Monday 3 January 2011

That's Enough 2011 Predictions

Feeling uninspired (OK, feeling hung over) I ran a highly scientific canvass around the New Year table of family & friends, who came up with some interesting stuff. Putin will not install himself as candidate for the 2012 presidential election. House prices to continue rising in London zones 1 & 2, falling almost everywhere else in the UK. England to qualify for Euro2012 - I detected a hint of sarcasm with this one. Referendum to go against AV: coalition breaks down in consequence. Mrs T to shuffle off.

Have to say, the Putin prediction scores points for its attention-grabbing quality. Thus bestirred, nay, provoked, time to re-engage my own brain for first time in 10 days.

(1) Gold - yes, you guessed - to continue its year-on-year gains, in £, $ and €. Do I hear snorts of derision from the back ? Come on, look at this and tell me you'd hold a short position for the next 12 months. That said, there will be more nice in-and-out (or out-and-back-in, in my case) opportunities, which are easy to do in this commendably liquid market with its tight bid-offer spread and low dealing costs.

(2) Oil to be in 3-digit territory by year-end (in $, of course) - and to stay there forever. It will cross the 100 line earlier than that, but there is scope for some dithering on either side initially. (I realise that, although I can be proved wrong about this 12 months from now, I cannot be proved right ...) Cowardly caveat: a combination of second-leg global recession in 1H11 plus absence of strife in Caucasus / Middle East / Nigeria etc could delay the timing.

(3) UK rioting bad enough to cause backpeddling on Police numbers, but not enough to force fundamental retreats on other policies.

(4) A big & fairly brutal Cabinet reshuffle, to distract Con and LibDem backbenchers. There are so many cabinet members not of Cameron's generation, it won't be hard to unblock a few choice beds. Huhne to replace Cable. (Actually this may be wishful thinking on my part - anything to get Huhne out of Energy - but is there a suitably savvy replacement anywhere in Parliament ?)

(5) England to win the 6 Nations, then reach yet a third World Cup final on the trot.



Budgie said...

Now that all 3 have pronounced, I will throw my ha'pence into the ring too.

1. Coalition to survive drubbing at locals and other pointless political shenanigans, like Cameron becoming leader of LibDems.

2. Cameron to fail to cut where he should, will spend where he shouldn't and will continue to hand power and our cash over to the EU and the Eurozone. Cameron finally revealed to even the most bone-brained Tory supporter as worse than useless.

3. Inflation 4% - 5%

4. FTSE to 6700 by June, then wobbling about without significant gains to year end.

5. House prices off by 10%.

6. Bank rate held at 0.5% for most of year, rising only towards the end to 1%

7. Euro - 50% chance of some form of break-up or government collapse under the weight of imposed austerity: Spain to be biggest problem because of its size. Widespread civil unrest. Will affect UK.

8. Man made CO2 responsible for global warming finally accepted as a fraud. Politicians jailed for their CAGW incompetence (actually that's just wishful thinking).

9. GDP up about 2% which, with inflation of 4%, means shrinkage again.

10. Unemployment up - resulting in civil unrest.

11. Immigration up - resulting in civil unrest.

12. Some form of major political storm (eg NK invades SK; China invades NK; Israel bombs Iran; Cameron invades Ivory Coast; Australia found to have won Ashes after all).

13. Ed Millidross - well who cares anyway?

14. Winter to be severe into January, February and March. To cost £billions.

15. Gold to $1600/oz.

16. Oil to $120/ barrel.

Philipa said...

Wishing BQ and all here a very happy new year.

andrew said...

Sticking to 6

1. Euro to survive

No actual Spanish/ Portuguese defaults, however much fear and rumor.

2. Met office predicts warm, drier summer than average

Wet summer - or the reverse of whatever the met office says

3. Market volatility remains 'high'.

Daily volatility > 20x net movement over the year.
Year end ~6800 ish
high ~7500, low ~5200
Sudden movements on thin news.
I think this is due to the growth of HFT.

4. No trade wars

Not between China and the US at least

5. Inflation stays 'high', interest rates up

Inflation stays about 3-3.5%
Base rate increases to 1%

6. Government does not actually make expected savings

Balanced by higher tax receipts mostly due to higher inflation.

No. 2 is a safe bet.

Nick Drew said...

budgie, andrew - we like the ones with numbers attached: thanks for coming to the party !

we like friendly greetings as well, Philipa !

Steven_L said...

1) TUC March demo gets over 250k of usual suspects out, but strikes are a flop.

2) Sterling continues it's decline against aussie dollar ending year at 1.30 or less.

3) Government U turn on housing benefit as tory MP's offices fill up with irate BTL landlords.

4) Euro/corporate debt shocks don't move markets much as central banks get on top of things quick and hit the liquidity pedal. FTSE 7,000 in 2011.

5) Silver hits $50.