Kass: Checking In With 2007's List of Surprises

I even suggested that the derivatives problem would become so severe that:

1. Congress would hold a series of hearings on the derivative problem; and
2. The Fed would be forced to aggressively ease.

Both happened.

My prediction for 2007 that corporate profits would be flat (and inconsistent) were closer to being true than Altucher surmised.

I predicted that volatility would rise exponentially in 2007 and that stocks would routinely have 2% moves; Altucher remarked that volatility was at an all-time low and seemed likely, based on history, not to conform to my prediction.

Altucher (the eternal optimist) and I (the eternal pessimist) also clashed on our equity market price expectations. The spike in the S&P 500 price that Altucher forecast was never seen, nor was my expectation for a 10% decline -- though we were both correct in forecasting a strong start to the year. Nevertheless, as I suggested, a steep drop occurred owing to the "mortgage implosion."

I was 100% correct in the reason (a nascent credit crisis) and substance of a material slowdown in M&A activity. Altucher didn't see this development.

I thought a well-known corporate raider/hedge fund would suffer losses in the credit crisis of 2007. Altucher disagreed and was wrong as some notable blowups occurred and continue to take place.

There were no cyberterrorism attacks, as Altucher suggested.

I saw the general consumer slowdown affecting Wal-Mart (WMT Quote) and others; it did. Altucher saw a continued expansion in retail sales.

Finally, we agreed on Google's (GOOG Quote) continued success.