Well, its prediction time again:
Politics:
1. Mitt Romney will be the GOP nominee and will poll well against Obama at first but will draw even as the campaign goes into high gear. Obama will win a squeaker that will have the taint of fraud in several districts but he will still win a second term. The GOP captures the Senate and the government becomes effectively divided. As a result not much is done.
2. There is a massive fight over the budget with Obama's and the GOPs differing by a wide margin. No compromise is put forth and the GOPs budget passes easily is vetoed and Obama is narrowly overturned. This becomes a pattern for much of the legislation passed in 2012
3. Obamacare is ruled partially unconstitutional and is sent back to the Congress for fixes. It is gutted by the GOP and Obama vetoes the greatly watered down bill that comes out of Congress. Obama uses the Department of Health to impose some Obamacare tenets that Congress throws out. This becomes a pattern in 2012.
4. There is a crisis and civil war in North Korea as the generals try to seize power from the ineffectual Kim Jong Un. China and South Korea are on high alert but much of the fighting is in the streets of Pyongyang between Kim Jong Un loyalists and the break-away generals. The break-away generals seize power and a military dictatorship that is more open to the west takes power by the end of the year.
5. Iran his hit hard by sanctions against their oil industry and tries to rattle the saber in retaliation. Oil prices rise to $130 before things settle back down. The Green Revolution begins in earnest as the Iran slowly moves the way of Egypt and the rest of the Arab Spring countries. Large demonstrations break out all over Iran and the Mullacrocy totters toward oblivion. Oil stays high throughout the year due to Iranian instability. Many Iranian students are gunned down before the UN steps in and quells violence.
Economy:
1. More green shoots begin to form in certain sectors and the housing market improves slightly. However, Europe still overhangs everything but a solution to the debt crisis is finally reached by spring. High oil prices challenge the recovery and India and China begin to cut back on the demand side of the equation. Worldwide growth slows as Europe enters a recession by Fall.
2. The market rallies early on but high oil prices takes its toll as growth slows. The market is in a holding pattern and trends downward as Obama is re-elected. Companies still hold vast reserves of cash but Obamacare being struck down by the Supreme Court allows some of it to flow again. GDP growth trends to 3% by the winter of 2012. The US economy does not go back into recession.
3. Unemployment stays at the 8 - 9% level for much of the year as absolutely nothing is done to create jobs. The payroll tax cut and other half-measures continue throughout the year. Companies slowly start to hire and things look somewhat better toward the end of the year.
4. Facebook's IPO does decently but does not come in as the blockbuster that many predicted in the past. Slowing growth and waning ad dollars are sited as the reason for the muted response. Many users stop using Facebook altogether and a "Is Facebook Dead" story is circulated by the end of the year.
5. SOPA does not pass due to the agitation of Google, Ebay, Facebook and other large sites mobilizing against the Congress and the supporters of the Bill. The general public learns about the issue as net titans take to the airwaves against SOPA. Talk of the bill dominates the news for the early part of 2012 and it is defeated by a very wide margin.
6. Here are the numbers for the various indices for the end of 2012:
Dow: 12800
NASDAQ: 2850
S&P 500: 1320
Eur/Dollar: 0.98
10 Year Bond: 2.10%
Gold: $1310 and ounce
Oil: $113 a barrel
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