market folly

Byron Wien, Senior Managing Director at The Blackstone Group pens an annual list of surprises each year and below are his predictions for 2010. Although the information was released earlier this year, many outlets just covered the bullet points of his predictions and not the entirety of his research presentation. As such, we wanted to post up the full piece for those interested. Wien of course was previously the Chief Investment Strategist at hedge fund Pequot Capital before they shut down. His list now joins the rest of our 2010 crystal ball coverage as we'd previously posted up Doug Kass' 2010 predictions as well as a prediction of the top 10 investment themes for 2010.

Here is the brief summary of Wien's 2010 predictions that you may have seen floating around the internet:

1. The US economy grows at a 5% real rate and unemployment drops below 9%.

2. The Federal Reserve hikes the fed funds rate to 2% by year-end.

3. Ten year treasury yields rise above 5.5%.

4. The US dollar rallies against the yen and the euro.

5. The S&P rallies to 1300 in the first half of the year, declines to 1000, then settles around 1115.

6. Japan becomes the best performing market.

7. President Obama endorses nuclear power development.

8. The Obama administration becomes energized via US economic improvement.

9. Financial service legislation will be passed (but in a softer form than originally feared).

10. Civil unrest in Iran peaks.


An interesting set of predictions from Wien, and you can already see how some of them are playing out like he predicted as the S&P marches higher and treasury yields have started to jump as well. We'll watch with interest to see if some of his second half of the year predictions come true. As always, take these with a grain of salt. Below is the presentation in its entirety from Wien and The Blackstone Group. It's chalk full of research that illustrates the macro factors he examined to draw his conclusions. Here is the embedded document:



You can directly download a .pdf here.

For more crystal ball gazing, check out the top 10 investment themes for 2010 as well as Doug Kass' 2010 predictions. And for those of you interested in some of Wien's previous work, we've posted some of his past market commentary while at hedge fund Pequot as well.