Saturday, January 02, 2016

"Tempus fugit", as Virgil said--especially between annual ICBW predictions posts.  Here are this year's predictions--starting, as always, with a review of last year's...

  • The US economy will continue to be robust, leading towards a new recession in the 2016-2018 timeframe.  The fed will back off on its easing, keeping inflation in check, and interest rates will climb slightly in response.  Oil prices will bounce off their lows, but still remain well below their $100-ish average of the last few years.  The US market will rise modestly from its current already-frothy highs, setting the stage for a major correction post-2015, leading into the aforementioned next recession.  Real estate will also continue to climb moderately.


  • Not bad in general--the markets decided to go sideways rather than "rise modestly", but growth did maintain its fairly robust trend, the Fed finally bumped up interest rates a bit, and real estate prices did rise. Oil prices did bounce briefly in the spring, but then resumed their slide.

  • The EU will face another year of turmoil, with massive bailouts to Greece and possibly Spain looking necessary to save the Euro.  Eventually the currency will break up--as Herb Stein famously said, "if something cannot go on indefinitely, it will eventually stop"--but it probably has a couple of more years of stagnation, bailouts and general economic misery left in it before it finally gives up the ghost.


  • While the terrorism and refugee crises obviously distracted attention from the continuing EU bailout crisis, the Greek bailout went roughly as I predicted, with Greece accepting new austerity measures in return for a bailout extension.   

  • President Obama's recent modest approval ratings increase (near, though not above, 50 percent) will generally hold up through 2015 following the Republican takeover of the Senate, much as Bill Clinton's did once he became the sole bulwark against the GOP-dominated Congress in 1994.  This will enable him to continue implementing his executive amnesty for illegal immigrants, defend Obamacare against legislative attacks, and support local anti-police initiatives.  The effects of these policies will be as intended:  increased illegal immigration, rising crime, and erosion of affordable employer-provided health care.  Republicans in Congress will launch legislative measures to counteract all of these, as well as various tax reform and pro-business proposals, but they will all fail, some due to internal GOP squabbles and the rest after being vetoed by the president.


  • Pretty spot-on, I'd say...

  • By the end of the year, the frontrunners in the Democratic and Republican presidential candidate races will be Hillary Clinton and (out-of-the-box call, here) Wisconsin governor Scott Walker.


  • I think I can be forgiven for not predicting Trumpmania.  But it's also interesting that Walker turned out to be much less ready for the national stage than his political skill at the state level suggested.  It may be that state and federal politics are becoming more distinct than they were in the past. 

  • The Israeli elections will produce an inconclusive result followed by weeks of complex political wrangling, out of which Bibi Netanyahu will once again emerge as the prime minister.  He will lead a center-right coalition little different from the current one, although possibly including more ultra-Orthodox representation.  Israel's policies will therefore remain largely unchanged.  Meanwhile, the Palestinian Authority will continue its current strategy of war-by-legal/diplomatic-means, while quietly continuing its security cooperation with Israel.  The EU will similarly make a grand show of supporting this international campaign, while quietly undermining it at exactly the moments when it threatens to cause concrete harm to Israel (as in the case of the recent UN Security Council vote).  Hamas and its Gaza-based partners will continue to launch terrorist attacks on Israel, with public encouragement from the PA, but those will gradually decline in frequency and effectiveness as Israel's counterterrorist forces--assisted by the PA's internal security agencies, happy to betray their Hamas rivals--get a better handle on combatting them.


  • Mostly correct, but I failed (as did the Israeli government, I gather) to predict the current campaign of low-level, low-tech terrorist attacks. 

  • The Islamic State will weaken considerably in the face of stiff resistance from the Kurds, the US, and internal elements tired of their incompetence, corruption and indiscriminate brutality (with emphasis on the "indiscriminate" part).  Its foreign supporters will respond by shifting their generosity towards new candidate Sunni radical forces in Syria and Iraq, who will be little better in their behavior but less enamored of the kind of grand international gestures that bring on Western countermeasures, and more willing to take on the Iranian proxy governments in Syria and Iraq directly.  The result will be continued slaughter in Syria, Iraq and Lebanon.


  • The Islamic State lost ground in 2015, but has responded, bizarrely, by lashing out at its external adversaries--France, Saudi Arabia, and the US.

  • Nuclear talks between the US and Iran will continue to be extended without resolution, as Iran continues to refuse to denuclearize.  US sanctions will remain mostly in place--they were enacted by legislation, not by executive choice--but their effect will be eroded by increasing international disregard for them.  Fortunately, the global fall in oil prices will have roughly the same economic effect, limiting Iran's economic resources--although not enough to block its continued heavy involvement in its proxy wars in Syria, Iraq and Yemen, of course.


  • I certainly didn't expect that the Obama administration would ever be willing to cave as completely to the Iranians as they did in their 2015 pseudo-agreement (it has been neither signed by Iranian representatives nor ratified by Congress). 

  • Elsewhere, the decline in oil prices will weaken Vladimir Putin's Russia, forcing him to pare back his aggressive moves against European neighbors as he deals with his domestic economic crisis.  China, on the other hand, will get an economic shot in the arm from cheaper oil prices and more robust exports to the US.  


  • My biggest miss of the year.  Putin has reacted to the collapse of his nation's economy by acting even more boldly abroad--in Syria, for instance.  And in China, low oil prices appear to have been insufficient to compensate for decades of bubble-like economic growth reaching a breaking point.

  • The recent Sony-North Korea-"The Interview" incident will turn out to be the harbinger of a trend, with more hackers making "hacktivist"-style outrageous behavioral demands of their corporate victims, and more studios milking horrible films for quick pay-per-view profits by finding a way to link them to some major current-affairs controversy.


  • Once again, I'm years ahead of my time...

    And now for this year's predictions:
    • The US economy will stall this year, as trouble abroad (in China, Canada, and other oil-based economies) hurts exports and the Fed's tentative forays into non-zero interest rates burst various mild bubbles in the stock and other asset markets.  The stock market and real estate markets will fall, interest rates will remain very low, and the price of oil will not rebound significantly from its current lows.
    • Immigrant-related issues will continue to distract the continent from the greater threat of disintegration due to the incoherence of its monetary union.  Hence bailouts of bankrupt southern members will continue as a quid pro quo for cooperation in stemming the flow of Middle Eastern and African migrants.  Meanwhile, rightist, populist, nativist parties will continue to surge across the continent, jettisoning many of the domestic and foreign policies anchored into place by the previously-dominant bureaucracy/union/activist/corporatist coalition.  (Hostility to Israel will of course be one of the few policies to survive the purge.)  
    • Democratic nominee Hillary Clinton will narrowly win the presidential election over Republican nominee Marco Rubio, with the crucial Republican-vote-diverting assistance of third-party candidate Donald Trump.  However, the Republicans will maintain their Congressional majorities--just barely, in the case of the Senate.
    • The stalemate in Syria will continue mostly unchanged, tying down the main pro-Assad participants (Russia, Iran and Hezbollah) as well as the anti-Assad ones (Turkey, Saudi Arabia) while the US largely stays on the sidelines.  ISIS will continue to weaken under the pressure of its many enemies, and its big terrorist "successes" of 2015 will be repeated very sparsely if at all.  On the other hand, Israel will find itself increasingly drawn into the fray in support of the Sunni rebel side, as the Iran/Assad/Hezbollah axis intensifies its drive to establish a front along Israel's Golan Heights border with Syria. Finally, the Kurds will once again be in the region's crosshairs, as Iran, Turkey and ISIS all increase their pressure on them, each for its own reasons.  The Obama administration will sit that one out as well, leaving the Kurds in a precarious state.
    • The current "stabbing intifada", consisting mostly of random Palestinians spontaneously attacking random Israelis with knives, will evolve into a complex game in which the Palestinian Authority attempts to carefully calibrate the level of violence so as to keep Hamas and other radical groups occupied without provoking a major Israeli crackdown.  Ultimately this strategy will fail, and at some point Israel, responding to one or more high-casualty attacks, will launch a major "lawn-mowing" operation in the West Bank to round up terrorist organizations hiding out in PA-run areas.  World condemnation will follow, although European vituperation will be milder than usual, as a result of the new terrorist-hostile political environment there, as well as greater Israeli willingness to take active measures to counter European meddling.
    • Disney will announce that following the huge success of "Star Wars Episode 7: The Force Awakens", Star Wars Episode 8 will be entitled, "The Force Has Breakfast".
    Readers are once again encouraged to add their own predictions in comments.  Just think--You Could Be Right!

    2 comments:

    Anonymous said...

    Interesting predictions... I disagree with your choice of Republican nominee; it will be the Canadian (Ted Cruz). Trump will not run as a third party candidate because he hates to lose and he is bound to in that scenario. Otherwise, your forecast is sound. BTW, it's tempus (not tempis) fugit (si tacuisses etc.)

    Dan said...

    Thanks for spotting the typo--now fixed. As for the prediction, I see Cruz as basically pitching for the Trump vote, casting himself as a more marketable version of Trump. The problem with that strategy is that the Trump constituency already has a limited ceiling, and Cruz will have to compete with Trump for it. Without a similarly dominant competitor on the pro-business side, Rubio has more leeway to make concessions to woo the "other" side than does Cruz, who risks losing his supporters to Trump. Rubio thus stands a better chance than Cruz of being able to build a broad coalition within his party (not to mention in the general election).

    As for a third-party candidacy, you and I both know that Trump will lose, but then, you and I both know he'll lose the GOP primary, yet apparently Trump and his entourage haven't figured that out yet. I see no reason why they won't have similar delusions about the general election.