25 Takes on 2007 Surprises, Part 1

This column was originally published on RealMoney on Dec. 15 at 1:09 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

I have to say again that Doug Kass is bold for putting out his 25 Surprises for 2007, parts 1 and 2. All I can do is comment on them rather than go out on a limb like he did. I do think his stab at attaining "prophet" status is both thought-provoking and a little "did he really say that?" but his ideas are great jumping-off points worth following up on.

Here are my thoughts on his 25 -- and I look forward to any email or Columnist Conversation responses they provoke.

1. Private equity deals. Kass gets into specifics about the private-equity transactions he believes will happen in the beginning of the year, including ones with Kohlberg Kravis Roberts, Goldman Sachs(GS) and Berkshire Hathaway(BRK.A).

I agree with his general sentiment, that 2007 is going to be the year of private equity. There is so much cash out there, it's ridiculous, and the shameful secret every private-equity firm carries is that its management fees begin to go away if it doesn't spend the money. They're all time bombs of massive leveraged buyouts waiting to happen.

Doug's specific call that Goldman is going to go private definitely won't happen, though, particularly with Warren Buffett behind it.

2. Citigroup changes. I found this item very stimulating: Kass says that Bob Rubin, former Goldman Sachs chief and Treasury secretary under President Clinton, will become CEO of Salomon Brothers if ("when," as Kass says) Citi decides to spin it off.

I believe there's zero chance of this, but with so many people calling for Chuck Prince's head, I wouldn't be surprised to see Rubin, currently Citi's chairman, become CEO as well.

3. Stabilizing housing. Kass says: "Based on misleading government statistics, the housing market appears to stabilize in the first quarter of 2007." With interest rates so low and prices in many areas already plunging, why wouldn't the housing market stabilize? I agree with his conclusions, but without the conspiracy theory.