Friday, January 15, 2010

11 Shockers for 2010

(Editor's Note: Paul Schatz, President of Heritage Capital, LLC, in Woodbridge, will be contributing to Fi$callyFit every Friday. Read his biography here)

Each year, I usually release a small list of off the wall things that I think have some chance of occurring. Some shockers are repeats. Obviously, I hope that all of the less than positive ones don't happen. This is not my forecast for 2010, which I hope has a better chance of coming true!
In 2008, I said the whole Dubai experiment would fall apart along with private equity and the dollar would embark on a new bull market. Not bad, right? But I also called for a new bull market in stocks to begin in the US and Japan, the Euro to see 100 and then countries would start pulling out.

Last year, I predicted a 50% stock market rally from some low, another private equity collapse, sovereign debt default and a 10% savings rate in the US. Non-financially, I said families would begin moving back to the major city centers and larger suburbs and away from rural life. I coupled that with a sharp rise in new network television comedies and the return of family importance.

For 2010, here's my list in no particular order:

1 - At least one major European country defaults on its debt

2 - The Euro sees a country leave, causing further strains in the union

3 - A municipal bond crisis unfolds in the US

4 - Heading into its third decade of deflation and economic ruin, the graying and flat population of Japan begins to open its borders to immigration and remilitarizes, hoping to shock and stimulate their economy

5 - Aided by a resurgent economy, the Democrats retain both houses and Congress and super majority in the Senate

6 - Tim Geithner resigns from the Treasury citing personal reasons to spend more time with his family and embark on a career in the private sector, payback to him for having helped Wall Street "swindle" hundreds of billions from taxpayers.

7 - Treasury bonds end the year as one of the top performing assets

8 - Citibank is broken up and sold off in pieces and loses its name

9 - Goldman Sachs goes private since the benefit of being public, added capital and huge leverage is no longer there

10 - Citizens of Iran rise up against their government and begin a revolution. Iran responds by attacking Israel in an ill-conceived attempt at rallying public support behind a collapsing government.

11 - The stock market peaks during the third quarter and a new bear market begins.

12 – The Jets win the Super Bowl. Hey, I can dream! (actually, it’s San Diego)

Please feel to email me with any questions or comments at

Until next time…

Paul Schatz

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