Predictions For 2009: Earth Generally A Rubbish Place To Be

As well as the aforementioned resolutions, the first week in January also sees everyone going into soothsayer mode and ruminating on the future of humanity in the forthcoming year. If 2008 told us anything, then it was that nothing is predictable – who said this time last year that America would have a black president, nationalised banks and interest rates at nearly zero? But what the hell, newspapers don’t write themselves, and so people are nonetheless making grand claims about our surely caprice-ridden 2009.

First up are Nomura, the bank that took on bits of Lehman and then didn’t look as strong as we all thought. They’re saying that Asian markets are going to be just fine while the US deteriorates, “with Asia being invited to form a new global financial structure”. It comes in their Warren Buffett-esque assessment of the quality of Asian companies’ stocks, in their paper (adopt booming movie-trailer voice) “Titans, Heroes and Mortals”. Their Asian “titans” include Acer, SingTel and the aptly named Want Want China Holdings.

But their confidence is skewered somewhat by Ambrose Evans-Pritchard in the Telegraph, who after crossing his palm with silver tells us: “The great surprise will be the ferocity of the downturn in China”. Other Telegraph predictions are mostly depressing: “Recovery from recessions always takes many months (or sometimes years) longer than people anticipate. In this case, the wait will be even longer than in previous episodes: assuming we do escape from the perils of debt deflation (by no means an assured outcome) we will then face the challenge of constraining inflation with higher interest rates”; about the stock market they say: “one thing can be expected. Volatility will continue with large daily swings the order of the day”; “lending levels for the next one to two years will be very subdued.” Where’s the bit about the tall, dark and handsome stranger?

But their glumness is shared with Craig Brown at Seeking Alpha, who deals the financial-prediction equivalent of three “death” cards – he predicts a rise in bankruptcies, unemployment over 8%, zero lending, and house prices still in decline, before wailing and gnashing his teeth, saying that the EU will disband and encouraging people to “lock those doors” amid a poverty-induced crime spree. Tim Lacono gives us an example of what passes for optimism over at Alpha: “The question today is whether what happened in 2008 was Armageddon – Part I, or just plain Armageddon. As you’ll see below, from my vantage point, it looks more like the latter.” Thank heavens!

Who else? Ben Wright over at the Wall Street Journal says that banking culture is set to change completely, with boards and executives being overhauled, simplicity taking the place of complex derivatives (bit late, but never mind), and hedge fund managers saying sorry for all the trouble they’ve caused. Meanwhile Vince Cable says: “The battle for survival will be thoroughly nasty…there is a danger of the vulnerable being trampled underfoot”, cheering somewhat to add: “for those in secure jobs with decent employers and with low debts, there are few worries”, before the crystal ball gets all scary and brimstoney, and he forsees massive civil unrest and extremism: “I see the personal and party animosities played out every week at Westminster and wonder if the political classes are capable of grasping the enormity of the crisis we are in and the challenge to us to behave differently. If we do not, the public will become seriously angry. We know from history that such anger can lead to extremes.”

Brian Eno, of all people, continues Cable’s theme: “What if it comes to feel like there isn’t a long term—or not one to look forward to?…Resources that are already scarce will be rapidly exhausted as everybody tries to grab the last precious bits. Any kind of social or global mobility is seen as a threat and harshly resisted. Freeloaders and brigands and pirates and cheats will take control.” So that’s what working on a Coldplay record does to you.

Still, at least we’ll be having more sex. And England will win the Ashes. And we’ll be reading each others minds. And we’ll be wearing bold or nude lipstick while its all happening. Happy New Year!

Posted by Ben Beaumont-Thomas in Other | January 5, 2009 3:21PM |