As a result of the increasing pressure on Congress to finish health reform and spend much more to fix the unemployment situation the United States is likely to see much higher deficits.  Thus, we have decided to investigate the impact of increasing deficits on BRIC nations and their unique economies.  Below is a chart of treasury securities held by each of the BRIC nations over the period of 2000 to 2007 (a period of relatively consistent bullish trends accross the globe, similar to what we expect for the next several years).  The data was compiled from the United States TreasuryDepartment.  The chart is followed by  a chart of GDP in billions of dollars, accounting for inflation in each of the BRIC nations over the same time period (data compiled from Index Mundi).  Analysis follows the jump:

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It was the one year birthday of the American Reinvestment and Recovery Act (the Stimulus Package) and the President touted its success one year in.  And despite what many on the far right claim, economists on both sides of the aisle would agree that it has saved plenty of jobs.  By looking at recovery.org’s archives and other estimates we have compiled estimates of how many jobs were saved at 5 different points since the act was passed.  Below is our estimates of how it has benefited the economy.  All I have to say is, thank god it passed because otherwise, we’d be at a 10.9 percent unemployment rate.

Today, as the 2009 fiscal year comes to a close, we take a quick look back and a quick look ahead.  Looking back, we see that on January 3rd of 2009, we predicted that the Dow would close the year at 11,000 dollars a share.  Today, the Dow ended the year above 10,500 and made our prediction one of the closest of the year.  Last year in that 2009 outlook we discussed how the stability of the housing industry and the recovery of the banking industry would be the catalysts behind an astounding recovery.  The housing sector has remarkably stabilized and recovered while the banking industry has seen massively robust positive changes since the start of 2009.  As we have said many times before, the one think lacking from the equation is jobs.  Unemployment is thus the pefect segue to our quick 2010 outlook.  2010 will be the year of recovery and will see the strongest recovery since that following the Great Depression.  Unemployment has ticked downward to 10 percent and the US will, in all likelyhood, finally witness job growth this month.  But unemployment numbers will still be sky high and they will only turn around with a substantive reversal in consumer confidence.  That will come, in our opinion near the 3rd month of 2010.  At that point unemployment will quickly decrease and by the end of 2010 Fiscal Frenzy predicts unemployment rates of between 6.8-7.2 percent.  While other indicators will likely slow in recovery, the job growth the US will witness this coming year will lead the Dow up even higher.  In that regard, Fiscal Frenzy sees the Dow ending 2010 at 13,000-13,500 due to very strong recovery in the first half of 2010 followed by a market flatlining in the second half of 2010.  Nonetheless, look for a great year for investors ahead.

It seems as if the Obama administration may finally have gotten the hang of the recession.  The decision to consider using TARP funds for job growth is a great proposal that truly handles the two underlying problems of our recession.  It is thus that Fiscal Frenzy strongly supports such a decision, were it to be finalized.  Bank of America just recently announced that it was going to pay back all its remaining debt to the US government from the TARP funds.  Citigroup will soon do the same as will many other large banks.  The fact of the matter is that the banking industry has begun to recover significantly, and will likely see some of the biggest gains of any sector in the coming fiscal year of 2010.  The picture is significantly different when it comes to jobs and the deficit.  

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