Archive for December, 2020

Top 10 Predictions for 2021

Tuesday, December 22nd, 2020

I should have my head examined for even making predictions for 2021. I should probably just say that there will be a lot of uncertainty and leave it at that.

But that wouldn’t be fun – would it? So here I go again. As always, please keep in mind this is what I think will happen – not necessarily would I would like to see happen.

10 – President Trump will leave office and the White House on January 20th (he might in fact vacate the WH before that date) and Joe Biden will become our 46th President. Trump will not concede and he will not attend the inauguration. He will quickly associate himself with a right-leaning media organization (Newsmax, One America Network or Rush Limbaugh as examples) to either produce his own show or be a frequent guest. He will also explore starting his own media empire. His talk of running again in 2024 will fade as the year progresses but his influence within the GOP will persist.

9 – President Trump will pardon his children and many of his close associates (Rudy) before he leaves office (some of these might take place in 2020 after this is posted), but he will not attempt to pardon himself. While the Democrats in Congress will not begin a large number of investigations into Trump and his allies in an attempt to cool the partisan atmosphere in Washington, expect NY State to quickly and vigorously investigate The Trump Organization and the President’s other business dealings.

8- I went back and forth on this one, but made a last minute decision to predict that the Democrats will win the two Georgia Senate seats and essentially take control of the Senate with Kamala Harris being the tie-breaking vote. Why did I change my mind? Because I just read that more people have already voted by mail (December 21st) than did in total in the November general election. Such high turn out favors the Democrats as does President Trump’s continued criticism of Georgia election officials, which could lead to low turnout on the Republican side. Ironically, Susan Collins (who almost lost her re-election bid) and other moderate Senators like Mitt Romney and Lisa Murkowski will yield more day-to-day power than Majority Leader McConnell, as their willingness to work across the aisle will give them powerful leverage in determining the success/failure of Biden’s agenda in such an evenly split Senate.

7 – The Senate will block at least two of Biden’s nominees, but the Secretary of Defense will be confirmed with a waiver. There will be another major stimulus bill passed within the first 60 days of the new administration and a major infrastructure bill will pass in the first half of the year. Given the small House majority, however, there will not be a major tax bill passed; any changes will be smaller and more targeted. Efforts will also be made early in the year in reestablishing our international standing and willingness to reengage with the rest of the world, especially with fears of a Taliban resurgence in the face of recent U.S. troop withdrawals from the region.

6 – There will be one or two additional new Covid-19 vaccines approved in the first quarter, and everyone who wants to be vaccinated in the U.S. will be able to be by the end of June. The Biden Administration will increase overall confidence in the vaccine and herd immunity will be reached in time for the start of school in the Fall. (Trying to be optimistic and realistic here.) Life will not get back to near normalcy, however, until at least January 2022.

5 – Executive orders will make rejoining the Paris Climate Accord and the World Health Organization early highlights of the Biden Administration, but entering into a new deal with Iran will prove to be more tricky. I don’t envision any new deal (or modification of the existing one) during 2021. There will be little progress with North Korea, and the two leaders will not meet.The U.S. will sign a trade deal with the UK.

4 – Biden’s efforts to re-engage with our allies should help lesson NATO clashes. Tensions with Russia will rise, especially in light of the recent evidence  of ongoing hacking, and I expect some significant new sanctions will be put into place. Relations with China will be tense as well, fueled by the Trump administration’s late 2020 exit from the Open Skies Treaty, but I expect less trade war rhetoric and fewer sanctions. There will be continued progress with Israel and other Middle Eastern government normalizing relations, but I expect fewer U.S. concessions to make this happen. Relations with Israel will remain good, but I don’t expect Biden and Netanyahu to have a close relationship. The leadership succession plan in Germany will finally become clearer. Boris Johnson’s popularity will continue to decline, especially after his botched handling of Christmas, but he will survive the year as leader; he will not, however, learn how to use a comb.

3 – The economy will go into another mini-recession early in the year because of the delay in passing a stimulus bill until late Q42020 and the lingering effects of this new strain of Covid-19. As more people get vaccinated, however, and the spread of the virus slows post-holidays, the economy will pick-up quickly IF there is another stimulus bill and a comprehensive infrastructure bill. If either of these efforts stalls, the recession will be longer and deeper. In any case, economic growth should pick-up in the last quarter of the year as the travel and entertainment sectors begin to recover. The outlook for these industries remains bleak, however, as it will be years before things are back to near normal.

2 – The stock market will continue on its upward trajectory, but as always it is a market of stocks – and industry performance will vary significantly. The stay at home trend is here to stay even when herd immunity is reached. More people will be working remotely, and people have gotten used to the new normal. I don’t expect to see people running back to gyms and entertainment venues when they have invested in equipment at home. As a whole the market will be up 3% – 5% for the year, with technology stocks continuing to perform well even with a somewhat struggling economy. Bitcoin and others cryptocurrencies will continue to become more mainstream in what is quickly becoming a cashless society amidst concerns over touching objects in public.

1 – Finally, sports – which has been my achilles heel for the past few years. Ohio State will win the college football national championship with an asterisk, since they only played six games. This was my second last minute change. I originally had Ohio State, then switched to Clemson because I didn’t think the Buckeyes looked so good against Northwestern. BUT I just read that Saban and Swinney both ranked OSU out of their final Top Four. This will serve as a great motivator for Ohio State and they should have most if not all of the 20+ players that were out of the last game back. Revenge is a great motivator (in my humble option it is ND that should have been left out of the top four). The Kansas City Chiefs will beat the Green Bay Packers in the Super Bowl. Gonzaga will win the college basketball national championship. The following teams will repeat as champions – the Los Angeles Dodgers in baseball, the Tampa Bay Lightening in Hockey and the Los Angeles Lakers in basketball.

How Did I Do? Review of Top 10 Predictions for 2020

Thursday, December 17th, 2020

I think it is safe to say that most of you are probably as happy as I am that 2020 is coming to an end. Before I make my predictions for next year, I want to review my predictions for 2020 – both sets of them.

You might recall that given the pandemic, I updated the predictions at the end of June. I was not asking for a redo, and I stand by my initial predictions, but given the nature of the year I felt it appropriate to adapt to the unusual circumstances and update my predictions for the second half of the year.

My initial prediction is first. The updated prediction is in ( ) and my year-end comments are bolded.

10 – President Trump will be acquitted in the Senate and remain in office. No information has yet emerged that indicates that Republicans in Congress who have supported him so far will change their minds. While this is currently the expected result, what I am really predicting here is that no bombshells will appear that will result in the Republican-led Senate turning against Trump. There will also be talk among Democrats of a second impeachment soon after the election, and before the year ends. (Kind of hard to update this prediction other than to say that there has already been talk of a second impeachment and additional hearings into some of the conduct of the Administration, At this point, however, I think as a nation we are too tired and distracted to do much here. It will be all about fighting the pandemic, making progress on social justice reform and of course the election.) I turned out to be right here, but as we all know, progress on social justice reform has, and will continue to be, slow and we continue to fight the pandemic.

9 – Joe Biden will be the Democratic nominee and pick Kamala Harris as his running partner. (I am sticking with this. If not Harris, however, my money would be on Val Demings.) Was right here as well. I should have stopped at two predictions!

8 – President Trump will be re-elected (with Mike Pence as his VP) after one of the ugliest campaigns in modern history, and the country will remain deeply divided. The Republicans will keep the Senate (barely) and the Democrats will keep the House but with a smaller majority. At least one if not two members of the “Squad” will lose in their re-election bids. (I now believe that the Democrats will sweep the election and win the presidency and both Houses of Congress. The left wing of the party will actually take more of the seats on the Democratic side and the “Squad” will stay intact. I believe that there is a 75% chance that Biden will win in a landslide. Trump will not fight leaving office, but will announce an unprecedented number of controversial pardons before he goes.) Mixed bag here. While the left  wing of the Democratic party did gain seats, the party underperformed overall in both the House and the Senate (we will have to wait until the beginning of January to see who will control the Senate). One could argue both ways on whether Biden won in a landslide. He had large margins in both the popular vote and the Electoral College, and his total in the College was the same that Trump declared to be a landslide 4 years ago. And the pardons have begun … and will continue.

7 – There will be some legislative progress early in the year, post-impeachment trial, as both parties will be hungry to show the country progress. The final revised U.S.-Mexico-Canada Agreement and an infrastructure bill will be two of the successes. No meaningful legislation will pass after June with the exception of a trade deal with the U.K. (I’m not sure that the stimulus packages that have been passed would count here since no one could have anticipated them. The new trade deal was finalized earlier in the year. Trump recently mentioned an infrastructure bill but I don’t see anything other than perhaps one more stimulus bill being passed the rest of the year. We are already in campaign mode; Congress couldn’t even make significant progress on law enforcement reform in the face of the mass nation-wide demonstrations.) My updated prediction turned out to be correct. But I guess one could argue that given the political divide, this was a pretty easy call!

6 – Brexit will occur early in the year thanks to the surprisingly large Conservative victory in the general election held in December; Boris Johnson’s gamble worked. The U.S. and Britain will sign a comprehensive new trade agreement during the year, and Britain will negotiate a trade agreement with the EU so that it will not be a no-deal Brexit despite year-end concerns that a deal might not be struck. (The U.S. will not have a new trade agreement with Britain before the end of the year. I don’t think there will be a final agreement on Brexit before year-end either. There may be an extension however, given the pandemic, so the discussion of a deal v. no-deal Brexit might be pushed into 2021. Finally, Trump will increase European tariffs before the end of the year on some products, increasing tensions with these countries.) As we go to print, my updated predictions were pretty accurate, although it looks like there not be an extension and there will be a no-deal Brexit. But since this is being published before year-end, there is a slight chance that a deal will be reached since negotiations have gone into overtime.

5 – Elsewhere overseas, Merkel will call new elections and not be President of Germany at the end of the year. Netanyahu will not be Prime Minister of Israel at year-end either, and may in fact be standing trial by year-end. I also predict that Netanyahu will not even be the candidate for PM in the upcoming election, as the Likud Party will turn him out in the wake of his legal problems. Political turmoil in France will continue, further dimming Macron’s political future. There will be no progress toward Middle East peace once again, and the growing divide between Trump and Kim Jong-un will increase. (Merkel will in fact stay in power, as she has gained even more stature thanks to her response to the pandemic. Netanyahu will leave office at the end of next year as part of a power-sharing agreement made to be able to form a government, but his power will wane with Trump’s defeat and he will never be PM again (this is more of  a 2021 story). No progress will of course be made with North Korea for the rest of the year, but I don’t think tensions will escalate before the election. Trump will also not confront Putin despite continued Russian interference. His relationship with Putin will be a very big issue in the election, and not be a positive for him. World leaders helped by the pandemic in addition to Merkel include Trudeau in Canada. Macron remains weakened and Boris Johnson has been hurt by the UKs initial response to the pandemic, and while he will stay in office for now, his political future looks bleak.) Once again, the updated predictions turned out to be pretty good. Although the fate of many of these leaders really is a 2021 story. 

4 – The economy will do surprisingly well as overall trade tensions will ease with China, but it will again be up and down and progress will be slow (Trump will be very accommodating with his policies and rhetoric, recognizing that this is the only way he will win re-election). The U.S. Federal Reserve, while considering increasing interest rates, will remain neutral throughout the year so as not to be seen influencing the election. (The Fed will continue its proactive actions to prop up the economy in the face of the pandemic, but this will be in the form of additional asset purchases rather than interest rate cuts for the remainder of the year. The country will end the year in recession, as the recent flair-ups in the pandemic will slow economic growth and ensure that there is no v-shaped recovery.) Missed this one except the prediction on the Fed. The economy is not in recession, although things are looking worse heading into next year as the pandemic continues to take its toll. It does look like this will not be a normal v-shaped recovery.

3 – The stock market will also do better than expected, rising about 10% (S&P 500). There will be general relief that the Democratic candidates at the far left of the spectrum will not be on the ticket and again Trump will do everything he can to help boost the economy and to take credit. (The market will give back some of its recents gains over the rest of the year, but will not retest the March lows. While typically the market would fear the election of a Democrat, and one party winning the presidency and Congress, I believe the market will rally after the election on hope for a more unified country moving forward. The market will end the year down between 3% and 5% and will be volatile along the way. GDP growth will remain negative through the end of the year with debt levels growing to unprecedented levels.) While there was some volatility, and a little bit of a pullback, the performance of the stock market continued upward – surprising to me. GDP growth rebounded faster than I thought (although that may reverse) but debt levels continue to grow.

2 – It will be a quiet year for the financial services industry, as fewer mergers are apt to take place in an election year. The anti-finance rhetoric of the left will also be muffled after the Democratic nominee is decided. The first Bitcoin ETF will be approved in a surprising resurgence of the crypto-currency.(Other than the Schwab/TD merger, and the recent Orion/Brinker Capital merger, it has been a quiet year, but for different reasons than I had previously believed. No resurgence of Bitcoin. There will be a continued move to a cashless society in the face of the pandemic. Not much will happen the rest of the year as the election looms and companies in general do not want to make changes that might worry investors who are already on edge.) Bitcoin continues to amaze me as it hit a record level this week. I do think we will continue to see this move to cashless in the face of the pandemic (where people don’t want to touch physical things) and because of the work from home trend which will continue (more on that in the upcoming predictions).

1 – And turning to sports, I will try to redeem myself after two bad years in a row. LSU will win the NCAA Football National Championship. The Ravens will beat the 49ers in the Super Bowl. Louisville will win the NCAA Basketball Championship. The Washington Capitals will win the Stanley Cup, the Milwaukee Bucks will win the NBA Championship and the NY Yankees will rise again and win the World Series. (Not sure what to say here – although LSU did win. There will be no NCAA Basketball champion, and while I hate to say this, while the major league seasons will either start or restart soon, I am not convinced that they won’t be shuttered again and no champions crowned. I actually lean toward this being the case, as well as there being at best an abbreviated college football season. So no further predictions here – too much uncertainty. Big money talks, but at the end of the day if the players believe that their health is in danger then there is no way sports seasons can continue.) There have been many cancelations, but the sports have continued. The NBA pulled off its bubble. And I again pretty much missed the sports that did crown champions. I will try again next year!