This is becoming something of an annual institution. And here they are:
1. EU creates a new wealth tax on savings above €100,000 in a return to a ‘Soviet-style economy’.
2. The European Parliament elections see the creation of a strong anti-EU alliance, to include the UK Independence Party.
3. The bubble bursts in the five US technology giants that have been trading at a huge premium to market valuations this year – Amazon, Netflix, Twitter, Pandora Media, Yelp.
4. The yen falls below Ұ80 per dollar, as investors pile back into the currency, forcing the Bank of Japan to delete its government debt in order to escape deflation.
5. The US recovery slows down, bringing deflation worries back to the fore.
6. Far from tapering, the Federal Reserve increases QE to $100bn per month and focuses on mortgage bond purchases tosupport a flagging housing market.
7. The price of Brent crude falls to $80 per barrel, as producers fail to slow down production.
8. Germany enters an unexpected recession as economic activity slows.
9. The French CAC 40 index drops 40% as local politics takes a turn for the worse.
10. The currencies of the ‘Fragile Five’ countries – Brazil, India, South Africa, Indonesia and Turkey – fall 25% against the US dollar.
Not so outrageous this year beyond number 1. My forecast for the most likely one is number 5, my base case!