Predictions on the economic crisis
Predictions 2010
Predictions for 2010 are more risk taking and more aggresive than 2009, as such failure rate will logically be higher. This is an attempt to see how far predictions can be made in advance. Actually Dr. Berninger believes that in fact there is a good chance that many of his predictions will turn out true and will be exceeded in scope by the events to occur in 2010.
For the followers of the predictions: You might be aware of the fact that the media black-out is preventing now information to leak through the normal channels. This is different from before the crisis and has changed since the end of 2009. The effort to identify trends has therefore become extremly more difficult.
My financial crisis prediction track record
| Number | Prediction | Periode | Published | True / False |
| 1 | Spanish Economy to enter crisis | September 2007 (+/-4 weeks) | 2005 |
TRUE
(False if measured by Stock market, only) |
| 2 | Massive bank failures to start | from June 2007 + six months | June 2007 |
FALSE
bank failures were avoided but started little later |
| 3 | Recognition of economic problems will start to materialize | Q1 2008 | June 2007 |
TRUE
|
| 4 | Governments will design short term actions delaying economic crisis | Q2 2008 | June 2007 |
TRUE
Stimulus plan in form of rebate checks |
| 5 | Stock markets starting to decline after Olymic games | Q3 2008 | June 2007 |
TRUE
|
| 6 | Stock market crash | September 15th (+/-4 weeks) | July 2008 |
TRUE
major crash following the Lehman bankruptcy |
| 7 | Real economy hit by Major bankruptcies and stock market crashes | Q4 2008 | June 2007 |
TRUE
e.g. GM and other car makers needed bail outs |
| 8 | Stock markets will further decline, unemployment starts to rise to unprecedented levels | Q1 2009 | December 2008 |
TRUE
New alltime lows in stocks |
| 9 | High Volatility in Gold Price with prices nearing and exceeding $1000 | February 2009 | January 2009 |
TRUE
Price went above 1000$ per ounce |
| 10 | Gold Price to increase amid panic in markets. personal target $2500 (50% probability) | March 2009 | November 2008 |
Amended
(Amendet in January 2009 into Prediction 13) |
| 11 | First major shocks to some of the currency markets | Q2 2009 | December 2008 |
TRUE
Decline of British Pound and start of Dollar crisis |
| 12 | Further State and country bankruptcies | Q2 between April 7th and May 5th | January 2009 |
TRUE
California and some eastern European countries and Ukraine entering de-facto bankruptcy |
| 13 | Talks about new currencies, or revaluations | Q3 2009 | December 2008 |
TRUE
IMF SDRs considered to be new reserve currency |
| 14 | Bond Market turmoil starts - Paper investments start losing value (Investor Capital Rights under attack) | April 7th - May 5th 2009 | January 2009 |
TRUE
Money Market bonds were first to decline by up to 36%; Gold Market reached low in April, as predicted |
| 15 | Severe disruptions of markets. Major bank, currency, country or bond market failure | June-July 2009 | December 2008 |
TRUE
Largest bank in Florida went down. HRE and HSH in Germany were kept illegaly alive, 7 US banks failed on July 2nd. California issues IOU |
| 16 | US bankruptcy or starts to enter (Hyper)inflation - measured by FED purchasing over 50% of US treasuries | Start June-July 2009 | Q3 2008 |
TRUE
FED now buys > 80% of treasuries according to some sources |
| 17 | UK shows "negative" deflation in Q1 and Q2 and enters starting (Hyper)inflation in Q3, while asset prices continue to decline | Q2 2009 | January 2009 | (Most likely true) |
| 18 | GM bankruptcy will be unavoidable | unknown | 2007 |
TRUE
|
| 19 | US to enter deflation | Q1-Q2 2009 | Q3 2008 |
TRUE
|
| 20 | Domino bankruptcies of US banks measured by starting to see >7 bankfailures/week | start Q3 2009 worse in Q4 and Q1 2010 | Q2 2009 |
TRUE
|
| 21 | Sucker Rally to intermediately end mid 2009 | some smaller shocks to the markets in June July | April 2009 |
TRUE
(new lows, California issue IOU) |
| 22 | Renewed shocks to the Financial System | September-November 2009 | April 2009 | (see 22a) |
| 22a | [Narrowing down 22] Currency and Stock market turmoil | w4 Sept. 2009-October 2009 | Q2 2009 |
FALSE
USD collapsed, but stock markets remained stable |
| 23 | Talks about new reserve currency | Q2-Q3 2009 | Q1 2009 |
TRUE
G20, China and Russia all talked about new currency. SDR and Gold as potential candidates |
| 2010 Predictions | ||||
| 24 | Massive Unemployment > 25% in Spain | by Q3 2010 | 2008 |
FALSE
unemployment topped only 20 amid the illegal EU bail-out. So the prediction failed in timing. |
| 25 | Spain GDP down by >20% (compared to 2007) | latest Q3 2010 | 2007 |
FALSE
(off course amid the illegal EU bail-out) |
| 26 | Unemployment Germany > 15% (measured by Nr. of recipients) | in 2010 | 2008 | (at the moment ca. 11%) |
| 27 | Cuts in Social welfare in Germany | 2010 | 2008 |
TRUE
ftd 08.06.2010 |
| 29 | Tax increases in US | 2010-2012 | Q3 2009 | |
| 30 | Tax increases in Germany | 2010 | 2009 |
TRUE
ftd 08.06.2010 |
| 31 | Dollar Devaluation continues | 2010 | Q4 2009 |
TRUE
measured in Goldprice |
| 31a | Gold appreciation. evtl. collapse of markets | 2010 | Q4 2009 |
TRUE
continous appreciation by May 2010 |
| 32 | Deflation causing further money creation in US and EU | 2010 | Q4 2009 |
TRUE
Euro zone ECB diverts from inflation target and starts QE |
| 33 | Over 300 bank failures in US in 2010 | 2010 | Q4 2009 | not likely, but new record numbers of bank failures |
| 34 | New record number of unemployment in US >12% | Q1-Q2 2010 | Q4 2009 |
TRUE
(US 12% official and >16% inofficial) |
| 35 | Inflation takes off Import prices up, Gasoline up | 2010 | Q4 2009 |
TRUE
new record prices of gasoline at the pump; consumer prices increase |
| 36 | New record of bankruptcies & bond failures (US, Europe, Japan) | 2010 | Q4 2009 | |
| 36a | Money Market bond failures or freezes | Q2-Q3 2010 | 08.06.2010 |
FALSE
|
| 36b | European Insurance company failures | 06.2010-12.2010 | 08.06.2010 | |
| 36c | bank failures in Germany | July-October 2010 | 08.06.2010 | |
| 36d | more than 2 bank failures in Spain | July-December 2010 | 08.06.2010 | |
| 37 | Massive seizure of safe-deposit boxes in UK | 2010 | Q3 2009 | (most likely false) |
| 38 | US Deflault becomes an option | 2010-2012 | 2009 | |
| 39 | Greece to default at least in part on its debt | Q2-Q3 2010 | Q4 2009 | (see 39a) |
| 39a | Greece to default around 23rd of April | 23.04.2010 | Q1 2010 |
TRUE
Official help request to IMF as Greek Bond market collapses yields reached 38% (technical default). |
| 40 | Euro-zone to be reshuffled - Some countries to leave the Currency | 2010-2011 | first prediction in 2007, timing Q1 2010 | |
| 41 | Euro parity to Dollar 1:1 | by Q3 2010 | Q1 2010 |
FALSE
|
| 42 | Spain social unrest | by Q4 2010 | 2007 | |
| 43 | Stock market crashes | June - Dec 2010 | Q4 2009 | (see 43a) |
| 43a | Forced liquidations most likely to start July-September 2010 | 08.06.2010 |
FALSE
forced liquidations in real-estate funds, but not broad level |
|
| 44 | Bond market yields rise | April - Dec 2010 | Q4 2009 | |
| 45 | Banking crisis returns to Europe measured by Euribor/Libor peaks | Q2-Q4 2010 | Q1 2010 | ? (Initially I rated this one true, but reviewing the rates, LIBOR and EURIBOR rising amid Greek and French banks issues remines below 2008 levels. |
| 46 | Bank runs and currency crashes (start) - Corralitos - Bank holidays | Q2 -Q4 2010 | Q1 2010 | |
| 47 | Massive deflation in EU will cause rise in unemployment | H2 2010 | Q2 2010 |
TRUE
Massive deflation in Greece, Portugal, Ireland and Spain brings EU unemployment to above 10% |
| 48 | Airlines bankruptcies or gvt. takeover | H2 2010 | Q2 2010 | |
| 49 | Collapse of the car industry starting | H2 2010-2011 | Q2 2010 | |
| 49a | Update (to add precision): Starting collapse defined as sales to western consumers will shrink by 10% y/y | Q4 2010 | ||
| 50 | China starts to decouple (measured by rising inflation in China and yuan appreciation) | 2010-2012 | Q2 2010 |
TRUE
CNY started to float and appreciated from July 18th 2010 |
| 51 | Spanish Stock Market to crash > 5% | 10.06.2010 +- 4 weeks | 03.06.2010 |
TRUE
|
| 52 | Run on the FED to start within 3 weeks causing sever consequences to money and bond markets | 09.2010 | 28.08.2010 |
TRUE
Gold (here GLD) gained 11% against Dollar also we have the need for QE2 and reports for the first time on "currency wars" |
| 53 | QE2 will lead to capital flight (measured by flows and emergence of capital controls) | start Q4 2010 | August 2010 | |
| 54 | QE3 unavoidable (foreclosure gate bonds) | start from week 45 2010 | October 2010 | |
| 54a | Current estimate of bond buying (initially 1-2t, then 3-6t) |