On December 28, 2008, I published my predictions for 2009. I should have graded myself in January, but I was still on hiatus from Hennessy’s View. So let’s take a look.
The Dow: The Dow trades within a range of 1,000 points with a daily average closing of 8,500.
Grade: D. The average would be a pain to figure out, but it looks like it was closer 9800.
GDP and Economy: By July, everyone pretty much calls the situation “Great Depression II.” Unemployment, which declines in the first quarter, increases to more than 12 percent by fall. Gross Domestic Product by quarter:
Grade: B. The combination of unemployment and GDP followed my track except that Q1 actual was worse than I predicted and Q3 better.
US Treasuries: Moody’s warns investors in US Treasuries that inflation could erode the real value of the paper dramatically but falls short of lowering bond ratings. China and Japan sell over $1 trillion in long-term US debt.
Grade: C+. Moodys did release several warning about US debt hurting Treasury ratings, and China was a net seller most of the year. I overshot the amount of treasury sales by China and Japan—by a lot.
Auto Industry: The bridge loan isn’t enough and the UAW refuses major compromises, but Obama and Congress block GM and Chrysler from bankruptcy. Instead, Congress authorizes $70 billion in exchange for voting stock and a seat on the companies’ boards. The companies oblige, effectively becoming government agencies.
Grade: B+. Everything happened as I predicted, but the companies went through bankruptcy anyway. On this, I was overly optimistic.
Iraq: The slow drawdown of troops will continue according to the plan approved by Iraq in 2008. The net effect of Obama’s win on Iraq is zero.
Iran: The Obama administration achieves a pyrrhic victory by signing a non-proliferation agreement with Iran similar to the one Clinton (via Carter) signed with North Korea. By the end of 2009, Iran’s cheating is obvious, but both the US and UN ignore it . . . until it’s too late. Israel acts alone.
Grade: D. Israel hasn’t attacked Iran, obviously. Obama got way too friendly with Iran, but he’s backed off.
Fairness Doctrine returns requiring television and radio stations to provide equal time to all sides of any news or science issue with the exception of climate science.
Emission Standards increased dramatically by Congress and rubber-stamped by GM and Chrysler boards. Ford sues claiming unfair competition and anti-trust violations. Suit will take years to settle.
Unions can demand to know a non-union’s position on unionization votes. Many shops turn union; many anti-union workers are assaulted and threatened.
Medical workers are compelled to participate in abortions regardless of religious or personal beliefs. Thousands of doctors and nurses quit in protest. The Catholic church closes thousands of hospitals creating the greatest healthcare availability crisis ever in a post-industrial country. Congress prepares, by year’s end, to take over the healthcare industry and all medical universities and colleges.
Several major professional sports teams fold as advertising dollars disappear.
No one really cares after reading the list above.
Grade: B. Michael Jackson died.
Newt Gingrich prepares a presidential run in 2012 by quarterbacking a team of more than 200 Republican Congressional candidates on single agenda to win back Washington and capitalism.
Grade: B. Newt will run. He just didn’t quarterback the Congressional Win-Back.
Climate Change: 2008 was the coolest year in almost 20 years, and 2009 looks to be even cooler. A major flaw is revealed in the most sophisticated models. James Hansen refuses to admit he was wrong, but even the media stop covering climate change. Environmentalism shifts to potable water, an actual problem that will affect the US in 20 years as the Ogallala Aquifer dries up.
Grade: A++. How could I have known that ClimateGate was coming down the pipe? Huh? You believe that? Amazing.
Composite: I’ll give myself a C.