I agree with everything on the list, but for all that to happen in 2013 is optimistic or pessimistic, depending on your perspective.

Bubbles often go on longer than anyone can ever imagine. Even some of the "permabears" turn and join in. This bubble is the mother of all bubbles. I think they'll be able to keep things going a bit longer than 2013. That of course means there more fissures will appear. Which is a matter for debate.

I took a 25% increase this year. Healthcare is now clearly the single most expensive component in the COGS outside of direct labor. Time to migrate to the barter and trade aspects of business, the ones that don't involve any paper transactions. They don't teach that in school by the way. Adams, Hancock and the rest of the founding fathers were experts in subverting the crown through barter, smuggling and trade.

The Republicans are reporting for the command performance Sunday night. Obama suspended his campaign (vacation) on your behalf. But both parties know down deep they haven't polarized us enough or inflicted any real pain yet. So my prediction is they repel us down the cliff just to compromise later for higher taxes on the rich and fake spending cuts 3-5 years down the line. But I have a feeling those narcisstic *******s are going to inflict some angst and pain just so you know who is in charge and just enough to make it real. I hope I'm wrong. You can see it in Europe, 25% unemployment comes before the bad debt is written off.

2013 prediction - guns and ammo sales increase.

The USA still has got to get to the problems of Spain then Greece.

For some 48 Million americans, tomorrow is now.

More of the same coming to your area.

Here is my off-the-wall prediction.

The next recession will first show up in manufacturing via lay-offs due to lack of orders. Everyone is already running with minimal inventory so there will not be a sudden crash at the retail level, what will happen is that as orders continue to shrink manufacturers will either close or, more likely, go to reduced workweeks.

Prediction 2. More investors will shun the stock market as they learn more about how it is rigged and HFT.

Prediction 3. Renders all other predictions moot: the Falcons win the Superbowl, he'll freezes over and, the world ends.

Flap

Notice how many are in healthcare..............

http://www.businessinsider.com/companies....

The can will continue to be kicked until the bond market takes away Ben's printing press. We've had a 30+ year bull market in Treasury bonds, when the trend reverses that's when austerity will strike. Until then Uncle Ben will continue to monetize the deficits. The psychology has to change from the fear of deflation to the fear of loss in purchasing power.

I think we will know that psychology has changed when the bond market and currency markets in Japan breakdown from their comatose state, if their new government accelerates as they say they will debt monetization with a clear goal to raise the rate of price inflation. Japan is in many ways the tip of the spear. They have had ZIRP for 20 years. Their government debt has pretty much been refinanced to zero rates. Their much vaunted savings rate has come down from 18% to now negative. Their current account is going negative. The biggest holders of JGBs are now selling as they redeem to pay pensions of an aging and declining demographic. The government's interest expense at 25% of receipts is now rising even at ZIRP as their government debt/GDP climbs beyond 240%. And if the new government does what it says it will do it will climb even faster and further.

Watch Japan and our yield curve!

To the "person making $10/hour [of which] about 35% of your earnings are being stolen pre-tax by the government's policy of currency debasement"

The good news:
In my estimate about 2/3 of that is actually not being stolen ("vaporized") from the working people, but from current and future retirees and MedicXXX recipients.

The bad news:
As you, the current worker, will never receive much (if any) retirement benefits, you need to save 20% of your annual income yourself, for that. Oh, that's of pre-tax annual income. And then look to preserve the purchasing power of those savings, somehow.

/sarc
My premium will rise 16%.

Karl, I for one appreciate your deep insight on the direction of our nation, particularly on fiscal matters. You're a 'go to' person because I can always count on you to tell us exactly what you see rather than what we might want to hear. And that's damn hard to find these days.

I think all of us underestimated just how many tricks these scoundrels have in their bag. I sure did. I never imagined we'd make it this far without a fiscal tsunami, following the 2008 sucker punch. But tricks last only so long before the illusions begin to wear off and lose their power over the deluded.

Even if we could gather our neighbors together and convince them we are on a road to disaster - personally, I think it's too late, we IMO we've gone beyond the point of no return. Sorry to be a pessimist (or a realist to some) but I see little hope for the coming generations. Besides, no doubt more than half my neighbors get a nice government subsidy of some sort that they DEPEND on for their survival and, as the old saying goes, you don't bite the hand that feeds ya. So even if I had a serious discussion about these matters with them, most would probably dismiss the warnings as counterproductive to their short-term best interests, and some might even report me those who maintain watch lists.

So for the time being, let them all eat cake.

Thank you for your wisdom.

Karl, you are not a psychopath. That makes it harder for you to predict the actions of psychopaths.

You're a more-or-less mature adult. That makes it harder for you to predict the actions of the infantile.

You're smart. That makes it harder for you to predict what utterly stupid people will do.

You're able to reason. That makes it harder for you to predict the actions of those who can't reason.

You can perform basic mathematical calculations. That makes it harder for you to predict the actions of people who can't.

Given how little access you have into the mental lives of nearly all of our politicians and fellow citizens, I'm surprised that you got ANY predictions right.

No matter how screwed up things get, I hope you don't stop writing for us, your appreciative public. Even if it seems that all is beyond remedy. In fact, even if all IS beyond remedy on a national level. Because there is value in *describing* what is going on at that level, even if it can't be fixed. And it will always be possible to improve things on a local level.

Health care is everything in this picture, for the reasons you give and others as well. This is a rich country still, and people who are not mentally or physically incapacitated will almost always be able to get by. But as health insurance becomes more and more expensive, and more regulated, and covers less actual treatment, people will have to become healthcare "preppers." Partly by taking better care of themselves, per your example, but also partly by saving money for self-paid (hence cheaper) treatment of every sort. And anticipating particular ailments and accidents, and preparing in advance for how to be treated for them. And treating one's own chronic illnesses. Being poor will become more and more horrible.

I've found a no-insurance-accepted walk-in medical clinic here in Silicon Valley (I found it for someone else; I have Kaiser; a HMO that is decent). It has extended and weekend hours, and for about $90 you can see a competent, caring doctor and get a prescription. It is NOT a government clinic. The Yelp reviews are numerous and very, very favorable. It would cover most people's needs, most of the time.

great post kareninca.

Health care is insane and getting worse. My family owns a pharmacy and the price of many drugs boggles my mind; seems that every week a new one gets a script and our carrying costs go up when they are $800/100..and sometimes much more.

dbongo said "Don't really see anything too worrisome in 2013 from the markets perspective. As long as Ben is in charge, stocks will continue to hold steady and gradually grind higher. He's done a remarkable job so far, no reason to think he can't continue."

friend, me thinks you do too many bongos ! Ben has done a 'remarkable' job- huh ? If you don't see anything worrisome, then you need to spend more time reading things here. Also I think Karl's prediction of I-bubbble 2 correction has high likelyhood; they may grind higher but some have not corrected in a long tme.

Making predictions, at best, is a slippery slope, but I give Genesis much credit for having the stones to try & more importantly, to honestly and critically evaluate the prior year's efforts. I will be greatly saddened when that day finally comes whereby he says "uncle" & I suspect that day is closer than we think. Cheers.

What Noodleman said above.

If I mention anything about a downturn in the economy, no one believes me. So I keep my thoughts to myself.

Edit:
People generally are not even interested in their own local government to come to their town meetings to see if their taxpayer money is being used wisely. Perhaps they have other priorities, or just believe their elected officials are governing properly.

Therefore, people will not come to a meeting to see how they could stop an economic disaster, mainly because they don't see a catastrophe coming. It is impossible to wake up other people. They need to wake-up on their own. Unfortunately, by then, it probably will be too late.

Quote:

It is impossible to wake up other people. They need to wake-up on their own. Unfortunately, by then, it probably will be too late.

Not impossible, but yes, very difficult. This is why I think going over the fiscal cliff is the best thing that could happen to this country. The tax increases and spending cuts are sure to get some people to wake up.

Mdm said "The tax increases and spending cuts are sure to get some people to wake up."

Yep, that would wake up people, when it personally impacts their wallet.

Im watching Japan more and more because a lot of western culture in the last 15 years has been infuenced by their soft power promotion. (partly the reason Toyota sold a lot of cars before 2008)

Nobody is talking about this partular issue conserning the debasement of the Yen - but nobody is watching on the reason why the Conservitive Party (LPJ) came back to power after being ousted 3 years ago. The reason isnt the Fukashima incident (which is still an issue and will become a major consern in 2013), nor what i stated above with the yen.

There has been and now growing social snapback to the supposed libertine attudes by the youth. You see it in the laws passed in recent years conserning the Internet and such. The reason why the LPJ is back in power is for social issues not economics persay. But that will not matter because before mid year 2013 the country goes into default and most of the western companies will buy their social, entertainment and manufacturing infostructures and ecosystems for pennies on the yen. LPJ/New Kometo is playing "youth must be controled game" that everybody is playing now and even in some cases the US might with Gun and Entertainment control.

Japan has single payer. The only problem they had they didnt take there bankers to Jail (because some are in leaugue with both the throne and the Yakuza) and they will be wiped because of it.

The US doesnt even have a system of health care. They have a system of leaving the dead alive longer than it need be, the living scrambling for a buck etc and the bankers are still around. Were going to see worse than Grecce.

Quote:

The can will continue to be kicked until the bond market takes away Ben's printing press

Unfortunately all the bond vigilantes have been effectively neutered by Ben B.

Some anonymous guy on the Internet wrote..

Don't really see anything too worrisome in 2013 from the markets perspective. As long as Ben is in charge, stocks will continue to hold steady and gradually grind higher. He's done a remarkable job so far, no reason to think he can't continue.

I'm going to start following Dbongo avidly. If I just stay on the computer 24/7, and keep refreshing the page "Posts by Dbongo" on his user display page, I know that I'll get a 20-30 second heads-up on when the market is going to totally tank.

I'm going to have to arrange to have food delivered in, and have my computer chair rebuilt & re-plumbed to include a stool.

It'll be worth it.

Flap wrote..

Everyone is already running with minimal inventory so there will not be a sudden crash at the retail level.

Flap, you sure about that? I mean think of all the MASSIVE channel stuffing going on by GM, and probably all auto-makers.. Wouldn't surprise me to find out that game is being played in other sectors as well.

KT

Ktrosper, the public backs up GM so it isn't just their own money they're playing with.

One of my subcontractors folded up shop in August to take a full-time job with a manufacturer in the auto industry; he wanted a "steady paycheck" because he has 2 kids in college this year and another following along closely.

He told me yesterday that he is now on unpaid "furlough" for 2 weeks with his new employer, that 12 others were also placed on furlough at the same time, and that the company laid off another 18. Their new orders and backlog are down to scraps, and they see very little going forward. But...he's convinced he'll be back at work by the middle of January.

I wished him good luck, 'cause I think he'll need it.

Reminds me of the 2005 hurricane season http://xkcd.com/1126/

It HAS to end SOMETIME!!

Quote:

take a full-time job with a manufacturer in the auto industry; he wanted a "steady paycheck"

I did the same thing in 1998. I went into telecom because I was tired of the instability and uncertainty of the software industry. It didn't work, to say the least. Earlier this year, I was laid off after the 9th merger/buyout/bankruptcy in 10 years. That made 6 layoffs in the same amount of time. I'm now out of telecom and couldn't be happier about it.

There seems to be just an eensie back up of unsold cars.

http://online.wsj.com/article/SB10001424....

Amongst all the doom & gloom, I guess I'll post some good news.


My first child is due in June.
My health insurance premiums aren't going up a penny (discounting moving from the "employee & spouse" plan to the "family" plan, which will cost me <$100/month), and coverage will actually be better in 2013 than it is now.
My company's reimbursement for wellness-related expenses is increasing 60%, meaning I get to buy more fitness equipment (or a better gym membership, or more massages, or...) and have my company reimburse me (taxable, but still...better than nothing!)
My company's 401k matching is going up 50%.
My company's bonus structure is changing, meaning we now have the possibility of making more than the 'standard' bonus amount.
My company has record profits and volume of work; my section broke 2011's production record in September.
A buddy of mine is unfortunately leaving where I work, but only because he got an offer for a 50% raise somewhere else. Congrats to him!



Not everything is awful and falling apart. :)

Nice Sparticle! Congratulations on everything!