Recapping my 2016 crystal ball predictions
Here are my 2016 predictions, what happened and my score. My prior, 15-year record is 73% accuracy.
1. Prediction: Wall Street's digital greed, Washington's anti-business policies and collusion between the two will continue a moribund economy for small businesses.
Actual: The 44-year old NFIB Small Business Index reported flat Main Street sentiment for the 8th straight year - Plus 1, unfortunately.
2. Prediction: With a declining global economy and exhausted financial manipulation options, capital markets will struggle in 2016.
Actual: What was I thinking, applying economic fundamentals and reality in my analysis? All stock indexes are in record territory for the year - Minus 1.
3. Prediction: Mature Main Street small businesses will fare well in 2016.
Actual: Small businesses surviving the Great Recession continue to report deleveraging while finding a way to operate profitably in a 2% GDP economy. I call this phenomenon "Invisible Hand Operating": the balance sheet gets stronger whether the owner intends it or not - Plus 1.
4. Prediction: Economic and regulatory pressures, plus demographic trends, will perpetuate an unprecedented decline in small business numbers.
Actual: According to a Gallup report, for the first time in 35 years, American business deaths outnumber births - alas, Plus 1.
5. Prediction: New crowdfunding rules for direct investment in small businesses will not become a funding silver bullet for this sector.
Actual: New Securities and Exchange Commission rules make it easier for direct investment in small businesses, but won't change inherent impediments to direct investment for most small firms, like unsophisticated financial records and misaligned exit expectations - Plus 1.
6. Prediction: Unlike its investor equity sibling, crowdfunding lending (aka peer-to-peer) will proliferate with small businesses.
Actual: Morgan Stanley reported recently 2016 P2P lending growing by more than half, from $23B to $36B - Plus 1.
7. Prediction: Global headwinds, the specter of terrorism, seven years of anti-business policies, and presidential campaign drama will contribute to a flat 2016 economy, with annual GDP stuck below 2.5%.
Actual: U.S. economy remained in the now 8-year perpetual recovery mode with GDP growth under 2% - Plus 1, unfortunately. For the third year in a row, the real economy doesn't reconcile with the record-breaking stock market (see #2). What's wrong with this picture?
8. Prediction: The perfect storm of a slowing global economy, a crude oil glut, newly approved exports from U.S. producers and OPEC's loss of pricing power, will keep crude averaging below $50 per barrel.
Actual: Crude averaged approx. $42 bbl. in 2016 - Plus 1.
9. Prediction: Slow global growth and deflationary threats will prevent the Fed from making more than one rate increase in 2016.
Actual: All my economist friends disagreed with this prediction, and the same one I made in 2015. They were wrong and I was right both years - Plus 1.
10. Prediction: Putin and Iran will become more desperate and dangerous.
Actual: Putin continues to flex his Soviet-like designs in Eastern Europe and the Middle East, meanwhile Iran thumbs its nose at the Obama Administration after signing the nuclear deal - Plus 1.
11. Prediction: In an unprecedented response to ISIS, moderate Muslims around the globe will denounce intolerance and violence in the name of their religion.
Actual: Alas, my hope springs eternal, but we're still waiting on the Muslim majority to take back their religion - Minus 1.
12. Prediction: You'll hear more about blockchains and distributed-ledger technology applications, disconnected from Bitcoin.
Actual: Global financial institutions - as much for defense as offense - announced adding blockchain technology to their business and financial security plans, plus the U.S. government will begin introducing it in 2017 - Plus 1.
13. Prediction: A mere shadow of its former self, Obamacare will continue to collapse under its own structural defects, causing the President's namesake policy to go from legacy icon to caricature.
Actual: Clearly the perfect storm timing of more premium increases for the not-so-Affordable Care Act just prior to Election Day contributed to the loss by the candidate who defended Obamacare, and the win for the one who promised to repeal it - Plus 1.
14. Prediction: In his last year, Obama will increase anti-business executive actions.
Actual: According to the Competitive Enterprise Institute, the 2016 Federal Register of new regulations and rules will exceed the previous record, also under the Obama Administration. The poster child for this behavior is the DOL's plan to double the overtime exemption amount, which was so excessive it was struck down by an Obama-appointed federal judge - Plus 1.
15. Prediction: Obama will go after the 2nd Amendment in his final year.
Actual: The President was no more vociferous about this in 2016 than any other year - Minus 1.
16. Prediction: Obama's Justice Department will not indict Hillary Clinton in 2016, but the critical mass of her baggage will cost her votes.
Actual: The proof was in the pudding. I should take two on this one - Plus 1.
17. Prediction: The GOP primary process will not produce an apparent nominee going into their convention, unless it's Trump or Cruz.
Actual: Trump was the nominee - Plus 1.
18. Prediction: Republicans will not win the White House unless the ticket includes a Hispanic and at least one person from Ohio and/or Florida. Look for Trump/Rubio or Cruz/Kasich.
Actual: This looks like a push, since I included Trump, but it's more like one-fourth accurate, since I missed the FL/OH connection, soooo - Minus 1.
19. Prediction: The social conservatism of Republicans and the socialistic economics of Democrats will create electoral challenges for both parties in 2016.
Actual: Let me say that another way: President-elect Donald J. Trump - Plus 1.
20. Prediction: If Trump wins the election, it will be because he's the only candidate most likely to avoid defending the bankrupt elements of either party.
Actual: Isn't that exactly how he won? - Plus 1.
21. Prediction: A liberal member of the Supreme Court will exit in 2016, probably in the first half.
Actual: A member of the court did exit in the first half, so that's two of three elements. Scalia died in February, but I said "liberal," so I'm calling this a push.
22. Prediction: With every member of Generation Y, aka Millennials (80+ million), old enough to vote in 2016, the electoral influence by this generation is now at critical mass.
Actual: Young voters didn't turn out for the Democrat in 2016 as they did in 2012, but turned out about the same for the Republican in both elections. I really expected the Gen Y impact to be more dramatic, sooo - Minus 1.
23. Prediction: More than just a president, the 2016 election results will reveal the future trajectory of America.
Actual: With Real Clear Politics reporting a "Right-track/Wrong-track" number of 57:33, the 30-state, heartland-America electoral majority loss by Clinton, diverse by both state and demographically, repudiated and reversed the eight-year political trajectory under Obama - Plus 1.
24. Prediction: Alabama will become the NCAA Football Division I Champion.
Actual: Alabama 45, Clemson 40 - Plus 1.
Write this on a rock ... My 2016 accuracy number is 78%, with my 16-year record at 73%. Notice that ten months before the election, I went 4 for 4 on Trump (without endorsing him). How'd you do? Look for my 2017 predictions in two weeks.
Category: Articles by Jim Blasingame