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2015 was a bad year for Warren Buffett, oil and natural gas producers, US coal companies, taxicab companies and their lenders, currency traders who thought the yuan could only go up, the New York Giants, Marissa Mayer, university administrators, and Trump haters.
Here are some guesses as to how these 2015 losers will fare in this New Year:
- Shares in Buffett's Berkshire Hathaway are down about 10%. The nature of its portfolio - rails, energy, auto insurance with accidents rising in response to more driving-while-texting - a collection of what CNBC's Mike Santoli calls "tired blue chips" - will have a hard time regaining much lost ground. But the billionaire Sage of Omaha can be counted on to retain his avuncular aplomb - and continue a daily health regimen that includes five cans of Coca-Cola, not exactly consistent with the emerging habits of modern-day consumers.
- Oil producers, including Putin's Russia, watched prices fall (from about $60 to $35 per barrel in the case of oil this year, following plunges from over $100). Producers will continue to struggle with low prices as the Saudis keep pumping in order to maintain market share, Iran returns to the market with perhaps 500,000 barrels per day of crude, and domestic fracking production holds up better than anyone expects. The Saudis are predicting $29 crude in 2016. Natural gas producers are probably in even worse shape, although the recent cold snap drove prices up about 15% at year end.
- Coal companies were losers in Obama's war on coal, and their own battle with low natural gas prices. They will continue to lose markets to natural gas and suffer from the tightening regulatory noose that Obama's EPA has looped around their necks, while international use of coal continues to rise as more and more power stations come on line in India and China.
- Taxicab companies and banks holding their IOUs will continue to surrender market share to Uber, although labor-market regulators will make the disrupter's life more difficult by getting courts to rule that drivers are employees entitled to benefits rather than independent contractors.
- The Chinese regime manipulated (it prefers "managed") the yuan down last year, and China's rulers will continue to hold their currency down to stimulate export industries as growth slows, banks' holdings of dicey IOUs from state-managed enterprise remain on balance sheets, and workers grow restive.
- The Giants - they prefer to be called the New York Giants, which should upset truth-in-advertising consumer regulators since New Jersey Giants would be more accurate - are ending an abysmal season tomorrow, and Tom Coughlin, their long-time coach, will soon join other once-lauded coaches enjoying retirement or making themselves available for another assignment.
- Marissa Mayer's plans for Yahoo were shot down by the market. By the end of 2016, Ms. Mayer will have tried shareholder and board patience to the breaking point, and collected a munificent going- away present.
- College administrators had to grovel before students who didn't want to be exposed to anything that might upset them, and 2016 will bring worse. These functionaries will reap the rewards of bending to pressure from violent, incoherent students and either share power with the rabble or retire.
Donald Trump deserves a paragraph all his own. The punditry is no longer quite so dismissive of the at-times vulgar businessman. Its members do keep repeating, "He is tapping into the anger of the American voter," a phrase that makes it sound as if all of his support comes from frothing-at-the-mouth irrational rednecks, bigots, and Tea Partiers. But, as Trump's pollings hold, these observers seem less certain that they have correctly diagnosed what they see as the nation's political ailment. Yes, there are some such types among his supporters. But consider this. Trump's promise to build a wall to keep out illegal Mexican immigrants is merely an easy-to-visualize version of the "border control" favored by other candidates. His promise to keep out Muslim refugees might disgust liberals who have not nor are likely ever to live near one, much less meet one except for a photo op, but it sounds sensible to most Americans, especially since he added that the ban would apply "until we can figure out what is going on". His promise to make trade a fairer proposition for Americans and eliminate special tax advantages for hedge fund operators is no different from the positions taken by Hillary Clinton and other "more respectable" candidates. Most of all, he has promised to "make America great again," which resonates with voters who feel we have lost our way and our standing in the world and are witnessing an immiseration of the middle class. How he will do these things is less important than that he wants to. Stephen Sondheim put it best (in another connection, of course): "Everybody says don't ... it isn't right ... don't disturb the peace .... Well I say do .... Maybe you're going to fail, but it is better than not starting at all ... Tilt at the windmill, and if you fail, you fail."
Like it or not, in 2016 we will see more of Mr. Trump, especially now that he has decided to use some of his unspent budget for a $2 million-per-week television campaign in the first three primary states - Iowa, New Hampshire and South Carolina. Film clips are certain to be picked up and aired by a repulsed and fascinated international media, now trying to imagine a world in which Trump has his finger on the button.
This does not mean that I am rooting for Trump to win his Party's nomination, or to prevail in the February 1 Iowa caucuses. Pollsters have him running neck-and-neck with Florida senator Ted Cruz, so it's anyone's game. Or that it would be a plus for America if The Donald gets to call in the Trump Tower design team to redo the White House in the style to which he has grown accustomed. Or that his lead in the polls means as much as it would if there were fewer contenders sharing the remaining 70-odd per cent of the pie. Bernie Sanders, the socialist challenging Clinton for the Democratic nomination, is polling about as well as Trump, but the absence of other contenders leaves Mrs. Clinton with around 50%, whereas Trump's nearest rival can muster only 18%.
Once Republicans select the candidate they believe can beat Hillary Clinton, the real campaign will begin in earnest. Polls have Clinton trumping Trump, but running about even in face-offs with either Cruz or fellow-Floridian Marco Rubio. Both are sons of Cuban exiles, but with little else in common. Cruz is disliked by his senate colleagues (a point of pride for him) and relies on his debating skills to slide over past inconsistencies; Rubio is thoughtful, more willing to commit American resources to the destruction of ISIL, and the candidate of the Republican establishment now that Jeb Bush cannot whip up enthusiasm for his campaign (polling 3%) and, I am told, is looking for a graceful exit from the race, probably after the third primary (South Carolina, February 20).
The campaign is likely to take place against a background of a steadily but slowly growing economy, and be dominated by ISIL, rising health care costs, income inequality, what to do about Wall Street, and, oh yes, the personalities of the candidates and whatever now unforeseeable event might occur. Of that uncertainty I am certain.
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