2013 Predictions

[Tobedotty]

Zero-Hedge always makes me laugh it has an over-the-top tone and always has an end of the world headline. Its like reading a literary version of fox news.

My predictions are quite dull, I reckon 2013 will be kind of uneventful.

1. Betfair's share price will finish down on it's final closing price of 2012 at the end of the year

2. Average Horse racing volumes will be down on Betfair

3. US 10-y treasuries will yield over 3% - they yield too little right now, they're just too over valued.

[haichless]

four predictions
1. The only reason we didnt get riots in the summer of 2012, as in 2011 was because the weather was so bad, and people dont riot in the rain. If we we get a long hot summer and the coalition is still in power/or tories on their own, we will have riots this summer.
2. The price of an average shop in the supermarkets for food will rise by more than inflation.(sainsbury £70.42)
http://www.thegrocer.co.uk/grocer-33/
3. The price of alcohol in pubs will continue to rise above inflation
http://www.pintprice.com/region.php?/United%20Kingdom/
4. The statistics quoted regularly that only 1-2% of all gamblers/traders/betters are successful will continue to diametrically oppose the number of successful g/t/b's on forums.

Happy new year

[superfrank]

3. US 10-y treasuries will yield over 3% - they yield too little right now, they're just too over valued.

i'd be very surprised if this comes true - you're right that they are overvalued, but with ZIRP and QE likely to continue for many years, the yields will stay very low as they are manipulated by said policies (see Japan of the last 20+ years).

[Iron]

Possibly, although do you not think the law of diminishing returns might eventually kick in with QE (if it has not started doing so already)?

Jeff

with ZIRP and QE likely to continue for many years, the yields will stay very low as they are manipulated by said policies (see Japan of the last 20+ years).

[superfrank]

well the US is running a deficit of $1.1Tr a year, and there's no chance they'll get that down for many years, so they'll take the easy option and finance it all via the printing press.

[Iron]

They can try, but the market may demand higher interest rates on future bonds if they get shafted too badly over the existing debt...

Jeff

well the US is running a deficit of $1.1Tr a year, and there's no chance they'll get that down for many years, so they'll take the easy option and finance it all via the printing press.

[superfrank]

the real market for US bonds is mainly the FED - others only buy because the FED is buying and because they can offload them at a better price later.

[Tobedotty]

I guess so, but to be honest I get the impression people are trying to hide in the us bond market because they're scared and can't find another asset to put their money right now. When the equity markets pick up, and things look rosy again, yields will go up a lot I reckon. I think I read on the FT that hedgies and mutual funds have been shoving a lot of money into bonds too - inevitably once they regain their risk-appetites yields will go up. Also, you say QE is going to force yields down, but it is to some extent offset by inflationary pressure. Anyway a more merry 5th prediction:

5. The UK will positive GDP growth for every quarter of 2013

[Iron]

Where do you see the growth coming from?

It won't come from public spending, and I can't see there being a surge in global demand for what few products the UK still manufactures...

Jeff

5. The UK will positive GDP growth for every quarter of 2013

[superfrank]

ZIRP and QE are designed to force investors into riskier assets (hence boosting stocks and confidence) while keeping govt borrowing costs down by forcing bond yields lower.

the problem is that everyone gets paid in a diluted currency and inflation erodes most of the gains from riskier investments.

[Euler]

It's a curious place to be in. I only invest if I am pretty sure I will yield a decent return including any risk, but a lot of yields are at levels where I can't invest. So I am not investing, which means the cash in piling up while I wait for an opportunity.

[Tobedotty]

Where do you see the growth coming from?

It won't come from public spending, and I can't see there being a surge in global demand for what few products the UK still manufactures...

Jeff

5. The UK will positive GDP growth for every quarter of 2013

The UK's main export in recent years has been Debt and other financial stuff. If banks pick up, so will the economy, I just think they might have an alright year.

[superfrank]

banks are shedding jobs and The City is predicted to contract next year (in terms of employment). the top bankers will be fine though, you can be sure of that!

[staker72]

Don't understimate UK manufacturing, we are the 5th largest exporter of manufactured goods in the world. It's just that a lot of what we make is high value. As we get more competative (or China gets less competative) a lot of mid value manufacturing may return.
Our only serious large competitor in Europe is Germany helped by their lower wages but with even lower unemployment that the UK that may not last.

[superfrank]

Don't understimate UK manufacturing, we are the 5th largest exporter of manufactured goods in the world. It's just that a lot of what we make is high value. As we get more competative (or China gets less competative) a lot of mid value manufacturing may return.
Our only serious large competitor in Europe is Germany helped by their lower wages but with even lower unemployment that the UK that may not last.

lets hope so.
that's where the growth needs to come from and Germany is a great model - for far too long the UK has relied on financial services, property, consumer spending etc. and that's not gonna cut it in future.