How to be Rich, Happy and Free from Scams

by Jeremy Siegel, Ph.D. It’s time to dust off the proverbial crystal ball and predict what’s in store for 2008. But before doing so, let’s see how I did with last year’s forecast. Well, I was pleasantly surprised to see that I got quite a lot right despite missing the subprime crisis. I predicted that the economy was poised for a mid-cycle slowdown, similar to what we experienced in 1995, the year after the Fed had also raised rates. I predicted GDP growth would slow in 2007 to 2½% to 3%, and despite the credit crunch, this estimate was very close. Even if this quarter’s GDP grows by a measly 0.5%, GDP growth for 2007 will be at 2.5%. For the US stock market, I predicted an 8% gain and greater gains for foreign markets. December still has two weeks to go, and given the recent volatility, the market could end the year anywhere. But as of now, the S&P 500 Index is up 6.3%, while foreign markets have done significantly better. The foreign developed markets, represented by ...

Economy Watch Published December 13, 2007 US recession fears overblown: IMF But official says US growth outlook has become subject to greater risks (WASHINGTON) World economic growth may be hobbled by financial market turmoil and the risks to the United States have mounted, said IMF first deputy managing director John Lipsky, but fears of a recession still look overdone. 'Never say never, but the latest indicators do not justify such a conclusion,' Mr Lipsky told an internal IMF publication in an interview posted on its website on Tuesday. He had been asked whether a US recession was looming, but professed that he was 'cautiously optimistic'. 'Employment growth and wage increases have decelerated, but they both continue to grow. So long as US household income continues to expand, it's reasonable to expect consumption expenditures to increase,' he said. A credit crunch spurred by the collapse of the US sub-prime mortgage market is expected to slow growth, a...

By Christopher Wellisz Dec. 16 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said he sees warning signs of so-called stagflation, a combination of slow economic growth and rising prices. ``We are beginning to get not stagflation, but the early symptoms of it,'' Greenspan said on ABC's ``This Week'' program. ``We had a period of remarkable disinflation'' in the years following the end of the Cold War, when inflation rates declined, Greenspan, 81, said. ``That period is now coming to an end.'' Greenspan cited rising prices of Chinese exports together with declining productivity increases in the U.S. and elsewhere as signs that the era of declining inflation rates may be ending. U.S. consumer prices rose the most in more than two years last month on record energy costs, a government report last week showed. The consumer price index increased 0.8 percent in November, up from 0.3 percent the previous month. Prices excluding food and energ...

Thu Dec 13, 2007 2:21pm EST By Steven C. Johnson NEW YORK (Reuters) - Inflation is shaping up to be a serious threat to financial markets and the world economy next year and the timing couldn't be worse, money managers at the Reuters Investment 2008 Outlook Summit said. Even as prices rise, a severe global credit squeeze has prompted major central banks to flood the banking system with more money than at any time since the September 11, 2001, attacks. With that much money sloshing around, many fear high prices will push the world into a prolonged period of sluggish growth, with the U.S. economy in particular vulnerable to a rerun of 1970s-style stagflation. "We're trying to deal with two polar opposite problems here," said Robert Kowit, an international bond fund manager with Federated Investors. "I would say (stagflation) is an increasing concern for most investors." Stagflation, a combination of stagnation and inflation, describes periods of rising prices...

By Andrew Tanzer, Senior Associate Editor From Kiplinger's Personal Finance magazine, January 2008 Profit handsomely from what's happening half a world away. To paraphrase Dickens, think of 2007 as a tale of two economies. The home-building bust, crumbling housing prices and mounting credit woes sapped the domestic economy. As a result, stocks tied to housing and the U.S. economy sagged. But such businesses as natural-resource producers and capital-goods exporters, which are tethered to the robust global economy, had more bounce in their step, and shares of those companies sizzled. In 2008, we expect a similarly bifurcated stock market. The U.S. economy and consumer will be subdued, but investors will have plenty of opportunities thrown up by the boom in emerging markets. As bombs continue to explode in the portfolios of U.S. banks, international sales of American goods and services will surge. The fortunes of various industries will diverge widely. With more uncertainty ...

Warren Buffett became one of the wealthiest people in the world by making predictions and putting money behind those predictions. Every time he buys a stock or a business or some other investment, he's forecasting the future. Judging by the incredible returns of his holding company Berkshire Hathaway, Buffett and his colleagues are very good at making those predictions. Of course, it helps when you can give your predictions plenty of time to come true. That's one reason Buffett's favorite holding period for investments in "outstanding businesses with outstanding managements" is "forever." After all, "We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." With that in mind, here are Warren Buffett Watch's "Eight for '08" .. and beyond. 1. Recessions can't be avoided forever. In the last few days, Buffett told our Becky Quick that if unemployment picks up signif...

Straits Times English (c) 2007 Singapore Press Holdings Limited They are more bullish over jobs and the overall economy: MasterCard survey A NEW survey has found that Singapore consumers are highly optimistic about the economy but slightly less upbeat about the stock market. Their counterparts in Hong Kong are also bullish about the economy, but confidence in the stock market has fallen even more sharply there. The latest MasterCard Worldwide Index of Consumer Confidence survey found that, in the two economies, sentiment towards the stock market had dipped amid caution over wild swings in share prices. Overall, the index was up: For Singapore, it rose to 83.6 from 83.3 six months ago; for Hong Kong, it rose to 85.9 from 84.7. Published twice a year, the index is calculated based on percentage response figures, with zero denoting the most pessimistic view and 100 the most optimistic, while 50 would be neutral. In terms of the stock market, sentiment in Singapore slipped slightly, to 75....