Well here we are again..... and my scorecard from the last year!

• Car prices: Kaboom!  Clean miss.  Stupidity continues.
  
  
• Business will be forced to cut those who do not produce.  Half-hit.  There clearly are major cuts happening, but its under the surface to a significant degree so far (e.g. Intel's recent layoffs), so only 1/2 point here.
  
  
• The "great congressional reset" will be BS.  Yep.  Ding ding ding ding ding.  "Oh, no more CRs" eh?  Uh huh.
  
  
• Silly season upset.  Nope.  Trump won.  Miss.  RFK being in the game does not count as well, he wasn't in the end was he?
  
  
• Congress will not reign in spending and the second inflationary spike will hit before the end of the year.  Off by two months, so miss.  The last two months in the MTS is what it is, but it was two months late to be in the CPI thus far (it IS in the PPI but that doesn't count) so no point.
  
  
• There will NOT be four or more rate cuts.  Point. There were three.
  
  
• 10% or better drawdown in the SPX.  Nope; the peg was 12/31 and nope.
  
  
• Housing begins to crack.  Oh yeah.  Further, I predicted "its too early to think its good" and indeed it is and remains so.  Point.
  
  
• AirBNB rental price crash.  Yep.  Especially in places like here.  Hoh boy are people sweating.  Point.
  
  
• Revolt begins on illegal immigrants.  Uh, yeah.  Chicago residents are rather pissed off and now we have a woman set on fire in NY.  Never mind multiple governments deciding that Hohman isn't quite as crazy as the left would prefer they think. Point.
  
  
• Middle East is not settled; if anything it expands.  Point.  Syria anyone?
  
  
• America tells Ukraine to bite it.  Nope.  Not yet.
  
  
• Dealing with the medical business.  Clean miss, but its clearly coming -- either through government action or other sorts.  I don't count the singular "other sort"; that would be cheating.
  
  
• DEI will have a rough year.  Can I get three points?  Starbuck anyone?  Naw, I'll just take the one.
  
  
• Big R will be evident (Recession) but not declared in 2024.  This one's tougher; I won't take it but it will roll forward.  I think its here, but of course when its always declared in arrears.  Nonetheless without people being quite-sure it is taking it in advance is simply unfair, so I won't.

What do you we got here for a total?

7-1/2 out of 15 by my count, so 50%. Eh, I've had better and I've had worse.  Worse than last year though, so this needs improvement.

Let's roll forward to 2025, which I fully expect to be quite the doozy:

• Trump's "deport 'em all" BS will fall flat.  Homan has the right general idea but he won't be unleashed and neither will the rest of the Federal prosecutorial apparatus.  Further, he will own all of it and I will savage both him and Trump up and down when he fails along with Trump as well, because he knows damn well that 8 USC 1324 applies to every person who harbors, assists, rents to, or employs an illegal immigrant so there will be no excuses available when he doesn't do it.  Oh sure, there'll be a show but the problem is that it will be exactly that -- a show.  In other words what he won't do is what he knows he can do, which is to start locking up employers like Tyson and landlords who rent to illegals which, if he did, they'd all leave and solve the problem at near-zero cost.
  
  
• Trump will not take on the H1-b problem at all and in fact will likely make it worse.  Thus the STEM collapse of Americans and as a bad side effect the birth rate collapse will continue.  Simply put nobody with a brain in their head will make children if they believe (whether justly or not) said kids will get screwed out of a job by someone from India, China or otherwise.  This problem incidentally goes back more than a decade and has only gotten worse.  You can only incentivize people to create -- you cannot force them to do so.  We must demand everyone stop with the BS about H1s being "exceptional contributors" because anyone who is in fact exceptional and can prove it qualifies for an O-1 visa which is wildly superior in that it is has no limit on the number that can be issued, has an initial three-year validity, is not tied to an employer so you can move if a better opportunity presents itself (including starting your own firm) and is both infinitely renewable and forms the basis for a "green card" (permanent residency) application (and from there, ultimately, citizenship!)
  
  
• The inflation monster will appear like Godzilla out of the water in early to mid 2025 forcing market rates higher.  Powell will have no choice but to follow the market, as The Fed always does, despite the hollering coming from Trump.  Like it or not inflation is always a monetary phenomena; it is simply too much credit (money is not credit but they spend the same) chasing too few goods and services.  The core of the problem is found in the productivity and median income graph and the above two points are a very large part of it.
  
  
• Recession declared this year.  Its already in the data, and the Philly Fed has recently issued a monster report (which is being ignored by the markets) that an utterly huge percentage of the claimed "job adds" this last year were nonsense and that actual second quarter numbers were negative in aggregate.  Whether intentional knob-twisting or not by the BLS all the indicators are saying a recession has started, with the last ratification coming from the curve un-inverting -- which just happened.  Since the curve inversion was historically un-heard of in both depth and duration so should be the recession that follows.  The cognitive dissonance -- that policy has set this in place and no you can't do more of the foolish things to "rescue" from it or you'll make it many times worse -- will be amusing but the impacts of that will likely not be fun for Americans at all.
  
  
• The medical monster will fail to be addressed.  Panic in this sector and the economy generally is coming.  Panic is never a good thing as it precludes careful analysis and deliberative action to address an issue, such as, in the case of the medical mess, doing this.  I'd love to predict they'll do intelligent things here but that's a loser given both the body politic and those in government (never mind the shills in both the media and medicine alike) so I'll take the under instead.
  
  
• Despite the rhetorical flair "MAHA" will go nowhere.  I'd like to be wrong on this but I can't take the bet on the other side of it, and what's worse is that the compounding effects of bad policy not only over the last four years (and we know what that consists of) but the last several decades has to be unwound.  If it was to be the impact would take a decade or more to bear fruit just as the damage did.  It won't get done; again, unless prosecutions happen for all the frauds, and we know Trump's record on this from his first term, it won't change and he doesn't have the stomach for zeroing large company stock prices by charging them under existing laws that can be used in this regard.
  
  
• Ukraine will be recognized as having lost and the war, such as it is, is settled.  Nobody on our side will be held accountable for goading it on even though our culpability goes back to 2014 and in fact before.  The key elements will wind up being that Crimea remains Russian along with their naval port, no NATO expansion and an effective DMZ is set up in the eastern portion bordering Russia -- which incidentally is almost-exactly what Putin wanted originally.  Thus a huge number of people died and a monstrous amount of material was destroyed over hubris yet changed nothing in the final outcome (well, except for boosting the stock prices of defense contractors both here and abroad.)  If there's one good thing that comes out of Trump's Presidency it might well be the expulsion of some of the warmongers that were involved from the government's sphere of influence.  We'll see.
  
  
• The Middle East becomes much less-stable and serious trouble comes.  Don't kid yourself about that part of the world; Syria's implosion is not a good thing.  My concern level there has gone up several notches and even though I don't think the odds are much higher than 50% I'll put a marker on the table that something nasty out of the Iranian side of things comes in the nuclear realm; as I've pointed out for a very long time all it takes is the material and Iran shares a land border with Pakistan which is a nuclear nation.  I'll take this point if any nuclear-related thing happens over there (including someone blowing up someone else's nuclear stuff, even if they do it with conventional weapons.)  I also have serious concerns about Turkey; our drive to admit them to NATO originally (when they're clearly not "North Atlantic") was a stick in the eye on Russia's naval access to open water (again, you shouldn't sleep in geography class) and has been a sore spot since.
  
  
• The bubble pops in asset markets.  I know, its a repeat.  Better to be early than late however.  This feels a lot like the turn of 1999/2000 to me but jacked up with a whole lot more drugs -- both stimulants and hallucinogens.  Of note is that there are very large firms realizing that "cloud" is more expensive than running their own infrastructure and more dangerous as well when it comes to cyber-security risks.  I don't think this is the year it all comes apart in regard to "cloud" but I do not believe that between the inflation already stuffed into the system in October and November by the outgoing Biden Administration which cannot be reversed and the collision between rate expectations for more "free money" and reality at the grocery store a quite-large drawdown in the stock market can be evaded.
  
  
• Housing will be a five-alarm mess; lateral moves if you own a house are ok but otherwise stay away from it.  As I've pointed out many times if you already own a house selling a bubble and buying one doesn't benefit you; you get more than you should for your existing place but you pay more for the replacement.  This remains true if you have to move during the converse provided you're not levered.  The market has been "locked" to a material degree due to the foolish acts in monetary policy of, in particular, 2020-2023.  Those days are not coming back and forced sales will occur simply because circumstances change and force people's hands.  Beware as this was a long cycle and so will be finding the valuation floor; 2025 will not be the year where you want to go fishing for same.  Bare land may become attractive in 2026 but with the exception of special circumstances that can always arise for a specific deal I don't expect '25 to be the year to be shopping anywhere near residential anything.  Of serious concern on a forward basis is the unfounded and unreasonable property tax levels and thus forward expectations in many parts of the country.  This is not just state-specific it is, within a state, county and even incorporated area, if you're in one, specific.
  
  
• Commercial Real Estate's doom loop will tighten.  If you think residential is in trouble well..... Of some note will be the continued pressure for "return to office" both in the private sector and government.  I fully expect that to continue -- one problem those pushing back have is that its really not very hard to measure actual productivity and the data is pretty-much in on this -- employers, whether government or private-sector, have been paying more and getting less.  When you can't borrow at negative real cost anymore you're forced to actually be productive with the lending you employ -- including your levered commercial real estate transactions and nearly all commercial real estate is, in fact, levered.
  
  
• The collapse of "green mandates" will begin in earnest.  When the "free money" game ends so do the schemes powered by it, and nowhere was this more in evidence than in wind and solar.  They simply don't make sense as both actually destabilize the grid due to the lack of any sort of "flywheel" which you get for free with rotating heavy machinery such as a steam turbine.  The unfortunate reality of "renewables" (other than hydro or geothermal, both of which are very location-specific as to viability) is that they are negative-sum games when you are forced to actually amortize costs with a positive real rate to borrow the money to build them.
  
  
• EVs have had their day; any sort of "mandate" or "pressure", with the exception of perhaps California that will be dragged kicking and screaming, will collapse.  This is one place Trump can make near-immediate changes and I expect him to; if you like EVs because you like them then that's fine but the forced-subsidy from others buying fuel-powered vehicles is almost-certain to disappear.
  
  
• The Chevron Deference decision will drive plenty of change.  That is perhaps the most impactful item on the agenda; the end of insular policy organs in the Federal Government "making it up as they desire" when the statute does not clearly delineate said power will bring major changes. I'll go through some of that on the other side of the blog as time goes on, but this decision cannot be overstated as to its importance.  I expect some of these impacts to start almost-immediately with the new Administration and continue through the new year; these are all good changes from a standpoint of removing artificial cost barriers that have raised your cost of living over the last decade or more.
  
  
• At least one Supreme Court vacancy occurs.  I have some bets on who and why but I'll keep those to myself.  This one's simple; Trump gets a shot at a fill in his first year.
  
  
• One or more major scandals among the powerful, with the most-likely being centered in Congress, will be thrust front-and-center among the American public and unlike many other claimed "outrages" this one will find traction.  I predict at least a half-dozen resignations and possible prosecutions and these will be documented events outside of Congressional privilege and into the realm of "extreme outrage" among the public.

As always I reserve the right to revise and/or add silently until January 1st 2025 at 12:01 AM and this thread, like all of my annual prediction Tickers, will be exempted so it remains available through the year for reference (and then scored next year.)

Enjoy!

This does not require a law, although that would be better since then to change it you'd have to repeal it.

All bills must have an appendix and each paragraph or clause (which may encompass more than one paragraph) must be sponsored by at least one member of the respective chamber, who must name themselves in the appendix.

This instantly stops the "bills written by lobbying entity" games.  Yes, they can still try to do it but now at least one member of the chamber must be put his or her name on each paragraph, and therefore be responsible for same.

As things stand right now once a bill is originally filed (which requires at least one member) who wrote what ends up in it is completely without accountability and nobody is forced to take ownership of even a single sentence.

This must stop right now and it must become policy that until it does absolutely everything is vetoed no matter what the bill is.

This really ought to get passed into law and therefore can bind both chambers but since each chamber can control the form and substance of its own business each can write this into their own rules for consideration and one can effectively force both by refusing to take up any bill that does not contain such an appendix that is submitted from other.

This is how we stop the 1500 page monstrosities immediately that are filled with things like "renaming offender to justice-involved person" and similar claptrap, never mind very substantive policy changes such as extending and expanding pandemic-era authorities, both of which are in the current CR.

Accountability must return to the legislative process.

This is the fastest and easiest way, and can be implemented in a literal 30 seconds.

There is a reason the first three letters are "CON" you know.

Speaker Johnson said just three months ago there would be no Christmas omnibus/CR bill.  That they'd extend through the election break to get the work done and pass the actual appropriations bills.

That didn't happen, and rather than enforce the appropriate penalty (shut it down until Congress passes said bills) he is now going to once again do what he said he never would.

This, on the back of record deficit months for both October and November, which at present run rates would roughly triple the annual deficit from last year.  That won't happen mostly because if they actually try to do that we will not make it to September before the Treasury market blows up and both short and long rates are well into double digits -- being that such a deficit would result in a roughly 15% inflation rate and quite-clearly imply that Congress has no intention of getting the situation under control -- not then, and not ever.

This, by the way, is precisely the last check and balance that can be imposed on a runaway Congress when it comes to spending, which is the reason that folks such as Bill Still who advocate for issuing non-debt-backed notes are wrong.  You need only look to the actions of Congress to recognize that removing that one last check and balance would leave as the only available remaining option the violent removal of said Congress by the people -- in other words, Revolution.  A real one, not a rhetorical one.  That's bad, so let's leave the only remaining means of imposing discipline which is both peaceful and lawful in place.

Anyone who believes that actual inflation in terms of all items less food and energy is only up 3.3%, and all items including same is up 2.7% annually as of the last report as you experience it is out of their mind.  Services, less energy services, which is the vast majority of the economy, is reported up 4.6% -- functionally, that might as well be 5% and is above the current 13 week bill rate AND the 10 year note rate.

In other words the idea that you are actually paying to borrow is false; the borrowing rate is below the inflation rate so we still have Congress driving a speculative bubble rather than incentivizing production and innovation, which is what sustains an economy (and the people in it) over time.

Car insurance continues to be on a tear posting a 12.7% annualized rate.  Anyone who has renewed (or will) can speak to that being the case too.  Oh, and if you like eggs (and you should; they're delicious) they're up a stunning 37.5% annualized on a retail basis and if you've bought them recently you may well have seen a double.

Many have tried to claim we can "grow out of the inflation"; Trump, among others (including his nominee for Treasury) has peddled this nonsense.  Nope.  We never really did it in the 1980s after the Nixon and Carter years; instead women went to work and added another income to the household.  That was a one-shot deal, of course and were we to try to grow out of the double in grocery prices not only would it require actual productivity and growth rates never seen in America outside of the years immediately WWII after the war had blown up basically all production in Europe but in addition you can't have any recessions and you must immediately cease all deficit spending -- which the last two months have already voided as a possibility.

The President is one person and does not set spending levels; he, and his people, file a proposed budget (and "DOGE" can influence that of course) but it is Congress that, per the Constitution, must appropriate every single dollar that the government spends.

Therefore this issue begins and ends there with the President being able to sign or veto said bills -- but that's it.  In addition during the last time of "big mess" (anyone younger than 60 or so doesn't remember it and how bad it got because they were either of single digit age or not born yet) brought us the 1974 Budget and Impoundment Control Act which prohibits the President and Treasury from refusing to spend what Congress has appropriated.  The law was passed after Nixon in fact refused to spend appropriated funds in an attempt to control the deficit.

We still have plenty of people who believe this issue mostly resides in the Executive and decisions made there but in fact it does not; as the Constitution calls for, and the 1974 law restated and enforced, a President's power in regard to spending levels is advisory and ends with his right to issue an original veto.  If overridden, or if he signs an appropriations bill he is bound by said levels of spending as it directs.

It certainly would appear, from the last two months MTS, that coming into the new Trump Administration we're in for a rough ride -- and that is very likely to bear -- no pun intended -- the asset markets.

This amuses me greatly.

Industry veterans, bartenders and servers in the nation's capital told the Washingtonian that resistance to the Republican figures in the progressive city was inevitable and a matter of conscience. 

"You expect the masses to just ignore RFK eating at Le Diplomate on a Sunday morning after a few mimosas and not to throw a drink in his face?," said Zac Hoffman, a DC restaurant veteran who is now a manager at the National Democratic Club.

Actually, what I expect is a bunch  of bankruptcies.

Its not like there isn't a restaurant or bar on every corner in DC -- there is.

Further, word gets around very rapidly.  If you start doing this everyone in the Administration will know about it in 10 minutes.  Everyone.

I'd love to be a bar owner in that town with this attitude running around.  I'd make very-clear to my staff -- I will be watching for any indication of this and if I see it, you're instantly fired and the table's check is comp'd.

And the next day I get all the business with lines out the door while the place across the street that pulls this crap sees half their business disappear in a single day -- and those people never come back.  Why would they when they get excellent service with a smile right across the street?

In fact I'd run advertisements so-stating and with all the targeted advertising (hi Google and Facebook!) I'd hit every mobile device in DC with the ads too -- "Come one, come all, everyone is treated equally and with respect irrespective of your political party.  We are here to sell you delicious food and beverages -- and for no other reason -- and every member of our staff shall do so."

Smart businesspeople love a market where their competitors deliberately destroy themselves.