Marking My Book

At the end of 2007, I made some predictions. How are they holding up?

1. Domestic politics:

i. I predict that the 2008 Presidential Election will be: McCain-Huckabee versus Obama-Webb.

Looking good so far on the top of the ticket. Huckabee not looking so likely for the GOP second spot, which is a good thing on the whole. If I had to bet today, I’d bet with the rest of the crowd (Pawlenty), but don’t have much of an axe to grind at this point. I’m holding out for Webb because it would be a really interesting (and, I think, effective) pick, though I still think my odds are a bit long.

ii. If they get their respective nominations, Clinton will pick Richardson and Romney will pick Kay Bailey Hutchinson.

Romney pick is longer relevant, obviously. And I suppose if Clinton manages to thread the needle and win the nomination there is zero chance she’d pick Judas as her VP. Nonetheless, no points off unless she actually is the nominee!

iii. If McCain is still in the race after New Hampshire, then when Thompson drops out he will endorse McCain.

Apparently, he couldn’t quite rouse himself to it.

iv. If McCain is still in the race after South Carolina, then Arnold Schwarzenegger will endorse him.


. Bill Richardson will drop out after losing Iowa and endorse Clinton.


vi. Edwards will drop out after losing South Carolina, and will endorse whoever is clearly winning at that point (and if it’s still up in the air, he won’t endorse).

I’m going to claim Bingo on this one – he dropped out after losing SC, before Super Tuesday, there was no clear leader at that point, and he didn’t endorse.

vii. Rudy Giuliani will not drop out until it’s become embarrassing.

You know I’m claiming Bingo on this one as well.

viii. Al Gore will not endorse Hillary Clinton, except in the general election.

Looking pretty good on this one so far.

ix. Ron Paul will get double-digits in New Hampshire, which will be his strongest showing for the campaign in any major contest. He will not run as an independent.

Didn’t get double digits, and wasn’t his strongest showing. But I stand by my prediction that he won’t run as an independent, and so far that’s looking good.

x. Neither will Michael Bloomberg.

Looking good as well.

xi. Senate: the Democrats will pick up Colorado, New Hampshire, New Mexico, Oregon and Virginia, and the next Senate will contain two Senators named “Udall.”

Not a lot of hard info yet, but feeling good about everything except Oregon based on the most recent polls I’ve seen, and Oregon doesn’t look hopeless for the Democrats.

2. Oscars:

i. “No Country for Old Men” will win Best Picture.


ii. Best Director will go to Joe Wright for “Atonement,” another film I haven’t seen. The Coens will get a nomination, but not the award.


iii. Best Actor will go to Daniel Day Lewis for “There Will be Blood” – yet another film I haven’t seen, but unlike the previously mentioned two films, this one I’d like to see. Denzel Washington also gets nominated, for “American Gangster,” and Viggo Mortensen, for “Eastern Promises,” and I’m not sure who else.

Bingo on the winner and or Mortensen; whoops on Washington.

iv. Best Actress goes to Keira Knightley for “Atonement,” because, you know, that’s the way things work. Going in to the nominations, people are talking about how lousy the field is for women this year. When the nominations come out, though, people will be talking about what an interesting bunch of nominees it is – Amy Adams for “Enchanted,” Ellen Page, for “Juno,” Laura Linney, for “Savages” – and then they’ll give the statuette to Keira Knightley, for “Atonement.” Because, you know, that’s the way things work.

Whoopsadoodle! Knightley doesn’t even get nominated, nor does Adams. Oh, well.

v. In spite of appearing in every single movie this year, and hence running the risk of splitting his natural vote, Philip Seymour Hoffman will still win the Oscar for Best Supporting Actor for “Charlie Wilson’s War.”


vi. In like vein, Cate Blanchett, who doesn’t even got nominated for “Elizabeth II: This Time It’s Personal” – probably because the title confused people who thought they were going to see Helen Mirren – gets the Oscar for playing Bob Dylan in certain parts of “I’m Not There.”

Whoops! Doesn’t get the Oscar for playing Dylan, does get nominated for playing Elizabeth.

vii. Diablo Cody will refuse to accept the award for Best Original Screenplay (for “Juno”) in solidarity with the striking writers.

I’m going to claim part credit here; she did win, after all.

viii. In non-Oscar movie news, “Ender’s Game” will still be wandering homeless through the streets of Hollywood. There will be no sign of a Ringworld movie either, but that doesn’t matter, because World of Ptavvs, Dream Park and The Mote In God’s Eye would all make better films.

And so it goes.

3. Economy and Markets predictions:

i. The major domestic equity indices will be down on the year. They will still outperform the Asian indices, which will be weighed down by the unravelling of the Chinese bubble. But they will underperform the major European indices in local currency and dollar terms.


S&P-500: down 9.92% in USD

European Indices:

FTSE-100: down 11.69% in GBP, 11.52% in USD
DAX-30: down 17.79% in EUR, 11.78% in USD
CAC-40: down 16.16% in EUR, 9.11% in USD

Asian Indices:

Topix-500: down 18.10% in JPY, 7.49% in USD
Hang Seng: down 16.52% in HKD, 16.29% in USD

I could claim a moral victory by saying I meant non-Japan Asia. But I’m still wrong about Europe, which generally underperformed the US in both local currency and dollar terms. But more to the point: the year isn’t over!

ii. The dollar will spend the year debating whether to weaken or strengthen, having a volatile but ultimately inconclusive year.

Too soon to say, but so far it hasn’t been terribly inconclusive: the dollar is just plain weaker, against the Euro and the Yen, and has been inconclusive only against the other Anglosphere currencies (GBP, CAD, AUD). But the year isn’t over!

iii. The housing market nationally will trough out in the third quarter, but will flatline from there for quite a while, so that won’t be the end of mortgage defaults.

The year isn’t over! Seriously, this was specifically a 3rd quarter prediction. We’ll see.

iv. None of the major monoline insurers (MBIA, Ambac, FSA, FGIC, Security Capital) will go out of business, though most if not all will have to raise new capital. Nonetheless, at least one new monoline will be launched (presumably by Berkshire).

MBIA looks OK. Ambac looks OK. FSA is fine. FGIC . . .

v. Brazil will be one of the few emerging markets to have a good 2007 and a good 2008.

Bovespa: down 4.57% in local, 3.00% in USD


Bolsa (Mexico): up 4.66% in local, 7.43% in USD
Ipsa (Chile): down 5.05% in local, up 8.54% in USD

On the other hand:

CSI-300 (China): down 28.99% in local, down 26.04% in USD
Sensex (India): down 22.88% in local, down 24.22% in USD
KRX-100 (South Korea): down 9.01% in local, down 14.10% in USD
Micex (Russia): down 14.60% in local, 10.95% in USD

So I should have said Latin shares generally would outperform other emerging markets, not just Brazil. And Brazil had a much better 2007 than Chile or Mexico. So I claim a moral victory at a minimum. And the year isn’t over yet.

vi. Slowing growth in Asia and the United States will keep oil prices generally below $100/barrel, but geopolitical factors and refining capacity tightness will keep it above $75/barrel.

I’m not so good at tracking commodities – not my market – but if I recall correctly crude did get above 100 (as high as 107, I think) and has since fallen back to around 100. If we don’t go higher than that, and don’t go below 75 (safer bet), I’ll claim victory.

4. Foreign affairs predictions:

i. Neither the United States nor Israel will bomb Iran. The Iranian regime will not fall. There will be no “grand bargain” between the United States and Iran. Iran’s nuclear power plant will not open on schedule.

So far so good!

ii. Pakistan will postpone its elections. Musharraf will be out of power by the end of the year, pushed out by the army. There will be no civil war. Nawaz Sharif will be the next Prime Minister of Pakistan. Not that it will do any good.

Elections postponed: yes. Musharraf out: not yet. Civil war: not yet. Sharif PM: whoops!

iii. Ehud Olmert will, emulating his nemesis, Bibi Netanyahu, shift focus from the Palestinian “track” to the Syrian “track” in 2008, with some initially promising talks, but there will be no signed peace between Israel and Syria in 2008.

I’m sticking with this one.

iv. The United States will withdraw all troops in 2008 from . . . Saudi Arabia.

This one, too.

v. There will be no international intervention to save Darfur.

Always a good bet.

vi. I’ve been predicting for years that the German far-left will do something to try to capture more of the far-right vote. So I’m going to predict it again: the bigger, stronger, more united German far-left will do something to blur the distinction between far-left and far-right, which will get it a lot of bad press but will win it a slightly higher showing in the 2008 regional elections (though all these elections will actually be won by the conservatives – votes for the far left come from either otherwise disaffected voters or voters who would otherwise vote for the Greens or the SPD).

This one still hasn’t paid off.

vii. The “Blues” (KMT) will win a decisive victory in the Taiwanese elections. This will be received extremely favorably by Beijing in the run-up to the Olympics. The Olympics will proceed without incident.

Bingo! Unless you count Tibetan unrest as “incident.” Which I don’t. A major country boycott would, however, be “incident” and would leave me with only partial credit.

viii. Most of the world will continue to forget that North Korea is still out there, doing whatever it is it does.

Again, always a good bet!

5. Other.

i. The kindle won’t do well enough to make a profit, but will do well enough to convince Apple to invest in a competing product.

Does anyone know anything about this? I don’t.

ii. Some kind of social-networking-based pyramid scheme will be a big enough story to prompt public debate.

Not that I’m aware of.

iii. Gregory Cochran will publish something impressive and controversial.

I’m sure he’s working on something.

iv. Grand New Party will do really, really well.

The year isn’t over yet!

Anyone out there care to throw out something they want a prediction on?