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Blackstone's Byron Wien Unveils 10 Surprises (Non-Predictions) For 2015

Tyler Durden's picture




 

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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Mon, 01/05/2015 - 13:18 | 5624158 Divided States ...
Divided States of America's picture

If I were Byron, I would not be surprised if there was a nail gun aimed right at me...sometime in 2015

Mon, 01/05/2015 - 13:38 | 5624252 nope-1004
nope-1004's picture

When I saw #1, I stopped reading.  Would like to see rates rise, but lol.....

Mon, 01/05/2015 - 13:47 | 5624303 TruxtonSpangler
TruxtonSpangler's picture

Hillary wont even make it our of the primaries. Pocahantus Warren will clean her clock.

Mon, 01/05/2015 - 14:25 | 5624545 BaBaBouy
BaBaBouy's picture

Interesting, He Conspicuously Leaves Out GOLD. Probably Accumulating All They Can The #1 Story For Coming Years GOLD Standard Bull Market...

Mon, 01/05/2015 - 15:50 | 5624957 TruthInSunshine
TruthInSunshine's picture

...map of Israel...

...on his face.

Mon, 01/05/2015 - 15:55 | 5624983 TheReplacement
TheReplacement's picture

Sorry but Fauxahantus would probably get a bullet between the eyes if she ran and was beating Clinton. 

Mon, 01/05/2015 - 14:47 | 5624656 Obama LaForge
Obama LaForge's picture

When I saw Jeb Bush's name, I lol'ed.

Mon, 01/05/2015 - 16:32 | 5625148 Things that go bump
Things that go bump's picture

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. 

Mon, 01/05/2015 - 13:42 | 5624267 fauxhammer
fauxhammer's picture

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.

In other words, an innovative new twist on the old "Bank Holiday"

Mon, 01/05/2015 - 15:24 | 5624821 daveO
daveO's picture

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.  

Mon, 01/05/2015 - 17:24 | 5625360 ThroxxOfVron
ThroxxOfVron's picture

" 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.

Mon, 01/05/2015 - 19:00 | 5625691 SuperRay
SuperRay's picture

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...

Mon, 01/05/2015 - 14:14 | 5624461 sgt_doom
sgt_doom's picture

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?]

Mon, 01/05/2015 - 14:32 | 5624587 fuu
fuu's picture

Didn't Booz Allen get hacked around the same time HBGary did? Well before the whole Snowden leak thing.

Mon, 01/05/2015 - 14:19 | 5624505 KnuckleDragger-X
KnuckleDragger-X's picture

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.

Mon, 01/05/2015 - 13:15 | 5624148 The Most Intere...
The Most Interesting Frog in the World's picture

Fucking die already you old bastard.  

Mon, 01/05/2015 - 13:22 | 5624174 NotApplicable
NotApplicable's picture

I'm thinking that he died at least twenty years ago.

Mon, 01/05/2015 - 13:31 | 5624223 Vylahkinnen
Vylahkinnen's picture

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.

Mon, 01/05/2015 - 14:40 | 5624632 cheech_wizard
cheech_wizard's picture

Disney Animatronics are simply amazing these days, aren't they? :)

 

Mon, 01/05/2015 - 17:27 | 5625376 ThroxxOfVron
ThroxxOfVron's picture

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...

Mon, 01/05/2015 - 13:26 | 5624197 noben
noben's picture

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?

Mon, 01/05/2015 - 13:18 | 5624156 buzzsaw99
buzzsaw99's picture

god what a maggot

Mon, 01/05/2015 - 13:19 | 5624160 Creepy A. Cracker
Creepy A. Cracker's picture

"...they see Jeb Bush as a winner for them."

Ummm...  No.

They are blind.

Mon, 01/05/2015 - 13:33 | 5624232 actionjacksonbrownie
actionjacksonbrownie's picture

Sarah Palin FTW!

Mon, 01/05/2015 - 13:19 | 5624164 Bunga Bunga
Bunga Bunga's picture

15. Shut down the Interwebz. Install facism. Enslave.

Mon, 01/05/2015 - 14:17 | 5624492 sgt_doom
sgt_doom's picture

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 . . . .]

Mon, 01/05/2015 - 13:21 | 5624167 gmak
gmak's picture

Is it just me or does he look like the Sicilian in "The Princess Bride"? - right before drinking the poisoned wne.

Mon, 01/05/2015 - 13:23 | 5624182 pods
pods's picture

Inconceivable!

Mon, 01/05/2015 - 13:26 | 5624203 Dr. Engali
Dr. Engali's picture

I do not think that word means what you think it means.

Mon, 01/05/2015 - 14:21 | 5624510 KnuckleDragger-X
KnuckleDragger-X's picture

LOL

Mon, 01/05/2015 - 13:32 | 5624230 Toolshed
Toolshed's picture

ROFLOL!!! You are spot on dude!

Mon, 01/05/2015 - 13:25 | 5624189 Loucleve
Loucleve's picture

 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.

Mon, 01/05/2015 - 13:28 | 5624190 falak pema
falak pema's picture

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.

Mon, 01/05/2015 - 13:26 | 5624201 ukspreads
Mon, 01/05/2015 - 13:31 | 5624226 Toolshed
Toolshed's picture

Thanks for the comedy link. That Donald is always a real hoot!!!

Mon, 01/05/2015 - 13:33 | 5624231 ukspreads
ukspreads's picture

Maybe, maybe not, but did you even hear what he had to say about OPEC and the direction of oil....?

Mon, 01/05/2015 - 15:27 | 5624841 daveO
daveO's picture

Busting up OPEC is cheaper, for the west, than nuclear war with Russia!

Mon, 01/05/2015 - 17:54 | 5625474 Wahooo
Wahooo's picture

I like that. But what would israel say?

Mon, 01/05/2015 - 19:06 | 5625713 SuperRay
SuperRay's picture

Dude, NEVER link me to that incredible piece of scum! 

Mon, 01/05/2015 - 13:28 | 5624202 SillySalesmanQu...
SillySalesmanQuestion's picture

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...

Mon, 01/05/2015 - 13:28 | 5624207 overmedicatedun...
overmedicatedundersexed's picture

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.

Mon, 01/05/2015 - 13:28 | 5624208 NEOSERF
NEOSERF's picture

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...

Mon, 01/05/2015 - 13:30 | 5624218 Toolshed
Toolshed's picture

I could gather more actionable market info by divining the hidden meaning in used toilet paper.

Mon, 01/05/2015 - 13:33 | 5624238 noben
noben's picture

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.

Mon, 01/05/2015 - 13:36 | 5624242 Bell's 2 hearted
Bell's 2 hearted's picture

Sam Drucker?

 

(petticoat junction)

Mon, 01/05/2015 - 13:38 | 5624249 seek
seek's picture

Almost half of these have already happened.

Mon, 01/05/2015 - 18:00 | 5625491 mkhs
mkhs's picture

Yeah, but it is so hard predicting the future.

Mon, 01/05/2015 - 13:51 | 5624279 freedom123
freedom123's picture

"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/

Mon, 01/05/2015 - 13:45 | 5624286 hopefulbutwary
hopefulbutwary's picture

I feel he is right on # 14. I would never vote for a woman that tried to steal the White House furniture.

Mon, 01/05/2015 - 13:50 | 5624316 saveUSsavers
saveUSsavers's picture

big ARSEWHOLE in need of lamppost

Mon, 01/05/2015 - 13:49 | 5624320 Squid Viscous
Squid Viscous's picture

I predict there will be more Zio-lizards making self serving predictions in 2015

Mon, 01/05/2015 - 13:52 | 5624339 WTFUD
WTFUD's picture

Blackstone Blackrock BlackOps; Fink Again!

Mon, 01/05/2015 - 13:52 | 5624341 corbeau
corbeau's picture

Amazing! Multiply all "predictions" by -1, and you will probably get the truth.

Mon, 01/05/2015 - 13:59 | 5624378 WTFUD
WTFUD's picture

Nothing on the swathes of Housing Stock they can't shift?

Mon, 01/05/2015 - 14:20 | 5624512 withglee
withglee's picture

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.

Mon, 01/05/2015 - 15:29 | 5624854 daveO
daveO's picture

get something done in Washington

Code for bigger gov., more slavery.
Mon, 01/05/2015 - 14:21 | 5624525 Chad_the_short_...
Chad_the_short_seller's picture

fuck this clown

Mon, 01/05/2015 - 14:28 | 5624557 Ricky Roma
Ricky Roma's picture

Boring Weiner, those are for shit recs.  Even if they are made up.  None of that empty rhetoric will happen.

Mon, 01/05/2015 - 14:32 | 5624586 Longarm
Longarm's picture

Hell can wait....

Mon, 01/05/2015 - 15:06 | 5624743 Ewtman
Ewtman's picture

The biggest surprise will be when the bubble bursts...

 

http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...

Mon, 01/05/2015 - 15:19 | 5624818 Mike Honcho
Mike Honcho's picture

Scratch that one off my resolutions list: ask an 82 year old about the future of cyber-terrorism and internet retail.

Mon, 01/05/2015 - 15:26 | 5624840 yogibear
yogibear's picture

"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.

Mon, 01/05/2015 - 15:32 | 5624869 EcoJoker
EcoJoker's picture

My 2014 prediction came true already.  This guy HAS lost enough hair to completely resemble a penis head.

Mon, 01/05/2015 - 16:07 | 5625041 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

In-CON-THIEVE-able...!!!

Mon, 01/05/2015 - 16:10 | 5625049 YouThePeople
YouThePeople's picture

It looks like a crossbreed of Lloyd & Gollum.

Mon, 01/05/2015 - 17:47 | 5625449 Wahooo
Wahooo's picture

15. The Saudis behead more than 100 people.

Mon, 01/05/2015 - 22:35 | 5626434 rex-lacrymarum
rex-lacrymarum's picture

90% of the market-related stuff is consensus opinion - how can any of it be called a "surprise"? OK, it would probably surprise me....

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