Saturday, December 31, 2011

New Year's Predictions

It's New Year's Eve and I thought I would make some not so fearless predictions. "Not so fearless" because if I'm wrong, there is really no downside if I am wrong. Last year's predictions weren't that great. Some things I got wrong.

1. Romney would fade as a candidate due to lack of tea party support.
2. The economy would recover then stall. It just never really recovered.
3. The nut roots would froth at the mouth at Obama. They occasionally did so, but not much.
4. A multi-employer union pension plan would go bust. None did, although Kroger took some action due reduce risk to such funds that it contributes to.

The big thing I got right was that the battle to reduce spending would be mostly a draw due to divided government.

On to my fearless 2012 predictions.
  1. The world will not end in December, although many will wish it would due to an Obama victory in November.*
  2. Romney will be the Republican nominee.
  3. The economy will recover but stall around election time, but not soon enough to derail Obama's election prospects. The signs of recovery abound. I recall reading over the past two weeks that consumer confidence is up, steel prices are up, on-line holiday sales are up 15% and new unemployment claims are down. Enough good news would allow Obama to eke out a victory, because the Republicans have not made the case that they are not the party of business interests married to government.
  4. Looming economic disasters in China and Europe will be put off until the end of the year.
  5. Pension reform will pass locally in San Diego.
  6. Global warming debate will remain unsettled as higher sunspot activity will continue a warming trend.

These are my own predictions, I am sure my fellow SLOBs will be posting their own.

*Of course, I am not rooting for an Obama victory, but it is the way to bet. Also, my history of Presidential predictions is almost perfectly inaccurate, starting with Goldwater in 1964.


  1. Best we just prepare for an Obama getting a polio vaccination. Don't quite agree that the economy will recover, but the news won't report much on how bad it is. But I do agree that the collapse of Europe will be artificially stalled beyond November at all costs.

  2. Sounds like some pretty safe predictions. Where does number four come from? Really think they can or care enough to delay their eventual collapse?

  3. Sarah, we have to be in this for the long haul, agreed.
    Kelly, Number 4 is based on the ability of central bankers to inject liquidity to temporarily hold off a collapse. This ability has been known to influence elections.

  4. #3 is interesting. Most economists/economic strategists were forecasting a 4th quarter pop due to an inventory rebuild from midyear issues. Now they say the effects are temporary and 1st half of 12 should be worse followed by a second half acceleration. Most see full year GDP of 2.2-2.5% based on the status quo--no european collapse, Chinese soft landing, etc. Too many wild cards out there (Iran, North Korea, Russia, Iraq, Syria). (Now that Obama has drastically reduced the primary stabilizing force from the Middle East (US ground forces), I can see major flareups there as well as major economic issues from adding significant numbers to those needing work.) I digress.

    Of course, Obama will (blame/do) (whoever/whatever) he can to stave off admitting that his administration is a flop.

    Keep the faith and kudos for going on record.

  5. From watching Euro market economists, it seems that the US will inject a ton of liquidity in Europe. I see 2012 as a slow motion economic train wreck. My opinion is that the economy will weaken but markets will be sideways as inflation adds price to value investments and manipulated government stats will hide the true economic climate.

    The real estate sector will continue to falsely report strength to try to sell units. Gold will hit the 2500 range but with lots of volatility. The defeat of Obama will help the economy but should he prevail, we are going to see a new economic school emerge - the Mayan School.

  6. Being more of an optimist:

    * Obama loses in landslide, "unexpectedly".
    * The name Obama evolves into unsavory verb form.
    * Dec. 22, 2012 will dawn like any other.