index, NYSE short sales, hot sectors, and cold sectors.



ShortTerm Power Ratings

Here is main site of shortterm Power ratings

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Market Commentary

It has indices and Commodity Commentary

For now, the only all-clear sign that risk-averse private investors should accept would be a close of the S&P 500 Index ($INX) above its 12-month average for at least one month, and preferably two straight months. That's currently 1,260, but it's moving lower all the time. If you want to take more risk and try to jump the gun at some point, wait for a one or two weekly closes above 1,010.


Thus the crisis will end only when private fund managers replace the government as the market's top credit buyers. Don't hold your breath, though, as that will require a large appetite for risk, which is painfully missing on Wall Street today at a time of shrinking balance sheets.

This new economic paradigm has already slaughtered many hedge fund and mutual fund pros who have gotten it wrong, so it's going to take unusual foresight and patience for individual investors to survive. My recommendation is to avoid getting sucked into rallies in seemingly cheap stocks and high-yielding bonds except for brief trades, and just guard your cash patiently while awaiting the next bull market that's bound eventually to emerge after a lot more sideways action, or worse.



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Insider Trading
"Insiders might sell their shares for many reasons, but they buy for only one: they think the price will rise" - Peter Lynch ( Fidelity famous chief )

Insider Sentiment Summary: Market
ebay insider sales
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News Letter TradePerformance : Tips Traders -
http://tipstraders.com/tipster.php?tp=356&lm=20

Zacks Daily Bull - asr: seeming doing good with in few days as shown on top lines
Zacks Daily Bear - seems good on top lines with in few days

All gurus preformance
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Market Commentary


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Market Sentiment

Name: Brent Leonard
Location: San Francisco, California, United States

This Internet Blog attempts to exhibit the most meaningful Sentiment Indicators that we believe affect the performance of the market in different timeframes; most are Contrarian extremes suggesting that the majority has adopted a certain trend fully at the point at which it is about to reverse

asr: seems good data collection on weekly basis, but no readers/comments?

MktSentiment. 10/31/2008 Prev. Week.....5Yr.HI......LOW

DJIA ………. 9325…………8378………..14093............7286
Nasdaq………. 1720…………1552…………2810.............1114
S&P500…….. 968…………..876………….1561………..776
CBOE Eq. put/call …68……………83…….…..96-10/08….....46-1/03

VIX ………. 59.9…………79nh…….…….79..-10/08bull….10.0-7/05 bear

McClellan Osc………72…………..-38……………..91 -5 /04 bear...(-100)-10/08bull
McClelSum……….…-1441………-1514nl……..…....1568-6/03.......-1514-10/08
Newsletter Surveys:
Inv.Intel -Bull:…..…23.1………….22.2nl……….…63 (12/04bear)......22.2-10/08bull
Bear:………… 52.7…………54.4nh…..………… 54.4.10/08.......16-6/03

AAII-Bull/Bear ……37.1/40.3……38.7/38.7..……..n/a n/a
Public/NYSE Spec.-…17………….22nh… …….……22-10/08…………14.1
Bullish%- ………37…………….8………….…88 -2/04bear.....2-10/08bull
*Insider corporate sellers.3.6:1…….4:1…. ………..97………….4-10/08
Mutual Fund Inflows (2.3B)………200M
ETF InflowsL……….(.4B)……….500M……
Money Market Inflows: .(3B)………17B… ………144B
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Gold News Letter
http://www.jsmineset.com/index.php/about/

Self-Employed Forecaster Tops Big Banks With U.S. Housing Call

The survey covered 10 quarters starting in January 2006 and ending in June '08. During that time, homebuilding plunged, subprime-mortgage defaults infected banks and the Fed cut rates at the fastest pace in two decades.

Oct. 23 (Bloomberg) -- Joel Naroff was visiting Arizona in September 2005 when he had an epiphany. Phoenix-area realtors were looking for home prices in the metropolitan area to surge about 40 percent for a second year.

``That was an indication to me that the market had gotten out of control,'' he recalls.

Naroff's concern about a housing bubble paid off three years later: He's the top forecaster of the U.S. economy in a period that included the start of the global credit crisis, according to data compiled by Bloomberg. Naroff, 59, was the most accurate for his combined predictions for gross domestic product, unemployment, the consumer price index and the Federal Reserve's benchmark interest rate.

The survey covered 10 quarters starting in January 2006 and ending in June '08. During that time, homebuilding plunged, subprime-mortgage defaults infected banks and the Fed cut rates at the fastest pace in two decades. Since then, banks have failed, President George W. Bush has signed a $700 billion rescue bill and the Standard & Poor's 500 Index was poised for its poorest annual performance since 1937 as frozen credit markets threatened the worst worldwide recession in a quarter century.

Stock markets rallied on Oct. 13 after the U.S. government agreed to buy stakes in banks and the Fed led a push to flood the global financial system with dollars. As of Oct. 22, the S&P 500 had tumbled 39 percent this year.

``It's a world we've never seen before,'' Naroff says.

Far From Chaos

Unlike most of the 126 forecasters Bloomberg rated, Naroff makes his predictions far from the chaos gripping Wall Street. He's the self-employed president of Naroff Economic Advisors, working at home either in the Philadelphia suburb of Holland, Pennsylvania, or at his New Jersey shore vacation house.

``I walk or I go outside,'' he says. ``That's how I do my thinking, by moving or by being active.''

Naroff also uses his home offices in his role as chief economist for TD Bank Financial Group's U.S. arm, TD Bank, which has headquarters in Cherry Hill, New Jersey, and Portland, Maine.

In January, Naroff correctly estimated unemployment would rise to 5.1 percent at the end of the first quarter of 2008, the highest since September 2005. He accurately predicted 0.9 percent GDP growth for the 2008 first quarter, a plunge from 4.8 percent in the first quarter of 2006, as the housing slowdown took a toll.

He forecast 12-month inflation at 3.9 percent through March 2008, which turned out to be slightly less than the actual 4 percent rate.

As credit flows remained clogged in early October, Naroff forecast the economy shrank at a 0.8 percent rate in the third quarter and will contract at a 0.4 percent pace in the fourth. He says growth will rebound to a 1.6 percent rate in the first quarter of 2009.

Realtors Optimistic in CA for 2009 so long as…

asr: Link came from 'the bigpicture' left side categories ..
The 2009 forecast calls for a further decline in home prices, down 6 percent for the year following a 32 percent decline in year 2008 .

C.A.R.'s California Housing Market Forecast for 2009 -- See table

Given all those factors, and the uncertainty left in the marketplace, it was no doubt difficult to come up with a forecast for 2009, but Appleton-Young and her staff at CAR did a very admirable, and thorough, job of it. Based on the historic data she presented, it appears as if California is set to come out the other side in pretty good shape, probably by the second half of 2009 if no other major events change the nation’s — and the state’s — financial landscape

California Real Estate

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realtytrac map site,
see Cupertino has 50 houses vs. 8000 san jose,
consider cupertino is 1/10 of san jose then still it needs 800 houses vs. 50 .
see sunnyvale is better, Fremont after sunnyvale , this shows foreclosures problem

http://www.realtytrac.com/MapSearch/MapSearch/MapSearch.aspx?txtCity=cupertino&txtCity=CA#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http://www.thenorrisgroup.com

http://www.thenorrisgroup.com/crash_overview.html

http://www.thenorrisgroup.com/crash_overview.html

Testimonials

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http://piggington.com/bruce_norris_predictions

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Bruce Reviews
http://www.realestatecoursereviews.com/review/index2.php?item_id=39
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Bubble Premier

http://piggington.com/bruce_norris_predictions
(asr: this site piggington.com seems credible, he gave lots of data on San Deigo RE: ,and he attenede Bruce meeting and endorsed so we can give credit to Bruce based on Piggington .. and piggington is still continuous live site ..)
Bruce Norris' predictions
User Forum Topic
Submitted by EconProf on December 20, 2007
Long time real estate guru Bruce Norris spoke last night in San Diego about the likely future of CA real estate. Gave a wide-ranging analysis of why we are only in the initial stages of a "perfect storm" that is hammering real estate and will create opportunities galore once the bottom is reached.
First, as to why this guy commands respect--his forecasting record is near perfect, as far as I can tell. In 1997, after 7 years of housing prices declining then stabilizing, he predicted they would double in 8 years. He was mocked for that call, but as we now know, they actually about tripled. Then he turned bearish in 2005, and in January of 2006 published a prediction that prices were wildly overblown and would fall radically. He really caught hell for that call. If others here can chime in with any other evidence of his record, then please chip in.

Anyway, here is a summary of some of his observations and predictions:
1. The bottom will be in about 2010 or 2011, with the steepest decline occurring in 2008. ( asr: meaning after 2008 still there is bottom, but peak yearly %drop is in 2008)2. 50 - 60% of sales in 2008 will be REO's.
3. Auctions will be a growing segment. Suggests investors only play that game and buy when "absolute auctions" are held.
4. Rents are falling rapidly in the most hard hit areas of Riverside. We in San Diego are helped by our fires (!), and less overbuilding.
5. Watch out for BK judges pushing "cramdowns", which I believe is when he simply tells the home lender to wipe out a portion of the principle on the loan and renegotiate it. (Correct me if I'm wrong on this interpretation).
6. Look for interest rates to get a bump up due to (5) above as investors naturally flee from lending in the future. Expect same fallout effect from current and feared future tendencies by gov't to interfere with existing loan contracts. This will prolong the decline, and rub salt in the wound of those responsible savers who have waited to buy a home. Law of unintended consequences.
7. Outmigration from CA due to our still-insane housing costs will accelerate. People will start coming back only when price/income ratios revert to the mean, about 2011. An interesting prediction is that Phoenix and Las Vegas will bounce off the bottom sooner than SoCA, since demographics favor them, i.e., many refugees from here will tend to prop up their housing markets, speeding their recovery.
8. As support for above, he cited the ratio of the cost of renting a U-haul truck from SD to other cities, versus the reverse. Biggest ratio cities:
Portland 2 1/2 to l, Salt L.C., Seattle, Dallas, Denver, all 2 to 1.
9. Another ticking time bomb I had not heard of: some HELOCs have a provision in which if the value of the house falls a certain amount, the loan converts to a fixed 15-year amortization loan AT 18 PERCENT.

All in all, a very analytical, data-driven speech, not the kind of hype-driven presentation most of these events are.

Any other attendees from this forum there? Would like to hear your input.

‹ Refinancing now: A bad move? prices down, slowly but surely ›
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I didn't attend. I was
Submitted by pbnative on December 20, 2007 - 3:40pm.
I didn't attend. I was curious about #9 so I looked at mine. It says that my line can be terminated, requiring me to pay the outstanding balance and pay certain fees, if "the value of the dwelling securing the equity account declines significantly below its appraised value for purposes of the equity account." Separate from the possible termination, the rate can go as high as 18%. I can't find anything about a conversion to fixed 18%. I don't have any money on it, but this is good to consider in case I want to use it.

I suppose that 'Declines significantly' means whatever they want it to mean. There is no specific LTV amount.

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This is now not something to
Submitted by kev374 on December 20, 2007 - 3:49pm.
This is now not something to forecast but it is quite OBVIOUS!

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BobSPBNative: Sounds like
Submitted by EconProf on December 20, 2007 - 9:46pm.
BobSPBNative: Sounds like you are vulnerable to the lender's whims.
Norris also said there is a clustering of resets scheduled to hit in 2010, after the cluster hitting in early 2008.

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2010 resets sound about
Submitted by sdrealtor on December 21, 2007 - 9:04am.
2010 resets sound about right. I have long said that 2009/2010 will be the pain for the higher end as all the 5/1 arm's reset on 04/05 purchases/refis.

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