Goldman's Jim O'Neill Predicted 11 Surprises For 2012 — Here's How They Did

jim o'neill gesturing

A year ago, Goldman’s Jim O’Neill predicted 11 surprises for 2012.

“One thing for sure we can say about 2012 is that there will be no shortage of things to think about,” he wrote. 

“In some ways, for the discerning analyst and the ambitious alpha generating fund manager, you couldn’t wish for a better environment. The only dilemma is that it is probably quite easy to get something(s) wrong!”

We scored O’Neill’s surprises and found that he spent most of the year being right than wrong.

#1 We won't talk about Europe quite as much


This one is a bit hard to measure. But the bottom line is that Europe continued to be a big deal in 2012. 'With a bit of luck, it might go back to being as dull as it usually is,' said O'Neill a year ago. An argument can be made that the crisis has receded, but it's far from dull.

Score: 0.0/1.0

#2 Italy and the EMU do not survive with Italy's 6-7 per cent 10-year yield


Thanks to the extraordinary efforts of Italy's Mario Monti and the ECB's Mario Draghi, 10-year yields are down, and the EMU hasn't fallen apart...just yet.

Score: 1.0/2.0

#3 Euro falls against the US dollar


'The Euro is more likely to reach 1.10 next year, rather than 1.50. I doubt it will see both, and it might not see either, but 1.10 is more likely than 1.50,' predicted O'Neill.

Directionally, he was correct as the euro spent most of the year below where it started than above. It got as low as $1.20, but no higher than $1.34.

Score: 2.0/3.0

#4 Yen falls dramatically against the dollar


O'Neill was directionally correct again as the yen spent most of the year lower versus the doll.

Score: 3.0/4.0

#5 The Euro strengthens against the Swiss Franc


The Swiss National Bank spent much of the year maintaining its price floor of 1.20 Swiss Francs per euro.

Score: 3.0/5.0

#6 Global economic data will continue to surprise


According to the Citi's Economic Surprise Index for the G-10, the data spent most of the year disappointing. However, the surprises have picked up more recently.

Score: 3.0/6.0

#7 Europe's GDP disappoints


Europe fell into technical recession again in Q3 after booking its second consecutive quarter of negative growth.

Score: 4.0/7.0

#8 The S&P 500 heads to 1,400


2012 was a good to the stock market bulls.

Score: 5.0/8.0

#9 No hard landing in China


The definition of soft and hard economic landings are not black and white. 'China won't have any kind of landing in reality, neither hard nor soft, but it will still be travelling. It might have seemed like a soft one though.'

In recent weeks, the economic green shoots have been coming out in droves in China. We're comfortable saying that China avoided a hard landing.

Score: 6.0/9.0

#10 Mexico, Indonesia, South Korea, and Turkey (MIST) rise in importance


This one was a bit hard to judge. All four continue to be considered significant growth markets. Mexico's resilient growth got it praise from the likes of David Rosenberg and Mark Mobius. However, a New York Times story suggesting bribery between Walmart and Mexico reinforced scepticism.

Score: 6.5/10.0

#11 A team from Manchester will win the Premier League, but not the Champions League


Manchester City upset Manchester United to win the Premier League.

Chelsea upset Bayern Munich to win the Champions League.

Score: 7.5/11.0

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