* Another Trump/Clinton Presidential race appears increasingly likely in 2024 – But it’s not the Trump you think!
* “Slugflation” (sluggish growth and stubbornly high inflation) becomes a commonly used term to describe the global economy next year
* The Federal Reserve becomes “Volcker-like” by aggressively tightening policy
* Musk and Bezos battle to see who can set the record for biggest loss of a personal fortune in a single year
* Berkshire Hathaway and Apple go on a corporate buying spree
* Share prices of “The Nifty Seven” (FAANG + Microsoft and Nvidia) are under pressure most of the year
* Precious metals finally have their day
* A failing Robinhood is acquired by JPMorgan at $2/share
* What little is left of global harmony is upended in a year characterized by expanding geopolitical tensions on three continents.
* Read on for more surprises… Like Diogenes with his lantern, I am, again in 2022, a cynic looking for truth – as I engage in my annual assault on the consensus and “Group Stink.”
Remember, my Surprise List is not a set of forecasts. Rather, the List represents events that the consensus views as having a low probability of happening (25% or less) but, in my judgment, have a better than 50% chance of occurrence. In betting parlance this is called an “overlay.”
I would note a change in the format of my Surprise List this year (and last), as, in the age of social media, attention spans are shrinking – so this year’s Surprise List will again reflect this new reality (of fewer characters and less words) by being noticeably shorter than in the past two decades.
Here are My 15 Surprises for 2022 :
1. The Deteriorating Health of Both Biden and Trump Becomes The Biggest Surprise of The Year – The Irony Is That It Will Likely Lead to Another Trump/Clinton Presidential Race in 2024!
President Biden becomes sufficiently incapacitated such that President Harris becomes the first female President of the United States. She immediately becomes, in effect, a lame duck president and has no significant successful legislative accomplishments over the next year. Leaked stories of abusive temper tantrums in the Oval Office make headlines.
Both Vladimir Putin and Xi Jinping immediately put Harris to the test with a series of foreign policy crises – and she proves to be not up to the task.
The November mid-term elections result in a landslide for the Republicans, who take the Senate and win a sizeable majority in the House of Representatives.
Speaker Pelosi retires from Congress.
Meanwhile, Donald Trump also becomes ill and announces he will not run for President in 2024.This creates a wide open field for the nomination in both parties.In mid-2022, Republican Nikki Haley announces that she will run for president and assumes the (defacto) mantle of her party’s leadership and takes a strong lead for the 2024 Republican Presidential nomination.Leading Democrats speak out and encourage Hilary Clinton to run, again. Though she remains publicly uncommitted, she is clearly very interested, and, according to numerous sources is seriously considering a run.Privately, the former president, Donald Trump, lobbies, postures and grooms his daughter, Ivanka, to run for President.Almost overnight, when his/her political ambition is revealed, Ivanka Trump takes a significant lead over Haley as her father’s supporters quickly return in force.In a speedy response to the Ivanka Trump declaration, Clinton announces her plan to seek the Democratic Presidential nomination.The stage is thus set for another Trump/Clinton Presidential contest in 2024!2. Powell Turns Hawkish – But Monetary Policy Fails to Dent Rising Inflation Despite accelerated tapering and an attempt to signal slow and steady rate hikes, inflation accelerates well beyond expectations. By February inflation is running close to 8%. Though comparisons are tough, inflation stays well above consensus expectations (sticking at above 5% this summer).ESG investing, the complete reopening of the global economy and rising geopolitical tensions sends oil to over $110 a barrel.While Omicron proves far less virulent than initially feared, business closures put in place and uncertainties serve to exacerbate the supply chain dislocations seen in 2021. The continued logistical mess reinforces more (cost push) inflation and mounting inflationary expectations.The U.S. labor shortage intensifies and wages grow +6%. The shift from “goods to services” demand post Covid actually causes more inflation as, surprisingly, service prices accelerate across the board. “Slugflation” (sluggish growth and sustained inflation), a distant cousin to “stagflation,” becomes a feature and commonly used term in 2022.As interest rates increase (in the U.S. and in Europe), the rising higher debt burdens in the financial system – which have […]
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