Looking ahead to 2009

Short the UK

The book the Final Crash has pretty much nailed this financial crisis, will it continue to be so prescient:

'It appears that we may be facing a meltdown rather than just a temporary slowdown, perhaps the greatest since the dawn of the Industrial Revolution.'

'Debt is utterly endemic throughout western economies: not just at government level but for individuals, corporations and financial markets alike.'

'It could prove to be the final crash for western stock markets as they wither in proportion to the deflating economies they represent.'

'The bursting of the 1980s property bubble hamstrung the Japanese financial system as banks became completely risk averse and ceased to lend money: activity ground to a halt. This is they key weakness of a debt-driven economy where constant new loans are required to continue the charade whereby growth is not organic but artificial.'

'A catch-22 situation exists whereby consumer spending is supported by consumer confidence which is supported in turn by higher house prices and home equity extraction.'

'The knock-on effect of a generational low in interest rates has inflated every asset to the hilt: there is now nothing left to pump. When the final crash comes, every active participant in the primary and secondary bubble areas will be blown away. A deflationary pin-prick now looms large.'

Nassim Taleb reckons it is the biggest crisis in America since the American Revolution.

I think it is best to prepare for the worst.

Spin and bull*** are no doubt going to be spouted until the collapse really hammers the glass half full posse.

Short the UK

I misquoted Taleb. He said, we could be entering the most difficult period since the American Revolution. You can find his interview along Mandelbrot on YouTube.

He does think that this collapse is worse than Roubini is forecasting.

Augustus

You say that 'Victory' is what America will see in Iraq. Well, I suppose that given Obama's appointments, Iraq is no longer an open sore, and of no longer any use in fighting radical Islam, but quietly evolving into a success better turned over to the Petraeus timetable. There may also be a little less campaign chest-thumping, and a quiet compliance with existing Predator strikes against Bin Laden in Waziristan.

All this is very American, like taking the same old laundry detergent, sprinkling it with a few inert green crystals, and putting it in a more eye-catching redesigned box marked 'New and Improved' (rather than 'hope' and 'change').

strapworld

This whole disaster has proved that there are no such things as EXPERTS! Everyone, like Short the UK above, is running around like headless chickens. Soothsayers and gypsies are making a fortune and are as accurate as a politician!

Nobody knows and nobody leads. Brown has led this country into a cul de sac and has no idea what to do! Cameron has no idea as yet. The Arch Bishop and his Bishops are raising the CROSS and hoping that people will flood back to them. But, what do they know? Half of them do not believe in the virgin birth or life after death! There are no experts, no problem solvers, no calm people who will lead us out of this mess.

Spin and Bull...t are the order of the day and soon we will be bartering as the cash machines will run dry.

But, some people will still be buying £2000 handbags for £600! I ask you £2000 handbags. It proves amongst the mad some are truly dangerously mad!

CCTV

Much of the problem is Derivatives exposure and how to price it, value it, and sterilise it. Since Lehman and Bear Stearns rode this wave high for well over 20 years it does suggest the Fed Chairman at the time was senile.

The political system which was so entwined with City/Wall Street finance is discredited and will command no confidence. Change will come but it will hardly be apocalyptic as in 1939 when Adolf Hitler set in train the reflation of the US economy where FDR had failed.

The political parties will change or be replaced having betrayed voters in favour of funders, and import controls will save Western society from meltdown.

Fergus Pickering

Things will be more the same than most of you imagine. They always are. The onlycertainties are Death and Taxes. They always were. Amor vincit omnia. It always did. Get a grip, you doomy tossers. Happy New Year Fraser. I even forgive you for being a Scotchman. I am, alas, one myself.

Fraser Nelson

Fergus, at least death doesn't get worse every year. Happy new year to you, too.

BrianSJ

Strapworld,
Short the UK - by quoting Nassim Taleb - is harder on experts than you.
CCTV,
Global unsecured derivatives are at over a thousand trillion dollars; there is no bail-out that can cope with that.
Fraser,
All the people who moved out of Iraq during the surge will return once Obama pulls out. Then we will see just what a mess it becomes. There will be no possible claim for victory. Who is going to pay for US expeditionary warfare now?
Cheap oil will lead to hollowed out states in the places you mention; things will not be 'quiet' with no money.

Short the UK

Strapworld,

Headless chicken is a bit wide of the mark. There are plenty who have seen this coming: Taleb, Roubini, Schiff, Bonner, Prechter, Shiller, Panzer, Bouleau, Mellon, Rogers, Morris, Das, Edwards. I started tuning into them last year and thought they were being a bit over the top. Capitalism couldn't implode! Since October I have given them more respect and now I am ready to listen to their apopcalyptic warnings. The real headless chickens are the Texas Longhorn Bulls who are losing their fortunes.

This is a panic and rightly so.

Paul B

I predict my 15 year daughter may have got out of bed by the !7 April

Tax freedom day won`t be until Jan 2010

Brown will not have the gonads to go to the country

Denman & Kauto Star will provide one of the most thrilling finishes ever in the Gold Cup, with the "Star" just winning as Denman will not be quite race fit. Any odds you can get above 3/1 on either horse grab while you can.

Ricky Dicky Darling announces his retirement, in tears,at the end of the Oval Test, after England regain the Ashes.

Tally Ho.

strapworld

Short the UK..I apologise. But the way 'experts' are coming out of the woodwork NOW and telling us all how they saw it coming - yet although I read all newspapers/blogs and listen as much as I can I can hardly recall any of them suggesting this collapse of capitalism!

But of the list of people you name, which one would you suggest I tune into?

Tiberius

I presume, Fraser, that pub closures came to mind as you were thinking of a way to soothe yourself from all the other points.

And I see that troll "Labour Matters" stalks you wherever you go.

But a Happy New Year none the less, and although the rate is 1.02 euros to the pound this morning, let's hope Short is a L/Cpl Jones doppelganger rather than a prophet for the book of Revelation.

Fraser Nelson

Strapworld, I'd name Jeff Randall and Bill White (ex-BIS) for more academic stuff.

Short the UK

I recommend:

Satyajit Das

He deconstructs the uber complex. He has a blog. He did an interview with The Street.com in 2007 which is worth googling.

A very good view I came across recently is by Stephanie Pomboy in Barron's, it gives a blend of the Micro and Macro:

http://online.barrons.com/article/SB122912505428802977.html

If the link does not work the article is called A Long, Cold Winter.

TGF UKIP

Fraser, I greatly enjoy your NOW column every Sunday. You make the populist conservative case to a wider audience than Dave Snooty and His Pals could ever hope to reach or indeed, for that matter, wish to reach.

I particularly liked "T" for Temperature and "The planet WON'T (Your caps) get hotter for the tenth year in row. The global whining brigade will start to look daft ......"

Now of whom could you have been speaking and why do your posts on this site never sum matters up so pithily I wonder, especially on this particular subject.

BTW, I note you have "M" for Mandelson but could I suggest it could equally be "M" for Miliband Jnr. Expect Ed and Energy to be centre stage very soon setting the stage for Keep Yer Lights On Gordon versus Swampy Green Dave.

hadrian

Fraser,
I think our initial 'doomster' poster on this thread, UKShort, is not far wide of the mark in his dire predictions for continued Western complacency and affluence/effluence.
Personally I am seriously beginning to wonder- has Gary North and his radical gang of economists got it right, and fractional banking itself is about to crash over the teetering edge? Or can Dave and his mob at least alleviate matters?
Ah, well, as you're perhaps aware, false prophets in the Old Testament were condemned to death...but I think you're modest enough to get away with it...especally the Cliffy thing!
A Good New Year..but keep it abstemious!