hi WitchPredicting 4 years ahead is very hard to do especially...

hi Witch

Predicting 4 years ahead is very hard to do especially with the sharemarket, i do share your bearish thoughts on the stockmarket in the near term(next 6 months), i personally sift through all the monthly US economic data as it comes to hand and rite now things are going form bad to worse with the odd bounce up in the market which i dont understand why, when GE comes out like it did last night and lower full year earnings and miss earnings forecasts which mainly to its financial arm of business, its a worry.

The biggest problem that faces the US is that for 2008 they have another $200 billion of sub prime loans to reset, there is no going around this issue at all and its a huge roadblock, the last recession that the US faced in 2002 was very shallow and short as they had the housing economy going gang busters, every home owner felt like a millionaire because of the equity in their homes, most of these clowns went on their merry way and sucked it all out while the banks were lending 110% on the property value, this ofcoarse could only go on for so long before the piper had to be paid, now that home prices are falling faster than a brick and tile handglider there is no saving them, the US has to flush out all of these bad loans and write down all of these assets, the process is well and truly in play and unfortunately has a long way to go, im not sure but in sometime in 2009 the subprime cancer will be cut out of the US economy, the US economy could face a decent period of economic contraction, they have outsourced most of the factory jobs to asia with their free trade agreements for cheap labour, the american worker is not only broke but they are losing jobs faster than ever, 3 straight months of job losses now with 80,000 lost in march, the US economy needs to create 100,000 jobs per month just to keep up with new people entering the workforce.

About the only thing the US can export now is war which dosnt do much for the average Jo, so while i dont know what will happen in 2012, i do think that 2008 will be flat to lower for the stockmarkets considering an election year on top of all of the other problems.

The last recession in 2002 the Dow dropped from about 10500 to a low of 7000, so your call of 10,000 in 2012 could really happen this year which would represent a similar fall in 2002 of about 4000 points, its hard to fathom but it could easily happen this year if they dont sort this mess out.

I wouldnt own anything financial if it were given to me including australian banks

Very interesting year ahead and most of all this month of April will be very important as the big US corporations report earnings, GE/Alcoa are already of to a bad start, also watch out on the 18th of April which one of the big US banks which i thinkits Citi Group to report, Merideth Whitney of Oppenheimer has forcast that losses of 4 X larger that CITI are estimating could be reported, if this were to happen this will certainly rock the markets in a big way.

Good luck