It wouldn’t be the holiday season without a few predictions for the year ahead. While it’s always a tricky proposition, it’s a fair bet that what happened last year is seldom to be repeated, especially when it comes to Wall Street. So here are my top 10 predictions and surprises for 2011:
10: The fiscal situation in Europe will become increasingly dire as the new year unfolds, sending the eurozone back into full-blown recession. The euro moves to fresh lows against the dollar.
9: With the extension of the Bush tax cuts and President Obama appearing to move to the center, Treasury Secretary Tim Geithner will quietly step down early in the year.
8: By fall, unemployment will still be high enough to stoke the ambitions of several third-party presidential candidates — including Mayor Bloomberg.
7: Private-equity honcho Steve Schwarzman’s surprise move to Paris will turn out to have been more about pleasure than business; he’ll be back in the Big Apple, full-time.
6: Despite deep recession in Europe, oil prices will remain stubbornly high, with gasoline prices well over $3 a gallon. For consumers, this means much of the new 2 percent payroll tax cut will be spent at the pump.
5: The widening Bernie Madoff probe will become Wall Street’s favorite soap opera. After two years of stagnation, the investigation will widen rapidly to engulf several big banks.
4: The insider-trading probe spearheaded by the US Attorney’s office in New York will net some big hedge-fund fish.
3: The Time “Person of the Year” Curse will continue as Facebook’s Mark Zuckerberg’s plans for an ill-timed IPO will have to be scratched.
2: An early 2011 market rally in the US will fade, as conditions in Europe darken and several US states need federal assistance.
1: US interest rates spike sharply higher, putting a cap on any nascent housing recovery and reviving that ’70s word, stagflation. terrykeenan@email.com