President Obama's truth-challenged state-of-the-union address was successful in a least one respect: creating more jobs for fact-checkers. His speech was studded with dubious claims of his presidency's middling achievements, none more egregious than his assertion he single-handedly saved the auto industry.
In what amounted to a televised political stump speech, the president stroked his ego by trumpeting the following: "On the day I took office, our auto industry was on the verge of collapse...and tonight, the American auto industry is back."
No question the industry has rebounded, but the president's actions had virtually nothing to do with the auto makers' resurrection from the grave. His declaration ignores both history and reality. However, he has made this pronouncement so many times that the media never bothers to confront its veracity.
First of all, the president did not bail out the auto industry. The government scooped up $80 billion of taxpayer money and forked it over to just two companies: General Motors and Chrysler. Ford declined to participate in the giveaway and recuperated just fine.
Despite pumping billions into the auto enterprises, the government was unable to prevent their collapse. General Motors and Chrysler filed Chapter 11 bankruptcy in 2009. Both firms had been losing millions of dollars for years because of glaring mismanagement, shoddy product quality and plump union contracts that made them uncompetitive.
When the two mega corps emerged from bankruptcy proceedings, management shed jobs, shuttered plants and forced investors to take a $27 billion haircut on bonds issued by the enterprises. These initiatives were facilitated by the Chapter 11 filing, enabling the companies to regain their financial footing.
In the interest of space, let's look at what this meant for one firm, General Motors. Prior to bankruptcy, employment at the company was 266,000. At the beginning of this year, the multinational workforce had shrunk by 64,000 jobs to 202,000. The story is similar at Chrysler.
Along the way, GM closed 17 factories and parts centers. In addition, the company lopped off more than 1,100 dealerships across the U.S. Many suppliers scaled back operations or went out of business. As a result, tens of thousands of jobs vanished. No one has ever calculated the damage to the economy.
Therefore, it is patently false to claim the administration saved industry jobs by bailing out GM. To skirt the truth, the administration always adds the disclaimer that job losses would have been a lot worse had the government not intervened. But there are no facts to support the contention, just supposition.
Lastly, the president bragged in the past that taxpayers would recoup every penny the government invested in GM and Chrysler. The White House retreated last June, admitting that taxpayers would likely lose about $14 billion on the bailout. Oddly enough, the president did not mention this in his speech.
Obama suffered other mental lapses as well in his address. For instance, he never explained why the government still owns 26.5 percent of GM, despite his repeated promises the feds would exit the business. Nor did he reveal why the government has not demanded GM cough up the remaining $25 billion it owes taxpayers.
You would have to suspend reality to find one scintilla of credible evidence that raiding the U.S. Treasury has done anything to save General Motors or Chrysler, much less the entire auto industry. Yet President Obama persists in spinning this fairy tale for an adoring media.
It proves that if you repeat a lie often enough, it becomes reality when you have a partisan press.
Sunday, January 29, 2012
Saturday, January 21, 2012
You Can Bet Your Fannie There's a Scheme Afoot
The Obama Administration and the Federal Reserve are feverishly working behind the scenes to stir momentum for a massive rescue package designed to resurrect the ailing housing industry. It's all part of a synchronized stealth effort to boost the president's flagging reelection chances.
The blueprint began unfolding earlier this month when the Federal Reserve issued a little-noticed white paper recommending that mortgage behemoths Fannie Mae and Freddie Mac assume a more active role in awakening the slumbering housing market.
In its document, the Fed admitted the new direction could deepen financial losses for the two lenders. Already taxpayers have ponied up $183 billion and counting to keep Fannie and Freddie from plummeting into a financial sinkhole. The prospect of more red ink apparently doesn't faze the Fed or the president.
The white paper provides air cover for the administration to move ahead on several fronts. The president's puppet masters are taking aim at replacing recalcitrant heads at Fannie Mae and the Federal Housing and Finance Agency (FHFA) to remove potential roadblocks to their scheme.
That helps explain why Fannie Mae CEO Michael Williams unexpectedly announced he was stepping down. Almost simultaneously, the administration leaked the news that it was searching for a new chief executive to shepherd the Federal Housing and Finance Agency (FHFA), replacing Edward DeMarco.
Apparently, Williams and DeMarco are both too independent for the president. Obama wants sycophants who will advocate for aggressive government intervention to stabilize housing prices and stem the onslaught of foreclosures sabotaging the real estate market.
As head of the independent housing agency, DeMarco's role has been to regulate Fannie and Freddie. The once private firms were placed into conservatorship by FHFA on September 7, 2008, after both were threatened with insolvency when the housing market collapsed.
Since then, Fannie and Freddie have continued their downward spiral. In the most recent quarterly earnings reports, Fannie tallied $5.09 billion in losses while her mortgage brother Freddie experienced a similar hit of $4.4 billion.
By any measure, Fannie and Freddie are abject failures. The lenders were at the forefront of the sub-prime lending frenzy that subverted the housing market. The twin turkeys, which underwrite 90 percent of all the nation's home mortgages, also have a sordid history of abuse of power.
In the last decade, Fannie and Freddie have been slapped on the wrists by Congressional oversight committees for dubious campaign contributions, accounting scandals, gross mismanagement, political lobbying and influence peddling.
It begs the question: why not do away with both agencies and turn over the mortgage holdings to private companies? The answer can be found by following the money trail. Both agencies have been generous donors to Democrats, including the president.
But the president has other reasons for wanting Fannie and Freddie to return to the lax lending standards that got it into trouble in the first place. It seems Obama has finally awoken to the fact that consumer spending and thus the economy will not improve unless housing prices and property values stabilize.
As a result, his foot soldiers are scurrying to develop a massive refinancing package or possibly a housing stimulus program to resurrect the moribund real estate market. There are sure to be plenty of Congressional skeptics in light of the administration's past flops to revive housing.
For example, the president's much ballyhooed Home Affordable Modification Program (HAMP) has been an utter disaster. Despite $50 billion in taxpayer funding, even the government has admitted the program fizzled in its effort to arrest the tide of home foreclosures.
In 2011, there were foreclosure filings on 1.88 million properties in the nation, according to Realty Trac. The number would have been much higher but thousands of foreclosures are being held up by legal action pursued by states. A settlement in the case will unleash a torrent of new foreclosure notices.
That would be catastrophic for the housing market and for the president's chances for a second term.
The president's state of the union address is scheduled January 24. It would not be surprising for Obama to call for Congressional action to prop up delinquent homeowners and the sagging real estate industry with colossal infusions of taxpayer money.
In a period of record federal deficits, such a plan may seem preposterous. However, never underestimate the power of election year politics to influence politicians to do dumb things with your money.
The blueprint began unfolding earlier this month when the Federal Reserve issued a little-noticed white paper recommending that mortgage behemoths Fannie Mae and Freddie Mac assume a more active role in awakening the slumbering housing market.
In its document, the Fed admitted the new direction could deepen financial losses for the two lenders. Already taxpayers have ponied up $183 billion and counting to keep Fannie and Freddie from plummeting into a financial sinkhole. The prospect of more red ink apparently doesn't faze the Fed or the president.
The white paper provides air cover for the administration to move ahead on several fronts. The president's puppet masters are taking aim at replacing recalcitrant heads at Fannie Mae and the Federal Housing and Finance Agency (FHFA) to remove potential roadblocks to their scheme.
That helps explain why Fannie Mae CEO Michael Williams unexpectedly announced he was stepping down. Almost simultaneously, the administration leaked the news that it was searching for a new chief executive to shepherd the Federal Housing and Finance Agency (FHFA), replacing Edward DeMarco.
Apparently, Williams and DeMarco are both too independent for the president. Obama wants sycophants who will advocate for aggressive government intervention to stabilize housing prices and stem the onslaught of foreclosures sabotaging the real estate market.
As head of the independent housing agency, DeMarco's role has been to regulate Fannie and Freddie. The once private firms were placed into conservatorship by FHFA on September 7, 2008, after both were threatened with insolvency when the housing market collapsed.
Since then, Fannie and Freddie have continued their downward spiral. In the most recent quarterly earnings reports, Fannie tallied $5.09 billion in losses while her mortgage brother Freddie experienced a similar hit of $4.4 billion.
By any measure, Fannie and Freddie are abject failures. The lenders were at the forefront of the sub-prime lending frenzy that subverted the housing market. The twin turkeys, which underwrite 90 percent of all the nation's home mortgages, also have a sordid history of abuse of power.
In the last decade, Fannie and Freddie have been slapped on the wrists by Congressional oversight committees for dubious campaign contributions, accounting scandals, gross mismanagement, political lobbying and influence peddling.
It begs the question: why not do away with both agencies and turn over the mortgage holdings to private companies? The answer can be found by following the money trail. Both agencies have been generous donors to Democrats, including the president.
But the president has other reasons for wanting Fannie and Freddie to return to the lax lending standards that got it into trouble in the first place. It seems Obama has finally awoken to the fact that consumer spending and thus the economy will not improve unless housing prices and property values stabilize.
As a result, his foot soldiers are scurrying to develop a massive refinancing package or possibly a housing stimulus program to resurrect the moribund real estate market. There are sure to be plenty of Congressional skeptics in light of the administration's past flops to revive housing.
For example, the president's much ballyhooed Home Affordable Modification Program (HAMP) has been an utter disaster. Despite $50 billion in taxpayer funding, even the government has admitted the program fizzled in its effort to arrest the tide of home foreclosures.
In 2011, there were foreclosure filings on 1.88 million properties in the nation, according to Realty Trac. The number would have been much higher but thousands of foreclosures are being held up by legal action pursued by states. A settlement in the case will unleash a torrent of new foreclosure notices.
That would be catastrophic for the housing market and for the president's chances for a second term.
The president's state of the union address is scheduled January 24. It would not be surprising for Obama to call for Congressional action to prop up delinquent homeowners and the sagging real estate industry with colossal infusions of taxpayer money.
In a period of record federal deficits, such a plan may seem preposterous. However, never underestimate the power of election year politics to influence politicians to do dumb things with your money.
Sunday, January 15, 2012
Why An Ohio Farmer's Case Could Save Obama Care
Legal briefs trickling into the Supreme Court signal the launch of an epic battle over President Obama's brazen health care overhaul. Unless there are unforeseen delays, the court will hand down its decision in June, right smack in the middle of the presidential campaign.
In its coverage, the mainstream media has cast the legal contest as an ideological war pitting opposing views of providing health care coverage. However, the case has much broader meaning for the country and its citizens.
At stake is the future of government's power to regulate most aspects of American life. The decision in the case will frame for generations how much authority Congress will have to unleash its regulatory bullies on businesses and individuals.
Twenty-six states have joined forces to oppose the new health care law. In their court filings, the states argue Congress overstepped its constitutional authority when it mandated that Americans must purchase health insurance under threat of financial penalties.
In addition, the plaintiffs are challenging the health care law's unlawful expansion of the Medicare program. They contend the statute will force states to add more poor and disabled people to the program or face loss of federal funds.
The president's lawyers counter that Congress is entitled to regulate health care under the Commerce Clause enumerated in Article 1, Section 8 of the U.S. Constitution. For decades, courts have confirmed Congress' authority to pass laws to regulate economic activity within the nation.
However, it wasn't until 1942 that the precedent was established. Prior to that, the Supreme Court had struck down statutes that imposed regulations on economic activities within a state because the Commerce Clause expressly limits the federal government's authority to interstate matters.
But the case of Ohio farmer Roscoe Filburn changed everything. In 1941, Filburn planted more wheat than his federal allotment permitted. He used the excess wheat production to feed his chickens. He neither sold the wheat nor did he transport the grain off his farm.
Then Secretary of Agriculture Claude Wickard was outraged. He ordered Filburn to destroy his crops and pay a steep fine. Filburn refused and took the matter to court, where a three-judge panel enjoined the secretary from enforcing penalties against the farmer.
The ruling ignited a flurry of legal and political activity. President Franklin D. Roosevelt, worried the court decision could torpedo his New Deal programs, ordered his lawyers to file a motion to overturn the ruling at the Supreme Court.
Roosevelt knew he would find a receptive audience. Earlier in his term, the high court had rebuffed his efforts to expand government intervention into every element of the economy. Roosevelt publicly chastised the justices for thwarting economic recovery.
When the justices refused to bow to pressure, the president warned that he was prepared to expand the number of Supreme Court members from nine to 15 by appointing six additional justices who would be sympathetic to his agenda.
After the presidential browbeating, the "supremes" began taking a decidedly more friendly view of Roosevelt's expressed interests. Therefore, it came as no surprise when the high court ruled against the Ohio farmer on November 9, 1942.
The unanimous decision written by Justice Robert Jackson became the legal tenant for future courts to follow in upholding Congress' right to regulate not only matters that cross state lines, but practically every activity within a state as well.
Now comes Obama Care, the quintessential Congressional power grab. When it renders its decision, the Supreme Court justices will have to either overturn or reaffirm the judicial paradigm established by the Wickard vs. Filburn case.
If history is a guide, high court justices have been reluctant in the past to scrap established legal precedent. That's why those who believe the case against Obama Care is a slam dunk should heed what happened to an Ohio farmer nearly 70 years ago.
If the Supreme Court upholds the precedent, Congress and the federal government will be handed carte blanche power for unbridled regulatory intrusion, imperiling individual freedoms for future generations.
That prospect should frighten the daylights out of every American.
In its coverage, the mainstream media has cast the legal contest as an ideological war pitting opposing views of providing health care coverage. However, the case has much broader meaning for the country and its citizens.
At stake is the future of government's power to regulate most aspects of American life. The decision in the case will frame for generations how much authority Congress will have to unleash its regulatory bullies on businesses and individuals.
Twenty-six states have joined forces to oppose the new health care law. In their court filings, the states argue Congress overstepped its constitutional authority when it mandated that Americans must purchase health insurance under threat of financial penalties.
In addition, the plaintiffs are challenging the health care law's unlawful expansion of the Medicare program. They contend the statute will force states to add more poor and disabled people to the program or face loss of federal funds.
The president's lawyers counter that Congress is entitled to regulate health care under the Commerce Clause enumerated in Article 1, Section 8 of the U.S. Constitution. For decades, courts have confirmed Congress' authority to pass laws to regulate economic activity within the nation.
However, it wasn't until 1942 that the precedent was established. Prior to that, the Supreme Court had struck down statutes that imposed regulations on economic activities within a state because the Commerce Clause expressly limits the federal government's authority to interstate matters.
But the case of Ohio farmer Roscoe Filburn changed everything. In 1941, Filburn planted more wheat than his federal allotment permitted. He used the excess wheat production to feed his chickens. He neither sold the wheat nor did he transport the grain off his farm.
Then Secretary of Agriculture Claude Wickard was outraged. He ordered Filburn to destroy his crops and pay a steep fine. Filburn refused and took the matter to court, where a three-judge panel enjoined the secretary from enforcing penalties against the farmer.
The ruling ignited a flurry of legal and political activity. President Franklin D. Roosevelt, worried the court decision could torpedo his New Deal programs, ordered his lawyers to file a motion to overturn the ruling at the Supreme Court.
Roosevelt knew he would find a receptive audience. Earlier in his term, the high court had rebuffed his efforts to expand government intervention into every element of the economy. Roosevelt publicly chastised the justices for thwarting economic recovery.
When the justices refused to bow to pressure, the president warned that he was prepared to expand the number of Supreme Court members from nine to 15 by appointing six additional justices who would be sympathetic to his agenda.
After the presidential browbeating, the "supremes" began taking a decidedly more friendly view of Roosevelt's expressed interests. Therefore, it came as no surprise when the high court ruled against the Ohio farmer on November 9, 1942.
The unanimous decision written by Justice Robert Jackson became the legal tenant for future courts to follow in upholding Congress' right to regulate not only matters that cross state lines, but practically every activity within a state as well.
Now comes Obama Care, the quintessential Congressional power grab. When it renders its decision, the Supreme Court justices will have to either overturn or reaffirm the judicial paradigm established by the Wickard vs. Filburn case.
If history is a guide, high court justices have been reluctant in the past to scrap established legal precedent. That's why those who believe the case against Obama Care is a slam dunk should heed what happened to an Ohio farmer nearly 70 years ago.
If the Supreme Court upholds the precedent, Congress and the federal government will be handed carte blanche power for unbridled regulatory intrusion, imperiling individual freedoms for future generations.
That prospect should frighten the daylights out of every American.
Friday, January 6, 2012
Don't Be Fooled By Deceitful Unemployment Rates
U6 may sound like the name of a World War II German submarine, but it holds the key to unlocking the real unemployment figures in the United States. Yet the mainstream media omits the U6 number when it reports jobless rates because it does not fit the narrative of an improving economy.
By way of explanation, U6 refers to one of several formulae the Bureau of Labor Statistics uses to calculate the nation's unemployment rate. Under the Obama Administration, the bureau has camouflaged the U6 measurement in a stack of statistics, hoping it will be overlooked.
Under the U6 calculation, the country's unemployment rate for December stood at 15.2 percent. This measurement includes not only Americans unable to find work, but those who have given up seeking employment as well as people who want full-time positions but have settled for part-time jobs.
When President Obama assumed office in 2008, the U6 jobless rate was 8.8 percent. It reached its zenith in October of 2009 when it soared to 17.4 percent, a level not seen since the Great Depression. However, most media outlets either buried the number or never reported it at the time.
Instead, the media and the Bureau of Labor Statistics tout what is known as the U3 unemployment rate. This formula considers only unemployed Americans actively seeking work. Those people with no job, but not looking for employment, are not counted.
In many cases, these workers have given up because they believe their search for employment would be futile. They have cause for pessimism. According to the latest government figures, there are more than 4.5 unemployed people for every job created by the economy.
Using the "official" U3 measurement, the current unemployment rate is 8.5 percent. That is a far cry from the real number of 15.2 percent. But it shores up the media's argument on the president's behalf that the economy is trending in the right direction.
However, this ignores the fact that even under the "official" measurement there are still 23.7 million Americans out of work. Since December of 2007, the U.S. economy has shed 6 million jobs. Last year the country added 1.6 million jobs. At that growth rate, economic prosperity will remain elusive for years.
Finagling the unemployment rate isn't the only fraud the media has perpetrated. News outlets also have taken to trumpeting private-sector hiring numbers. However, the media conveniently fails to mention that most new jobs being added are "low wage" positions, according to the Labor Bureau.
In recent months, the media has latched on to declining jobless claims to buttress the notion of economic recovery. Each month's tally is breathlessly recited. However, news outlets fail to report that seasonal hiring has been mostly responsible for the improvement.
In other cases, the media is indifferent to upward revisions in economic numbers. For instance, the November jobless rate of 8.6 percent recently was revised to 8.7 percent but the change escaped media attention until the more favorable December figures were issued this month. Coincidence?
None of this should surprise astute observers. Big media is heavily invested in President Obama's reelection. They will go to any length to secure a second term for the president, even if it means torpedoing the "real" unemployment numbers.
By way of explanation, U6 refers to one of several formulae the Bureau of Labor Statistics uses to calculate the nation's unemployment rate. Under the Obama Administration, the bureau has camouflaged the U6 measurement in a stack of statistics, hoping it will be overlooked.
Under the U6 calculation, the country's unemployment rate for December stood at 15.2 percent. This measurement includes not only Americans unable to find work, but those who have given up seeking employment as well as people who want full-time positions but have settled for part-time jobs.
When President Obama assumed office in 2008, the U6 jobless rate was 8.8 percent. It reached its zenith in October of 2009 when it soared to 17.4 percent, a level not seen since the Great Depression. However, most media outlets either buried the number or never reported it at the time.
Instead, the media and the Bureau of Labor Statistics tout what is known as the U3 unemployment rate. This formula considers only unemployed Americans actively seeking work. Those people with no job, but not looking for employment, are not counted.
In many cases, these workers have given up because they believe their search for employment would be futile. They have cause for pessimism. According to the latest government figures, there are more than 4.5 unemployed people for every job created by the economy.
Using the "official" U3 measurement, the current unemployment rate is 8.5 percent. That is a far cry from the real number of 15.2 percent. But it shores up the media's argument on the president's behalf that the economy is trending in the right direction.
However, this ignores the fact that even under the "official" measurement there are still 23.7 million Americans out of work. Since December of 2007, the U.S. economy has shed 6 million jobs. Last year the country added 1.6 million jobs. At that growth rate, economic prosperity will remain elusive for years.
Finagling the unemployment rate isn't the only fraud the media has perpetrated. News outlets also have taken to trumpeting private-sector hiring numbers. However, the media conveniently fails to mention that most new jobs being added are "low wage" positions, according to the Labor Bureau.
In recent months, the media has latched on to declining jobless claims to buttress the notion of economic recovery. Each month's tally is breathlessly recited. However, news outlets fail to report that seasonal hiring has been mostly responsible for the improvement.
In other cases, the media is indifferent to upward revisions in economic numbers. For instance, the November jobless rate of 8.6 percent recently was revised to 8.7 percent but the change escaped media attention until the more favorable December figures were issued this month. Coincidence?
None of this should surprise astute observers. Big media is heavily invested in President Obama's reelection. They will go to any length to secure a second term for the president, even if it means torpedoing the "real" unemployment numbers.
Sunday, January 1, 2012
Top Ten Predictions For 2012
If you thought 2011 was a bad year, just wait until you learn what's just around the corner in 2012. From the world economy to international politics, all signs point to a new year shaken by one crisis after another. Better chew a bottle of Maalox before you read any further.
Crystal ball gazing has never been easy, but 2012 presents a Herculean challenge for prognosticators. Turmoil has roiled financial markets, governments, trade and foreign policy, making predicting the future is as difficult as trying to nail Jello to a wall.
Despite the formidable challenge, here are the Top Ten Predictions for 2012:
1. Rosy forecasts for economic recovery in the U.S. fail to materialize as GDP growth barely inches above 2 percent after finishing below that level in 2011. Consumer spending, the backbone of the economy, suffers as layoffs, falling house prices and anemic wage growth scuttle the economy.
2. The European Union teeters on the brink of a currency crisis as burgeoning sovereign debt compels some member nations to consider pulling out of the euro-zone. Economic growth in the EU stumbles to a minuscule one percent as financial shock waves jolt the continent.
3. Housing prices continue their downward spiral while annual sales barely eclipse 2010's low water mark of 4.91 million. Foreclosures jump in the first half of the year as mortgage firms clean up the mess of paperwork stalled by government investigations.
4. North Korea's new leader, anxious to flex his power, provokes a confrontation with neighboring South Korea, which escalates into a massing of troops in the DMZ between the two countries. After the dust-up, the military quietly begins looking for an opportunity to dump the new dictator.
5. Gasoline prices in the United States leap past $5 a gallon as Iran begins meddling in the affairs of Iraq, destabilizing the Mideast. As a result of Iranian coaxing, sectarian violence flares up, leading to the fall of the current government.
6. In spite of a sour economy, cosmetic surgery procedures experience record growth in the United States. The nip-and-tuck industry's revenues lift past the $15 billion mark in 2012 as aging boomers with discretionary income face their golden years with a new look.
7. Russian premier Putin, nervously watching growing unrest at home, secretly concocts a scheme to spark a domestic terrorist attack aimed at shifting voters' focus on homeland security. Rattled by the crisis, Russians return Putin to the nation's presidency.
8. Real unemployment remains near 16 percent in the U.S., but the Bureau of Labor Statistics issues a report in the third quarter pegging the jobless rate at 8.4 percent in a desperate attempt to show the economic policies of the president are succeeding.
9. A weak political organization and voter fatigue sink the presidential candidacy of Newt Gingrich, leaving Mitt Romney as the presumptive GOP nominee heading into summer's Super Tuesday primaries. However, he fares poorly in the southern state primaries, which raises the specter of an "open" GOP convention.
10. After a sometimes raucous convention spiced with talk of a Romney challenge, the former Massachusetts governor finally secures the GOP nomination. He goes on to capture the nation's highest office with 53 percent of the popular vote to President Obama's 46 percent.
Some may complain about the dollop of gloom and doom saturating this year's predictions. Get over it. The world is a scary place with more uncertainty and disruptive forces than at any time in recent memory. There are good reasons for pessimism.
If it's any consolation, the prediction here is that the Mayans are dead wrong about the world ending in 2012. At least, we think so.
Crystal ball gazing has never been easy, but 2012 presents a Herculean challenge for prognosticators. Turmoil has roiled financial markets, governments, trade and foreign policy, making predicting the future is as difficult as trying to nail Jello to a wall.
Despite the formidable challenge, here are the Top Ten Predictions for 2012:
1. Rosy forecasts for economic recovery in the U.S. fail to materialize as GDP growth barely inches above 2 percent after finishing below that level in 2011. Consumer spending, the backbone of the economy, suffers as layoffs, falling house prices and anemic wage growth scuttle the economy.
2. The European Union teeters on the brink of a currency crisis as burgeoning sovereign debt compels some member nations to consider pulling out of the euro-zone. Economic growth in the EU stumbles to a minuscule one percent as financial shock waves jolt the continent.
3. Housing prices continue their downward spiral while annual sales barely eclipse 2010's low water mark of 4.91 million. Foreclosures jump in the first half of the year as mortgage firms clean up the mess of paperwork stalled by government investigations.
4. North Korea's new leader, anxious to flex his power, provokes a confrontation with neighboring South Korea, which escalates into a massing of troops in the DMZ between the two countries. After the dust-up, the military quietly begins looking for an opportunity to dump the new dictator.
5. Gasoline prices in the United States leap past $5 a gallon as Iran begins meddling in the affairs of Iraq, destabilizing the Mideast. As a result of Iranian coaxing, sectarian violence flares up, leading to the fall of the current government.
6. In spite of a sour economy, cosmetic surgery procedures experience record growth in the United States. The nip-and-tuck industry's revenues lift past the $15 billion mark in 2012 as aging boomers with discretionary income face their golden years with a new look.
7. Russian premier Putin, nervously watching growing unrest at home, secretly concocts a scheme to spark a domestic terrorist attack aimed at shifting voters' focus on homeland security. Rattled by the crisis, Russians return Putin to the nation's presidency.
8. Real unemployment remains near 16 percent in the U.S., but the Bureau of Labor Statistics issues a report in the third quarter pegging the jobless rate at 8.4 percent in a desperate attempt to show the economic policies of the president are succeeding.
9. A weak political organization and voter fatigue sink the presidential candidacy of Newt Gingrich, leaving Mitt Romney as the presumptive GOP nominee heading into summer's Super Tuesday primaries. However, he fares poorly in the southern state primaries, which raises the specter of an "open" GOP convention.
10. After a sometimes raucous convention spiced with talk of a Romney challenge, the former Massachusetts governor finally secures the GOP nomination. He goes on to capture the nation's highest office with 53 percent of the popular vote to President Obama's 46 percent.
Some may complain about the dollop of gloom and doom saturating this year's predictions. Get over it. The world is a scary place with more uncertainty and disruptive forces than at any time in recent memory. There are good reasons for pessimism.
If it's any consolation, the prediction here is that the Mayans are dead wrong about the world ending in 2012. At least, we think so.