Remember - The Peon Pulpit Called It First

Remember back in 2008 when I made my first stock market prediction and was somewhat amazed that it failed to even come close to being accurate? At the time I suggested that perhaps the Fed was covertly purchasing stocks to prop up the market artificially:

It does seem like every time the market makes some huge drop (like 11/13/2008's -554.11 drop) it makes a remarkable close up the next day (11/14/2008's 324.88

Could it be bargain hunters? Or could it be the Treasury/FED monster propping up the dead?

Either way, you heard it here first.

Well it appears that now I'm not alone in my suspicions:

Stock Market Prediction: Take Two

Ok, Here goes my second prediction on the stock market. Back in October I predicted the DJIA would fall to 7,500 within 30 days. It did lose 481 points during that period, but wasn't as bad as I had predicted. But I did note that on March 6, 2009, it was only ~100 points from my previously rediculous sounding prediction. I figure my timing is a bit off.

So here's my second go. In the next 90 days (including the 90th day...a larger time frame to account for my inaccuracy) the DJIA will drop to or below 6,500 at least once.

Today's close was: 8,612.13

I guess we'll see on 9/14/2009 or sooner.

Peon Pulpit Predicts US Government Crackdown On Political Blog(s)

While my (very short) prediction track record has not been all that great.... The Pulpit is now predicting that a government agency will crack down on (and, at least temporarily, shut down) one or more well known political blogs within the next 2 years. The time range is long, but the prediction is that this will create a 1st Amendment 'crisis' in the US.

This predicted crack down will likely be done with the excuse that the blog(s) in question are in some vague manner inciting either violence or economic instability, but could be done under the guise of some other unforeseen criminal act.

Depression, Here We Come.....

There's only denial left now, at least, that's how I see it. In the last year, the DJIA has lost 46% of it's value (!) . Citibank has lost 95% of it's value. Bank of America has lost 90%. GE has lost 80%. Ford has lost 70%.

Here are my predictions for the year ahead:

Inflation (thanks to the nearly $3 trillion spending spree) is not far away and will be rampant. The low prices and great 'deals' that are to be had right now are going to end fast as competition diminishes due to manufactures leaving the market (bankruptcy, mainly), and production cutbacks by the ones who survive.

When inflation comes (likely within the next year), the housing market will lock up due to high mortgage rates (remember the 16% rates of the early 1980's? I think we'll be at least that high). The 1% of buyers who can make it through the lending requirements maze with their 20% cash down-payment will find that at a 15+% interest rate, even the 'cheapest' of homes is unaffordable. Many lenders will leave the market all together, as the uncertainty of inflation and judicial modifications of mortgage contracts makes the business just too risky. Homeowners are going to have to get used to staying in their homes for the next 25-30 years. They won't be happy.

Production cutbacks will lead to high unemployment rates. Foreclosures will dominate the real estate market (much more so than today). Pension funds and 401(k)s will be virtually zeroed out. States and local governments will struggle to make ends meet as property values nosedive.

A rise in crime and economic frustration will lead to civil strife. There will likely be riots worldwide as citizens vent their frustrations against the perceived 'elite' who got everyone into this mess (and who's tab we'll all be picking up).

In short, I predict a real depression is in our future. Right now, the economic pundits on CNBC and elsewhere are looking for a bottom to the market. 6 months ago they chortled at the thought of a severe recession. In the next 6 months, they will be using the 'd' word with regularity.

DJIA Prediction: 0/1

Well, my DJIA prediction expires tomorrow...and since that's Saturday, I guess it's up today. The DJIA closed today at 8,497.31. On 10/16/2008 when I made the prediction it closed at 8,979.26.

That's only a 481.95 point loss for the last 30 days.

Truly, I'm at a loss. Could my predictive powers be so bad? Or is it perhaps that the government is manipulating the DJIA and the S&P 500 every time it looks like it's going to tank?

It does seem like every time the market makes some huge drop (like 11/13/2008's -554.11 drop) it makes a remarkable close up the next day (11/14/2008's 324.88 jump). Hmmm.

Could it be bargain hunters? Or could it be the Treasury/FED monster propping up the dead?

Either way, you heard it here first.

Prediction: The DJIA Falls to at least 7,500 in the next 30 days

It's got at least another 12% to go before we can talk about a bottom. That was the Jan 1998 DJIA, before the tech bubble...and long before the housing bubble. The scary part is, it might sink lower than that once inflation sinks in and rising mortgage rates cause the housing market to lock up.

Stay tuned and buckle your seat belts....

DJIA Chart

National Media Wakes Up To The Polling Problem

As I predicted, the polling error issue is becoming a big issue in 2008. Amazingly, the pollsters blew the Democratic vote for New Hampshire.

Candidate	Predicted % Of Vote (Rasmussen)	% of NH Vote	Within Margin of Error (95% confidence)?	% Difference
Barack Obama	37%	36%	Yes	-2.7%
Hillary Clinton	30%	39%	No	30.0%
John Edwards	19%	17%	Yes	-10.5%
Bill Richardson	8%	5%	No	-37.5%
Dennis Kucinich	3%	1%	Yes	-66.7%
Mike Gravel	0%	0%	Yes	0.0%

Prediction: 2008 Will Be The Year Of The Pollster Crisis

Finally, a prediction of my own. It is simply this: In the next year, pollsters will realize that telephone polls are no longer predictive of reality. What evidence do I base my prediction on? Well, other than my 'gut instinct', I'm basing my prediction on the few items I briefly outlined in this post. Mainly that:

• Telephone polls rely solely on traditional 'wired' telephones. They do not call cellphones or VOIP phones (for various reason, some of which are legal restrictions). Nearly 20% of all Europeans have just a cellphone, and I think the US is not far behind that figure.
• Caller ID is in such widespread use that more than 50% had it in 2004. Today, I'm sure that a much larger percentage has Caller ID, and nearly all cellphone only households have it.

Both of these facts indicate that a large number of people are not being called at all (cellphone-only users) and those people are likely to be younger (as most early adopters of technology are). Another large segment of people are not answering calls from a telephone number they don't recognize, primarily younger people who understand how to use Caller ID to avoid solicitation calls. Which of course begs the question, who does answer the telephone when they see an unknown number or "Number Not Available" on their Caller ID?

These two effects will combine to grossly underestimate the number of young people (15-35) who are being polled.

In the past, the effect of excluding that group might have been muted by the fact that their opinions were largely represented by the public at large. However, the more age-specific the poll issue is, the larger the possibility for a huge error. I think 2008 election is the perfect set up for a 'young vs. old' polling issue to finally bring this error to everyone's attention. We'll see.

Grand Master Predictions #2

OOOOooohhhhhhhhh People. Today is your lucky day! The Grand Master has handed down (4) new predictions:

• In the US Senate Race in Pennsylvania, Rick Santorum Loses.

• After the November 2006 elections, the public will be shocked at the lack of change, especially in the House of Representatives.

• Within the next 5 years (i.e. beforeFeb 2011) there will be a US currency crisis of epic proportions which will cause great turmoil in the world. There will be rampant inflation as dollars rapidly lose value.
  

• The conflict between Iran and the western world over it's nuclear weapons development will end up being a conflict between the US and China. The reason will be that China will step in on Iran's behalf due to their growing need for Iran's oil.
  

Prediction Corner #1

Here it is people.... The first of the predictions from the (very shy...well, anonymous) grand master himself (ah...it's not me). This will be updated as he chooses to drop his nuggets of wisdom upon us:

1) In spite of the (apparently) growing distaste for the Iraq war and the Republicans in general, the mix of Democrats/Republicans in the House and Senate will stay virtually unchanged after the November 2006 elections. The end result will be that the Republicans will retain control of the House and Senate.

He has spoken.