Calculated Risk is such a widely-read blog that when it polls its readers, there are so many votes that there will be statistical significance from the results. Of course, those who respond are self-selected.
CR is now near completion of a 2-question poll. 57% of respondents expect a double dip in 2010 and half as many expect anemic growth of less than 2%.
The great majority of respondents expect the unemployment rate to be at or above 10% at the end of next year.
Many people read blogs to get away from the buy and hold (but please trade your holdings) cheerleading of the mainstream media and thus are likely more skeptical than the average. Nonetheless, historic economic downturns followed by pro-cyclical Federal and monetary policy usually are followed by growth. This degree of pessimism is a bit surprising. The only double dip recession I am aware of was the 1981-2 downturn, but that is easily explained because Fed Chairman Volcker eased up on the monetary throttle in 1980 prematurely, in part to help fellow Democrat Jimmy Carter get re-elected, then tightened again after the election. Mr. Bernanke is not about to do the same, you can assume.
None of the above has a lot to do with stock prices, which may be incorporating much rosier assumptions.
I voted for 2-4% growth (subpar given the severity of the downturn and the Fed's easy money policy) and a 9-10% unemployment rate at yearend 2010. Risks abound, of course, including a surge in growth elsewhere than in the U. S., pushing oil prices way up and slowing growth here.
In any case, a weak economy will favor discount retailers and a double dip will knock out even more competition for Wal-Mart and Target. Preserving capital in a world where it is unclear whether the country's largest banks are truly even solvent is not easy. Noting that large pockets of skeptics on the economy exist makes it easier to project upside from risking money in common stocks of high-quality companies.
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