20 Predictions For 2010 By Doug Kass

Doug Kass of Seabreeze Partners released his 20 market/political/economic surprises for 2010. He covered the wide areas of people’s interests, he covered GDP to U.S. Dollars, Obama to Israel, gold to SEC. If his predictions are to be true, the world is going to see quite a striking bunch of surprises next year.

They are:
1) Large upside to first quarter GDP (up 4.5%) and corporate profits (up 100% YoY) owing to continued cost cuts, coupled with a series of positive economic releases

2) Not much improvement in housing and labor market (excluding the increase of census workers) as companies will continue to cut costs and show little commitment to adding permanent employees

3) US dollar will be the strongest major world currency during the first three or four months

4) Gold price will plummet to $900 an ounce by the beginning of the second quarter of 2010. The un-hedged gold companies will report losses and the gold sector will be at the bottom of all major sector performers

5) Central banks will tighten monetary and fiscal policy ahead of the Fed, which will tighten rates by 50 basis points

6) Tension in Middle East as Israel will attack Iran’s nuclear facilities

7) Stocks will drop by 10% in the first half of the next year in the face of renewed geopolitical tensions

8) The shares of Goldman Sachs (NYSE: GS) will drop back to $125 to $130 a share. Warren Buffet’s Berkshire Hathaway Inc (NYSE: BRK) will team up with Goldman Sachs to make it private

9) GDP growth in the second half of 2010 will be flat

10) Utilities will be the best sector in the US stock market and gold will be the worst followed by consumer discretionary

11) Yield on the 10-year Treasury note will drop from 4% at the end of first quarter to under 3% by the summer

12) Warren Buffet will step down as the Chairman of Berkshire

13) Insider trading charges will expand, as several large mutual funds will reveal that they have consistently received privileged information

14) SEC will restrict 12B-1 mutual fund fees

15) SEC will restrict short selling

16) Two major hedge fund managers will announce retirement and fund closure owing to underperformance and legal problems

17) Peter Cohen will replace Vikram Pandit as the Chief of Citigroup (NYSE: C)

18) A weakened Republican party will be in disarray and Obama’s popularity will be back to pre-inauguration levels

19) Tiger Woods will reconcile with his wife in early 2010 and will return to the PGA tour earlier than expected

20) The New York Yankees will be sold to an investor group led by former General Electric (NYSE: GE) Chairman Jack Welch.