So, it’s that time of year again when people make their year-end predictions. I’ll be running my own and critiquing my performance from last year. Here are former bear now bull Richard Bernstein’s ten predictions for 2010. There is a clip at the bottom from CNBC as well.
Before you pillory Bernstein for going from David Rosenberg-esque Dr. Jekyll to Abby Cohen-esque Mr. Hyde, I should point out he is running with the multi-year recovery that I took so much stick for earlier in the summer. While I have backed away from that position, I still see it as a significant possibility. So, don’t pooh-pooh his (medium-term) optimism. Once I listened to what he was really saying, I came away thinking he is talking about a cyclical upturn only. I should also point out he is sufficiently disgusted with the lack of reform that he also believes the next leg down could be worse than this past one.
The next list will be Saxo Bank.
- Stock and bond market returns will be positive in US.
- The US dollar will appreciate big-time once short-term rates rise.
- Dollar “carry trades” will be savaged (haven’t they been already).
- The Fed will be behind the curve by the second half of the year. Short-term rates could rise a lot. Long-term rates could rise in the first half of the year, but bet on a curve flattener during the second half of the year.
- Corporate profits will explode to the upside.
- Employment will improve. Consumer Discretionary will be among the best performing sectors.
- Treasuries will underperform stocks.
- Small cap value best performing segment. Small banks will out perform.
- Meaningless financial reform due to bull market.
- Democrats will do better in 2010 than people think.
He is sounding a lot like he believes in the fake recovery meme i.e. a short cyclical upturn followed by major down leg in the economy and stock market.