Here are some interesting predictions of unexpected things to happen in 2023. I really enjoyed the written rationales, because they make you think about causality and how people respond.
https://www.home.saxo/en-gb/content/commentaries/pressrelease/saxo-2023-outrageous-predictions-the-war-economy-06122022Some samples:1) The EU will create its own military.
2) Brexit will be reversed.
3) Japan cancels its own debts and pegs its currency to the USD
...
My predictions:
1) China drops its zero-COVID policy in a series of fits and starts and a renewed vaccination drive. Commodities prices and US inflation go up in response. Information is suppressed about how many millions of Chinese people die.
2) A series of 0.5% and 0.25% rate hikes bring the Federal Funds rate to 6% by the July meeting, with talk of going to 7%.
3) A recession begins in October. +/- 3 months :)
4) Ukraine attempts to take back Crimea in a spring blitz, but fails.
5) DeSantis consolidates his status as the presumptive GOP presidential candidate. People talk less and less about Trump. Yet it remains unclear all year whether Biden will run again, as his approval rating falls to 35%.
6) A domestic terror attack occurs against federal government property and personnel.
7) Twitter becomes another Parlor or 4-Chan. With no real allies remaining in the tech billionaire world, the Democratic Party begins to form a consensus about repealing section 230 of the Communications Decency Act, a change which could end the social media industry as we know it. However, a deep schism emerges.
8) Warren Buffet dies.
9) Stores start selling generic and bulk groceries again. They actually re-label store brands to make it look like less money was spent on packaging.
10) No immigration bill will be passed. Haha! This is easy!
11) The FIRE movement shifts debate to things like "can I retire on a 5% WR if my portfolio of 100% treasuries yields 7%?" and "should I let my underwater home be foreclosed so I can buy an apartment building with my remaining cash and be a live-in landlord?"
12) Housing corrects -25% nationwide. mREITs go bankrupt as their interest rate hedges become unaffordable or unavailable. The market braces for a flood of discounted mortgage-backed securities in 2024 as defaults rise.
13) The Fed starts tapering down QT in June, due to concerns about liquidity drying up and banks being unable to lend because they've purchased so many treasuries.
14) The FOMC fails to cut rates as expected in its September, November, and December meetings for fear of reigniting inflation. Powell explains to baffled critics that he's been saying rates would need to stay higher for longer since at least the Summer of 2022. Pundits talk about the Fed's 1970's errors in cutting rates too soon, versus the prospect of a recession without an interest rate cut. Markets capitulate and the yield curve un-inverts. 20-year treasuries can be had yielding 7% by the EoY.
15) Credit Suisse collapses, deepening the European recession and raising fears of contagion with Deutche Bank.
16) Italy and Greece have simultaneous debt crises.
17) Mass forest die-offs occur in the US during the extremely-hot summer, killing millions of acres and evoking comparisons with coral bleaching. The casualties include California's Sequoias and Redwoods, evoking national mourning.
18) Digital detox clinics open in most states, allowing well-off tweens and teens to continue their education while in treatment.
19) Meta introduces a new Occulus headset at $300, and it becomes the "must-have toy" of the 2023 Christmas season. Meta plans to subsidize the hardware by charging for various things in the metaverse.
20) College enrollment continues to drop, stressing the finances of colleges. Community colleges thrive by offering a better value and helping students obtain specific industry certifications offered by private organizations. Universities cut their humanities departments and there is a push to make curricula applicable to real-world jobs rather than academic theory.
