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Predictions for 2015


AzCactus
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With 2014 just about over and all three US indexes up---what are everyone's predictions for 2015 for the S&P 500/Nasdaq/Dow/Oil

I am aware of the futility of this exercise but thought it might be interesting nonetheless.

 

HAPPY HOLIDAYS :)

 

S&P 500-2200

DJIA-19000

Nasdaq-5000

Oil-70

 

 

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My predictions for 2015: 

 

The western world descends into civil war, and all of the gold investments that were supposedly a "hedge" on inflation/money-printing/chaos turn out to be absolutely worthless because there are no functioning exchanges, and all of the white-collar folks with physical gold have it stolen by the smarter folks who invested in guns, bullets, and water purifiers.  Just kidding....

 

My prediction is little to no change in the major averages...just a volatile year and an elevated VIX.

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1. China and the USA will have far better relationship benefiting both.

2. Putin will get off his high horse or at least put on a shirt. The Ukraine issue will be resolved.

3. India will become a better place for many of its people including plenty of officials.

4. CoBF will have the best thread. EVER.

5. Middle East will calm down significantly after agreement by Qatar to support Saudi Arabia/Egypt.

6. 50% of my portfolio will be in oil companies.

6. All will be good. Other than Europe.  Cause Europe is f*cked.

 

Happy Holidays! Love and Kisses to All!

 

 

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Japan could finally crash when they run out of people to borrow cheaply from. The moment they cannot roll over debt at those low rates, or inflation spikes up there (yen is already falling hard in the past 2 years) is when it will collapse. Pensions will be wiped away. I really hope it will be a warning sign to the rest of the western world.

 

 

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Mark this down because gold is going to $3,000 per ounce!  Invert invert invert right?

 

cheaper oil -> lower inflation -> gold going up?!?! does it this make sense? I don't think so

 

That's why it's going up because no one is expecting it to!  Just like how no one expected oil to drop 50% this year.

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Japan could finally crash when they run out of people to borrow cheaply from. The moment they cannot roll over debt at those low rates, or inflation spikes up there (yen is already falling hard in the past 2 years) is when it will collapse. Pensions will be wiped away. I really hope it will be a warning sign to the rest of the western world.

 

 

 

Warning?  It will be too late by that point.  When Japan finally cracks, yields in the Western countries will shoot up, preventing countries from rolling over debt and/or slashing budgets to support higher debt service payments.  I can't feel sorry for the Japanese though...their issues are in large part due to population growth (or lack thereof), which could have been resolved by allowing some immigration, but the Japanese are too rascist to do so.  They are going to get what they deserve....

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Oil goes back to $80-90, well capitalized oil related stocks recover at least half of their losses

US/EU continues to mismanage relation with Russia

Russia stabilizes and forms closer tie with China

S&P resumes its rally, US stocks continue to outperform the rest of the world

The average joe capitulates and begins to chase into market's last parabolic phase going into 2016

As Chinese property speculation comes to an end, money flows into its dormant stock market, Japan 2013 style

US interest rates stay in the current range or going even lower even as the Fed begins to change its language and prepares to raise rate

Industrial/agro commodities play catch up with the stock market

Doomsayers keep getting poorer

 

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Japan could finally crash when they run out of people to borrow cheaply from. The moment they cannot roll over debt at those low rates, or inflation spikes up there (yen is already falling hard in the past 2 years) is when it will collapse. Pensions will be wiped away. I really hope it will be a warning sign to the rest of the western world.

 

The BoJ just buys the debt, problem solved. Every foreigner selling stuff in japan will just shy away and leave marketshare for the japanese companies. The Japanese economy is getting back on track and finally they get GDP growth. (In a weaker Yen, but who cares?)

At that point the Yen stabilizes and everybody is happy.

 

I didn`t want to post in this thread, but i am bored so here are my predictions: (But i don`t put my money where my mouth is here, so who cares?)

 

S&P500      -> up to 2200 and then back to 1800 and up again to the end of the year.

Oil              -> down to <40$ where it bounces around and at the end of the year it will go up again to around 65$.

Gold          -> down, up and down again, will end the year below 1100$.

10y Bond Yields -> Up to 2.6-2.8% and then down again, will end the year around 2.5%

 

Deflation will come to europe until Super Mario starts the biggest QE europe has ever seen. As a consequence the €/$ will fall to parity.

 

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ECB does full blown targeted stimulus while Fed starts to tighten.  Greece leaves the EU and no one cares.  Dollar continues to strengthen in first half of year eventually stimulus and weak euro lead to actual european growth.  Impressive gains in constant currency, decent gains with currency factored in.  Wisdomtree blankets financial media with adds for HEDJ. 

 

Kinder Morgan buys Williams, and Spectra Energy.  People start calling Richard Kinder, "commodore."

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Japan could finally crash when they run out of people to borrow cheaply from. The moment they cannot roll over debt at those low rates, or inflation spikes up there (yen is already falling hard in the past 2 years) is when it will collapse. Pensions will be wiped away. I really hope it will be a warning sign to the rest of the western world.

 

The BoJ just buys the debt, problem solved. Every foreigner selling stuff in japan will just shy away and leave marketshare for the japanese companies. The Japanese economy is getting back on track and finally they get GDP growth. (In a weaker Yen, but who cares?)

At that point the Yen stabilizes and everybody is happy.

 

I didn`t want to post in this thread, but i am bored so here are my predictions: (But i don`t put my money where my mouth is here, so who cares?)

 

S&P500      -> up to 2200 and then back to 1800 and up again to the end of the year.

Oil              -> down to <40$ where it bounces around and at the end of the year it will go up again to around 65$.

Gold          -> down, up and down again, will end the year below 1100$.

10y Bond Yields -> Up to 2.6-2.8% and then down again, will end the year around 2.5%

 

Deflation will come to europe until Super Mario starts the biggest QE europe has ever seen. As a consequence the €/$ will fall to parity.

I dont think it works that way. That would cause inflation. Your basicly saying, print yourself out of the whole mess!

 

That still leaves that they get only half their spending from income, other half has to be borrowed. I think a quarter of their spending is just servicing debt. If inflation goes up, interest rate would go up. So that means and even bigger hole in their budget. And given that debt is so high, and their budget deficit is so enourmous, they would have to print large amounts of yen. A few % rise in inflation would be a disaster and make the whol fragile structure collapse.

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I dont think it works that way. That would cause inflation. Your basicly saying, print yourself out of the whole mess!

 

That still leaves that they get only half their spending from income, other half has to be borrowed. I think a quarter of their spending is just servicing debt. If inflation goes up, interest rate would go up. So that means and even bigger hole in their budget. And given that debt is so high, and their budget deficit is so enourmous, they would have to print large amounts of yen. A few % rise in inflation would be a disaster and make the whol fragile structure collapse.

 

Getting inflation is the target of Abenomics, without inflation they can`t inflate their debt away in the long run. Its called financial repression and was done by the UK in the past century.

They are not forced to borrow their money long term, when rates go up they can just finance this with short term debt. And short term rates are under full control of the BoJ.

 

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I dont think it works that way. That would cause inflation. Your basicly saying, print yourself out of the whole mess!

 

That still leaves that they get only half their spending from income, other half has to be borrowed. I think a quarter of their spending is just servicing debt. If inflation goes up, interest rate would go up. So that means and even bigger hole in their budget. And given that debt is so high, and their budget deficit is so enourmous, they would have to print large amounts of yen. A few % rise in inflation would be a disaster and make the whol fragile structure collapse.

 

Getting inflation is the target of Abenomics, without inflation they can`t inflate their debt away in the long run. Its called financial repression and was done by the UK in the past century.

They are not forced to borrow their money long term, when rates go up they can just finance this with short term debt. And short term rates are under full control of the BoJ.

yeah but interest rates go up with inflation. And since they are so extremely levered, if that happens, the hole in their budget becomes bigger and bigger. They spend twice as much as comes in already, and one quarter of that is interest. So if interest doubles, suddenly they are screwed. They would need to borrow more, and more inflation will only widen that budget gap, untill there is no other way besides hyperinflation or default.

 

What you are saying is possible with the US. But not with Japan. The US has a small budget deficit, and debt isn't so massive yet. I mean sure there is some small chance things will go alright. But there is a reason they are rotating through ministers of finance. And one even had a panic attack after looking at the books.

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I dont think it works that way. That would cause inflation. Your basicly saying, print yourself out of the whole mess!

 

That still leaves that they get only half their spending from income, other half has to be borrowed. I think a quarter of their spending is just servicing debt. If inflation goes up, interest rate would go up. So that means and even bigger hole in their budget. And given that debt is so high, and their budget deficit is so enourmous, they would have to print large amounts of yen. A few % rise in inflation would be a disaster and make the whol fragile structure collapse.

 

Getting inflation is the target of Abenomics, without inflation they can`t inflate their debt away in the long run. Its called financial repression and was done by the UK in the past century.

They are not forced to borrow their money long term, when rates go up they can just finance this with short term debt. And short term rates are under full control of the BoJ.

yeah but interest rates go up with inflation. And since they are so extremely levered, if that happens, the hole in their budget becomes bigger and bigger. They spend twice as much as comes in already, and one quarter of that is interest. So if interest doubles, suddenly they are screwed. They would need to borrow more, and more inflation will only widen that budget gap, untill there is no other way besides hyperinflation or default.

 

What you are saying is possible with the US. But not with Japan. The US has a small budget deficit, and debt isn't so massive yet. I mean sure there is some small chance things will go alright. But there is a reason they are rotating through ministers of finance. And one even had a panic attack after looking at the books.

 

The key point that no one mentions is their reliance on importing foreign hydrocarbons.  If/when they "monetize" their debt ( and I generally believe they are already doing that but calling it QE), the cost to import hydrocarbons using their inflated/worthless currency will skyrocket.  That will have an enormous impact on a economy that has reduced reliance on nuclear power.

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