Home » Economic Predictions » Barreling Toward Epocalypse: Grading My 2020 Predictions
 

Barreling Toward Epocalypse: Grading My 2020 Predictions

By Photo credited to the firm Levy & fils by this site. (It is credited to a photographer "Kuhn" by another publisher [1].) (the source was not disclosed by its uploader.) [Public domain], via Wikimedia Commons

After each year closes, I typically grade myself on the predictions I made for that year. My last set of predictions were written near the end of June, during our reopening from the COVID lockdowns, for the second half: “2020 Economic Predictions: This Series of Unfortunate Events Guarantees the Epocalypse.”

I led off with this economic overview of what was still to come:

Many people are living right now in the delusional hope of a V-shaped recovery from the recent Coronacrisis lockdown…. That is the most unlikely possibility imaginable.

Half a year later, that overarching theme has been realized. Even though the economy reopened, we still have millions and millions of unemployed people who are surviving off of various stimulus programs. Without those programs millions would be bankrupt. We even had to renew forbearance programs for mortgages and rent that were set to expire at the end of the year even though that termination date was originally set because congress hoped we might be past the worst of this by then. Clearly we are not.

I believed it was absurd to think the disease would be settled by the end of 2020. As it has turned out, we are going down economically again due to viral resurgence and more economic lockdowns in various parts of the country, making unemployment worse again even as much of the damage from the first lockdown has become permanent or remains unresolved. So, we are building lockdown damage upon lockdown damage.

From there, I went on to say the following:

During this time of economic crisis, most of the predictions listed below are current events that are almost certain to continue as the major trends of 2020 and are likely to even worsen, plunging us into the chaos of a deep economic collapse, worse than 2008:

  • The social unrest of BLM will become even more widespread and intense. [That prediction was easily right for the summer, but toward the end of the year BLM actually fell off the radar screen as Trump “Stop the Steal” protests took center stage.]
  • Additional social unrest over forced social distancing will reappear around the nation as distancing measures return. [We did go back to extreme social-distancing measures in numerous parts of the nation in the fall, and many of the “Stop the Steal” rebellions have expressed a buildup of fiery rage fueled by those dictates. Again an easy prediction.]
  • Social unrest over corporate bailouts is likely to begin as the Federal Reserve and government stack up mega bailouts for the rich. [The corporate bailouts were mostly accomplished by July, and there was almost no social unrest over them during the remainder of the year. So, didn’t happen.]
  • Tearing down of monuments and other acts of violence will certainly create backlash against BLM. [I think a lot of the rage in the “Stop the Steal” rebellions is a backlash by people who feel their culture is being taken away from them. Thus, you hear a lot of “take our country back” statements by those who are rebelling and those inciting rebellion.]
  • So, social unrest will beget more social unrest. [My statement here meant that rage will just snowball, becoming worse and worse as people counteract the cultural dismantling from BLM and as protests become increasingly angrier. Things cooled down a little in the early fall, but rage exploded after the election. The “Stop the Steal” rebellion became more and more intense with every protest until it finally became an insurrection at the start of 2021.]
  • All the turmoil of a likely-to-be contested election with all the accusations of Russian tampering and other hacking … will cause even more social unrest. [Some of the rage when Trump bas based on claims that voting machines were hacked. The hacking claim, however, was not the main concern of the voting-machine allegations. The legal claims focused more on allegations that the machines were rigged by their operators. Yet concerns were expressed that the machines were hacked by the CIA’s operations out of Germany, and an office in Germany was even raided to try to prove that. So, this prediction was right on in it’s main statement of a contested election, which was easy to predict, but may have overemphasized “hacking” as part of the concerns.]
  • All those social conflicts will negatively impact some local businesses already hurting badly from the COVID-19 lockdown because they will be unable to reopen due to the protests at a time when we cannot afford anything that causes further damage to business. [I don’t think we’ve seen that. While the resurgence of lockdown has hurt businesses, protests in the latter part of the year had less and less harm on businesses than they had earlier.]
  • Social distancing being ignored entirely by BLM protestors, will increase the spread of COVID-19 as will reopening, ending the stock market’s fantasy of a V-shaped recovery. [Here I meant economic recovery. BLM protests died down a lot after I wrote this, so whatever spread happened through them was already happening at the time I wrote this. As the year moved on, few BLM protests diminished, and the rallies held by Republicans who refused to wear masks became the suspected super-spreader events instead. This one was half-right, though, because reopening definitely resulted in the disease starting to rise again in the second half of summer, and it exploded when people started getting together more in the fall, especially the holidays.]
  • Travel and hospitality will certainly remain in deep depression as COVID-19 stages resurgences. [An easy prediction, but certainly dead on.]
  • Lack of travel assures a continued rise in bankruptcies in the oil and gas industry. [Dead on! Eleven refineries are scheduled to close, including the nation’s largest refinery, Royal Dutch Shell in Louisiana. The nation’s largest U.S. refining company, Marathon Petroleum, is closing several refineries. In terms of actual bankruptcies from all businesses in the oil industry, the industry passed a milestone in October of over 500 bankruptcies, making 2020 its worst year ever.]
  • Shutdowns of major summer events will depress local business and government revenue as will shutdowns of sports events and concerts. [True. Almost all summer events were cancelled.]
  • Local governments will be forced to downsize staffing quickly and cut back projects of all kinds due to hugely diminished tax revenue caused by all the troubles listed here, causing a new wave of job losses…. [Didn’t happen to the large degree I expected. I believe it will still happen, but so far most local and state governments appear to have found ways to make it through with only minor adjustments, and government downsizing has been fairly quiet in the news or in job statistics so far.]
  • Diminished policing will result in a huge crime wave across America … because police officers resign and no new people want to become police in the present atmosphere. [Did happen. A number of cities have struggled to find sufficient numbers of police officers because of public rage against police in some cities and defunding, and their crime rates have soared.]
  • Business uncertainty due to the continuing trade wars and to additional COVID-19 border lockdowns, as well as inability of businesses to get parts across borders even for products produced and sold within the nation, will act like gravity on the hope of economic lift. [This has happened in the background of our economic troubles that have come from COVID shutdowns, BUT these aspects have not developed into a significant part of the economic news. The main problems have been from businesses locked down that never reopened and the resulting unemployment.]
  • We all know the federal debt will keep growing at an exponential rate because of reduced taxes that were supposed to be paid for by a rise to 4% or better GDP growth. That’s now a distant dream… The Federal Reserve [will] monetize the debt to the moon and back. At some point that will call into question the current US credit rating. [Fitch downgraded the US credit rating outlook to “negative” a month after I wrote this due to the exploding debt, but the government’s credit rating retained its overall AAA status. So, it got a nick.]
  • So many bonds sliding toward junk because the weak business economy will force all kinds of already risky credit to become riskier and become downgraded. [As it turned out, most of this was already in when I wrote this. Some city’s and states like New York were downgraded late in the year, but there was not not as much worsening of the situation, as I was actually anticipating with this statement.]
  • Forced offloading of that debt by institutions that are not allowed to carry junk bonds, will cause huge bond market problems and defaults by those who can no longer refinance by issuing new bonds. That will force the Fed to continue to soak up ever larger amounts of junkier debt, moving further down the junk spectrum, even as it also has to fund the federal government’s exploding debt plus the new exploding debts of local governments via new “special vehicles.” [The Fed has silently soaked all of it up, and the news has been silent about it, making it hard to ascertain how bad this problem really has been.]
  • The stock market, being utterly dependent on the Fed continuing to print money while also utterly dependent on COVID-19 keeping its head down, will go down hard again, likely this summer and probably again in the fourth quarter. I predict it will ultimately fall lower than its nadir in March. [MASSIVE fail. It did go down at the end of Summer and again in October by about 10% each time, but nothing like it went down in the spring, and it more than fully recovered since.]
  • That will cause more wealth evaporation, leading to more natural economic tightening across the financial and business spectrum. [Nope.]
  • The second wave of COVID-19 will be worse than the first when the fall flu season hits or maybe even this summer. [Definitely. The second wave from the fall is still rising and went well above the first wave.]
  • Some major banks and other financial institutions in Europe, such as Deutsche Bank, and in other nations will crash. US institutions will get pulled down by their associations…. [Fail.]
  • Many businesses will never reopen even though the economy has been reopened legally. Many others that do re-open will close for good before long because partial reopening is not enough to sustain them. [Extremely accurate. Numerous business remained shut after the reopening that had begun when I wrote this. Many of those that struggled through the reopening, shut for good during fall’s return in some areas to lockdowns.]
  • More shopping malls that were already marginal will close forever after reopening because of the number of businesses that do not return or that fail during the partial reopening…. [Numerous malls shut forever, and the buildings are being repurposed for all kinds of other uses or have just been left vacant.]
  • That, in turn, will have a knock-on effect for other surrounding businesses that now experience less traffic…. [Hard to say so far.]
  • Due to the continuing sweep of all the problems listed above, we are in for a deep, longterm jobs depression…. [Definitely. Unemployment remains horrendous, and is now getting worse again.]
  • That means housing and commercial real-estate will crash again as longterm unemployment and business losses result in mortgage defaults…. [Massive miss! Housing prices have soared. I TOTALLY did not see the COVID migration coming that resulted in a huge housing surge. My only comfort is that I don’t think anyone else back in June saw it coming either.]
  • The resulting deep slowdown in construction will mean even more job losses…. [For the reasons just given, way off!]
  • That means some US banks will crash…. [It didn’t happen at all. We may get there, but it did not happen in 2020.]
  • Add to all of these near certainties, the growing possibilities of more international wars that we already see rising in risk…. [Didn’t happen. Maybe some skirmishes, but no big new wars of the kind I talked about.]
  • Civil wars within various nations are more likely because of the rising economic troubles and social strife listed here as well as continued growing strife due to immigration pressures that developed under globalization. [Well, it looks like the US may be plunging into one — the tensions of which began to seriously build in the last two months of 2020, which exploded into insurrection in the first week of 2021 in an event that is the worst of its kind since the US Civil War.]
  • I won’t predict the US dollar will collapse, BUT … this is the FIRST year in which I’ve ever said that is a reasonable possibility.I am certain the indomitable dollar will finally start to experience struggles of its own…. [That has been the news of the past few months. How far it goes, nobody knows.]
  • Add to all of that the normal economic crises from major exogenous events, such as earthquakes, volcanism, hurricanes, tornadoes, floods, droughts, pestilence, wildfires, and, oh, an asteroid or two. The difference this year is that those big catastrophes will be hitting badly crippled economies and stressed societies wherever they hit in this world. (We cannot know what will hit or whether the number of such events will be lighter or heavier than other years because these are black-swan events — things we know CAN happen but have no knowledge of the specific likelihood of any particular event in a particular area in any given year. What we do know is that nations struggling under an economic crisis and an emergency health crisis will be less able to manage those events when they hit. Organizations like FEMA will be stretched way beyond their capacities.) [We dodged a bullet in the US. We had some bad catastrophes, such as wild fires that turned out after I wrote these predictions to be our worst season ever, but overall the natural disasters proved manageable and did not seriously strain our economy, except, of course, the local economies of those areas hit by the massive wildfires; but nationally it did not strain the system.]

From there, I concluded:

That’s a long list of finger-in-the-wind economic predictions. I’m not saying all of them will be dominant trends this year, and I can’t say when or in what order each one will happen; but I am certain 80% or more of my 2020 economic predictions will play out as stated above, and that is more than enough to assure the deep economic depression I’ve named “The Epocalyse.”

Counting only those items above that were largely or entirely correct and not those that were minimally correct, I come up with 16 solid positive scores out of 32 items. That’s my worst ever. So, I gotta give myself a “C” for getting only half right. However, I think 2021 will still bring around many of the things that didn’t happen this year. So, for some those that I didn’t score on, it’s really a matter of slower timing, not that they won’t happen. I’ve usually scored myself with a “B,” sometimes even an “A-.” Not this past year. I’ll blame it on COVID. Why not? Weirdest year in my lifetime.

I may have overstated the economic bad news for 2020 because we’ve weathered through economically better than I expected so far; but the social train wreck piled into the station only a minute late, blowing up in the first week of 2021. The economic strains listed above that didn’t happen or barely happened probably will not turn out to be a miss because the end of this train is still piling into the station on top of the cars that have already crashed. With lots more economic strain piling on and social strains that look like they could become worse than 2020, we are still barreling toward Epocalypse.

Liked it? Take a second to support David Haggith on Patreon!