19. Google ( GOOG) marches on, proving its skeptics wrong, and dramatically exceeds sales, profit and cash-flow expectations. Its shares approach the $650 level by early spring, after rising by more than $100 the day after first-quarter earnings are announced. Though results continue to beat expectations in the second and third quarters, the shares take a large hit after its domination and monopolistic position in search is questioned by legislators in a series of congressional hearings later in the year.

20. Saddam Hussein is assassinated in jail even before his appeal is concluded. Osama Bin Laden is found dead, and initial reports indicate he has been dead for more than 12 months.

21. A series of corruption scandals in Russia hits the emerging markets in 2007, which further exacerbates the impact of uneven worldwide economic conditions and difficulties in the mortgage markets.

22. A large hedge fund lowers its investment management fees (to 0.5%) and incentive fees (to 10%). This effort, combined with the overall market weakness in 2007, leads to a 50% reduction in the number of hedge funds over the next 12 months.

23. With the hedge fund ranks diminished, commodities dropping in value and the appeal for alternative investments (private equity, real estate, etc.) moderating, the bullish chorus for a global liquidity case for equities becomes a faint whisper.

24. Maria Bartiromo leaves CNBC to join Joy Behar, Rosie O'Donnell and Barbara Walters on ABC's "The View." (At the same time, Elisabeth Hasselbeck gets booted off the show!) Another well-known CNBC anchor leaves to join a large hedge fund.

25. Amid the early 2007 stock market euphoria, Jim "El Capitan" Cramer's "Mad Money" show goes prime time on CBS. But it is canceled during the midyear market meltdown and returns to CNBC by the fall. CNBC extends the show to two hours by year-end after Cramer, The Movie reaps $38 million in its first weekend.
At time of publication, Kass and/or his funds were short JPM, MSFT and WSM, although holdings can change at any time.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd. Until 1996, he was senior portfolio manager at Omega Advisors, a $4 billion investment partnership. Before that he was executive senior vice president and director of institutional equities of First Albany Corporation and JW Charles/CSG. He also was a General Partner of Glickenhaus & Co., and held various positions with Putnam Management and Kidder, Peabody. Kass received his bachelor's from Alfred University, and received a master's of business administration in finance from the University of Pennsylvania's Wharton School in 1972. He co-authored "Citibank: The Ralph Nader Report" with Nader and the Center for the Study of Responsive Law and currently serves as a guest host on CNBC's "Squawk Box."

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