10 Truly Outrageous Market Predictions for 2011

[Ken H.]

Jakobsen’s been doing this for a while, partially tongue in cheek, but not entirely. Which ones of his projections do you think is likely in 2011?

 

Saxo Bank

 

Personally I think #2 (maybe not Germany but someone), #4 (some state(s) anyway), #5, and #10 have some amount of potential truth in them.

 

[VinnyR11]

An Illinois bankruptcy isn't out of the question. Predicted by many others as well.

 

I would not consider doubling US interest rates an "outrageous prediction" considering the base we're starting from. Almost any 2 increases during the year would amount to a doubling.

 

Don't buy any of the others.

 

 

[John Ranalletta]

#6 is a real possibility. Banks are holding toxic assets but aren't required to mark them to market. When/if they are made to do so, BAC, Wells and others will be seen to have negative capital.

 

Illinois is bankrupt. When it's official, the federal government will step in and revive the corpse without demanding any changes in its corrupt, too expensive policies. I'd not want to be holding any IL state or municipal bonds in my portfolio.

[Bud]

Well, Illinois is certainly in debt and can not print money like the US can. However, California is also in deep trouble and their collapse would certainly have a bigger impact on the nations economy. Maybe CA is "Too Big to Fail" and IL isn't?

[Mike]

I doubt that Illinois will fail in 2011, but I can see it as a realistic possibility within the next five years. My wife and I have certainly begun discussing the personal implications for us (we live in the Chicago metro area).

 

A far as the other predictions are concerned, I could see an economic tremor in China erupting into something much bigger, with implications for China and the rest of the world. But, here's the way I see these things: Not too many things on this Earth are really predictable, but if you make a lot of predictions at some point you'll be able to proclaim your prescience.

[John Ranalletta]

Doesn't matter. Ugly is ugly, even on a relative basis. IMO, CA is still a place where people want to live. Less so for states like ours. I was in Spfld last week and three facts were noted. It is a haven for non- productive state house retirees; it is almost devoid of manufacturing; and it's losing population.

 

That's not a recipe for success.

[bmw_rider]

Illinois can indeed print money the same way California has- they are called warrents. Vendors trade them, dicsount them, sell them just like any other currency. Unfortunately, they'd have to take deep discounts to move them .

[Antimatter]

I can see tensions rising in China and a big market drop by June. The first will be a reaction to the inflation caused by China's manipulation of its currency. The second will occur when the EU decides to vaporize some of the debt carried by Ireland, Spain and Portugal. Due to austerity measures, all three countries' GDP's will shrink faster then their ability to repay their banking system's debts. Eventually all three will look at Iceland's decision not to prop up their banking system, and decide to do the same.

 

My black swan prediction: a huge increase in the price of oil makes outsourcing manufacturing overseas no longer as profitable, and manufacturing the US starts to make a comeback.

[Deadboy]

States actually cannot go bankrupt....kind of a common myth that seems to get repeated over and over.....cities yes, states no.....

 

I say #1 and #2 are the most interesting.

[Bud]

Illinois can indeed print money the same way California has- they are called warrents. Vendors trade them, dicsount them, sell them just like any other currency. Unfortunately, they'd have to take deep discounts to move them .

 

That is not really printing money, it is an IOU. They can not print US $'s. And, as you suggest, the warrants are not traded at face value like the $.