25 Takes on 2007 Surprises, Part 2

Editor's note: This is Part 2 of James Altucher's response to Doug Kass' 25 Surprises for 2007, parts 1 and 2. Click here to read Part 1 of Altucher's column.

This column was originally published on RealMoney on Dec. 18 at 10:18 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Kass starts to get into Nostradamus mode with surprises 14 through 25; take 14, for instance:

14. "A well-known corporate raider finds himself with a concentrated portfolio ... and suffers large losses." Every year we're going to experience an Amaranth or two. The important thing about these big losers is that our economy has shown an astonishing ability to bandage itself when there are holes. Long Term Capital Management's disaster was enough to cause chaos back in 1998. In 2006, Amaranth -- which had significantly larger losses -- caused barely a ripple. Same will go for the big losers of 2007.

15. Cyberterrorism. These bad apples are trying and failing, trying and failing. I can guarantee that on July 4, 2007, the Internet will not be ineffective due to cyberterrorism. Doug, I will instant message you on July 4 to wish you a happy Independence Day.

16. Newt Gingrich for president? I sincerely hope not.

17. SAC Capital Partners' Steve Cohen acquires majority control of the New York Yankees. It would be great for the Yankees and NYC if Stevie Cohen took over. Kass, I hope you're right; if this comes to pass, I might actually attend the third baseball game of my life.

18. Wal-Mart's funk continues. Kass specifies that Wal-Mart(WMT Quote) will report five consecutive months of negative same-store sales. I don't even understand how this could happen, mathematically. And where would everybody be shopping in that case? Target(TGT Quote)? Dollar General(DG Quote)?

Kass is saying that a combination of deflationary winds blowing plus a general consumer slowdown that could affect high-end purchases will cause problems. Maybe, but why didn't that happen this year when all the car companies fell apart and housing prices slumped? Incomes went up, the stock market went up, and global expansion continued, which all ultimately drive sales to companies such as Wal-Mart.

19. "Google marches on ... and dramatically exceeds ... expectations." I agree, but only because of the trend that online advertising, fueled by a growing economy, is going to keep booming, and Google(GOOG Quote) gets the bulk of that revenue.