My personal take is the markets will pick up, particularly early. We should get an innaguration bounce (regardless of politics, markets dont like unknowns and the legislative and excutive branches are both filled with lame ducks) and we should get a normal February bounce.
The Dow usually starts to recover 6 months or so before the end of a recession. It appears we hit a hard floor at 8000. Since the first of December it seems that the market is trading with a floor of 8300-8400. Certain stocks are really trying hard to rally. Look at the companies that have solid financials and deal in durable goods. Cat was trading in the 30s, it was the first company to rally on the market rallies and the last to fall. Now, its holding in the 40's. Deere is the same way, on a 35 range.
I read on TDAmeritrade that the money on the sidelines, right now, in money markets and treasuries is equal to 75 percent of the TOTAL value of the Russell 500. We are looking at real, new, government spending on the order of 300-500 billion in the next fiscal year with a repeat the next. Thats hugely pro economic growth. I have serious concerns about what it will do long term with inflation but over the next 4 years Im expecting a strong breakout to begin sometime in mid 2009 with the discount rate at 6 percent by late 2011.
As to equipment prices, we have just come off one of the best years in agriculture, ever. Fuel prices are down, fertilizer, especially nitrogen is down and the commodity complex is trending up. Old iron is under pressure because its a hobby in most cases. New and good used iron will at best drop a token amount off last years highs to reflect lower steel and fuel costs but remember, there are shortages of new equipment. I read this a.m. that Kinze was going to make planters up through March for spring 2009 delivery.
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Today's Featured Article - An Old-Time Tractor Demonstration - by Kim Pratt. Sam was born in rural Kansas in 1926. His dad was a hard-working farmer and the children worked hard everyday to help ends meet. In the rural area he grew up in, the highlight of the week was Saturday when many people took a break from their work to go to town. It was on one such Saturday in the early 1940's when Sam was 16 years old that he ended up in Dennison, Kansas to watch a demonstration of a new tractor being put on by a local dealer. It was an Allis-Chalmers tractor dealership,
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