[转贴] Wien Sees GDP Growth, Treasury Yields Rising to 5%

何鸿燊

Blackstone's Wien Sees GDP Growth, Treasury Yields Rising to 5%

By Inyoung Hwang and Nikolaj Gammeltoft - Jan 3, 2011

Blackstone Group LP’s Byron Wien, who called the bottom for U.S. stocks in 2010 while failing to predict the size of the ensuing rally, said economic growth and 10-year Treasury yields will approach 5 percent this year and gold will surge above $1,600 an ounce.

The price of corn will surpass $8 a bushel, wheat will top $10 and soybeans will exceed $16, while housing starts climb past 600,000, Wien, chairman of Blackstone’s advisory services unit, said in his annual “Ten Surprises” list published since 1986. He reiterated a forecast that the Standard & Poor’s 500 Index will advance above 1,500 and also said the price of oil will climb to $115 a barrel.

“The continuation of the Bush tax cuts coupled with the extension of unemployment benefits has put all working Americans in a better mood,” Wien wrote, according to a statement today on Business Wire. “Real gross domestic product rises close to 5 percent in 2011 driven by improved trade and capital spending in addition to stronger retail sales. Unemployment drops below 9 percent.”

Wien said in June that rising pessimism in options markets signaled it was time to buy stocks. His forecasts at the beginning of last year were less prescient. The former senior strategist for Morgan Stanley said yields on 10-year Treasury notes would top 5 percent, Democrats would lose 20 seats in Congress and that equities would finish 2010 unchanged.

Missed Mark

The Democrats lost 63 House seats and six in the Senate, the Fed didn’t raise rates and the benchmark U.S. equity index finished 2010 at 1,257.64, a 13 percent advance. Yields on 10- year Treasuries peaked at 3.99 percent on April 5.

The 10-year Treasury yield rose to 3.33 percent at 4:25 p.m. in New York. Corn futures for March delivery declined 1.4 percent to $6.205 a bushel, wheat futures for March delivery increased to $8.055 a bushel, while soybeans futures for March delivery fell 1.7 percent to $13.79 a bushel. The S&P 500 gained 1.1 percent to 1,271.87 while crude oil advanced 0.2 percent to $91.55 a barrel.

Commodity prices beat stocks, bonds and the dollar last year as China, the biggest user of everything from cotton to copper to soybeans, led the recovery from the first global recession since World War II. At the same time, crops were ruined by Russia’s worst drought in at least a half century, flooding in Canada and parched fields in Kazakhstan, Europe and South America.

Commodities Surge

The Thomson Reuters/Jefferies CRB index of 19 raw materials gained 17 percent in 2010. Global bonds returned 4.88 percent, based on Bank of America Merrill Lynch’s Global Broad Market Index. The U.S. Dollar Index, a gauge against six counterparts, added 1.5 percent. The CRB outpaced the other measures for the first time since 2007.

In 2009, Wien, who was then chief investment strategist for the Pequot Capital Management Inc. hedge fund, correctly predicted rallies in equities, gold and oil. From 2005 to 2009, he worked at Pequot, which closed in 2009 amid an insider trading probe by the U.S. Securities and Exchange Commission.

U.S. stocks fell 16 percent between April 23 and July 2 amid concern that the European debt crisis and China’s efforts to cool its economy would slow the global recovery. Wien predicted the “weaker” countries in Europe will be provided additional aid by the European Union and the International Monetary Fund. The two groups approved rescue packages for Ireland and Greece in 2010.

‘Less of a Concern’

“The European financial crisis becomes less of a concern,” Wien said. “The policies put in place prove psychologically satisfying to the financial markets but harmful in the longer term because they are palliative and do not represent solutions.”

While Europe’s debt crisis will abate and Japan will avoid falling back into recession, the developed market of choice for global investors will be the U.S., as rising interest rates and a strong economy allow the dollar to strengthen versus the euro and the yen, according to Wien.

Wien forecast China will manage the value of the yuan “aggressively” to keep the growth of the economy below 10 percent. He also predicted a major state will fail to pay interest on a municipal bond because of a lack of funds, President Barack Obama will accelerate the withdrawal of most military personnel in Afghanistan to the end of 2011 and Sarah Palin will seek the Republican nomination for the U.S. presidency.

何鸿燊

Byron Wien's Prediction Track Record: Zero Out Of Ten



Submitted by Tyler Durden on 01/03/2011 17:06 -0500

Byron WienCarry TradeCentral BanksConsumer protectionFederal ReserveForeign Central BanksIranJapanMorgan StanleyNikkeiNuclear PowerObama AdministrationPresident ObamaPurchasing PowerTransparencyUnemploymentWhite HouseYen


Instead of wasting time with Byron Wien's Top 10 "predictions for 2011" we have decided to skip this latest and greatest worthless charade in prognostication, and instead we believe that presenting the list of what the man whose retirement age has come and gone, thought would happen in the past year, is a great example of why all these so called institutional Wall Street experts are nothing but two bit hacks. As may be expected, somehow Wien got exactly zero out of ten correct! The man is the contrarian indicator on Wall Street. Also keep in mind: it takes a lot of skill to be this bad.

cc1212

Zero Out of Ten? since 1986?

何鸿燊

Laszlo Birinyi, the Hungarian famous for discovering such curious novel uses for a ruler such as i.e., a stock price forecast device, has just officially reached over into the twilight zone and pulled out his forecast for the S& for 2013, September 4th to be precise, not 3rd not 5th, and it is, hold on to your hats, 2,854, or well over a double in just over 3 years.

Bloomberg clarifies this particular prediction which is either pure idiocy or even purer brilliance: "While this ‘forecast’ is fraught with potential pitfalls, unseen events and caveats,” investors should be optimistic about the U.S. stock market, given its history, Birinyi wrote.

" While not sure what particular history Birinyi is referring to, it most likely is not the 50%+ plunge in the market in a year and a half, when it became all too clear for a few brief days, that the entire global financial system is one big ponzi.


From Bloomberg:

    Birinyi said given how long the advances that began in 1962, 1982, 1990 and 2002 lasted, the current rally should continue another 32 months. Historical precedent shows that gains are largest in the first and last quarters of bull markets, according to research conducted by Westport, Connecticut-based Birinyi Associates Inc. The first of this increase ended in April 2010, and the final quarter may start in July 2012, he said in a report e-mailed to clients today.

    Birinyi, who analyzes historical charts and patterns to make forecasts, said in December that the S& 500 will climb to 1,333 this year, joining money manager Leon Cooperman in citing higher earnings and valuations below historic levels. Earnings should advance 14 percent this year after they beat estimates in the three quarters reported so far for 2010, according to analyst estimates compiled by Bloomberg.

    Birinyi’s 2011 forecast compares with the 1,371 average of 11 strategists surveyed by Bloomberg News. The S& 500 fell 0.3 percent to 1,268.42 at 11:03 a.m. New York time today, after advancing 13 percent in 2010.

While we fail to see how someone who is an "expert" in analyzing historical charts and patterns to make forecasts, can cite fundamental reasons for a justification, we are confident that everyone will be holding their breath for the next three years. And while we would love for Laszlo to be correct, the only way this prediction will every come true, is if the US currency enter a period where it loses 100% of its value a day. In that case the stock market will hit not 2,854 but 2.8E666, a number that as Zimbabwe learned fast, has little practical use.

And before some may accuse Biriinyi of dementia, here is his terrific track record from a decade ago (h/t thetrading)