Friday, September 25, 2009

Some Bold Economy Predictions Hold True

I have a friend, Dody Bush, who made 20 bold predictions about the economy at the beginning of 2009. I thought I would go ahead review her assessment of the economy. I answer Dody's hypotheses using social media trends, statistics and supportive news stories.

Here is what she wrote. I list an answer below each prediction.

Hypothesis 1. More jobs will continue to be lost until mid-May. By May things will either get better or much worse.

Finding 1. Unemployment has been rising throughout 2009.

Hypothesis 2. Gold will be high. I am not expecting 1600 or 2k like some commenters, but the highs of 2008 are likely to occur again.

Finding 2. Gold topped $1,000 again since February.

Hypothesis 3. Food stamps will become a staple for getting food for more than 40% of American families, and consequentially will be a budget problem eventually.

Answer 3. US population 304,059,724 million. Number of people using food stamps is 34 million. Given those numbers, only 10% of the US population uses food stamps.

Hypothesis 4. Luxuries will remain “not desirable”. So if you are in the luxury business, add another line.

Answer 4. I think this depends on the product type. Starbucks made a profit in its recent fiscal 3rd quarter. Starbucks made a profit through cost cutting efforts primarily though.

5. Foreclosures will suddenly increase at the end of 2009 unless government intervention occurs.

Answer 5. This just came out today on Bloomberg. Home sales are up 0.7%. The government has intervened though by offering tax rebates for new home buyers.

6. Sewing will become “IN” again. That is “remaking” clothes.

Answer 6. Google trends suggests otherwise.

7. Beans and Rice in bulk will be seen as staples for America’s diet. Steak is so yesterday, except for rare treats like an Anniversary. Also expect potatoes, macaroni, tomato sauce, and PB and J’s to sell well.

Answer 7. More people might be buying beans and rice, but less people are talking about them.

8. Back to school shopping, will start to involve second hand stores for clothes. For the poor it will be patching up hand me downs.

Answer 8. I'll answer this question after I see Walmart's next quarterly figures.

9. Children will learn to be thankful for the awesome stuff you give on holidays…at least a little more.

Answer 9. This answer depends on how you define "awesome stuff." I love the optimism though.

10. Every teen having their own cell phone with text messages, will be drastically cut back. Expect prepaid for Emergencies only to be the thing parents do.

Answer 10. Teen cell phone ownership nearing adult numbers doesn't sound like cutting back to me.

11. Shoe cobblers will find their business increase

Answer 11. Shoe cobbler buzz is trending down.

12. Parents will start to pressure schools to remain open during holidays and possible weekends so kids can have free school lunch. (urban areas)

Answer 12. Schools should go year around in my opinion anyway.

13. Libraries will cut back hours or raise late fee fines just as more patrons come in due to budget cut backs.

Answer 13. This is sad but true.

14. Food staples will rise in price.

Answer 14. Inflation is trending down.

15. Treasuries will be sold off by other countries, causing our dollar’s value to dip. How much is anyone’s guess.

Answer 15. China isn't selling US and other treasuries. China's just not buying as much.

16. Gas prices will rise again. As this happens, more inflationary pressures will occur.

Answer 16. Gasbuddy.com says otherwise.

17. Towns and states will start laying off even more workers. The problems in California will hit Georgia, New York, Rhode Island, and various other states. At least 10 states will have to lay off drastically.

Answer 17. The state of Rhode Island just laid off 1,000 workers.

18. Court houses may shut down for longer furloughs on holidays, or not open for weeks at a time.

Answer 18. Budget cuts are affecting law enforcement everywhere.

19. Crime is headed up, but not way up.

Answer 19. Crime rates have fallen in some areas.

20. Gardening will become a new passion as people looking into new “Victory Gardens”.

Answer 20. Online buzz for gardening is trending down.

A quick review shows that Dody may have not been too far off with her predictions. At least half of her predictions are correct. I'm impressed that she took some initiative to make these predictions, despite not having a background in Economics. I certainly didn't make any bold predictions like these.

Feel free to reach out to me if you have any questions or comments regarding my responses. You can find out more about Dody by reading her profile on Examiner.com.


3 comments:

marry said...

Blogs are so informative where we get lots of information on any topic. Nice job keep it up!!
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Shah said...

I enjoyed this question answer discussion and learn more from this informative article.

jacob said...

This is a very interesting post, and the comments are also fantastic to read. I’ll have to have a little re-think about my own contact form on our new website, as this poses some interesting questions!
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