So far in 2010 the US FDIC has closed 26 banks and we expect to see more as the year progresses. While derivatives were more of a problem in 2008 and 2009, the issue now is more basic loan defaults from underwater mortgages.

The bubble in China is is now to the point where it will cause real turmoil when it bursts. Bubbles are destructive and the fallout will be severe. China is now moving to the world's 2nd largest economy overtaking Japan. China is moving to reign in its overheated economy and has moved to deal with sky high valuations in the real estate market.

In the US about 50% of commercial real estate is under water. The consequences of this mess could cripple the US economy for years to come. This mess of the consumer housing mess is nothing compared to the commercial market looming.

Our outlook for 2010 is to see the FOMC finally move away from zero rates to some modest token rate. The carry trade has largely priced this in already. Since Goldman Sachs wound down their carry position, the dollar has leveled off. Gold has remained elevated. US banks are slowly recovering but they are far from comfortable. News out of the FOMC suggests the Fed is in no rush to raise rates.

We expect unemployment will be a problem in 2010 mainly due to the ongoing credit crunch that still dives deleveraging. Australia was the first industrialized economy to raise interest rates and they are experiencing a decline in unemployment. Canada has seen some improvement but most major economies have structural problems that need to be addressed.

The Bank of Canada has consistently maintained their policy of low rates until Q3 at the earliest. Australia is been bucking the trend with a couple of rate hikes that started last year..

Until unemployment eases we cannot see to much rush to raise rates, or cut stimulus packages. With some stimulus plans finishing, the desired improvements has not been seen.

Some commentators suggest inflation could be a problem but the horizon is distant. Most suggest 2012 at the earliest. We expect the US to continue to struggle beyond 2012 until the excess housing market inventory is finally absorbed. We expect 2015 is likely to see the housing mess mostly cleared up. We expect hosing starts to remain at very low levels for may years to come.

Deflation in home prices has continued to hurt consumers and banks. Businesses are also struggling with the credit crunch so commercial real estate is also a mess.

NEW HARDWARE

We upgraded the server to a Pentium IV board, so now we are now using the 500 GB EIDE disk as / so we have lots of space for larger web-based databases. Hopefully ext4 is more reliable. We were using ext3 with the old 80 GB disk. Eventually when we procure a large storage server, the database capabilities will be enormous. There many projects I can think of for a large scale file server. The primary one is computer chess related and the distribution of endgame tablebases. Another is a large scale food database for consumers on our vegan site.

We will need more storage for our computer chess site, 500 GB is not sufficient to make tablebases available for downloads with P2P. We are considering a torrent to distribute 6 piece tablebases.

HARDWARE WANTED

VIDEO CARDS

We are seeking PCI Express video cards for testing purposes. We require both ATI and NVIDIA cards. We plan to post a table with testing results once an adequate number of cards are available. Visit our developer site for reviews.

HARD DISKS

We are seeking large capacity SATA hard disk for our servers. This will allow us to expand our chess site with new download capabilities.

MOTHERBOARDS

We are seeking PCI Express motherboards for testing purposes as well as for our servers. We desire to have several machines to act as a fail-safe system to reduce the risk from hardware failures.

RACK BASED SYSTEM

We eventually desire to move to a EIA rack so that several machines can be maintained in unison. This way we can have test machines ready for reviews etc. Relatively low cost chassis are available to have a flexible place for testing video cards etc.