In this week’s article, I wanted to follow up my piece from the week prior – Predictions for 2009 - and this time offer some offbeat predictions for 2009. First, however, I wanted to make a few observations about making prognostications. Many times prognosticators look to the past for patterns which will repeat themselves in the future.

I myself look to history quite often, searching for parallels to what is happening today. However, I always keep in mind that famous Mark Twain quote - “History doesn’t repeat itself, at best it sometimes rhymes”. The consensus Wall Street deflationists are ignoring this bit of wisdom.

The deflationists are assuming that hard economic times, like the 1930s, will lead to massive deflation. I predict that our current hard economic times will “rhyme”. The actions of the Bernanke Federal Reserve are completely different than …

It’s abundantly clear now that too much borrowing and spending in recent years is at the core of the current economic crisis. But what perplexes Bill Bonner is that government policy still assumes that more of the same is the only way to get us out of this mess. And Wall Street is only too happy to go along with it…

More from The Daily Reckoning:

The U.S. government borrows money from taxpayers… gives it to Wall Street so they can lend it back to the taxpayers at a profit. Wall Street borrows ‘our money’ from the Fed at, say, 1%… then they lend it back to us at, say, 6% or 7%. That way, Wall Street makes money and we can still borrow what we need.

Nice system huh?

And take that Hank Paulson…please! Now, there’s a big city guy we admire. He made a fortune running Goldman, right

If you’re thinking of getting back into stocks, it’s better to arrive late than too early says Ben Traynor. Yes, losses this year have been spectacular. And the temptation to bargain hunt is strong. But Ben says investors should remember that they still have a once-in-a-lifetime opportunity to lose a lot of money very quickly.

This from Fleet Street Daily:

I attended a most interesting lecture last night at the London School of Economics. It left me feeling that anyone who rushes back into the stock market now must be barking mad (you’ll see why in a moment).

Entitled ‘The Subprime Crisis’, it was given by Professor Robert Shiller of Yale. Shiller’s well worth hearing on this stuff. A former advisor to new US Treasury boss Tim Geithner (“He had no idea this was coming”), Shiller forewarned of both the dotcom bubble and the more recent one in housing.

The lecture kicked off with

How many economic-advice-giving organizations does it take to run a White House?

MarketWatch reports:

President-elect Barack Obama tapped former Federal Reserve Chairman Paul Volcker to run a new White House advisory board tasked with offering independent advice about how to stage an economic recovery. Obama named the 81-year-old Volcker to head the President's Economic Recovery Advisory Board....

The board is modeled on the Foreign Intelligence Advisory Board that gave President Dwight Eisenhower independent opinions on intelligence issues. Austan Goolsbee, another key Obama adviser, will serve as the economic board's staff director and chief economist.

Volcker can be single-handedly credited with ending the great inflation of the 1970s, and has been critical of the unorthodox steps that Fed Chair Ben Bernanke has taken to address our current challenges. Although I share some of Volcker's concerns, it is not clear to me what specifically Volcker would propose to do instead.

President-elect Barack Obama today announced more details of the economic team that will be advising the new president. I find these quite encouraging.

The Wall Street Journal reports:

Speaking at a news conference in Chicago, Mr. Obama unveiled the team that will lead his administration's response to the slumping economy and battered financial markets, confirming that New York Federal Reserve President Tim Geithner will be nominated to replace Henry Paulson at the Treasury Department.... In addition to Mr. Geithner, Mr. Obama said former Treasury Secretary Larry Summers will head his National Economic Council, while economist Christina Romer will lead the Council of Economic Advisors and Melody Barnes will be director of the Domestic Policy Council.

I'm particularly reassured to hear that Larry Summers will head the National Economic Council. How much power this position involves will depend on how the internal White House politics play out, but potentially this

In the currency market, the dollar sank against the euro. Late Friday, the euro was trading at $1.2587 vs. $1.2453 on Thursday. There were no hard economic numbers out on Friday. The major news item seems to have been the belief that President-elect Obama intends to name New York Fed President Tim Geithner as Treasury Secretary.

Chris Rupkey, senior economist at The Bank of Tokyo-Mitsubishi in New York, represented general market sentiment as he hailed the selection: “A fantastic choice to help lead the financial markets out of the wilderness,” Rupkey said. “A crisis manager par excellence who will hit the ground running as he has been on the case since the global funding crisis began way back in July 2007.”

We’ll have to wait and see whether having a key Fed official proves a smart choice to be in charge of the bailout, but at this point even Joe

Monday November 24, 2008 Navivest

With the rumored appointment of Tim Geithner, the current New York Federal Reserve President, as Obama’s Treasury Secretary, stocks turned around late Friday and staged an impressive rally.

We expect that we will get some strong follow through on that today and won’t be surprised if we see gains for most of the Thanksgiving shortened trading week as there is some major news coming out of the Obama camp, with regards to the economy.

Today, we will be getting actual word of the make up of Obama’s economic team and hopefully, the team passes muster with Wall Street and stocks shoot up further.

On Sunday’s Meet The Press, a member of Obama’s transition team, William Daly, suggested that because of the current economic climate, Obama may not only be willing to hold of on raising taxes, but also letting President Bush’s tax cut, which favors those in

Friday November 21, 2008 Navivest

NBC News is reporting that President-elect Barack Obama, will announce his economic team on Monday and that New York Federal Reserve President Tim Geithner has been tapped to be the new Treasury Secretary in the new administration.

NBC broke the news at about 3PM. At that time the Dow Jones Industrial Average was down about 26 points, but started rallying as the news got disseminated. The rally held and we ended up closing 494.13 points on the Dow (6.54%), 68.23 points on the Nasdaq (5.18%) and 47.59 points on the S&P 500 (6.32%).

Unfortunately, even with the late 6.5% rally on the Dow, that index is still down 945.02 points for a loss of 11% - in one week!

We have been calling for this rally for the latter half of this week and we are hoping that with the announcement of the Obama economic team, we

One of the follies of the Bush administration was the notion that the class of money-shufflers who got us into the credit crunch could somehow be trusted to get us out of it.  Which is what makes the Obama administration such a breath of fresh — oh, wait, never mind.

MSNBC reported last night that Obama is already getting advice from Ben Bernanke.  That ought to make you feel warm and fuzzy right there.

But wait, there’s more!  As of this writing it appears Lawrence Summers is the leading candidate for Treasury Secretary.  As in, the guy who was Clinton’s last Treasury Secretary.  So much for the promise of “no retreads” in an Obama administration.

I mean, Larry Summers?!  That’s really in-your-face, on any number of levels.  PC-liberal types are still up in arms over his remarks about the size of women’s brains when he was running Harvard, and the general consensus