The Four-Letter Word Which Might Save You in 2012...
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"Cash."
Okay, hands up: before 2012 starts, who wants to just skip to 2013? Anyone?
According to a report from McClatchy Wednesday, economists are expecting a dull 2012 not much better or worse than 2011. Optimists might refer to 2012 as a "Goldilocks" year -- not too hot and not too cold.
One analyst from IHS (NYSE: IHS) Global Insight said there's more risk to the downside with the possibility of a eurozone meltdown spreading to U.S and Chinese economies. He puts the odds of that happening at 20 percent to 25 percent.
Bank of America (NYSE: BAC) Merrill Lynch sees the potential for a eurozone eruption at 40 percent. Despite a flurry of late-year negotiations which led to no specific resolution about the debt crisis, analysts at BAML are expecting a strong finish to 2011. The firm expects fourth-quarter growth to come in around 3 percent, but sees GDP up just 1 percent for the end of 2012.
The housing sector is expected to be a drag. Recently, a Wells Fargo analyst said there were "roughly 2 million homes in foreclosure, 2 million homes with delinquent mortgage payments and 2 million bank-owned homes that weren't even on the market," McClatchy quotes. With uncertainty as to how many excess homes are in the market -- or about to be in the market -- many consumers are putting off a purchase while builders continue holding on to cash.
Overall growth in the U.S. is expected to slow as well. McClatchy said economists with Microeconomic Advisers expect to end 2011 with GDP of 3.7 percent. Growth should drop to around 2.2 percent for 2012. Wells Fargo is also looking for just 2.0 percent GDP growth.
Elsewhere, China's growth will slow from 9 percent in 2011 to 7.5 percent next year, according to Wells Fargo. Though the growth is strong in comparison to most countries, it's slow for China, which has seen double-digit increases over the last several years. Others will fell a pinch as China slows: exports for medical, farming, and auto from the U.S., and raw materials from Brazil, are likely to see an ebb in demand.
Okay, hands up: before 2012 starts, who wants to just skip to 2013? Anyone?
According to a report from McClatchy Wednesday, economists are expecting a dull 2012 not much better or worse than 2011. Optimists might refer to 2012 as a "Goldilocks" year -- not too hot and not too cold.
One analyst from IHS (NYSE: IHS) Global Insight said there's more risk to the downside with the possibility of a eurozone meltdown spreading to U.S and Chinese economies. He puts the odds of that happening at 20 percent to 25 percent.
Bank of America (NYSE: BAC) Merrill Lynch sees the potential for a eurozone eruption at 40 percent. Despite a flurry of late-year negotiations which led to no specific resolution about the debt crisis, analysts at BAML are expecting a strong finish to 2011. The firm expects fourth-quarter growth to come in around 3 percent, but sees GDP up just 1 percent for the end of 2012.
The housing sector is expected to be a drag. Recently, a Wells Fargo analyst said there were "roughly 2 million homes in foreclosure, 2 million homes with delinquent mortgage payments and 2 million bank-owned homes that weren't even on the market," McClatchy quotes. With uncertainty as to how many excess homes are in the market -- or about to be in the market -- many consumers are putting off a purchase while builders continue holding on to cash.
Overall growth in the U.S. is expected to slow as well. McClatchy said economists with Microeconomic Advisers expect to end 2011 with GDP of 3.7 percent. Growth should drop to around 2.2 percent for 2012. Wells Fargo is also looking for just 2.0 percent GDP growth.
Elsewhere, China's growth will slow from 9 percent in 2011 to 7.5 percent next year, according to Wells Fargo. Though the growth is strong in comparison to most countries, it's slow for China, which has seen double-digit increases over the last several years. Others will fell a pinch as China slows: exports for medical, farming, and auto from the U.S., and raw materials from Brazil, are likely to see an ebb in demand.
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