• by Karl Greenberg , November 3, 2008

Forget the election. One pundit is looking at where the weathervane of the U.S. consumer market will turn next year.

Jim Gregory, the CEO of CoreBrand, a global brand consultancy headquartered in New York, sees U.S. automakers turning south, the stock market spinning back to north, and influence over industry and politics taking a decided shift to the Far East.

Gregory, who predicts the Dow will recover to over 13,000 by the end of 2009, says governments like China--which are heavily invested in U.S. debt--will begin to demand more influence. "They will be demanding broader representation and insist on more influence on the politics of business. We will see more corporate takeovers of major businesses by foreign companies," he predicts.

He sees General Motors and Chrysler shrinking, Ford making a possible recovery, and no value whatsoever in a GM/Chrysler merger.

"[Ford] still has difficulties with financing, but they have addressed many of their toughest issues and deserve a second look by the American public," he says. "Chrysler and GM, on the other hand, can't seem to get out of their own way. I think a merger between the two may be irrelevant since they both may be greatly diminished in the near future."

In the CPG arena, he predicts that generic brands will impinge on name brands as consumers define value mores strictly. "Consumer brands will be taking one on the chin as generic brands become more sophisticated and economic conditions drive consumers to seek better pricing on products."

Pharmaceuticals will be the best-performing corporate brands because of "their long-term efforts to explain their industry and the steps they are making to improve the lives of people around the world," he says.

Gregory says people will get tired of shopping online--and that retail sales will rebound as a result, because people will increase visits to stores "just to get out for the entertainment of shopping."

Housing will finally make a modest comeback. "With interest rates still at historic lows, demand will begin to build again there will be slow but steady turnaround in housing," he predicts.