Who could have seen this coming?
Back in January I made some predictions for the coming year. I wrote what I thought could happen this year, and then, thinking I was too far out on the fringe, reined them in a bit. I shouldn't have. In fact, maybe I should have gone the other direction.
In January, I guessed the average price for gasoline would hit $3.50 a gallon this year. (Remember, it was about $2.75 at the time, even as we hit $100 a barrel.) Well, we're not even to May yet and we're already at $3.57. That's a 30% increase in just a few months. Not that I have to tell you this. $4.00 gas, here we come.
In January, I guessed that the banking industry would consolidate, with at least one mega-merger. Well, we've seen a few mergers (including one big one: Bear Stearns + JP Morgan Chase, if it can be called a merger), and lots of shakiness. Citi, the world's largest bank is apparently on the ropes, and Washington Mutual, Morgan Stanley, Countrywide, Wells Fargo, Lehman, Wachovia, and many others hanging on for dear life too. And we haven't even peaked on house foreclosures yet, much less gotten into the rising tides of problems with credit cards, auto loans, home equity lines, etc. Perhaps worse, the credit troubles have spread to Canada, the UK, and cracks may be forming in the eurozone and elsewhere.
In January, I guessed that oil would hit $130 a barrel (though I apparently forgot to put it in my blog post). We're at $120 already, and seem destined for $150 at this rate. And this is while global oil production has actually increased slightly. What happens if it starts to decline?
Some of my other predictions are looking a bit iffy. But hey, it's only April. And here we are looking at food riots in a dozen countries and rice rationing right here in the US. I don't know of anybody who predicted that for 2008.
Since it's becoming fashionable to do so, I blame China. After all, I'm sure you've heard of the Chinese Curse, "May you live in interesting times..."