A Look Back At My Magic 8-Ball's Predictions for 2010

Flickr Photo Credit: seanmcgrath

I love my magic 8 ball! It sits in my office, right here next to the computer.

You know, I think everybody should have a Magic 8 Ball. I really do.

After all, it’s great for helping me answer life and death questions like, “Should I take the family out this evening to try that new Mexican restaurant that opened up around the corner?”

It also comes in handy when I need to know if I should take, for example, the Cleveland Browns and the points.

I’m kidding. As a matter of principle, I never bet on the Browns — it doesn’t matter how many points the bookies are offering.

Anyway, at the tail end of last year, I asked my readers if they would like to challenge my trusty 8-ball to make a few predictions for 2010.

As you might expect, the 8-ball simply refused to answer all of the questions it was bombarded with, including those regarding American saving habits (Ask again later), the future of blogging as a viable medium (Cannot predict now), if the Dow would hit 20,000 (Reply hazy), and the direction of the national housing market (Cannot predict now).

There were also more personal pleas as well, some of which the 8 ball did answer. For example, the Financial Samurai wanted to know if he was going to win the lottery and be able to quit his day job (You may rely on it).

The 8-ball also went out on a limb and made a handful of other less-personal predictions for readers that were loosely-related to money and finance. As 2010 comes to a close, I think that it’s only right that I go back and see how my faithful friend did in that arena.

So, without further ado, here is a brief rundown of the results:

Question: Will taxes go up for everybody, not just single people making over $200,000 per year? (From: Sam at Financial Samurai)
The 8-ball said: It is certain.
What really happened: In December, President Obama signed The Tax Relief Act from Congress extending most of the Bush tax cuts for another two years, including the cuts for single filers making over $200,000 per year.
Nostradamus meter: Wrong

Question: Will the government bailouts stop? (From: SVB at The Smarter Wallet)
The 8-ball said: Don’t count on it.
What really happened: In August, President Obama signed a $26 billion bailout that preserved the jobs of over 300,000 teachers, police, and fire fighters.
Nostradamus meter: Correct

Question: Will the housing market in Florida gain any steam? (From: Jesse at Personal Finance Firewall)
The 8-ball said: My reply is no.
What really happened: If one looks at the latest year-over-year numbers for single-family homes in Florida as of November, sales decreased 5 percent while prices fell by 15 percent. For condos, although sales increased 11 percent, prices fell by 16 percent.
Nostradamus meter: Correct

Question: Will consumers get more power against cell phone companies (e.g., regarding early termination fees, locked phones, etc.)? (From: My Life ROI)
The 8-ball said: Without a doubt.
What really happened: As their first priority at the start of the year, the FCC Consumer Task Force pledged to investigate rising early termination fees (ETFs) being imposed by cell phone companies. However, it ultimately resulted in no new consumer protections. In the end, all we got from the FCC was this handy ETF tip sheet.
Nostradamus meter: Wrong

Question: Will the Dow break 12,000? (From: Sam)
The 8-ball said: My sources say no.
What really happened: The Dow started 2010 sitting at 10,428. At the Christmas break, it was sitting at 11,573. With four trading days to go, the Dow needs to climb another 427 points (3.7 percent). I’m going out on a limb and will assume it ain’t getting there.
Nostradamus meter: Correct

Question: Will overspending get politicians voted out of office in 2010? (From: Bret at Hope to Prosper)
The 8-ball said: Outlook good.
What really happened: An extraordinarily large number of incumbents were voted out of office during the 2010 elections.
Nostradamus meter: Correct

Question: Will control of Congress stay with the Democrats in 2010? (From: Kevin at Out of Your Rut)
The 8-ball said: As I see it, yes.
What really happened: In an historic November rout, the Republicans won 63 seats in the House of Representatives to take control of the lower chamber. Additionally, the Republicans won six seats in the Senate. However, this was not enough to wrest control of the upper chamber of Congress from the Democrats.
Nostradamus meter: Inconclusive

Question: Will the US government provide more economic stimulus cash? (From: Jesse)
The 8-ball said: Outlook good.
What really happened: The previously-mentioned Tax Relief Act included a two-percent reduction in the payroll tax for 2011.
Nostradamus meter: Correct

Question: Will the US revert to spending in excess in 2010?  (From: Darwin at Darwin’s Money)
The 8-ball said: It is certain.
What really happened: The US government finished with a budget deficit of $1.29 trillion in fiscal year 2010.
Nostradamus meter: Correct

Question: Will the Obama administration be successful in implementing more major policies in 2010?  (From: Wojo at Fiscal Fizzle)
The 8-ball said: Don’t count on it.
What really happened: In March, President Obama signed the Patient Protection and Affordable Care Act — better known as Obamacare — into law.
Nostradamus meter: Wrong

Question: Will Russian academic Igor Panarin’s prediction that the United States will fall apart in July 2010, breaking into six pieces, come to pass? (From: Susan Tiner)
The 8-ball said: Don’t count on it.
What really happened: The United States is still, well, united.
Nostradamus meter: Correct

So there you have it. Overall, the 8-ball didn’t do too badly on the questions at least somewhat loosely-related to money and/or finance. By my count, throwing aside the one question that was inconclusive, the 8-ball scored a success rate of 70 percent. Not too shabby!

Now Taking Your Questions for 2011

If you have a question you’d like to ask the 8-ball regarding his predictions for 2011 — whether it’s related to personal finance or not — leave a comment below. I’ll repost all the questions I receive in an article scheduled for early January 2011 — with the magic 8-ball’s replies, of course. We can then revisit your questions at the end of next year.

And for those of you who think this whole exercise is a bunch of malarkey, well, maybe it is.

Then again, with a success rate of 70 percent, maybe — just maybe — it’s not.

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