Byron Wien's 2013 Predictions Unveiled

Tyler Durden's picture

While the predictions of Blackstone's Byron Wien (born in 1933), who may not be in the senate or "sleep-deprived", but this year will become an octogenarian, may have been all over the place in the past 10 years, some correct, but most miserably wrong (with a recent hit rate of about 25%), he always does provide entertainment value. Which is the only value in the latest release of his 10 forecasts for 2013. Naturally, take all of these with a salt mine.

Byron’s Ten Surprises for 2013 are as follows:

  1. Iran announces it has adequate enriched uranium to produce a nuclear-armed missile and the International Atomic Energy Agency confirms the claim. Sanctions, the devaluation of the currency, weak economic conditions and diplomacy did not stop the weapons program. The world must deal with Iran as a nuclear threat rather than talk endlessly about how to prevent the nuclear capability from happening. Both the United States and Israel shift to a policy of containment rather than prevention.
  2. A profit margin squeeze and limited revenue growth cause 2013 earnings for the Standard & Poor’s 500 to decline below $100, disappointing investors. The S&P 500 trades below 1300. Companies complain of limited pricing power in a slow, highly competitive world economic environment.
  3. Financial stocks have a rough time, reversing the gains of 2012. Intense competition in commercial and investment banking, together with low trading volumes, puts pressure on profits. Layoffs continue and compensation erodes further. Regulation increases and lawsuits persist as an industry burden.
  4. In a surprise reversal the Democrats sponsor a vigorous program to make the United States independent of Middle East oil imports before 2020. The price of West Texas Intermediate crude falls to $70 a barrel. The Administration proposes easing restrictions on hydraulic fracking for oil and gas in less populated areas and allowing more drilling on Federal land. They see energy production, infrastructure and housing as the key job creators in the 2013 economy.
  5. In a surprise reversal the Republicans make a major effort to become leaders in immigration policy. They sponsor a bill that paves the way for illegal immigrants to apply for citizenship if they have lived in the United States for a decade, have no criminal record, have a high school education or have served in the military, and can pass an English proficiency test. Their goal for 2016 is to win the Hispanic vote, which they believe has a naturally conservative orientation and which put the Democrats over the top in 2012.
  6. The new leaders in China seem determined to implement reforms to root out corruption, to keep the economy growing at 7% or better and to begin to develop improved health care and retirement programs. The Shanghai Composite finally comes alive and the “A” shares are up more than 20% in 2013, in contrast with the previous year when Chinese stocks were down and some developing markets, notably India, rose.
  7. Climate change contributes to another year of crop failures, resulting in grain and livestock prices rising significantly. Demand for grains in developing economies continues to increase as the standard of living rises. More investors focus on commodities as an investment opportunity and increase their allocation to this asset class. Corn rises to $8.00 a bushel, wheat to $9.00 a bushel and cattle to $1.50 a pound.
  8. Although inflation remains tame, the price of gold reaches $1,900 an ounce as central bankers everywhere continue to debase their currencies and the financial markets prove treacherous.
  9. The Japanese economy remains lackluster and the yen declines to 100 against the dollar. The Nikkei 225 continues the strong advance that began in November and trades above 12,000 as exports improve and investors return to the stocks of the world’s third largest economy.
  10. The structural problems of Europe remain largely unresolved and the mild recession that began there in 2012 continues. Civil unrest subsides as the weaker countries adjust to austerity. Greece proves successful in implementing policies that reduce wasteful government expenditures and raise revenues from citizens who had been evading taxes. European equities, however, decline 10% in sympathy with the U.S. market.

Every year there are always a few Surprises that do not make the Ten because either I do not believe they are as relevant as those on the basic list or I am not comfortable with the idea that they are “probable.” Below are several “also rans” which did not make the Ten Surprises.

“Also Rans”

  1. Having traded below 20 for most of 2012 the VIX Volatility Index surges 33% to 30, providing a bonanza for traders. The decline in the S&P 500 increases market volatility.
  2. The Newtown, Connecticut, massacre finally convinces Congress to do something about gun control. As a first step they ban future civilian purchases of automatic weapons, including handguns, with clips of more than ten rounds and require more extensive background checks on all gun purchases. “It should not be easier to buy a gun than rent a car” becomes a slogan.
  3. Frustrated by an inability to increase revenues through raising income taxes, Congress begins to consider different approaches. There is more talk of a value-added tax as well as a wealth tax, and these ideas appear to be slowly gathering momentum.
  4. Congress decides that high-frequency and other computerized algorithmic-based trading practices are putting the individual investor at a disadvantage. A transaction fee designed to slow down frenetic activity and protect against “flash crashes” and glitches is imposed on intra-day trades.
  5. The planet finds itself saturated with technology. Semiconductor companies, software providers, social media favorites and personal computer manufacturers all report disappointing earnings and provide discouraging guidance. They lead the overall market lower. Users finally agree the present state of the art is fast enough and connected enough, and that they have more “apps” than they know what to do with. Apple bucks the trend and trades above $700 as its products continue to enjoy enormous success abroad.

Over the past two years, Wien has gotten 4 of his 17 (24%) calls correct, which after adjusting for boldness, amounted to a woeful $0.67 yield.

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notbot's picture

#8 is a no-brainer.

price of gold reaches $1,900 an ounce as central bankers everywhere continue to debase their currencies

Zer0head's picture

Crazy old Byron, sittiing up there at 345 Park counting his billions making shit up for consumption by the masses while his company delivers double digits to its clients

ZerOhead's picture

Good afternoon Junior...

#7 is also a no-brainer. Worst winter wheat report in over a decade as the midwest drought continues...

http://igrow.org/agronomy/wheat/winter-wheat-struggling-on-the-plains/

http://droughtmonitor.unl.edu/

The Juggernaut's picture

Jeeze this guy just starts off like a Necon trash bag.  "Like"?

knukles's picture

Why are any of these prognostications a "surprise" or represent any particular "insight" out of the realm of "Reasonable Consensus Expectations"?

They're not.

And are therefore entirely fucking useless.

Jeeez... and he gets paid the big bucks for this.
Pitiful

Pitiful demonstration of the failure of the professional money management business.  All sales, hype and self interested belief that they are superior beings....

AldousHuxley's picture

predictions are only worth as long as someone's head is on the line.

 

rest are just juicy speculations or obvious common sense stuff.

Zer0head's picture

actually his 2012 predictions look a little better when you read the long version

http://www.blackstone.com/news-views/press-releases/byron-wien-announces...

 

or you can like him on FACEBOOK

https://www.facebook.com/blackstone

dbTX's picture

I'm sure this has already been done.

Freddie's picture

+1 F Byron Wein. 

Another of the Greatest Generation (of Liars).   Go take a f*****g dirt nap.

azzhatter's picture

I'm amazed this fossil is still wasting oxygen

Matt's picture

Silent Generation. Too young to fight in WW2. The ones who got the best benefits out of all the social programs.

Blazed's picture

Another psychotic chrome dome brother of Blankfein and company? Ooooh, scary Iran is gonna get ya with a potential future bomb, better bomb them into petrodollar/USD reserve submission. 

redpill's picture

This guy is not very imaginative.  Which means he's both frequently wrong AND boring.

 

cougar_w's picture

He didn't venture very far into muni defaults or additional TBTF M&A.

So his "predictions" are less like predictions and more like diversionary "don't worry be happy" hand-waving.

Snakeeyes's picture

Agreed. All that happened yesterday was the Obama/Congress agreed to further reckless spending with a guarantee of more debt and more Fed intervention. Like watching a horror show.

http://confoundedinterest.wordpress.com/2013/01/02/the-day-after-republi...

Silver Bully's picture

'#8 is a no-brainer.'

I beg to differ. These are fully manipulated markets, gold and silver especially. If the Fed wants the metals to stay below whatever arbitrary price they want, THEY WILL GET IT. Has the last year in precious metals not taught anyone anything? Unlimited fiat on the Comex hath its advantages. It can't stay that way forever, of course. There are penalties to be paid (they'll just be paid later.)

Is it possible we'll see above $1900?

Yes.

Is it a no brainer?

No.

Remember, the can can be kicked longer than you or I can stay solvent.

Note: I owned gold and silver until a tragic boating accident in Florida. I knew naming a fishing boat the Titanic was just asking for it.

Joebloinvestor's picture

China and corruption.

 

What a knee slapper.

 

As for Japan, It will be after 2013 they fianally announce that the island is becomming un-inhabitable.

DosZap's picture

As for Japan, It will be after 2013 they fianally announce that the island is becomming un-inhabitable.

 

And WHAT idiotic counrtry would allow them all to leave,and suck off their teat, after a thousand years+ of Xenophobia?.Most racist nation outside of Arabs?Islamic Rads, I know of.

 

samcontrol's picture

Financial stocks have a hard time but Shangshit raises 20%'!?!WTF

this guy does more morning dope than i do..

private.message to darthdork.. i bet i outperform my 3 kilos of silver and 788 gms of gold..

To Physicall gold lovers, do you consider Sprott funds to be paper?

Not going for red arrow record but some are appreciated.

ot anyone catch that hand wave just now on bloomberg?

Freddie's picture

Remember Jimmy Cayne at Bear Stearns.   He was a heavy dope smoker and I think golfer. 

All the idiots at Bear were big bridge players with that scum Buffett. 

Panafrican Funktron Robot's picture

"To Physicall gold lovers, do you consider Sprott funds to be paper?"

Is this a rhetorical question?  Of course it's paper.  

CrashisOptimistic's picture

Crude closed 2012 at $111.11 / barrel, the all time end-of-year closing high.  Yet people think oil was down last year.

Flakmeister's picture

Shhh!

That is an inconvienient truth...

Matt's picture

Don't worry, someone told me America is entering an energy renaissance and oil will be $45 a barrel in no time.

fonzannoon's picture

Why Cater to these douchebags. We have CNBcrap for that.

JustObserving's picture

The Wiener's predictions are pathetic.  His very first prediction is both fear mongering and war mongering.

Does he work for Homeland Security now?

ZerOhead's picture

I'm still waiting for the Russians and Chinese to get into the Plutonium Swaps business...

BlueStreet's picture

Wish #2 were true today.  

Dr. Engali's picture

It should not be easier to buy a gun than it is to buy a car? When you consider how many paople are killed by cars versus how many are killed by guns...I would argue the opposite.

Uncle Zuzu's picture

And heart attacks kill many more than cars every year.  It is still way too easy to buy a big mac and large fries.

MrBoompi's picture

The funniest prediction is that the United States (regardless of party in charge) will be independent of Middle East oil.  Even if this was possible, why would we even want to do that?  As long as the rest of the world accepts USD for oil, why deplete our natural resources?  If we had to pay for oil with gold, I would agree with him however.

 

 

Hype Alert's picture

Maybe they should create The Department of Energy!  Oh wait..

ouchtouch's picture

Gun control?  Hahahaha!

malek's picture

A powerful way to spread lies:

Wrap them up as "self-evident" assumptions in so-called "predicitions."

Uncle Zuzu's picture

#4 and #5 of the ten SURPRISES start with "In a surprise reversal...". Redundant, Byron.

BlueCheeseBandit's picture

I pretty much agree with these and have been allocating or planning to allocate assets accordingly.

Guess momma was right, I am a retard.

Correction: I mostly agree these are the market's broad trends, so long as TPTB can continue suppressing surprises.

TheMayor's picture

Idiot, automatic weapons are already banned.

Try taking a gun safety class before you go offering your prediction on something you know nothing about, you MORON.

KnightTakesKing's picture

Not exactly. You can purchase a "pre-ban" automatic weapon via a NFA Class 3 tax stamp from the ATF. Cost you about $200 (for the stamp) and about a month wait for the ATF to process the paperwork.

JR's picture

Speaking of predictions, of all the heavy weight socialism, inflation, bigger government, et cetera, heading our way, there’s one counter factor to consider for our future. To the 300 million firearms now existing in America, citizens are adding to the numbers as fast as they possibly can.

The firearms are not for hunting, target shooting or collections. They are to protect citizens, their property and savings, from tyrants.

In the wake of the Newtown shootings, Democrat Rep. John Lewis of Georgia said all the guns are not needed…”The British are not coming.” And columnist Walter E. Williams providing this quote in a tremendous article today on LewRockwell.com, said the Framers were not providing the Second Amendment to protect citizens against foreign invaders but to fight against domestic tyrants.

Williams’ list of quotations in Why the 2nd Amendment are blockbusters, including this one from Alexander Hamilton:

"The best we can hope for concerning the people at large is that they be properly armed. If the representatives of the people betray their constituents, there is then no recourse left but in the exertion of that original right of self-defense which is paramount to all positive forms of government."

http://www.lewrockwell.com/williams-w/w-williams151.html

WT Sherman's picture

Recommend 1000 times!

beachdude's picture

"WHEN ANY NATION MISTRUSTS IT'S CITIZENS WITH GUNS, IT IS SENDING A CLEAR MESSAGE.

IT NO LONGER TRUSTS IT'S CITIZENS BECAUSE SUCH A GOVERNMENT HAS EVIL PLANS."

- GEORGE WASHINGTON

Trader-Scholar's picture

"They are to protect citizens, their property and savings, from tyrants."

This is your interpretation of the 2nd amendment. The first part of it has to do with a well regulated militia. Look up Shays Rebellion on Wikipedia. It was a protest by former Revolutionary war soldiers and was eventually put down by the Massachusetts Militia. Hamilton was not alarmed, as you point out, but George Washington was. The 2nd Amendment was written after this rebellion. One could interpret it to mean that the right to keep arms is necessary to expedite the formation of militias to put down insurections threatening the Government. Just sayin'.

Trader-Scholar's picture

Retired. Don't Vote. Waste of time. If ever there was a time to overthrow the tyrany that is our federal gov't it was after the false flag operation that was 911. I was in the architectural field; the Uniform Building Code is about "life safety". The so-called events of 911 violate the UBC in that multi-story structures that could be demolished by fire could not be approved. Richard Gage is a San Francisco working to uncover this. The entities that have gotten away with this, so far, are the real powers. 

Yes, the Supremes have recently ruled that citizens can be armed. But to be an effective fighting force a citizen militia needs training and discipline. Catch-22. There was a legal case about this and to make a long story short........no way.

In Presser v. Illinois,  (1886), Herman Presser headed a German-American paramilitary shooting organization and was arrested for leading a parade group of 400 men, training and drilling with military weapons.....through the streets of Chicago as a violation of Illinois law that prohibited public drilling and parading in military style without a permit from the governor.

At his trial, Presser argued that the State of Illinois had violated his Second Amendment rights. The Supreme Court.......upheld the States' authority to regulate the militia and that citizens had no right to create their own militias or to own weapons for semi-military purposes.

 

Jean Lazard de Rotschild's picture

I thought Byron Wien worked for Blackstone, not BlackRock...

IamtheREALmario's picture

Uhu ... must be crop of Harvard grad Tylers they hired.

Zer0head's picture

there was a lot of incest between Blackrock and Blackstone bace in the eighties they even shared the Blackstone name for a while

Jean Lazard de Rotschild's picture

they fixed it :) kudos to tyler!