Super Bowl Predictions, Debt, Greenspan and Billionaires
February 4, 2011 by Chip Wood
*The Super Bowl predicts a rising stock market. You’ll be glad to know that no matter who wins the Big Game this Sunday, it will mean a good year for U.S. stocks. That’s because “the Super Bowl predictor” — a statistical oddity first noted by market analyst Robert Stovall — says that whenever the winner is an original member of the National Football League, the market will end the year higher than it began. Since both the Pittsburgh Steelers and the Green Bay Packers meet that criterion, expect good things for the Dow in 2011. Don’t scoff — the predictor has been right 35 out of the past 44 Super Bowls, giving it a 79.5 percent accuracy rate. Can you pick stocks that well?
*Guess who’s getting out of debt — and who’s not? The final figures for 2010 aren’t out yet. But here’s what the Federal Reserve’s Flow of Funds report says happened in 2009. Households in this country reduced their debt by an average of 1.7 percent. Businesses did even better, cutting debt by 2.3 percent. States and local governments went the other way, increasing debt by 4.9 percent. But our greedy, grasping Federal government was the worst spendthrift of all, piling on another 22.9 percent of debt to an already massive load. No wonder people are screaming “stop!”
*Alan Greenspan says “me bad” … almost. Former Fed Chairman Alan Greenspan, who did as much as any man alive to turn on the money spigots in Washington, now says: “We have at this particular stage a fiat money which is essentially money printed by a government. It’s usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money that is produced, either a gold standard or a currency board.” And what will happen if we don’t? The maestro warns, “All of history suggest[s] that inflation will take hold with very deleterious effects on economic activity….” Wish you’d followed that good advice when you were in charge, ol’ buddy.
*Another quote worth chewing on. Market analyst Marc Faber offered up this stunner last week: “If you measure the stock market not in dollars but gold, it is down 80 percent since 1999. I no longer regard the U.S. dollar as a valid unit of account. People shouldn’t value their wealth in dollars because one day, in dollars, everyone will be a billionaire.”