 Magic 8-Ball Forecast for 2012Saturday, January 7, 2012 - Article by: Linda Miller -
Al's Magic 8-Ball Forecast by Al Lewis Time for my annual economic forecast, which readers may recall, is something I do with my Magic 8-Ball, made in China by Mattel. In last year's forecast, published Jan. 2, 2011, this cheap, plastic oracle beat out most economists. It predicted oil would rise above $100, that gold would spike above $1,700, that high unemployment wouldn't significantly subside, that the housing crisis would rage on, that lawmakers wouldn't curb the nation's debt addiction, that stocks wouldn't return to pre-bust highs despite all the cheerleading to the contrary and that all of the optimism about a meaningful recovery was misplaced. This sounds like a no-brainer now, but it wasn't at the time. The 8-Ball's prognostications stood in stark contrast to luminary economists. Mark Zandi, chief economist at Moody's Analytics: "I think we will have a self-sustaining economic expansion in 2011." Lynn Reaser of the National Association for Business Economics: "People will finally recognize that an economic recovery is under way. This won't be a recovery seen only by economists." Despite accurately calling for more malaise, my little black globe stopped short of predicting a global economic collapse in 2011. Let's see what it says about 2012. Q: The Mayan calendar predicts the world will end on Dec. 21, 2012. Is it correct? Q: Phew! What about a recession in Europe? Q: What about a partial breakup of the euro zone? Q: Will this mean an officially recorded recession for the U.S.? Q: Some say the European downturn will mean more investors flocking to the U.S. for safety, creating a new dawn for our economy and equity markets. Is this possible? Q: But can it last? Q: The stock market just loves these historically low interest rates. Will the Dow Jones Industrial Average return to its highs above 14000? |
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