Wall St gurus find predictions game getting harder
By Joseph A. Giannone and Jessica Toonkel
NEW YORK (Reuters) - With every new year comes a new round of bold predictions for financial markets.
Bill Gross, the manager of the world's largest bond fund, kicked off the year calling the current market "paranormal." He forecast a 2012 characterized by "credit and zero-bound interest rate risk.
Blackstone (BX.N: Quote) Vice Chairman Byron Wien, among the securities industry's best known prognosticators, on Tuesday unveiled his latest crop of 10 "surprises" for the coming year. BlackRock (BLK.N: Quote) Vice Chairman Bob Doll is bullish on stocks, while one well-known forecaster declared 2012 too hard to predict and declined to offer a forecast.
Among some predictions: Doll foresees double-digit U.S. stock returns, while Wien sees benchmark oil prices plunging to $65 a barrel.
In the past -- before U.S. housing prices fell and kept falling for the first time since the Depression or the future of Eurozone was at risk -- their educated guesses had a good chance of being right.
But these days, market volatility is the norm and far-flung political events can send U.S. markets into a tailspin. Skeptics contend it is hard to predict what the world will look like tomorrow, let alone 12 months from now.
Indeed, that led Birinyi Associates' Laszlo Birinyi, whose stock market forecasts were widely followed, to tell clients this month that he would not be making predictions this year.
"There are too many variables which are beyond our comprehension," he wrote in his January client newsletter. Continued...