The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age
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    Predictions ... Revisiting old ones and making new ones

    In my most recent question column earlier this week, I asked for readers' predictions for the upcoming year ... aside from Genghis bravely predicting that Obama would become POTUS, I didn't get too many responses.

    So I'm going to ask for your predictions again, while repeating some of the predictions I made and adding a couple of more, before I revisit some calls I made this year.

    First, the predictions for 2009. I'm sticking mostly to economics, with a few foolish forays into other areas (I was going to make a call that Prophet would finish his Top 10 2008 Albums list next February, but I see now he's picked up the pace):

    Economy

    • Unemployment, now at 6.7%, surges past 9 percent and falls just short of double digits
    • Gold now at about $845-$850, revisits all-time highs at $1000 an ounce, probably later in the year
    • Obama puts alternative energy initiatives on back burner at first, but then gets more involved as light crude oil, now at about $36 a barrel, rebounds first to $55-60 in short-term and then approaches $90 sometime next year. Gas prices again become a political issue.
    • 'Class' replaces 'race' and 'immigration' as the next big battleground in America. We see several examples like the factory sit-in we saw a couple of weeks ago. At least one of these protests turn violent and leads to a fatality. Unemployment benefits get extended again, and numerous other populist measures, including foreclosure relief, get passed by Washington.
    • The market has another down year, probably more than 10%, but stages a pretty decent rally early in the year, with the Dow hitting 10,000 again. IPOs remain few and far between, but Facebook does end up pulling off one of the few big new public stock offerings of the year next fall. The stock does well in the short-term, leading to another mini-rally.

    Politics

    • The Obama inauguration attracts more than 3 million visitors, and the combined TV audience for his speech exceeds that for the Super Bowl, drawing more than 100 million viewers. There is at least one announced assassination attempt that is thwarted.
    • Biden was right after all and some terrorist organization or rogue state tests Obama's resolve by the summer. We have the first attack on U.S. soil since 9/11 and it's possibly a multi-city attempt that mimics the chaotic action in Mumbai. (Please god I hope I'm wrong on this one).

    Sports

    • The Panthers meet either the Patriots or the Colts in the Super Bowl and win it all.
    • The Red Wings win the Cup. The Celtics repeat. (These are huge guesses).
    • The Yankees win the division, but flame out in the first round of the playoffs. Girardi is fired by the end of October. The Angels get to the World Series and play the Dodgers in an all-SoCal World Series. Angels win. My beloved Cards come in 3rd place in the NL Central division, which the Brewers win.

    So should anyone listen to me? Probably not. My track record this year for predicting events was so-so. I was generally dead-on with economic trends, as I have been very negative for over a year now. On February 11, before I started blogging, I wrote an email to Jim Cramer, stating that we are heading into a 'severe economic downturn that will last longer than most people are predicting,' adding:

    We are still in the early throes of this current crisis. We still haven't seen any bankruptcies. Foreclosures and defaults have been at a minimum. The job market has only just begun to show signs of strain. The pain will of course spread to the rest of the world, which is wallowing in our debt and weak dollar, causing a global slowdown. Much more damage will be done, many more shoes will drop.

    In a July post on pessimism, I predicted 50% odds for a multiyear recession, and 10% chance for a depression, fairly bold but probably not high enough odds for either. When the Lehman bankruptcy occurred on Sept. 14, I warned this wouldn't be the end of the story and a systemic collapse was possible. When the Treasury first presented its bailout plan, I said there would be bumps along the way and that other industries would quickly be lining up for money, including the car manufacturers.

    When it came to the financial markets, the record was much more mixed. I probably made my best call of the year on July 4, calling oil a bubble about to pop on the exact day it hit its high price for the year ($140+). Despite talk of new rules against speculation and for offshore drilling, I also correctly pointed out that the main reason for oil's fall would be a rapidly weakening global economy. However, in that same piece, I said there'd likely be one more big run higher and that oil was not going to be heading to $50 anytime soon (It's now in the $30s. Oops).

    My calls for short-term bottoms and tops in the stock market were generally correct, but often early by a matter of days or even weeks, which makes a huge difference if you actually wanted to trade on the information (which I would NEVER recommend, as you have probably realized by now I like to talk out my ass a lot).

    For instance, on Oct. 8, I called for a short-term bottom in the market, but it didn't start happening until the next week. In a follow-up post on the 13th, I thought the rally could have some legs (somewhat true) with the Dow possibly hitting 11,000 (way untrue), but that we would revisit our earlier lows 'in the next few months, if not sooner' (true) and that we'd hover around the Dow 8K-9K for a year or more (to be determined).

    I didn't make many political calls, but wasn't so impressive here either. In July, I predicted an Obama victory and said ageism would prove to have a bigger impact than racism (hard to judge the latter call, but I think it was a pretty good one).

    On Sept. 3rd, I said McCain's Palin could backfire but was the only thing he could to generate even a trace of the excitement of the Obama campaign.

    On Sept. 24th, I called McCain's announcement that he was postponing his campaign to focus on the economy as 'just silly' and 'annoyingly hyperbolic.'

    When the bailout was being debated and strongly questioned in Congress, I said it would surely pass; It was vetoed. To be fair, after the bill was vetoed, I did correctly predict a new bailout proposal 'very similar' to the rejected one would pass.

    And in sports, the only prediction I made was a hopeful and ultimately correct one that St. Louis Rams Head Coach Scott Linehan would be fired after the bye week. Unfortunately, Linehan's firing didn't lead to 'watchable football' as I had hoped.

    OK, now it's YOUR turn. Go out on a limb. Make some calls. Trust me, if you're right, you'll look like a genius, a seer, a visionary. And if you're wrong, no one will remember (at least not 'til I revisit these predictions next year)

    Comments

    I commend your honesty, but if you want to build a reputation as a predictor, you should do it Nostradamus style: make a shotgun barrel for full of vague predictions and then crow about the ones that can be interpreted as correct.

    For my predictions, I'll reiterate the 2009-relevant ones from my End of an Era post, none of which are particularly bold:

    • Obama will create a new technocracy - focusing on pragmatism over idealogy. There will be continued complaints from the left, but they will remain muted as he delivers competent and generally popular government.
    • Obama will seduce moderate and non-partisan Republicans from Snowe to McCain to vote with him on a number of compromise bills. Right wingers, by contrast, will grow increasingly bitter. The dividision within the Republican party will increase, especially before the midterms in 2010.
    • Race politics will diminish. I agree that class politics will replace it but in the long term, not in 2009, as Obama's policies will have broad appeal. One other inhibiting factor is the lack of a clear populist party. Democrats are fiscally populist, while Republicans are socially populist, so class division will occur intraparty rather than between parties.
    • There will be a lot of China-is-kicking-our-ass-we're-not-a-superpower-anymore pessimism in 2009 which will dissipate after we recover economically.
    • Dumpster-chic is dead. People without money will dress as if they have it instead of people with money dressing as they if they don't.
    • We're due for another round of angry thrash and escapist dance music, which will flourish in the recession. The ailing music industry will shudder and splinter as niche labels outpace the majors.
    • The Tribune Company has declared bankruptcy since I predicted struggle and consolidation among the big papers. Expect more of the same in 2009. (Acanuck already corrected me that the small town papers will do fine.)

    As for Obama becoming President, I'll up the ante by predicting the exact date on which it will occur: January 20th.

    And on the subject of accuracy, I only made two predictions in 2008 and hit them both:

    Of course, I've probably repressed the ones I got wrong.


    Speaking of predictions, these are great! mine cant end up being as bad as these, can they?