By: Dennis Kneale
CNBC Media & Technology Editor
A funny thing happened on the way to Armageddon.
One year ago, the world braced for total economic collapse. We writhed in shock and fear in the wake of Bear Stearns-Lehman Brothers-AIG-Merrill Lynch-Wachovia-Countrywide et al.
The experts declared, "Game Over". The Wall Street model was dead and profits would take years to recover; the consumer was exhausted; credit markets were frozen: and the economy would languish for years to come. As for mergers & acquisitions and hedge funds and the private equity business: fuhgeddaboudit.
They were, all of them, just wrong, wrong, wrong. Our economy is healing more quickly than legions of pixel pundits ever believed possible. I’m sorry to gloat, guys, but while many so preached doom a year ago, I was sellin’ the hope.
Last November, I posted nine predictions for the new year, most of them in the searching-for-hope category. One year later, by my reckoning, I was right, more or less, on eight out of nine (see below). Now that I’m feeling a little cocky, here's my big-picture predictions for 2010.
1. Stocks.
The Dow 30 will have another volatile year, dipping below 10,000 a time or two before closing year-end at 11,650.
2. Economy.
We won’t have a second-dip recession; instead GDP will surprise the experts again by growing 3.0 percent or better for the full year.
3. Job Market.
Growth returns by the start of the second half of the year and a robust spring-back in hiring will startle the doubters.
4. Inflation.
Inflation smation. It will run below 2.0 percent for most of the year.
5. General Electric.
GE [GE 15.44 0.03 (+0.19%) ] will spin out or sell off a few huge businesses to focus mainly on heavy-metal infrastructure for the developing world. Goodbye light bulbs and, maybe, medical-imaging; hello, partial-stake spin or IPO for GE Capital. (GE, of course, is the parent company of CNBC and CNBC.com ... for now)
6. Citigroup.
Citigroup [C 3.35 0.06 (+1.82%) ] will cease to exist. Breakup artists will descend to chop it and sell off the pieces.
7. Goldman Sachs.
Wall Street powerhouse Goldman [GS 163.97 0.34 (+0.21%) ] will pump out even higher net income in 2010 than it did in 2009, and move early to buy out the preferred stake it sold to Warren Buffett at the height of the Great Meltdown of late ’08.
Current DateTime: 11:25:50 25 Dec 2009
LinksList Documentid: 34134938
Autos: Two Out Of Three Ain't Bad
Consumers: Forever Frugal
Markets: Uncertain For Sure
Media: Content (And Consumers) King
Real Estate: Still On The Mend
Sports: Less Luxury, More 3-D
Tech: Go Microsoft, Goodbye Twitter
The Big Picture: Big (Positive) Surprises
8. Health Care.
Obamacare will stall on a revolt by middle-class taxpayers, once they realize this trillion-dollar entitlement would also cover 15 million illegal aliens.
9. Obama.
The president will suffer a setback in the mid-term elections. The Democrats will lose seats in both the House and Senate. The good news—this will force Bam back to the middle, and that would help the markets.
10. Taxes.
The Dems’ mid-term spanking and a still-mending economy will force Obama to leave in place a couple of the Bush tax cuts that otherwise expire at the end of 2010. My bet—the lower rates on capital gains and dividends
1 comment:
Great video
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