Invest to Beat the Obama Blues

November 05, 2008



Watch a video of Toby's rant. Or listen.

I've got to say congrats to Obama. Nobody can deny that this guy has pulled off a miracle -- a broke sophomore senator outfights and raises more money than Hillary and breaks the Clinton machine.

Then he essentially invents his own Democratic party within the party and raises $500 million, mostly from the Internet in amounts of less than $200.

Obama truly is an American success story. It doesn't matter whether you're a Republican or a Democrat, you've got to give him that one.

But now that the hoopla is over, let's get back to what's important: How are we going to make money from this massive change?

At ChangeWave Investing, we're all about change, and this is about as big a change as you can get.

I think that the market has clearly given us a tradeable bottom here.

The market has priced in a ton of bad news already. And if we can shake off the 200,000 job loss report and 6.5% unemployment rate that I expect we'll get on Friday, there can be no clearer sign that we now have a mini bull market rally that could take us 10% higher before the underlying reality of a steep recession hits the market in early January.

What Lies Ahead

Here's what we can expect to see in 2009:

1. An auto industry bailout.

2. A move to a 7.5% to 8% unemployment rate.

3. The implosion of the private equity leveraged loans.

4. A rise in long-term Treasuries as the Treasury borrows more than $1 trillion from the world.

5. Another $200 billion to $400 billion in credit card and high-yield bond defaults.

6. A strong contraction in U.S. and world GDP. Expect a negative 3% U.S. GDP at the trough in the first quarter of 2009.