The Economy in 2009/2010

My prognostications for 2009/2010:

-After cutting costs in 2008/2009, corporate earnings stabilize and recover (this is already happening, with 60%+ of earnings reports coming out in the last few weeks beating analyst expectations*

-Growth from China, as well as growth from nations currently/formerly in recession, will spur lending and increase economic activity.

-Banks will be slow to recover because their balance sheets have been so damaged by bad loans, BUT the help they’ve received from government WILL enable them to lend earlier and lend more than had they never received any assistance at all.

-Companies will begin hiring more, unemployment will fall to 6 or 7% by January 2011.

*I know, I know–50% would be the expected beat-rate, so relatively, 62% doesn’t sound that bullish; that said, numbers don’t lie.

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