Enemy of the State Prognostication by Citizen2084 – The Results

My first prognostication was last August and contained thoughts on events in of the coming year which covering 2009 and 2010. Although we are not done with the first half of 2010 it should still be interesting to review their accuracy.

The upcoming 12-18 months should be eventful.I will offer my insight on what we can expect maybe it will be helpful somehow to someone. Depending on the first prediction results you can decide how much credence to place on my thoughts, if any. Look for those predictions to follow this post.

C2084’s Prognostication for the End of 2009 into 2010 posted on August 31, 2010

1) 2009/2010 NFL season will be interrupted due to a national emergency / disaster.
Result – MISSED.
It is great to be wrong sometimes. Multiple events surfaced in 2009 with the potential impact; thank goodness they materialize. Here are a few:
• The Swine Flu Scare/Hoax
• Reports of an Israeli attack on Iran , had weather been cooperative
• X-Mas Pantie Bomber


2) Commercial real estate continues its decline and as severe as it is, the second wave of ALT –A and ARM resets will be even more dramatic then the first wave that set the housing market downward. The bottom line is national average housing prices drop an additional 30%
Result – HIT.
It isn’t a perfect hit however the reality is prices fell significantly further, and will continue. The hardest markets did meet the 30% drop and others will join in the party.

Excerpts from stories by Tyler Durden at ZERO HEDGE.com

…Fannie Mae reported
its January total serious delinquency rate for single-family houses: the rate hit a new record of 5.54%, a jump from the December's 5.38%, and double the 2.77% in January 2009.

…Real Pointe has just released its March CMBS delinquency data, according to which delinquencies hit an all time high 6%. Not to be ignored, according to TREPP this number is even worse, at nearly 8%, after the single biggest monthly spike in 30 day + delinquencies.

The housing market and CRE will see no improvement anytime soon.

3) Baking holiday declared immediately after the end of 2009 that period of time we used to describe as holiday shopping. Used to. In 2009 holiday shopping will represent less than 50% of 2007 volume. Do not measure dollars spent, the inflation will hide the real impact, measure total units, items per sale.
Result-HIT.
The holiday didn’t happen but all the policy changes have been put into place. It was in the news and just like so many other “Market Signals”, joe public ignore the flashing neon warnings.

CITI Group tells customers that they can ask for 7 day notice to withdraw funds. Not a money market account, or contract deposit, but 7 day wait on demand deposits.

Suspending Money Market Redemption now Legal as SEC votes 4-1.

Everbank Notifies Customers that they now have the right to close their account to protect the bank form losses. Here are some of the more concerning quotes:

“We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us…we may close your account prior to providing notice to you.”

“…Notice from us to one of you is notice to all of you.”

A Bank Holiday becomes unnecessary with these changes to regulation and policies. A bank holiday is used to prevent the public from taking their money out of Banks. Now that they can just say “no” we may not ever see another bank holiday. Thank goodness our government is there to assist these banking institutions from the kind of extremists that would stoop to actually asking for their money. Only an Al Qaeda terrorist would think of taking their money out of a bank.

4) By the summer of 2010 we will announce the resumption of the military draft, whether it is for a civilian duty or traditional service, it will be compulsory.
Result-MISS.
Although Obama signed a National Service bill in 2009, the spirit of this was more military. This bill does include MANDATORY service, however this is not what I had in mind and it would be dishonest to say this was accurate. It is a horrible bill none the less as community service should always be voluntary, as all aspects of life in a free society. Most do not remember that America was once a free society and you could choose how to live your live.

5) By the end of 2010 capital controls and/or price controls will be implemented in US.
Result. HIT.
Unfortunately this happened much sooner than I expected. March 18, 2010 without a mention in US propaganda outlets Obama signed into law the H.I.R.E. act. Cute freaking acronym, f or the Hiring Incentives to Restore Employment, a $17.5 billion increase in government payroll largess, on page 27:

(a) IN GENERAL.—The Internal Revenue Code of 1986 is amended by inserting after chapter 3 the following new chapter:
‘‘CHAPTER 4—TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS
‘‘Sec. 1471. Withholdable payments to foreign financial institutions.
‘‘Sec. 1472. Withholdable payments to other foreign entities.
‘‘Sec. 1473. Definitions.
‘‘Sec. 1474. Special rules.
‘‘SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL INSTITUTIONS.
‘‘(a) IN GENERAL.—In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (b), the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment

You can read it all HERE.

In summary, I think 60% accuracy is a passing grade the first Enemy of the State predictions. I will post my next prognostications shortly and welcome any thoughts/suggestions.

In liberty,
c2084