Experts retained a gloomy outlook with 2011 forecasts, but 2012 outlooks appear to be even worse...
Here's a glimpse of some of America's most respected financial experts with some dire predictions for the coming year:
Nassim Nicholas Taleb: Best-selling author, Taleb is famous for his book “The Black Swan.” According to Taleb, the debt crisis here in the U.S. is far worse that the situation in Greece. He fears for the fiscal fate of our nation after the past three and a half years of little to no counteraction. Why would anyone do anything drastic now?
John Hussman: President of Hussman Econometrics Advisors, Mr. Hussman says that the most recent economic data insinuates “a nearly immediate global economic downturn.” Although the probability of a recession is not 100% guaranteed at this time, Hussman believes it is the the “most probable outcome” under the present circumstances.
Jim Chanos: Founder of Kynikos Associates, Chanos has boldly asserted that “The Chinese banking system is built on quicksand...extremely fragile” mostly due to the non-performing loans made in the previous two decades. Until there's a newly structured and solid business-plan for the coming year, the the banking system will continue to struggle. If you need further evidence that even the Chinese fear for the fate of their banking system, just take a look at the recent gold imports...
Peter Schiff: Schiff has continually made dismal economic reports on his radio show. Just a few days ago, Schiff commented that the dollar's advance was simply a “lucky streak.”
"When reality rears its ugly head, and the spell breaks, the reverses can be vicious...It happened with dotcom stocks. It happened with real estate, and I believe it will happen with the dollar and Treasuries."
Mark Spitznagel: Mr. Spitznagel is a doom-and-gloomer who expects that the S&P 500 could drop by 20 percent in the next year. He says there is a 20 percent chance of a correction greater than 40 percent. He blames Bernanke for a great deal of the deep troubles we've inured upon, and says the treacherous downward spiral started back in 2000.
Stephen Roach: Morgan Stanley Asia chairman, Mr. Roach, is fearful when it comes to consumer spending – a huge component of America's economy contributing to 70 percent of our GDP. He is not just worried that it will remain historically week for just 2012; rather, he fears it will stay dangerously low for “years to come.” He has cited American consumers as exuding “zombie-like behavior” and suspects that behavior is here to stay for quite some time. Meanwhile, he says much of the world is overreacting to China's "crisis." Rather, it's America that's really in trouble and should remain the center of attention until we sort out the disaster.
Jeremy Grantham: CEO of GMO predicted “seven lean years” for the U.S. back in 2009. He's certainly remained on track with his assertions so far... Moreover, Grantham says he's sad to say that economic growth here and around the globe have “permanently slowed.” Global economies will continue to suffer because of poor infrastructure, depleting resources, global warming, and the slacking educational system amidst extreme income inequality.
John Mauldin: President of Millennium Wave Advisors believes Europe will completely crumble apart this year. The U.S. is likely to follow a similar path:
"We've got a cancer. That cancer is debt...It will take four to five years for the developed world to get out of its debt mess” - John Mauldin.
*Image courtesy of Bloomberg.
Peter Thiel: A PayPal co-founder and early Facebook investor explains that people are going to experience a lower quality of life and many will be unable to retire due to hindered technological progression and minimal advancements. This factors feeds his pessimistic outlook as he is currently focused on unconventional research projects in hopes of boosting our technological advances.
Meredith Whitney: Whitney accurately predicted that Citigroup would cut its dividend back in 2008. Studying markets, bonds, and investor activity in the past year, Whitney is now making some more aggressive assertions. She's pessimistic on investor confidence and bond funds, suggesting that 2012 will be far worse than 2011...with 2013 continuing the downward-spiral-trend.
*Information and quotations courtesy of Bloomberg.
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