Tug of War in the Economy and Markets

The year started on a high note, with a rallying stock market and clear signs of economic recovery. After the near-death experience of 2008-2009, the worst appeared to be over.

That was the zeitgeist when I made my own predictions for 2010, which I’m reviewing a bit early this year. As I re-read those columns, two things became clear: I had my best year ever in anticipating the swings of the market, and I was generally too optimistic about the economy.

Since I’m a put-your-best-foot-forward kind guy, I’ll begin with what I got right.

In “Six Big Predictions for 2010” (January 7th), I focused primarily on the economy, but also touched on the markets

Louise Story has a front page article in the Sunday NYT that is your must read this morning:

“On the third Wednesday of every month, the nine members of an elite Wall Street in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast derivatives, one of the most profitable – and controversial – fields in finance. They common secret: The details of their meetings, even their identities, have been confidential.

“The sell-offs they trigger would be more like corrections than a second bear market, so for bullish investors they could be buying opportunities.” Right on target.

The most likely victims of such a crisis, I wrote then and in a January 21st follow-up, were “the sovereign debt of the PIGS nations (Portugal, Ireland, Greece and Spain) –perhaps Italy, too.”

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Howard Gold

“I am an independent-minded commentator and citizen. Like many of you, I have many criticisms of how decisions are made for us by entrenched politicians of both parties…


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