This is the time of year when we go off making predictions about the future.
Let me first say that here at Energy & Capital, we aren’t the type of prognosticators who run off and hide when our visions turn vicious. No, not us.
Here, we proudly stand behind what we say and take the stones of contempt and bile slung at us from the great unwashed.
In other words, let’s see if last year’s attempt at entrails-reading has paid off. On December 18th, 2012, I wrote five predictions for 2013:
Prediction #1
“Fed Fighters
Bernanke announced QE4 last week, saying he will buy $85 billion a month in government bond and mortgage purchases until unemployment drops below 6.5%.
Given our current job creation rate of 150,000 a month, the U.S. won’t drop below 6.5% unemployment until 2018…
That said, quantitative easing announcements are having a reduced and shorter-lasting effect on the market. And they continue to add to the national debt.
Prediction: 2.5% mortgage rates on the 30-year. Real estate prices climb 12% in 2013.”
I got the big picture right. Mortgage rates started the year at a low 3.3% and bounced around quite a bit, but they never fell below that again.
The Fed has seen diminished punching power. Right now, rates are at 4.4% and rising despite the continued monthly spending of $85 billion by the Fed.
The job creation rate has increased to 203,000, which is nothing to write home about.
Housing prices went up 12.72% on average through September – which is close enough for government work.
Prediction #2
“The Dragon’s Bounces
The overwhelming sentiment on China has been bearish for a few years now. As a contrarian, this is bullish. If we break that downtrend, I’ll be a big buyer.
Prediction: Shanghai 180 Index will hit 8,000.”
China did bounce back, but it was more turbulent than a straight line. The Shanghai 180 Index bottomed at 4,398 and rebounded to 5,239, where it is today. The chart shows a long, five-year pennant formation with higher lows and lower highs.
We bounced, all right – both ways. The index is worth keeping an eye on. That breakout to the upside is coming. If you like fundamentals, there is a lot of value out there in the BRICs.
Prediction #3
“Fiscal Cliff Relief Rally
We all know about the fiscal cliff by now. It’s a lot of fearmongering and finger-pointing among the liars and thieves who lead this country.
Any deal made over the next few months will cause a huge relief rally.”
The S&P 500 went from 1,398 to 1,813 – that’s one heck of a relief rally!
I also wrote:
“Prediction: Can gets kicked. The debt level will surpass $18 trillion by the end of 2013.”
According to the debt clock, the federal debt yesterday was $17,270,379,266,000. We aren’t at $18 trillion, but don’t worry – we have three weeks to go, and Congress is making a deal on the budget as we speak. We could still make it!
Prediction #4
“Prediction: Apple or Google will have an AI breakthrough in 2013.”
The list of artificial intelligence breakthroughs grows every day. One company broke the CAPTCHA code – those crooked words you type in the box to prove you are human.
Some robots are helping doctors with diagnostics. The Japanese put out another robot every quarter, and Microsoft’s Kinect uses AI for the Xbox.
There have been improvements. The question is, when AI really shows up, will good old human intelligence recognize it?
Prediction #5
“Prediction: No new highs for gun stocks in 2013. There will be gun control legislation. It won’t stop mass shootings.”
I couldn’t have been more wrong. Attempts at gun control went nowhere, but they did boost gun sales to record numbers. Sturm, Ruger & Co (RGR: NYSE) share prices doubled this year.
Sadly, I was right about the second part. Mass shootings haven’t stopped.
Next week, I’ll tell you what’s in store for 2014.
For profits,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
