Here are a few of the things that I think might go wrong this year, along with a few things that might go right.

US Economy:

1) Major Disruption of Electric Grid causes weeks of disruption to millions of customers for weeks. Economy falls into sharp recession.

2) Major Disruption of US Financial Markets occurs due to a collapse in the Dollar or sharp spike in interest rates to enable sales of Treasury Bonds. A sharp fall in the stock and bond markets results, and overall there's slow fall into a broad recession.

3) Due to DRM and product incompatibilities, and saturation of markets with cell phones and music players, there's no "must-have" electronic gizmo that teenagers demand. The lack of demand extends to DRAM manufacturers, hard drive manufacturers, PC manufacturers, and the electronics industry as a whole. The sharp drop in shipments leads to a recession in the electronics sector that extends to a broader recession in the economy as a whole.

4) The US housing market continues to fall. There was simply too much of a bubble in housing prices and supply to expect that a small drop will take care of the problem. Housing remains in the doldrums for 5+ years and continues to be a drag on the economy. Since it doesn't exist as a buffer, the economy as a whole remains extremely vulnerable to shocks.

5) New Orleans and the Gulf Coast continues a very slow, very drawn-out recovery. But it will be decades before the area will have pre-Katrina economic activity and population levels.

6) A Major Earthquake strikes a the US mainland and causes billions of dollars of damage. Recovery is very slow, but a few lessons learned from Katrina speed up the process to some extent.

US Politics:

1) Baring a revolt by Congress, there still will be a strong aversion by the Federal Government to pay for a budget. Bush will see it as his legacy that he didn't raise taxes, and will fight tooth-and-nail to preserve his tax breaks. The Democrats will try to implement a "pay-as-you-go" system, but won't have the votes to overcome a veto threat. Continuing federal budget deficits will hang like a Sword of Damocles above the neck of the economy.

2) The media will continue to push 2008 Election and try to predict the result 18 months in advance. Most people will try to ignore the noise.

3) One (Stevens) and potentially two (Ginsberg?) seats will open up on the US Supreme Court. A threatened confirmation battle will force Bush to consider and submit more moderate candidates than he has thus far.

4) (On the "Good News" side of things:) State and Local elections will continue a gradual trend away from the "conservatives". Close elections will break for moderates and liberals. ID proponents will not have another significant victory on school boards nor in the courts - at least not for many years.

5) There will be a lot of noise about changing policies toward Iraq, Iran, and North Korea, but little of substance will change. International relations do not (usually) change quickly, and the US military is a huge bureacracy that only changes very slowly.

International Relations:

1) There will be a major disruption in oil production or natural gas distribution that will cause a major recession in countries of Europe or the Far East. Putin's Russia will continue to try to reassemble the Soviet Union using oil and gas as the "persuasion".

2) The nuclear confrontation Iran will continue at a low level; the problem will not be resolved. Short of a grand bargain with the US, Iran's government will continue to pursue confrontation with the belief that their oil gives them the freedom to pursue their ideology without consequences. With indications that [link|http://www.washingtonpost.com/wp-dyn/content/article/2006/12/26/AR2006122600361.html|Iranian exports will continue to fall], domestic pressures in Iran will likely continue to increase and there are few better ways to maintain power than to point to external threats.

3) China's explosive growth will slow significantly due to a slowdown in world economic growth and due to internal problems with China's energy network, its banking system, and pressures for increased rural investment.

4) The US and the world will continue to only tinker with the wars and problems in Africa. Refugees will continue to pour into southern Europe. Wars in Sudan and Somalia will continue.

Electronics/Software/Media:

1) Nintendo's Wii will win this round of the console wars due to its low price, controller, and availability. Sony will be forced to reduce the system cost of the PS3 (by including more stuff or by selling a cheaper base version).

2) Windows Vista will sell well, at least initially, because MS will push it on new PCs. Drivers will lag, and Vista-optimized software from ISVs will lag. MS will continue to sell XP for at least a year. The DRM features of Vista will be quickly broken by crackers. MS and the movie and record studios won't learn the lessons of the futility of copy-protection until they lose a significant amount of business to Linux and Free Software. Congress will modify some of the most egregious anti-fair-use provisions of recent laws under pressure from the courts.

3) LCD and Plasma screens will continue to drop in price, but HD-DVD and Blu-Ray DVD uptake will continue to be slow. A substantial fraction of the country will not have HD-capable hardware by the time over-the-air HD broadcasts are mandatory.

4) Linux will make slow inroads, but will not be preloaded on consumer machines in large numbers unless an out-of-the-box distribution with most of the features of Win Vista Ultimate (but without the DRM crap) is available. There's a big market opportunity there, if Canonical or Novell or RedHat is willing to take the chance to go after it. MS charging $380 for Ultimate is giving Linux a big opportunity.

5) Video download services will become more popular, but other than Blockbuster and NetFlix being pressured, I don't think it's going to have much of an impact. Apple may introduce a box and service to make it more of a mass-market item (as Cringely suspects).

6) Otherwise, 2007 seems to be a continuation of 2006 - no new must-have boxes or must-visit sites. Google's "Office" offerings will continue to grow, but only slowly. Most businesses and individuals will not want to trust even more of their information to Google's servers.

7) The record companies and movie studios will lose more of their power over the market place and the courts and Congress will take steps to restore "fair-use".

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I expect 2007 to be generally like 2006, but there are going to be wild-cards that few predict. I don't expect major changes in Iraq. I hope and expect that we'll be able to muddle through without too much destruction outside existing conflict regions.

Happy New Year, everyone. :-)

Cheers,
Scott.