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John Bott’s 2011 Forecast – Discussion Dealing With Catastrophes - Strategies January 10,2011


Agenda  Introduction to TWEF  Introduction of Attendees

 Understanding Modern Money  Open Floor – Presentations  Main Topic – Pending Regime Change

 Significant Near Term Events  Meeting Review


What is the TWEF ?  a venue for discussion of economic topics which

  

impact our lives A venue for brief formal presentations on timely topics An opportunity to learn more about the economy and what drives it An opportunity to replace myths with fact-based reasoning on economic topics An opportunity to engage in spirited debate with others in your community on various topics


What the TWEF is Not TWEF will no doubt cover many topics of high value to investors, but the forum is not intended to be a venue for discussion of individual investments

TWEF is not a venue for solicitation of business. While vendor presentations may be made from time to time, please keep business solicitation outside our meetings.


Introduce Yourself!  Name  Industry Background

 What drives your Interest in Economics?  What are your goals in participation in TWEF?


Understanding Modern Money  Today’s Topic – History Of Market Crashes  1945 - Present


Lehman Crash – 9/19/2008  Gov does not

provide $50B in Loan Guarantees  Near Term Peak  10/12/07 – 1561.80

 Drop – 12.43%  9/19/08 – 1255.07  9/29/08 – 1099.2  Bottom -48%  3/6/09 – 667  -57.2% from Peak Full Recovery:


Lehman Crash – 9/19/2008  Gov does not

provide $50B in Loan Guarantees  Near Term Peak  10/12/07 – 1561.80

 Drop – 12.43%  9/19/08 – 1255.07  9/29/08 – 1099.2  Bottom -48%  3/6/09 – 667  -57.2% from Peak Full Recovery:

12/23/10 – 15 months


Terrorist Attack– 9/11/2001  NYC and Wash.

Attacked  Near Term Peak  5/23/01 – 1309.8

 Drop – 12.43%  9/11/01 – 1092.54  9/21/01 – 965.80

Full Recovery:


Terrorist Attack– 9/11/2001  NYC and Wash.

Attacked  Near Term Peak  5/23/01 – 1309.8

 Drop – 12.43%  9/11/01 – 1092.54  9/21/01 – 965.80

Full Recovery:

11/09/01 – 2 months


.COM Washout – 9/1/2000  Over Inflated Stocks

Sell off  Near Term Peak  9/1/00 – 1520.77

 Bottom -48%  10/4/02– 800.58

Full Recovery:


.COM Washout – 9/1/2000  Over Inflated Stocks

Sell off  Near Term Peak  9/1/00 – 1520.77

 Bottom -48%  10/4/02– 800.58

Full Recovery:

5/13/07 – 6 Years 4 Months


Crashes of the 1990s  8/2/90

Iraq Invades Kuwait  -18.32% Sell off over 2 months  Full Recovery:

 7/17/98

Asian Debt Crisis/LTCM Failure  -18.83% Sell off over 1.5 months  Full Recovery:


Crashes of the 1990s  8/2/90

Iraq Invades Kuwait  -18.32% Sell off over 2 months  Full Recovery: 7 Months

 7/17/98

Asian Debt Crisis/LTCM Failure  -18.83% Sell off over 1.5 months  Full Recovery: 4 Months


Black Monday– 10/2/1987  Blamed on:  Computer Trading  Derivatives  “Portfolio Insurance”

 Near Term Peak  8/25/87 – 334.57

 Drop – 27.81%  10/2/87 – 328.07  10/16/87 – 236.83

Full Recovery:


Black Monday– 10/2/1987  All major indexes finished year with a gain  Dec 1987 – 33 Leading Economists meet in Washington to declare the next decade will be the

worst economically since the Great Depression

Full Recovery:

7/14/1989 – 21 months


Crashes of the Early 1980s  2/5/80 Silver Crash/Abscam Bribery Exposed  -14.64% Sell off over 4 months  Full Recovery: 5 months

 8/14/81 Reagan Signs Econ Recovery Tax Act 

Waltons Tv Show was cancelled

 -21.72% Sell off over 1 month  Full Recovery: 14 Months


Arab Oil Embargo – 10/26/73  Arab Oil Producers Restrict Sales of Oil to West  Drop – 16.01%  10/26/73 –111.38  12/5/73 – 93.54

 Bottom -44%  10/4/74 – 62.34

Full Recovery:


Arab Oil Embargo – 10/26/73  Arab Oil Producers Restrict Sales of Oil to West  Drop – 16.01%  10/26/73 –111.38  12/5/73 – 93.54

 Bottom -44%  10/4/74 – 62.34

 Vietnam War Ends  Watergate Scandal

 Inflation Full Recovery: 6 Years


The 60s & 1970  11/22/63 JFK Assassination  -1.9% Sell off over 2 days  Full Recovery: 1 Week

 4/18/66 1st B52 raids in NVN, Massive Coal Strike, Malcom X  -17% Sell off over 3 months  Full Recovery: 12 Months

 3/30/70 – No Events – 500th Nuke Test, Apollo 13 accident  -13.9% Sell off over 1 month  Full Recovery: 8 Months


The 50s & Early 60s  6/12/50 South Korea Invaded (6/26/50)  -11% Sell off over 1 month  Full Recovery: 3 Months  7/15/57 Brazil Currency Crisis,  Senate Locks up over Voting Rights Act  John Lennon & Paul McCartney Meet for first time  -18.7% Sell off over 1 month  Full Recovery: 14 Months

 3/5/62 SEC Opens Mkt Investigations, US Enters Combat Ops in VN  -25.19% Sell off over 2.51 months  Full Recovery: 15 Months


John Bott’s Economic Forecast 

Comments


Open Floor Presentations ď‚— Member presentations of 10 minutes or less

followed by brief discussion or Q&A


Main Topic - Open Discussion  Pending Regime Change – the Nov 2nd Elections  Taxes  Healthcare (Including Social Security)  Financial Regulatory Reform (Fed, Treas, FDIC)  Defense Department  Energy Policy


Near Term Events ď‚— open listing of events in the near terms that

members should be aware of such as Fed Meetings, Political Events, etc.


Meeting Review  Review of Existing Agenda & Format  Suggestions for Future Topics

 Volunteers for Open Floor Presentations  Next Meeting – Date and Location  Adjourn


Crashes