The expectation for the Christmas sales season is the number will come in at a record, $469 billion, give or take. The rap will be “yeh, but its rate of growth is less than last year.” Just saying …
Get ready, folks, this is the week when all the predictions for 2012 come out. Yes sir, all those learned folks in the world of financial punditry and analysis climb up on their box to shout out their reasoned 2012 predictions to those who listen. I have no quarrel with this, as entertainment is a needed part of any society; I just hope everyone sees the entertainment value as I do, otherwise someone might be tempted to take some really smart person’s year-long market/economic prediction seriously. Just think Meredith Whitney and the municipal-bond market in January of this year.
Oh, so you think my attitude is flippant, that I should give the prognosticators more respect. Oh, I give them plenty of respect – I listen to and read them all the time. It is just that I don’t believe any one of them is better at guessing than any other, so they all are suspect in their ability to be accurate. Now, it is true that some will be right in a grand prediction, such as the S&P will be at 1450 by the end of the year. It could happen. Yet it also possible that the S&P will remain range bound all year because of political uncertainty. The folks who predict that will then be right.
I know, I know, I see the promos as well – so and so was right about Fannie Mae, the housing collapse, Leman Bros. etc. The trick is to look at all of his or her predictions. If you do that, I can promise you this this (yes, I said promise) – they will have a number of grand “misses” they simply are forgetting to tell you about.
So, as always, I say stick with your own analytical skills, and look to the facts for a reasoned outlook on 2012. For example, take a look at the housing market for possible trades. No, I mean take a really close look. What is the inventory of housing on the market and how does that compare with say, 2007? What is the residential housing sector doing? Is the focus on single-family or multi-family units? How does all of the above fit in with the recent U.S. economic indicators, and what does the picture look like with mortgage rates hitting all-time lows? What about the bugaboo of foreclosures? How many are now in abeyance creating a shadow inventory of homes? What about renting versus buying? Yeh, what about that?
With U.S. unemployment at a lofty 8.6 percent, home foreclosures rising and property prices under pressure, more and more Americans have given up the dream of owning, opting instead to rent, a shift that is remaking the face of the U.S. housing industry.
The year 2012 is coming, that I know for sure. Everything else, well, as always, we will see … Just don’t forget as we go through the year, look underneath the negative flow for data and information that will give you a better handle on where things are going, a better handle that will allow you to better predict the future. Did I just write that? In any case, dig a bit deeper to understand …
Japan has repeatedly expressed its willingness to help Europe contain its debt crisis, but has also stressed it wanted to see a convincing action plan before making any firm commitments.
Trade in the day – Invest in your life …
