2010 predictions thread.....

HAMISH_MCTAVISH

Time to put your money where your mouth is with some predictions on record folks.

I got lucky with many of my 09 predictions, and didn't get it all right, but mostly I've been close. So I'll see if I can keep the trend going for 2010.

1. Conservatives will lead the next government, but very possibly with a hung parliament. The race will be closer than expected, and the tories will have to back down on much of their austerity agenda to get elected. Expect a significant change in the narrative from the tories starting in January, with the emphasis on job creation, softening the cuts, efficiency savings and elimination of unpopular programmes (ID cards, etc) rather than big culls of public sector, etc.

2. House prices will end the year marginally up on this year, somewhere between 3% and 8%. Spring bounce will be weaker than last year as the election will cause some anxiety and defer purchasing into 2011. There will be at least 3 months of flat or slightly downwards price changes. But 2011 and 2012 will be "boom years" particularly for London with the olympic build up.

3. There will be neither a gilt strike nor a sterling crisis. Bank funding will continue to improve, with the return of securitised mortgage funding expanding somewhat from this years limited offers. LTV's will continue to increase, and bank margins decrease, as competition returns to the market.

4. BoE base rate will remain at or below 1% all year.

5. The additional liquidity created by QE will not be withdrawn in 2010.

6. Unemployment will peak at a slightly better than expected 2.75 million.

7. Oil prices will break the $80 barrier, and trade between $80 and $100 for most of the year.

8. Aberdeen house prices will return to within a couple of percent of, or possibly even slightly exceed, previous peak prices.

9. The Gold bubble will burst, as equities, house prices and bonds remain stable investments.

10. Crashaholics and Moneyweek readers will continue finding new and increasingly bizarre explanations for why the next leg of the crash is always "just around the corner".


And now a couple of morsels of bear food......


There are actually a few potential crisis inducing events on the horizon that could trip up the recovery. It's just that we don't hear the more bearish posters mention them very often, as they are too wrapped up in the hpc soundbites of unemployment rising to 4 million, tory cuts, rising rates, or a gilt strike/currency crisis. All of which are highly improbable.....

On my list of potential "black swans" for 2010.... A few things that could, in theory, trigger a wider set-back. They are also not probable, but they are theoretically possible, and in my opinion, more probable than the hpc soundbites so often portrayed on here as being inevitable.

1. Eastern Europe causes a second financial crisis. Eurozone banks are horrendously exposed to some of the dodgiest economies in the world.

2. PIGGS debt default. One of the PIGGS could well default, or have austerity imposed by the ECB, causing social breakdown. The option could be withdrawal from the Euro to allow currency devaluation and a less painful outcome. Euro then tanks as a result, and Sterling loses it's competitive advantage from devaluation.

3. China property and infrastructure construction bubble bursts, causing direct pain to Australia in the process, and a knock on effect into Asia as a whole.

4. Labour wins the UK election, and views it as a mandate to kill the goose that laid the golden egg with higher taxation. The wealth generating companies stick two fingers up to Gordon and leave. The remaining population are crippled by even higher taxes to compensate, and mass unemployment. Labour is destroyed for a generation, which may be a price worth paying....;)

5. Major terrorist attack such as 9/11, war with Iran which closes the Straits of Hormuz, regional conflict with Russian orbital states closing regional oil/gas pipelines, etc.... Such an event is possible in any year, and could have severe repercussions in any year. It's no more likely this year than any other, but possible, and the consequences to fragile economies recovering from recession would be worse this year than in most.

So that's the Hamish McTavish predictions laid bare for future adoration or ridicule.

Now whats yours.....:D

Generali

Generali predicts:

1 - Hung Parliament. Lab/Nats coalition most likely???
2 - House prices roughly flat, perhaps down a little
3 - Bank lending stays flat (M4 up by no more than additional QE in 2010)
4 - More QE. If not then base rate up by end 2010.
5 - No withdrawal of QE. Possible announcement that it is unlikely ever to be withdrawn.
6 - Unemployment to continue to rise throughout 2010.
7 - Oil @ $80/bbl
8 - No idea, never been to Aberdeen.
9 - Gold down a little. FTSE down as lack of investment of past 18 months starts to hit corporate profits. GDP up slightly (1%?). 10 year Gilt yields up considerably from now as Asian growth means higher market interest rates.
10 - Agree
11 - England go out to Spain in semis. Which group are Scotland in Hamish BTW?

My 'grey swans' (not predictions but possibles):
1 - California to default
2 - UK deflation
3 - Gilt buyers strike
4 - UK GDP growth > 2% (strong export led recovery - the UK consumer is a spent force for the foreseeable IMO)

Emy1501

1) The vast majority of the prediction will be nowhere near the mark.

2) The vast majority will be based on what people want to se rather than any evidence to support the predictions.

3) Anyone who comes close with their predictions will claim they are an economic genius even though its likely their previous predictions have been far of the mark.

4) Anyone who is wrong about their prediction will have it brought up at the end of the year and then on pretty much everytime they post.

5) Hamish will start more threads than anyone else often spun to the hills.

6) If prices do not fall this year people will tell us the 70% falls are coming next year and so on until the next crash.

7) The Tories will win the next election and tell us the county is in way more trouble than vast majority of the public thought.

8) House prices may go up they may go down they may stay the same.

9) QE may fail especially when it does not seem to have been successful anywhere else before.

10) We will lose the special relationship with the US.

11) Arsenal will win the league(Ok that hope more than anything)

abaxas

1) Labour will win, but only hold office for ~6 months before social breakdown and rioting forces a new election.

wymondham

What should happen and what does actually happen are two different things especially in these times when the Government have been making artifical paths for the economy - making predictions is even harder than normal. Who knows what odd decisions they'll make prior to the election. But enough of this boring stuff....

My list of predictions:

1. General elections are handed over to Simon Cowell to organise.
2. There are happy people about
3. There are sad people about
4. Shocking unseasonal winter snow will cause travel chaos
5. There will be hose pipe bans in the summer
6. The BBC license fee will go up despite 60% increase in repeats
7. Unemployment will go up mainly as people see that those who are unemployed get better off on benefits.
8. Marriage will become a rarity
9. French air traffic control will strike each bank holiday
10. Those wishing to fly will need to go through a 2 week check in process.
11. The war in afghanistan will still be going on, and 'winnable'...
12. Local authorities who switch off streetlights overnight discover a rise in crime
13. Concerts in Africa to raise much needed funds for poor British people
14. New scrappage scheme announced for televisions and washing machines and some makes of mp3 players (probably the blue ones).
15. New high speed rail link goes overbudget
16. Mrs Cameron gets criticised in the Daily Mail for her dress sense.
17. Gordon Brown becomes the head of the european central bank (I'm scaring you now arnt I??!!)
18. Any global warming meeting will fail to agree anything
19. Coronation street storylines become driven by phone votes
20. Some inappropriate person will appear as an 'expert judge' in a panel show
21. Alcoholism will be the big issue of 2010
22. Celebrity Big Brother is a hit and they revive it!
23. MP's will still be corrupt, but they now have proxies and agents to avoid detection (these will be paid for by the tax payer)
24. Immigration is left unchecked again, leading to a 'surprise' crisis later in the year
25. Cars will be stolen for their increasingly valuable fuel content
26. Bankers return to large bonuses, but it becomes illegal to report it.

I think I'll be shocked by how many of these become true??

Happy 2010 everyone!

2010

1 The Tories will win the election by a landslide
2 The British summer weather will be crap
3 Global warming will once again give us snow, ice and freezing weather (the opposite to what it`s supposed to do)
4 The banks will still rip us off along with the energy companies
5 Recovery will not happen

Mr.Brown_4

Hamish, it's basically a wish list you have written. I actually would like it to come true as well, everything continuing with low interest rates and still being in a job - that would be fine. However the economy is on borrowed time. The financial markets are waiting until the next government is formed, and for the subsequent emergency budget in order to start addressing the deficit.

If the budget is not severe enough it is likely that our gilts (whatever they are, IOUs I think) will not attract buyers. This will force up interest rates. The BOE can't keep on buying them.

If the budget is severe then there will be obvious difficulties for the economy and tax payers.

Maybe we will have a severe emergency budget and the financial markets will decide it is not severe enough. Greece and Ireland are showing the way perhaps.

Now it may be that in your little world, with your property and job, all is OK and I hope that is true, for you and me. A smallish drop in equity, a smallish rise in taxation - fingers crossed that it is not as bad as common sense would tell us it is going to be.

So rather than write a list of predictions, I'll just cross my fingers and hope.

Radiantsoul

1. Election still too close to call. If there is a hung parliament then another election is quite likely in Autumn.
2. House prices to rise slightly(perhaps 5%)
3. A bit more quantitive easing perhaps £25-50billion on top of the already agreed figure.
4. Fairly weak economic growth in the UK perhaps 1.5%-2%
5. Weak economic growth in the developed world, but much stronger in China, India and Brazil.
6. Unemployment will peak in the second or third quarter.
7. Oil prices will rise and spend the year between $70 and $95. Gold prices will fall as investors develop more appetite for risk.

The negative risks are;
1. The banking sector - especially those in the far east and middle east. I am sure there are more incorrectly priced risk in China than Britain or the USA. Although the sector is smaller.
2. Deflation in the eurozone seems quite likely.
3. Political paralysis in the USA following the midterm elections and Obama's healthcare reforms may limit the USA leadership in recovery.

In general I think it is going to be a better year and the fear factor will fade.

HammerSmashedFace

2010 prediction......... Is the beginning of the end of our flimsy existence based on cheap fossil fuels, of course only a few realise this at this time, I expect that few to turn into many, but due to lemming like short-sightedness it will take close to a decade for the panic to set in.

Here is just one aspect to look forward to, imagine your salary staying pretty much flat or rising at a couple of percent a year and fuel costing you £10-£15 per litre, just as night follows day, it is inevitable. House prices up ?, don't make me laugh, it's going to cost you half a weeks salary just to fill your Smart car.:D

nearlynew

I notice that McTittish goes on about "HPC soundbites", yet uses the term "black swan"

Where do you think he got that from readers?


He is totally clueless.

His "predictions" are nothing more than regurgitated mainstream opinions about what could happen.

HammerSmashedFace

nearlynew wrote: »

I notice that McTittish goes on about "HPC soundbites", yet uses the term "black swan"

I think probably from the other website he has open on his browser, hoping amongst hope that his 'orange hair' status has been revoked and he can post his short sighted, mainstream drivel in two places and not one.:D