Predictions for 2013

Posted by Jeff Carter
on December 28th, 2012

Starting to see the annual predictions for 2013 crop up everywhere. They are interesting but usually never correct. I certainly missed on a lot of predictions last year. How on earth did Obama get re-elected?! When I look at things, I don’t make single event predictions, but more mega trends. Series of small events lead to market effects that influence people’s behavior.

Anyway, here goes:

1. Flight of capital from public to private marketplaces as government regulation gets more intrusive.

2. Political gridlock causes people to abandon interest in politics. They become tone deaf to any politician. Obama goes on The Food Network to reach people. Makes peanut butter and pickle sandwiches. That becomes a Tumblr blog and Republicans get blamed for obesity crisis.

3. Debt crisis begins to manifest itself not at the national level, but at the local level. Local services are cut starting with things like libraries. No one cares. Meredith Whitney smiles.

4. GDP growth is less than 2% because of tax increases, and problems with worldwide debt markets. But, we probably won’t go negative so economists won’t call it a recession. Of course, we haven’t really exited the first one in reality, but based on data we have.

5. A huge crop of baby boomlets graduates from college this year. They won’t have jobs, so they will find a way to start their own companies while being baristas.

6. The migration of people in America from high tax, high regulated states to lower tax, lower regulated states will increase.

7. Home values in Washington DC will increase 1,076%, but stay the same in the rest of the country.

8. REITs will get overbuilt with low interest rates and demand for rentals. That’s the next real estate collapse building.

9. HFT traders will cause another flash crash, but then will band together to cause the first flash rally ever. Individual investors and CALPERS will sell at the bottom. Congress will have an investigation. However, most of them will have bought the bottom.

10. More porn than ever will be downloaded and it will go to one IP address in North Korea.

11. Boehner and Obama will play golf once at Congressional. They will argue over handicaps. Obama will tell Boehner he gets a stroke a hole for free. Harry Reid will get lost going there.

Hope you have a great 2013. What are your predictions?

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