From Matthew Lynn at Bloomberg:

One, Britain calls in the International Monetary Fund: In the last few months, the U.K. has been a lesson in how to turn a crisis into a catastrophe. Everyone knew its debt-fuelled, financial-services-dependent economy would need a painful overhaul to develop new industries. Instead, Prime Minister Gordon Brown has embarked on one last borrowing splurge. With the pound already in freefall, the U.K. will run out of money and have to beg the IMF for a bailout.

And…

Six, the Milton Friedman revival: Right now, the world is following the ideas of U.K. economist John Maynard Keynes, running up huge government deficits to kick-start their economies. By the middle of the year, we will wonder if Friedman, who cured us of our addiction to Keynesian demand management first time around, wasn’t right all along. You can’t spend your way out of recessions: All you do is postpone the eventual recovery by saddling yourself with huge debts.

I’d say there is no chance of that happening in just one year. It took most of the 1970s for Friedman to win the last time around. Politicians will not give up on the idea that they can save the day until voters finally get disgusted and throw them out. We’re a long way from that.

Eight, the great bull market of 2009 to 2015 starts. A bull market is a bit like falling in love: You don’t know it has happened until long after the fact. Stocks have plummeted and priced in everything short of the greatest depression of all time. Over the course of 2009 and 2010, markets will gradually climb again. Most experts will dismiss that at first as a dead- cat bounce, and then as a bear-market rally. Around 2011, a few will start describing it as a bull market, and pretty soon the whole show will be on again.

I’d like to think that one is true, but I have my doubts. I suspect there will be bull markets in lots of things before we get another one in US stocks.

Paul Kedrosky at Infectious Greed offers three different scenarios for 2009. This is the one that sounds most likely to me:

2) The Non-Boring Flat Line
No-one is talking about this, so it’s at least worth throwing into the mix: The market races higher early in the year as Obama-nomics looks real and fun, and then tanks mid-year as the economy refuses to get off the floor despite lots of happy-talk, a few new bridges across things, and some state bailouts. Later in the year markets pick up again as strategists counsel patience, and chatter begins about a first-half 2010 recovery. We end the year essentially flat.

Turning to the financial bits, the dollar surprises by only falling 10% against the major currencies; gold strengthens and then falls off a little; trade is crummy, but there are strong spots. There are a few surprises, like some sovereign wipeouts – Spain? Italy? Australia? other? — but essentially flat-lining the year is a big surprise to all concerned.

Dow: 8400  Nasdaq: 1500  S&P 500: 900  Oil: $60  Gold $1000

Let me emphasize, that isn’t my prediction, but of the three he offers, that is the closest to what I believe is likely. His other two scenarios are interesting as well. Read the whole thing.