Predictions are funny things. We strive to get it right and show that we have some ability to perfectly call the future. If we make a good call, this may set us apart from the rest. I've never taken predictions too seriously but rather with a grain of salt and a smirk. So with that, here are three bold predictions for 2012.
1. The U.S. will not enter a recession.
This may be a close one, but the resilient economy should manage to avoid falling into negative GDP in 2012. In today's global economy, we have many business cycles at work simultaneously. When one industry dips, another will pick up the pieces. We may not see everything fire on all cylinders again, but certainly there is enough of a chance to see growth. Where might it come from? Rails, cargo and transports are still pushing forward, commodities will do well with strong demand (even from Europe), and if leadership changes (see below), we could see the financials surge to the head of the pack.
2. We get leadership changes all around.
The economic challenges are far too much to overcome for President Barack Obama to win a second term. Much like George H.W. Bush in 1992 and Jimmy Carter in 1980, this president is hamstrung by poor economic performance and high unemployment and saddled with an enormous debt. It's always about the domestic economy, no matter how many points are scored elsewhere. A change at the top may be a blessing to the banks and financials -- a new leader lifting the regulatory burdens that are strangling corporations.
Blame, however is shared all around. Congress and the Senate receive a rude awakening in November when many of the incumbents are replaced by their upstart competition. Voters have a long memory -- the August debt crisis and recent political wrangling over taxes are just enough to say that change is in the wind. The message of the voters is clear: Do your job or lose your job.
3. Dec. 22, 2012, will be just another day.
According to the Mayan calendar, time runs out on Dec. 21, 2012. I will go out on a limb and say that we will wake up the following day with the world intact. I certainly hope this to be the case! I have two young children who have yet to face the challenges of life, and while the future burdens from my generation will be heavy to carry, it is the experience of the journey that is fulfilling.
Wishing all a prosperous, happy and safe new year.
