The much longer title of this post should be, “7 Things That Everybody Was Convinced Beyond the Shadow of a Doubt Was Going To Happen In 2012, And If You Thought Otherwise You Were Basically Stupid, Insane, or Both.”
I have to hand it to the Fisher editorial staff for putting this gem together. We tend to forget that everything we fear so much at one point turns out to be…well, not that big of a deal. If everybody’s convinced something is going to happen and it doesn’t, it’s satisfying to buck the trend. Here are 7 things the Fisher editorial staff remembers everyone was freaking out about in the beginning of 2012 (http://www.marketminder.com/a/fisher-investments-e...)
1. “EUROZONE’S GONNA BREAK UP!!!” Nope, still here. Although the EU isn’t out of the woods yet, the leaders over there have managed to hold it together despite the tension both within and among the member states. It probably won’t be expanding any time soon, though.
2. “WE’RE GOING BACK INTO A RECESSION!!!” The recession has been officially over since June 2009, and there has been 13 straight quarters of growth, including 3.1% annualized for Q3.
3. “CHINA’S GONNA HAVE A HARD LANDING!!!” What, China can’t keep growing at double digits every year ad-infinitum? They are “only” going to grow at 7.5% in 2013? Perish the thought!
4. “INFLATION’S GONNA EXPLODE!!!” Bank lending activity continues to be weak, and that’s what is keeping money from moving through the economy, as demonstrated by low M2 velocity. So inflation hasn’t really taken off.
5. “WE’RE GOING OFF THE FISCAL CLIFF!!!” Nope; as many on this board predicted, the fiddling fools in DC found a way to put off the full decision until they can figure out how to politicize the result. If brain-eating zombies invaded Washington, they would all die of starvation in no time. They aren’t accomplishing much of anything, but that means the private sector can continue to innovate and strengthen itself unmolested.
6. “THE MIDDLE EAST IS GOING TO DISINTEGRATE, AND EVERYTHING’S GOING TO ZERO!!!” Yes, the Syrian situation is awful. But to be honest, when has there ever NOT been chaos in the Middle East? The broader conflict and all-out war that many predicted just hasn’t happened.
7. “PROTECTIONISM WILL MAKE A COMEBACK!!!” Free trade agreements still happened in 2012, including one between the EU, Peru, and Columbia. Remember, we have to separate the rhetoric (which there is plenty of) from the action (which there is much less of). Look at what is happening to Hollande right now if you want proof.
It really makes you wonder what everyone expects to happen in 2013 and how accurate that can possibly be by year end. On December 31st this year, are we going to look back and say, “Wow, we really made a huge deal over nothing, didn’t we?”
By the way, it cuts both ways: if the consensus for the year ahead is good or bad, bear in mind just how probable it is that it can turn out to be the opposite.
What are people generally expecting for 2013? How might they be wrong?