Each year Byron Wien, Vice-Chairman of Blackstone, produces his list of the top potential ‘surprises’. He defines a surprise as an event which most people would ascribe a likelihood of less than 1 in 3, but which he believes has a greater likelihood than 1 in 2. Among his picks for the year were: 1) The weak American economy and the soft equity market cause overseas investors to reduce their holdings of American stocks. An uncertain policy agenda as a result of a heated presidential campaign further confuses the outlook. The dollar declines to 1.20 against the euro. 2) China barely avoids a hard landing and its soft economy fails to produce enough new jobs to satisfy its young people. Chinese banks get in trouble because of non-performing loans. Debt to GDP is now 250%. Growth drops below 5% even though retail and auto sales are good and industrial production is up. The yuan is adjusted to seven against the dollar to stimulate exports. For the full list (VIEW LINK) (subscription required)