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Blackstone's Byron Wien Unveils 10 Surprises (Non-Predictions) For 2015
While the predictions of Blackstone's Byron Wien (born in 1933) have been all over the place in the last few years, they nevertheless provide some color on just what the mainstream does not believe... This is the 30th year Byron has given his views on a number of economic, financial market and political surprises for the coming year. From "our luck running out on cyberterrorism" to "shock and awe no longer working in Japan", Wien's non-predictions range from The Fed to China and from Oil to Hillary Clinton...
Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.
Byron’s Ten Surprises for 2015 are as follows:
1. The Federal Reserve finally raises short-term interest rates, well before the middle of the year, encouraged by the improving employment data and strong Gross Domestic Product growth. The timing proves faulty, however, as the momentum of the economy has begun to flag and a short-term slowdown has started. The end of monetary accommodation and rising rates precipitate a correction in equities. Long-term Treasury rates stay where they started and the yield curve flattens.
2. Our luck runs out on cyber terrorism. Hackers invade the personal and corporate accounts of a major money center bank and the Federal Reserve orders the institution to suspend transactions for five business days while the accuracy of its balances is verified. Various government departments and agencies are mobilized to deal with the problem caused by the hackers having proved to be more skillful than our corporate cyber security efforts.
3. The year-end 2014 rally in United States equities continues as the market rises for a strong performance in 2015. A growing economy, fueled by housing and capital spending and favorable earnings, enables the Standard & Poor’s 500 to increase 15% during the year, outperforming equities in most major industrialized countries throughout the world.
4. Mario Draghi finally begins to expand the balance sheet of the European Central Bank aggressively by buying sovereign debt, mortgages and corporate bonds. In spite of this expansion, Europe falls back into a serious recession. Germany is particularly weak as reduced demand from various trading partners has a major impact on its exports. The European policy makers fail to embrace the one option, fiscal spending, that could turn the economy around, and European stocks decline. Politically, Europe moves dangerously toward the right.
5. Shock and awe no longer works in Japan. The recession which began in the third quarter of 2014 continues throughout 2015 in spite of further fiscal and monetary stimulus and the suspension of the second planned sales tax increase. The Nikkei 225 is flat for the year in yen and down in dollars.
6. China reports that it is no longer growing at 7% and that more fiscal and monetary stimulus is needed to grow at even 5% and to prevent a hard landing. It also acknowledges that it must rebalance the economy toward the consumer and away from credit-based investing in state-owned enterprises and infrastructure. What money is spent on infrastructure is focused on air, water and ground pollution, not roads and housing. A lower rate of job creation leads to protests but they are contained without excessive violence.
7. The drop in the price of oil finally has an impact on Iran. The country was dependent on its sale of crude to offset the impact of sanctions. The economic weakness resulting from the unexpected decline in oil finally forces a conciliatory attitude on the part of its nuclear negotiators. Pressure to cease nuclear weapons development comes from the Iranian people as well, as they seek more economic opportunity. An agreement to roll back its weapons program is greeted positively throughout the region and world equity markets rally briefly on the news.
8. Brent slips into the $40s. The low price of crude oil, which continues throughout the first part of the year, has a major impact on Russia. A peace settlement with Ukraine is signed, giving Eastern Ukraine substantial autonomy but guaranteeing the sovereignty of the rest of the country. President Putin seems to be trying to win back the respect of the international community as the country reels from its economic problems, but the Russian citizenry finally turns on him. His approval rating plummets and he resigns by year-end. During the second half of the year, West Texas Intermediate and Brent crude are both above $70, as emerging market demand continues to increase.
9. The year-end 2014 meltdown in the high yield market, as a result of the collapse in the price of oil, creates a huge buying opportunity. The spread between high yield and Treasurys is cut in half, and high yield becomes the best performer of the various asset classes as the U.S. economy continues to grow with no recession in sight.
10. The Republicans decide to position the party as the one that can get something done in Washington. They argue that President Obama was ineffective in his first six years, but when they got control of both the Senate and the House, legislation was passed. The Keystone pipeline finally is approved, as well as minor tax code revisions and even some changes in immigration policy. The Republicans are determined to strengthen their position with Hispanics in 2016. They want desperately to hold the nation’s highest office and they see Jeb Bush as a winner for them.
“Every year there are always a few Surprises that do not make the Ten either because I do not think they are as relevant as those on the basic list or I am not comfortable with the idea that they are ‘probable.’”
Also rans:
11. Water becomes the central environmental issue of 2015, eclipsing carbon-caused air pollution. While a shortage of water has always been a potential problem in the Western United States, it becomes a source of considerable tension in India and China, where large parts of the population do not have safe drinking water on a consistent basis.
12. Internet commerce runs into trouble. Established hotels push legislators to make Airbnb pay the same taxes and fees that they are required to charge customers. Uber is asked by local authorities to prove that its drivers have commercial insurance to protect passengers. The stocks affected decline sharply.
13. Brazil provides an emerging market favorable surprise. President Dilma Rousseff abandons some of her long-held socialist ideas and moves to the center. She introduces a number of business-friendly policies and the economy improves. It is helped more than it is hurt by the drop in the oil price. Brazil becomes a favorite of emerging market investors once again.
14. I liked this one, but I didn’t have more than 50% conviction about it. Hillary Clinton decides not to run for President. She fears that Jeb Bush would siphon off some of the votes of Hispanics, who substantially voted for Obama. Many liberals are disenchanted with Clinton and may not vote for her. She wants to be the first woman President but she doesn’t want to lose.
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If I were Byron, I would not be surprised if there was a nail gun aimed right at me...sometime in 2015
When I saw #1, I stopped reading. Would like to see rates rise, but lol.....
Hillary wont even make it our of the primaries. Pocahantus Warren will clean her clock.
Interesting, He Conspicuously Leaves Out GOLD. Probably Accumulating All They Can The #1 Story For Coming Years GOLD Standard Bull Market...
...map of Israel...
...on his face.
Sorry but Fauxahantus would probably get a bullet between the eyes if she ran and was beating Clinton.
When I saw Jeb Bush's name, I lol'ed.
No member of the Bush clan must ever be allowed to hold that office again. Same for Clinton, Kennedy (we might have ended up with Teddy if it weren't for that unfortunate incident at Chappaquiddick), Roosevelt, etc. Simply being a member of a family who has produced a president should disqualify a candidate in the eyes of voters. We'll end up worse off than the Brits, stuck with several expensive and useless clans of royals expecting to be supported in the manner to which they have become accustomed and demanding special treatment and privileges.
In other words, an innovative new twist on the old "Bank Holiday"
Right!!! They have to lie about everything today. At least he warned it'd be a major money center bank. They pulled the same thing on BofA, a few yrs. back. Called it technical difficulties.
" Federal Reserve orders the institution to suspend transactions for five business days while the accuracy of its balances is verified. "
'accuracy of it's balances'. Bwahahahaha!
Counterparty Risk to da fucking Moon -one of Jupiter's fucking moons!
BANK RUNS. BANK HOLIDAYS.
FDIC go splat.
It will be raining men in Manhattan.
Predictions? or wish list? I don't know this guy or his track record, but on the surface I'd say he's nuts if he thinks things are going to get better and the fed will be able to raise rates. If they raise rates the whole system will implode even faster than it already will. Next...
Why?
Byron is just staying on script.
Remember, Blackstone Group, along with Veritas Capital and AIG profited mightily from the events of 9/11/01, and were intimately connected according to the financial trails.
[FYI: Blackstone Group founded with old Rockefeller money, just as the second largest private equity/leveraged buyout firm --- after BG --- is the Carlyle Group, founded by old Mellon money and owner of number one intel private contractor, Booz Allen. Funny how that always works out that way?]
Didn't Booz Allen get hacked around the same time HBGary did? Well before the whole Snowden leak thing.
I don't agree with all of them but I can at least understand his reasoning, unlike most of the butt-clowns on CNBS. I think his problem is too much faith in people not making bad decisions based on greed.
Fucking die already you old bastard.
I'm thinking that he died at least twenty years ago.
Oh, he died a couple of years ago. Had a big stroke. What you now see is just a very elaborate CG version of himself. They made a very accurate scan of him - with a lightstage and 16k micro-tissue scans, bloodflow and hi-def wrinkle maps and all that futuristic shit. Dude, I know you think that sounds crazy. But...it's not.
Disney Animatronics are simply amazing these days, aren't they? :)
Possible.
...Like when Dante is walking around Purgatory with Virgil and see an Archbishop he knows that is still alive upstairs.
Just a body is walking around piloted by something infernal, the dead soul already doing time below...
For a second I thought he had snuffed it, when I saw that jpg of his, and his name.
Why do I think that he's more likely to make or sell nailguns, than to use them?
god what a maggot
"...they see Jeb Bush as a winner for them."
Ummm... No.
They are blind.
Sarah Palin FTW!
15. Shut down the Interwebz. Install facism. Enslave.
Believe that's already been done, citizen!
After all, there's a most definite reason the neocons attack Wall Street multi-generational lackey, President Obama, as a socialist, instead of ever mentioning the (Rockefeller-owned) oil companies his step dad worked for in Indonesia, and what his mother was about as an anthropologist there, doing surveys in that country, then those individuals who were surveyed as left-leaning or anti-American, would find the death squads on their doorstep.
[FYI: Project Camelot, Project Simpatico, Project . . . .]
Is it just me or does he look like the Sicilian in "The Princess Bride"? - right before drinking the poisoned wne.
Inconceivable!
I do not think that word means what you think it means.
LOL
ROFLOL!!! You are spot on dude!
Shock and awe no longer works in Japan. Really? Thats news?
Bill Gross at Reuters - Fed May not raise rates at all in 2015. http://www.reuters.com/article/2015/01/05/us-janus-outlook-gross-idUSKBN0KE1DG20150105?feedType=RSS&feedName=businessNews
Politically, Europe moves dangerously toward the right. Dangerously if your an elite globalist. Not so much if your a citizen.
Tell me what wine Mr Wien drinks and I'll tell you if he speaks the truth about 2015!
Remember the Court Jester ?
"The pellet with the poison's in the vessel with the pestle, and the chalice from the palace has the brew that is true."
As his first name is Byron, I'm sure he loves to play courtier.
Watch this peoples
https://www.youtube.com/watch?v=5wj_mVC9RYg
Thanks for the comedy link. That Donald is always a real hoot!!!
Maybe, maybe not, but did you even hear what he had to say about OPEC and the direction of oil....?
Busting up OPEC is cheaper, for the west, than nuclear war with Russia!
I like that. But what would israel say?
Dude, NEVER link me to that incredible piece of scum!
These are not "predictions", but how the old, rich, white-haired(or no hair) guys will try to make happen.
Die already you useless fossils...
putin would never never take out saudi oil ports thru proxy terrorists out of Iran, never happen he likes the kings sandy kingdom..or not.
add that to things that must happen if oils drops and stays down.
He's wrong on 2,4 and 14 but basically right on ...state funded cyber terrorism will probably be the big issue in the next couple years...once the less powerful central banks realize they can't win a game of monopoly with out Park Place and Marvin Gardens, they will start paying private hackers to take down the economies of rivals...
I could gather more actionable market info by divining the hidden meaning in used toilet paper.
If Iran truly needed nukes, they'd get them from their neighbor up north. Since they have a massive interest to keep Tehran from falling.
And don't forget that mid-size countries can always use the "Poor man's nuke": Bio-weapons. Not chemical WMDs or Hacking, but bio-WMDs. At some point those arrogant asses in DC, NY, Riyadh, Tel Aviv and London, with their heads up their ass when not stuck in the imperial 1800s, will learn that bitter lesson. I suspect.
Sam Drucker?
(petticoat junction)
Almost half of these have already happened.
Yeah, but it is so hard predicting the future.
"President Putin seems to be trying to win back the respect of the international community as the country reels from its economic problems, but the Russian citizenry finally turns on him. His approval rating plummets and he resigns by year-end. "
That could happen much faster, don't you think? I mean... look how RUB is crashing and ruskies fighting for living...BTW RUB is back to 60-ties (60,42)
http://www.forexpf.ru/chart/usdrub/
I feel he is right on # 14. I would never vote for a woman that tried to steal the White House furniture.
big ARSEWHOLE in need of lamppost
I predict there will be more Zio-lizards making self serving predictions in 2015
Blackstone Blackrock BlackOps; Fink Again!
Amazing! Multiply all "predictions" by -1, and you will probably get the truth.
Nothing on the swathes of Housing Stock they can't shift?
10. The Republicans decide to position the party as the one that can get something done in Washington.
The only thing I want them to get done in Washington is to shut the place down. Fat chance.
get something done in Washington
Code for bigger gov., more slavery.fuck this clown
Boring Weiner, those are for shit recs. Even if they are made up. None of that empty rhetoric will happen.
Hell can wait....
The biggest surprise will be when the bubble bursts...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
Scratch that one off my resolutions list: ask an 82 year old about the future of cyber-terrorism and internet retail.
"1. The Federal Reserve finally raises short-term interest rates"
Goes to show you how out of touch this guy is with reality. The Fed can't and won't raise rates.
My 2014 prediction came true already. This guy HAS lost enough hair to completely resemble a penis head.
In-CON-THIEVE-able...!!!
It looks like a crossbreed of Lloyd & Gollum.
15. The Saudis behead more than 100 people.
90% of the market-related stuff is consensus opinion - how can any of it be called a "surprise"? OK, it would probably surprise me....