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Boom or Bust for Stocks and Jobs in 2012?

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    Panel looks ahead to new year

  • Duration 9:37
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Try him but amid the turmoil -- of the economy surviving a year -- -- And it twists -- turns uprisings in the mideast as soon -- me in Japan.

-- debt crisis in right field Europe and here at home and near government shut down.

Followed by -- big US downgrade.

-- this -- all the Dow pulling out at five half percent gain for the year.

And that jobless rate finally trending in the right direction.

Fast forward to -- when he twelve.

Are we looking at a blue or blast for stocks and jobs.

Hi everyone happy new year I read about -- let's get Iraq -- do it.

-- -- Lee Gary B Smith Tobin Smith Jonas Max Ferris.

Along with Todd John -- and Mike Norman welcome to everybody -- Kerry -- timed it tends to an economic turnaround in 2012.

What did -- hey let's get the party started a -- -- not -- -- -- I can come up with current cautionary yeah.

Still current right now anyway listen I think the underpinnings are there.

As opposed to what most there are many people think about a very good here in 2000 -- look.

Let's take a kind of one by one quickly unemployment is not -- but is at least leveled off housing starts really the other.

Big part of this equation with.

Almost not over 9%.

In November.

Households have a lot of cash on hand debt levels are compared household net -- of the lowest they've been in like.

Twenty years companies have a lot of cash on hand so it's a big Green sprouts I think we can finally start using that in in reality are there.

For really a terrific 2012 Todd are you infected celebratory mood.

That plane that Brando -- -- those things were actually true that Gary he was talking about the market would have been up 5000 points this month.

And at that plane wasn't the case look the you have to look at just history alone and that's what economists are going to -- -- focusing on doing -- it's like twelve.

First of all this GDP rate we had a one point 8% -- but the year every year rates at one point 6%.

If you get back in 1948 the first year that government could compute gross domestic product in this country any time the year -- you're right it's below 2%.

The US economy always ends up in a recession.

Then you talk about how bad -- that's out there yes there has been some deleveraging of the household balance sheet but realistically though people still have a tremendous amount of debt.

And therefore they're not saving they're not going to be able to spend that we want the way we want them to -- and therefore -- -- this economy we're in for -- tough times next here guys.

But that -- is that this election this will be an election year and historically.

Government does any saying it hands again.

People feeling good.

Well you're saying we're not gonna get any tax increases in all likelihood this year all the yeah.

Temporarily citizen must firms -- same place there's nothing gonna happen on that -- it's gonna do you rail was -- covering.

Also the -- an additional things -- -- -- -- -- true I think the biggest thing is that our economy looks really good compared to the rest of the world right now.

In this includes emerging markets -- many of their markets down 1% this year we look good compared to Europe -- a good -- Japan.

It's not a great economy but it's relatively good that brings capital -- your country keeps your cost of capital like borrow at low cost -- -- hall worked for the governor or for corporations.

It should dry things along in continue like this swirling -- Nixon in the movement Jonas -- you're sounding because we're not that great right now at one point 8% afraid it's not good -- anyway you look at our country looks better than us including their stock market right now.

I don't know maybe China looks pretty good right now it's still growing at what 8% right now hate having to take a little bit of stock market tanked and huge inflation problems they've got their -- -- in the some of the bureaucracy there I don't think you're looking better than America right now million dollars Burnett having OK Mike what do you think Barbara wolf -- I can't think of any.

Pop star lead into what I'm about to say left Gary's behalf I'm -- but however it.

Pretty -- you can but he probably could have that for three days -- event I think that's all I really you know -- medicine things are true.

That's the snapshot of what had happened in the past year and conditions leading up until now.

I'm I'm not all that -- we don't need to -- well I think like.

-- -- said well it's an election year.

And politicians are going to do everything necessary you know to make things good the problem is what they think is the right prescription.

You don't cut back spending cutbacks this -- contraction that's not the stuff that.

You see big booms and recoveries come out up so I think we're gonna see a lot of what we have seen.

Bit you know in 2011.

We're gonna see week wrote.

We're not gonna see much improvement on the employment side on the -- side I think we're gonna still see sort of a choppy sideways market through 2012.

So it's gonna be frustrating for a lot of people it's clearly going to be persecuting the people who are looking for jobs with -- did not going to be a big job boom.

And it's gonna be frustrating for investors but that's probably you know the best we can hope for.

Okay tubby I know you're going to be -- in some bubbly but you season.

Three isn't -- Watson Bob believe because of our economy because of the market next year.

Well let let's look at our economy because it's just not this monolithic thing there are -- variety of pieces of our economy.

That are doing fabulously obviously this whole Shell Oil shallow gas revolutions get -- about a 150000.

Jobs net net over the last -- but that's a big positive.

If you were any involved at any of the computer science is any programming any you'll be at San Francisco -- going to be next week.

And that companies that we work with the partisan for them to do is hire people it's not money it's not to bad it's hiring people.

They have to balance that against as is Mike Jarvis says the government is contracting.

Beat you could make -- also be a positive thing so the growth that we traditionally got which was from health care and from government.

-- not going to be there because of some comic spirit -- -- -- we're going to get it though is in real businesses and I think the glimmer of hope that were missing.

Is that there's some real businesses that build real stuff that sell all over the world but that has real value rob those are the things that are -- Yeah the problem is that consumption is still 70% of our time it's great to talk about the -- but it's not big enough to support.

You know a big increase in GDP so that's the problem and what the people don't have jobs and if if income is actually going down we've seen negative income in recent statistic that's not a good.

Figure to look at it here -- -- like people to consume more it's just not right but what -- follow but what we've -- is the top 20% of whether we like it or not.

The top 20% of earners the United States are responsible for about 70% of discretionary spending.

-- ball that very closely and that number you -- has as it is hit a bottom and has been on its way up.

And that means that that the real net spending parent the United States is -- you know it's slightly -- okay we're not gonna have 3% growth.

And I think that's a dramatic way to know what that equated to one point 8% GDP growth it's not that well look let me get somebody else and talented at two and a half Jennifer also haven't employers basically used as much you've got as much productivity.

Growth that they have that they can from their workers bouncing back.

A study in the early stages of a slow economy they laid -- people they're gonna just switched overtime before you can add on a new full time employee right away you can go to overtime you're gonna go to temp work.

Because you don't know personalize and you can for awhile but at some point you reach the maximum hours you get of one person.

-- -- just a hard full time people on this -- this seems to be you don't think they're gonna hire those people this year.

But that could change as the year progresses your arteries to the unemployment rate going down a scene in the hard hit states that -- them in the boy in the bubble like out California's on -- -- in -- -- -- down -- double digits but eventually got her heart in full time people will sort of pick I'm handle.

Out of this from you guys a lot of this -- if this if I'm lucky to just look at that dated sausage does nothing supports our growing economy you wanna talk about history donate to an election year the Dow was down 37% to 2008 guys.

It's not looking good.

Up next here on starting.

Well you know got hit first of all in the immortal words of -- -- Since I was able to -- I had -- First of all I think it.

-- due respect the tot he points out all the things that we've seen in the past -- -- logical it's it's kind of like the I'm.

That the companies in the survey saying well they don't expect to hire you know a lot of people 2012 because everyone seems and always makes it.

The -- deep ball reacts and saying well.

What's happened in the past will surely that trend will continue in the future that's how we got the -- for crying out loud engine.

Everyone -- Internet stocks we'll keep going up up up.

You know and talk to other point you just can't dismiss -- you just can't say well yeah the particular show that time.

I told don't have a lot of data on hand but -- -- have a lot -- that that that is erroneous for Obama at the lowest about a debt.

To how to network they have in the last when he hears all the let me get it being on a other point is GDP is now higher than it was at the -- in 2008 and -- Mike's point.

Consumer spending continues to be strong efforts -- -- the company but it continues to be strong and increase -- rather than -- appear to have gotten out there sorry the rock star vehicle or no -- The word all right.

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