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Available to Teach Economics

I’ve gone out on a limb and made a few economic projections beginning in November of last year, and, if I may say so myself, I’m beginning to look like a brilliant economist:

I was on the phone with a friend, and I predicted as a nation we could hit 10% unemployment before we hit the bottom. A bottom I don’t expect us to hit until after the 4th Quarter of 2009. This year’s retail holiday season could be one that shrinks for the first time in a long time, and my guess is that next year will be worse.

Incidentally, during the same phone conversation I told my friend I expected we would see a 5,000 Dow Jone Industrial Average. He just called me last week to say, “Looks like you were right again.” Have you seen this in the Wall Street Journal?

Dow 5000? There’s a Case for It

Just how low can stocks go?

Despite Friday’s small gain, the Dow Jones Industrial Average marked its fourth consecutive week of losses as it tumbled through the 7000-point mark and spiraled to new 12-year lows. The Standard & Poor’s 500-stock index is trading below 700 for the first time since 1996.

As earnings estimates are ratcheted down and hopes for a quick economic fix fade, the once-inconceivable notion of returning to Dow 5000 or S&P; 500 at 500 looks a little less far-fetched.

In January, I was still sticking to my guns when those much more credentialed than me were feeling pretty optimistic about the second half of 2009:

Wells Fargo, a conference sponsor, expects the United States to lose 5.5 million jobs before the economy recovers in the second half of 2009, making this the worst recession since the 1930s. The United States lost about 2 million jobs in 2008.

Yeah, I didn’t see us making a recovery in the second half of 2009 last year, and I still don’t see it happening this year. I think I gave a pretty solid rationale as to why in January:

They’re not painting a pretty picture, but they’re more optimistic than I am. See, I don’t think it matters how much money the government throws at the economy over the next two years. We’re not going to see a rebound until 2012. Heck, we’re not even going to hit bottom until second quarter of 2009.

Why? Simple, people are scared, and more importantly, they are debt laden. So, if they start earning more or receiving tax rebates, they are going to either save them, or use them to pay down debt. The result of this is the we will continue to see a decline in consumer spending.

By the third quarter of 2009, expect all of those people laid off in 2008 to see the end of their unemployment benefits and severance packages. That’s when the real hurt will begin. The fourth quarter holiday season of this new year will significantly top the losses of this last one, and in the first two quarters of 2010, we will see even greater layoffs and bankruptcies.

Heck, I even beat Warren Buffet to the punch:

Billionaire Warren Buffett said unemployment will likely climb a lot higher depending upon how effective the nation’s policies are, but he remains optimistic over the long term.

Buffett said the nation’s leaders need to support President Barack Obama‘s efforts to repair the economy because fear is dominating Americans’ behavior and the economy has basically followed the worst-case scenario he envisioned.

“It’s fallen off a cliff,” Buffett said Monday during a live appearance on CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.”

Now, it is true that none of these premonitions have insulated me from the economic meltdown. However, I learned long ago to roll with the punches. As such, I wanted to put it out there that, for a generous fee, I can make myself available for guest a lecturer series on the U.S. economy. I will also entertain any offers for a tenured position at a University.