Showing posts with label Predictions. Show all posts
Showing posts with label Predictions. Show all posts
Thursday, September 27
Tuesday, July 3
Tuesday, February 7
2012 Prediction #4: Romney Will Not Win the U.S. Presidency
It's looking like Romney has the Republican nomination, but I am very doubtful that he can carry the country in 2012 for a whole variety of reasons:
- U.S. economic figures are showing signs of life, at just the right time.
- Like Eichengreen, Dalio, and others, I think the next leg down in the ongoing financial crisis won't make landfall until 2013 at the earliest.
- There is a decided lack of enthusiasm about Romney. He comes across as a Wall St. guy who, policy wise, isn't all that different from Obama. He also isn't well liked by the Republican base. In short, Romney seems positioned somewhere in political no-man's land.
- There is a reasonable chance for a third party candidate to be a factor, and should that happen it will work against Romney more than Obama.
- Even if Eurogeddon boils over the world's central banks have plenty of space to deploy more monetary artillery. Central banker hands won't begin to be tied until core inflation starts to increase significantly, and that's unlikely to happen over the next 10 months. Even though Bernanke was appointed originally by a Republican, he would probably prefer that Obama (who reappointed him) be reelected given Romney's and general Republican hostility towards the Fed.
- An Iranian conflict (perhaps the biggest X-factor in 2012) likely favors the incumbent as it would provide Obama with an opportunity to exercise leadership and look presidential.
Monday, February 6
2012 Prediction #3: The Gold 'Bubble' Will Not Burst This Year
George Soros has called gold the "ultimate bubble".
It's getting more than a little far along into 2012 to still be making predictions, but let me just state clearly that 2012 will not witness a collapse in the price of gold.
Why not? I've written about this at length previously, most recently here.
Gold is already off to a decent start in 2012, up $150/oz YTD, so it's perhaps a little unfair for me to be making this call in February. I'm also not making a call on whether gold will finish the year higher or lower, although I suspect higher. However, I am confident that we won't see the bottom fall out of the price of gold this year, or next for that matter.
Overall, we're somewhere in the middle innings of the fallout from the 2008 financial crisis and there is still way too much debt in the global financial system for the flight to gold to reverse.
It's getting more than a little far along into 2012 to still be making predictions, but let me just state clearly that 2012 will not witness a collapse in the price of gold.
Why not? I've written about this at length previously, most recently here.
Gold is already off to a decent start in 2012, up $150/oz YTD, so it's perhaps a little unfair for me to be making this call in February. I'm also not making a call on whether gold will finish the year higher or lower, although I suspect higher. However, I am confident that we won't see the bottom fall out of the price of gold this year, or next for that matter.
Overall, we're somewhere in the middle innings of the fallout from the 2008 financial crisis and there is still way too much debt in the global financial system for the flight to gold to reverse.
Tuesday, January 17
2012 Predication #2: iTV Will Prove Apple's Waterloo
Should Apple's all but confirmed iTV make landfall in 2012 I expect that it will serve as a fitting high-water mark for the high-flying tech company.
In this sense perhaps the Battle of Waterloo, which marked the once-and-for-all final defeat of Napoleon, is the wrong metaphor. Instead the Battle of Borodino, a contest which Napoleon won and allowed him to enter Moscow but also ultimately led to his later retreat from Russia in 1812, may prove a better analogy.
I'm sure the iTV will be a huge hit and will make a great addition in Apple's ecosystem. I'm so frustrated with the TV market that it was the subject of a rant a few months back. Let me be clear: TVs are begging for the Apple treatment.
And there is no doubt that Apple will be a successful, highly profitable company for years to come. Apple is more than Steve Jobs, and there is enough magic and momentum to sustain success for the next 3-5 years, at least. But having said all that some recent trends for Apple aren't looking so hot.
Apple is squarely in the competition's cross-hairs and very few -- if any -- companies have historically been able to sustain the level of success achieved by Apple this past decade. And the reasons are well known: people leave, get rich and lazy, retire, distracted, all of the above.
But perhaps the biggest problem will be Apple's own DNA, which is based on cult of personality, not long lasting institutions. Steve Jobs lionized and embodied the Great Man school. In contrast Bill Gates' favorite business book was Sloan's My Years with General Motors, a rather dull treatise on the art of running a large corporation through a series of committees. As so often happens following the departure of a dominant, charismatic leader there is growing talk of an Apple palace coup. Jockeying and politics won't make success any easier in Cupertino.
There is nothing Apple does that can't be replicated, and part of the evidence of that comes from Apple increasingly turning to the courts to fight its battles. Steve Jobs' seethed vitriol from his deathbed over Android's success. Because Apple controls its products end-to-end it has to flawlessly execute by itself every time. But there are literally hundreds of younger, hungrier companies competing with Apple. In some ways the relative demise of Apple is simply a numbers game.
The iTV will likely be insanely great in the way it integrates and simplifies our digital lives, and it is a product I'm very much looking forward to. But I predict that it will also mark the plateau of the greatest run in tech history.
In this sense perhaps the Battle of Waterloo, which marked the once-and-for-all final defeat of Napoleon, is the wrong metaphor. Instead the Battle of Borodino, a contest which Napoleon won and allowed him to enter Moscow but also ultimately led to his later retreat from Russia in 1812, may prove a better analogy.
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| All great runs ultimately meet the same fate |
I'm sure the iTV will be a huge hit and will make a great addition in Apple's ecosystem. I'm so frustrated with the TV market that it was the subject of a rant a few months back. Let me be clear: TVs are begging for the Apple treatment.
And there is no doubt that Apple will be a successful, highly profitable company for years to come. Apple is more than Steve Jobs, and there is enough magic and momentum to sustain success for the next 3-5 years, at least. But having said all that some recent trends for Apple aren't looking so hot.
Apple is squarely in the competition's cross-hairs and very few -- if any -- companies have historically been able to sustain the level of success achieved by Apple this past decade. And the reasons are well known: people leave, get rich and lazy, retire, distracted, all of the above.
But perhaps the biggest problem will be Apple's own DNA, which is based on cult of personality, not long lasting institutions. Steve Jobs lionized and embodied the Great Man school. In contrast Bill Gates' favorite business book was Sloan's My Years with General Motors, a rather dull treatise on the art of running a large corporation through a series of committees. As so often happens following the departure of a dominant, charismatic leader there is growing talk of an Apple palace coup. Jockeying and politics won't make success any easier in Cupertino.
There is nothing Apple does that can't be replicated, and part of the evidence of that comes from Apple increasingly turning to the courts to fight its battles. Steve Jobs' seethed vitriol from his deathbed over Android's success. Because Apple controls its products end-to-end it has to flawlessly execute by itself every time. But there are literally hundreds of younger, hungrier companies competing with Apple. In some ways the relative demise of Apple is simply a numbers game.
The iTV will likely be insanely great in the way it integrates and simplifies our digital lives, and it is a product I'm very much looking forward to. But I predict that it will also mark the plateau of the greatest run in tech history.
Tuesday, January 3
Prediction #1: U.S. Dollar Bears Will Remain On the Run in 2012
How is this a problem for portfolio manager Axel Merk, the self described "Authority on Currencies"? After all, according to Merk's written after-the-fact letters he claims to have traded out of and back into the euro just in time to surf its wild gyrations.
Merk moved his fund management business to California a number of years ago, where he has been beating a steady 'demise of the U.S. dollar' drumbeat ever since. This past year Merk Funds even took to deploying amusing anti-Dollar cartoon propaganda while routinely touting the superiority of the euro over the U.S. dollar.
Continue reading the full article at Seeking Alpha here.
Tuesday, December 27
Video: The Great Stagnation vs. The Singularity
For anyone who missed Tyler Cowen's presentation at the Singularity Conference from earlier this year.
Saturday, December 24
Recapping The PolyCapitalist's 2011 Predictions
For those keeping score three topics I made 2011 forecasts on were:
On Android, the verdict is in:
On Android, the verdict is in:
The U.S. housing market officially double dipped in May and then continued to fall, so that call looks correct as well.
The China prediction is a bit murkier, but here are some points worth noting:
- The Hang Seng and Shanghai stock markets are in a bear market and down roughly 20% for the year, or 30% since May. From its peak in 2008 Shanghai is off 60%.
- Housing prices are softening quickly; in Beijing new home prices dropped 35% in November alone.
- Coastal cities such as Wenzhou and Ordos appear to be experiencing a credit crisis with reports of businessmen leaping off rooftops.
- Hot money appears to be flowing out of the country: China's $3.2 trillion in foreign reserves have been falling for three months despite a trade surplus.
Things aren't shaping up too well for China or trade relations with the U.S. in 2012 either. For more on this see here, here, here and here.
Overall, does 2.5 out of 3 predictions sound about right?
Two more quick ones: bullishness on gold has been a steady theme since starting this blog in May 2010. And how did gold do in 2011? Despite the autumn selloff gold priced in U.S. dollars has returned around 10%. Not too shabby given that the S&P500 is flat YTD. I also managed a correct mid-year bearish call on the euro.
Check back later for The PolyCapitalist's 2012 predictions.
Will the Next Decade Be Dominated by America?
'Tis the season for predictions and STRATFOR's George Friedman has come up with a whopper.
The first chapter of his new book has been posted here. The main provocative claims is that the American 'Empire' will continue to be dominant over the next decade.
Will it? Here are a couple comments on Friedman's chapter:
First, I would take some issue with simplifying the Great Depression down to having originated in Germany. The role of Germany in the Great Depression does actually deserve more popular credit than it receives, but the scholarly consensus would not agree with Friedman's assertion that its "roots" reside in Germany.
Second, on his main argument, the IMF is projecting that China's economy will surpass the U.S.'s (on a purchasing power parity basis) in just five years in 2016. The EU economy is already larger than the U.S.'s. and has blocked U.S. mergers (e.g., GE's attempted acquisition of Honeywell).
Yes Europe has problems, and yes China may be experiencing the Mother of All Bubbles. But for Friedman to argue that the U.S.'s relative power in the next decade will be anything like it has been over the past 20 years seems incredibly optimistic and naive. The U.S. would appear to be at a significant cyber-warfare disadvantage compared to China at present (Update: within a few hours of this post STRATFOR's website was hacked and private client data posted on the internet). The U.S. has also failed to demonstrate that it can keep the nuclear weapons genie in the bottle in potentially hostile parts of the world. China is developing its first world class navy in 600 years. In short, examples abound of the U.S.'s relative power weakening.
Friedman writes about the U.S.'s need for a regional strategy. One interesting and rarely discussed possible outcome of the fiscal crunch facing America is the potential for unprecedented regional infighting inside the United States. For example, how difficult is it to imagine Texans questioning whether their tax dollars should continue subsidizing Maine, Oregon and Vermont? Or Californians funding Sarah Palin's Alaska?
The first chapter of his new book has been posted here. The main provocative claims is that the American 'Empire' will continue to be dominant over the next decade.
Will it? Here are a couple comments on Friedman's chapter:
First, I would take some issue with simplifying the Great Depression down to having originated in Germany. The role of Germany in the Great Depression does actually deserve more popular credit than it receives, but the scholarly consensus would not agree with Friedman's assertion that its "roots" reside in Germany.
Second, on his main argument, the IMF is projecting that China's economy will surpass the U.S.'s (on a purchasing power parity basis) in just five years in 2016. The EU economy is already larger than the U.S.'s. and has blocked U.S. mergers (e.g., GE's attempted acquisition of Honeywell).
Yes Europe has problems, and yes China may be experiencing the Mother of All Bubbles. But for Friedman to argue that the U.S.'s relative power in the next decade will be anything like it has been over the past 20 years seems incredibly optimistic and naive. The U.S. would appear to be at a significant cyber-warfare disadvantage compared to China at present (Update: within a few hours of this post STRATFOR's website was hacked and private client data posted on the internet). The U.S. has also failed to demonstrate that it can keep the nuclear weapons genie in the bottle in potentially hostile parts of the world. China is developing its first world class navy in 600 years. In short, examples abound of the U.S.'s relative power weakening.
Friedman writes about the U.S.'s need for a regional strategy. One interesting and rarely discussed possible outcome of the fiscal crunch facing America is the potential for unprecedented regional infighting inside the United States. For example, how difficult is it to imagine Texans questioning whether their tax dollars should continue subsidizing Maine, Oregon and Vermont? Or Californians funding Sarah Palin's Alaska?
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| (click to enlarge) |
This is the exact argument which is taking place in Europe right now between Germany and Greece. Yes, there are large differences between American and European social cohesion. But I would not be surprised to see growing regionalization within the U.S. as a key emergent theme in the years to come. In the absence of existential external threats the justification for an extremely powerful and centralized U.S. federal state is more open to question.
Overall, Friedman's chapter is written from the perspective of an all-powerful emperor and not from one bearing witness to the paralysis which has gripped Congress in recent years. I'm also not sure he has a firm grasp on some of the social-demographic shifts which are emerging nor the current economic/financial situation.
In short, this chapter seems more a treatise on how Friedman would prefer to see the world than how it actually is.
In short, this chapter seems more a treatise on how Friedman would prefer to see the world than how it actually is.
Friday, December 9
Thursday, December 8
Video: Carmen Reinhart vs. Paul Krugman
This event occurred back in June but the video just surfaced.
Watch live streaming video from nytimesopinion at livestream.com
Monday, December 5
Steve Keen on How He Saw "It" Coming and Why We're in a Depression
A must watch interview with Economist Steven Keen, the first part of which is embedded below (remaining parts can be found here).
Monday, October 17
Sunday, October 16
Saturday, October 8
Wednesday, October 5
Tuesday, October 4
As Predicted U.S.-China Economic War Heating Up
Another prediction which is coming in right on schedule: this Presidential political season the one thing Republicans and Democrats can agree upon (the generally conservative Senate voted 79-19) is that China is manipulating the value of its currency to make its exports more price competitive.
We're still in the early rounds of the latest Congressional flare-up over China's currency policy, so stay tuned.
We're still in the early rounds of the latest Congressional flare-up over China's currency policy, so stay tuned.
Sunday, September 25
QOTD from World's Largest Currency Trader, John Taylor: "The euro is going to hell"
Here are some other highlights:
So why should the U.S. dollar appreciate in such a horrid environment? As the world's reserve currency, Taylor says, the dollar has become a reverse indicator of the globe's economic health. "Whenever things are good in the world, [the] currency goes down," since there's ample liquidity. But when the rest of the globe is doing poorly, there's no liquidity and therefore the U.S. dollar is worth more. "That is the most important thing to know about foreign exchange nowadays–it is kind of backwards," he says.
Greece's default is more a matter of when than if, he says, as the Greek citizenry won't support the austerity measures necessary to stay in the euro zone. There will be a referendum this autumn on some of the recent changes, and the outcome could upend the fiscal cuts already decided upon, Taylor warns.
He now sees the euro trading between $1.37 and $1 over the next 18 months—nearer to the top side "if the Fed does its best at ruining our currency, and the euro manages to survive somehow." The world is pretending the European debt crisis is fixed, he adds—necessary if you are trading short term, but "long-term, a debt deal isn't going to work. The euro is going to hell. Every time they do things to fix it, it gets deeper and deeper."
Are there any other currencies worth paying attention to? Taylor is positive on the commodity-based ones, such as the Australian and New Zealand dollars, despite their run-up. "We use commodities to forecast currencies," he notes. For instance, Norway's krone is a function of the price of oil, which he thinks is a solid long-term bet on the next growth cycle. In five years, he says, "we could see oil at $500 a barrel. I would be a buyer on dips of oil."
Among Taylor's influences is the 1991 book, Generations, by historians William Strauss and Neil Howe, which identifies longer-term cultural and demographic cycles in American life. "Every 80 years, we go through a deleveraging cycle," he says. "It's hard to measure, but that's where we are now. It has to do with the period 2010-20, compared with 1930-40." The so-called Millennials, who were born between 1980 and 2000, "will be the ones to save us, but they'll have no money, no entitlements," says Taylor.Full article here.
Tuesday, September 6
SNB Gift-Wraps $2,000/oz. Gold
Today the Swiss National Bank declared that it will print an "unlimited" number of Swiss francs (because fiat central banks can do that) to prevent further appreciation of the franc.
The Swiss franc had been considered perhaps the ultimate safe haven currency, alongside perhaps to a lesser extent the Japanese yen. Both have been appreciating steadily over the past year+ in the face of periodic interventions by their respective central banks. Both countries have trade surpluses, which creates a built-in demand for their currencies as domestic firms repatriate funds. The Japanese and Swiss banking systems are also considered relatively strong. However with the SNB's decision to crank up the printing press and peg the franc to the euro at 1.20 francs will undoubtedly increase pressure on the Bank of Japan to do something similar.
Strangely, the price of gold dropped dramatically on the SNB news before rationality returned and pushed gold back up to an all-time record high of $1,923/oz. (although it did finish the day below $1,900).
Bottom line: today's news is very bullish for gold, and my prediction, made just under a month ago when gold reached $1,700/oz., that the yellow metal would push forward to $2,000/oz. should now materialize sooner than anticipated.
Monday, September 5
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