I usually don’t pay too much attention to year-end forecasts, although I do read them. But this one caught my eye.
It was not one of the typical forecasts that seem to be written so that the analyst can say he or she was right, whatever happens. Or they can point to a dramatic event that was completely unexpected.
I mean, who could have predicted that Mexico would send troops into California? So it’s nice to see a clear-cut prediction that leaves no room for doubt, at least in the mind of whomever is making the forecast.
This prediction for investors who wonder what 2014 will look like was publicized by a very successful broker – one of the biggest, as they say – named David John Marotta. It wasn’t Marotta’s forecast, he was just doing us all a “favor” by passing it on.
The message was – in a few words – to make sure you have guns and ammunition available because the market is going to have a fatal crash. I guess this doomsday fellow would include real estate and other investments too numerous to mention that will collapse along with the stock market.
It’s like the old gag about one day in the not too distant future, when a shocking announcement is made by astronomers – a previously uncharted giant asteroid is heading for us at almost the speed of light and will hit the next day, destroying the Earth.
The New York Daily News headlines “It’s All Over.” The San Francisco Chronicle says “Capitalism will destroy the Earth within 24 hours.” The Wall Street Journal, however, has a small front page item that says “World to end tomorrow – story on page A18.”
I think of that tired old joke whenever I read, or hear about, a gloomy, foreboding forecast such as the one Marotta is relaying to us. Think of this: can you name any financial types who, a year-and-a-half ago, predicted that the market would rise to more than 16,000 on the Dow? Or that interest rates would hold steady at rock bottom for 18 months with no end in sight? I don’t doubt that there were some accurate forecasts made, but I just don’t know who made them.
Now, having criticized the entire community of market forecasters, let me immodestly join the crowd.
By reputation, the new head of the Federal Reserve, Janet Yellen, is thought of as a “dove” when it comes to interest rates. In other words, she will want to see some strong indicators of inflation before putting on the monetary brakes. If all goes well – heh, heh – the economy will strengthen at a slow rate, providing no reason for a rate increase.
On the other hand, history tells us that something will happen that we didn’t expect.
Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at Bsteven254@aol.com.