Predictions 2006

Here are my totally unsupported predictions for calendar year 2006. I'll keep it to five, as I have a very short attention spa...uh, where was I going with that?

Without further ado(and in no particular order):

1) Economy

Definite cooling off of the US economy. There are a number of factors for this, but the main contributors are:

A: The housing market, which has shown an accelerating slowing trend. Most of the metrics have peaked and are now either in stasis, or outright decline.

B: The inversion of the bond yield curve. For some background listen to this All Things Considered show of Dec. 28

C: The Copper Indicator. Although it's too early to tell, the price of copper may have peaked, and this is a good indicator of future usage expectations. The price trend is flattening for the first time in over four years.

D: More expensive capital. The Fed seems far from done regarding rate hikes. With the Fed making money more expensive to loan, it is reasonable to assume that GDP will slow, and that doesn't bode well for businesses in particular. Expect more business failures in 2006.

Am I predicting a second Bush recession? Not yet. But the underlying trends that tend to signal an economic slowdown are already in place.

This ends prediction number 1 for 2006.

2) Global climate change will emerge as the sleeper issue of the mid-term elections. Main Street is finally waking up to the strong likelihood that global climate change and ecosystem degradation is the most important long-term issue facing humankind.

Although people tend to vote in accord with their stance on much shorter term issues, this will change. Most Americans are now aware that this is a real issue, much to the chagrin of naysayers on the right.

In the US, the southeast must surely be aware that the weather has been whacky. In Alaska the tundra is thawing and glaciers are receding.

On a bigger scale, the record hurricane/tropical Atlantic storm season won't soon be forgotten.

I'd add much more to this, but my point is essentially made.

This ends prediction 2 for 2006