at this time of year, it's always fun and instructive to look forward and make a few predictions for the coming year - hopefully the kind of ones that can make you some money too .
Here's mine, will be interesting to see what the informed posters on here think. I would be particularly interested to see the predictions of Dreaded Estate, kerrynorth, Cassandra Syndrome and mryoungdan.
1. 'da Banks'; as the NAMA discounts deepen, defaults increase and need for further recapitalisations becomes ever more acute (and the total lack of market appetite for same) AIB will pass into majority state ownership quite quickly, certainly before the summer. BoI will suffer the same fate - although with a lesser degree of State ownership. Expect the government to use every trick in the book to avoid full-on nationalisation. Shares slump back to the 'penny stock' category.
The EBS\PTSB\rump of INBS will consummate their 'third force' marriage.
By any reckonable metric, the lie that NAMA 'will get credit flowing again' will be exposed for the drivel that it unquestionably is. The Squeeze continues unabated and existing customers are hit by greatly increased charges and margins.
No criminal charges will be laid as a result of shenanigans at any Irish financial institution as the Great Anglo & INBS Cover-Ups continue to mask what really went on in these places.
The NAMA business plan is torn up (as a work of fiction) and rewritten under heavy pressure from Brussels - the €54bn is revised down to less than €40bn.
More than 5,000 people will be laid off by the Irish banks.
2. Unemployment: Jan\Feb\Mar = meltdown in the domestic services (esp. hospitality) and retail sectors. We move past 500,000 on the Live Register by Easter and then stablise due to the mitigating effect of discouraged workers and emigration outflows\EEs returning home.
3. Fiscal; Lenihan's bluster about turning the corner is exposed for the spin it is - tax receipts continue to fall and come in under 30bn for the year. Spending sees increases over the budget targets - driven by increased SW payments. The 2011 budget will be harsher and deeper than the one just past - we will require an adjustment of over €6bn just to stand still. Mini-budget in mid 2010 focusses on the revenue side of the equation and soaks the middle-class PAYE earner still further.
4. Property: 2010 will be the year of free fall and active revulsion towards property as an asset class - 'Despair' on the Market Cycle of Emotions. Prices fall below 2001 levels. Tens of thousands of middle-class families go bust as their property 'investments' strangle them. Rent levels continue to plummet.
5. Continued deflation; -3%
6. Bond issuance; our spreads continue to widen as the black hole that is our banking sector continues to weigh on our ratings, we are downgraded further.
1. Politics; the FF\Green coalition stays in power for the year. No election. Cowen increasingly viewed as a lame duck Taoiseach and Lenihan's position becomes ever stronger.
2. Industrial relations: no meaningful PS strikes as the membership of the unions recognise the futility of same. Expect refusal to co-operate with reform agendas to be met by threats to pay - a deal will be done.
3. other bits and pieces; Ireland win the Grand Slam again . Leinster and Munster contest the HC final . Bertie swallows a packet of truth serum and tells us all on The Late Late where the money really came from - Eoghan Harris says its unfair to blame him for this .
1. Stock markets tumble as it becomes increasingly apparent that growth is not resuming at any pace. Dow goes sub 7500. Gold continues to march towards 1800.
2. The Euro goes above parity with Sterling and hits 1.75 to the dollar.