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InvisibleBlack -> 12 Predictions for 2010 (1/11/2010 7:15:43 PM)
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Invisible Black's 12 Predictions for 2010
What do I know!? I don't know ... we'll see. I wouldn't go and bet the house (or the farm) on these but here's how I see it.
1) Unemployment remains high all year.
It might drop a little bit or rise, but it won't move substantially lower. The gov't hiring census workers coupled with a stimulus might move it down to something like 8% but we won't see unemployment rates like the "good old days" anytime soon.
2) AIG will fail.
We're talking either bankruptcy or being broken up and sold for parts to avoid bankruptcy. Some money may be recouped but most of the bilions loaned to AIG will have been wasted.
3) The Republicans will make substantial gains in the mid-term elections but not retake either the House or the Senate.
The Democrat super-majority will be over and passing anything against Republican wishes will be a massive struggle but the GOP will not be in a position to push legislation ... yet.
4) There will be no substantive reform in the financial industry - business will continue as usual.
Another regulatory agency may be created or additional supervisory boards or groups but the Glass-Steagall Act will not be restored, the dark liquidty pools will not be abolished or regulated, the short sale rule will not be re-introduced, flash trading will not be curbed, there will be no regulated futures market for CDS, the securitized market will continue as it is - nothing will change. As such, Americans' distrust of their financial institutions and the government's financial leadership will deepen. Bubble markets will rise and one may potentially burst during the year.
5) The Tea Party will attempt to field its own candidates for the Federal government.
It may make the attempt and be blocked from getting on the ballot (and thus give rise to allegations of fraud and corruption in the process) or manage to get on the ballot in one or more states.
6) Japan will not climb out of their recession.
7) Gold will top $1400/ounce.
It may surge up and then shoot back down. It's also possible the World Bank or one of the major Western governments may attempt to depress the price of gold by market manipulation or by dumping large supplies of gold on the open market.
8) Riots will break out at one or more protests - most likely during the fall elections.
Opposing sides will clash and a riot will erupt. People will be hospitalized and possibly killed.
9) The actions of the Federal Reserve will become much more obvious and blatant.
A government bond auction will fail and the Fed will immediately step in an purchase all of the available Treasuries. Their "quantitive easing" (i.e. printing money) policy will resume. The Fed will begin being active in the foreign exchange markets. At different times of the year they will both buy and sell dollars. Their stated objective will be "exchange stability".
10) Tim Geithner will resign as Secretary of the Treasury.
11) Terrorist activity will increase and another front will open up in the "War on Terror".
That's in addition to Iraq, Afghanistan and Pakistan.
12) There will be extreme volatility in the markets.
Stock and equity prices will seesaw, sometimes wildly, throughout the year. There will be several occasions when it will appear that we are about to plummet into the abyss or soar into the skies. Commodity prices will gyrate due to spot shortages in any number of materials, industrial goods and supplies - due to inventory shortages. Eventually the realization will dawn that there is no "safe haven" for investment capital. It will be a trader's and not an investor's market all year and great fortunes will be made and lost.
and, as a bonus prediction - scary Prediction Thirteen:
13) Sanity and Rulemylife will agree on at least one topic.
Feel free to comment, disagree or hurl insults - but for every prediction you tear down - you've got to put up one of your own!
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