As the curtain falls on another year, the spotlight shines on the beginning of the Prediction Season. Self-proclaimed experts forecast the outlook for the stock market, economy and which Hollywood stars are headed for divorce court. Most prognosis are bunk. But this one is the genuine article.
How can you be certain? Your journalist ditched his ancient crystal ball this year and decided to consult the Chinese Zodiac sign. This is the year of...wait for it...The Pig. The animal, according to the horoscope, represents honesty, trust and bravery. That bodes well for the New Year.
But there also is a dark side to The Pig. The animal also has characteristics of self-indulgence, naivete, stubbornness and laziness. Ah, forget all those attributes. All you need to remember is that the animal ends up as bacon on your plate. Hmmmm. Bacon! Now there's a reason for optimism.
The piggish forecast for 2019 is not as slovenly as the pessimists among you expect:
1. Despite gloomy forecasts from the likes of Goldman Sachs and other money firms, strong consumer spending spurs an annual gain of 2.9 percent in the Gross Domestic Product (GDP), after posting two quarters of 3+ percent growth early in 2019, outperforming most world economies.
2. With its stock market sinking and its economic growth underperforming expectations, China signs a trade deal with the United States but before the ink is dry the CIA reveals the Asian country has launched a cyber intrusion on our government that approaches a Category 1 attack.
3. Federal Reserve interest rate hikes in the new year continue to be an anchor on the U.S. stock markets as the Dow enters bear territory, igniting a very public feud between President Trump and Fed chairman Jerome Powell. The tension ends in Powell's resignation, calming markets.
4. Special counsel Robert Mueller, appointed in March 2017, finally issues his report on Russian interference in the 2016 election after the new Congress is sworn in. His report is littered with innuendoes about Trump campaign conduct but offers no proof of collusion with Russia.
5. The Democratic Party-controlled House launches a series of investigations aimed at President Trump and his campaign associates, using the Mueller report as its excuse for additional probes. At the urging of Speaker Pelosi, the House takes up articles of impeachment against the president.
6. With a March deadline approaching, a disheartened Prime Minister Theresa May calls for a public referendum on the Brexit deal she negotiated with the European Union after failing to get approval from Parliament. Voters reject the exit settlement, leaving the plan to leave the EU in limbo.
7. Electric car manufacturer Tesla fails to fulfill its commitment to produce 500,000 cars, sending the firm's stock in a nosedive and forcing CEO Elon Musk to give up the company reigns to an executive with auto experience to quiet the financial crisis.
8. Despite most political pundits debunking her chances, Hillary Clinton announces she will run for the presidency igniting a wild scramble among Democrats to come up with a more electable candidate. Former San Antonio Mayor Julian Castro throws his hat in the ring, becoming the favorite.
9. Justice Ruth Bader Ginsburg, who recently underwent cancer surgery, attempts to hang on to her seat on the High Court despite failing health before succumbing to the disease. President Trump nominates former Notre Dame law professor Amy Barrett as her replacement.
10. As the cost of health care and insurance continue to climb, industry giants Goggle, Amazon and Apple jump start more research and development on the use of virtual intelligence for applications in drug development, health diagnosis and personal health care, gaining a new revenue wellspring.
I can hear what your are thinking. These predictions are pig-headed, the figment of a bacon-lover's imagination. You could be right. But the good news is that when 2019 ends, you won't remember these forecasts. So go ahead. Have a wiggly piggly New Year!
Showing posts with label Business And Economy. Show all posts
Showing posts with label Business And Economy. Show all posts
Monday, December 31, 2018
Monday, November 26, 2012
Business Faces Its Own Cliff
Forget the media's slobbering infatuation with the so-called fiscal cliff. Ominous signs indicate the nation's economy may be skidding into another recession irregardless of how the political theatre plays out in Washington.
First, no one argues the fiscal cliff presents a clear challenge. Deep budget cuts and tax increases will kick-in next year unless Congress and the president strike a deal. But Congress and the president created the crisis because they were unable to reach a compromise months ago.
With most media eyes fixed on Washington, a financial caldron is simmering unnoticed.
Businesses throughout the country are losing steam. Corporate profits during the third quarter were surprisingly weak. Only 36 percent of the companies reported earnings that exceeded investor expectations for the months July through September.
Perhaps, they doesn't sound like such a big deal. However, Wall Street economists point out the norm is for 56 percent of the companies to perform better than estimates. Even more disturbing, business revenues have dipped one percent below year-ago levels after steadily rising throughout 2012.
It's true that profits inched upward at many blue chip firms, but improvements have been generated by reductions in both costs and people. Even with the austerity measures, profits rose a scant 1.1 percent from last year's third quarter. That is the lowest business growth in three years.
The laggard results portend a dramatic economic shift. In the third quarter of 2010, companies averaged earnings growth of 36.6 percent. In 2011, the increase was 17.3 percent for the same quarter. This quarter's 1.1 percent hike pales by comparison. Business momentum has stalled.
The list of companies reporting slowing sales and revenues read like a who's who of American business. Microsoft, General Electric, McDonald's, Google, Intel, IBM and Caterpillar all delivered disappointing financial numbers.
In an omen of things to come, many companies have begun shedding jobs. Since the year began, firms have laid off 352,185 workers. In October, job cuts spiked an alarming 41 percent, according to Challenger Gray and Christmas, the nation's oldest outplacement counseling company.
Don't expect the outlook to change in the fourth quarter. A Business Roundtable survey of corporate executives found their economic outlook had plummeted to its lowest level since 2009.
Some politicians and business people have blamed the fiscal cliff for the current business slump.
Their explanation is fallacious because most businesses already assume a compromise will be reached to avoid a catastrophe, according to surveys of corporate executives. The truth is a few businesses are blaming the "cliff " to shift the responsibility for their management's poor performance.
A more plausible explanation for declining results is the impending implementation of Obama Care. Businesses are reluctant to hire and expand because of costs associated with the plan. For instance, many service, hospitality and retail industry firms are trimming employee hours to avoid the threshold that requires mandatory insurance coverage, according to workforce strategy firm Mercer.
Despite the looming crisis, Washington bureaucrats keep cranking out cheery employment and economic figures. Declining business sales and revenues are reality, not some government report. The nation's economy is sinking into its second recession in less than a decade, no matter what Washington's flattering numbers say.
Unless the business climate improves soon, the fiscal "cliff" may seem more like a mere bluff.
First, no one argues the fiscal cliff presents a clear challenge. Deep budget cuts and tax increases will kick-in next year unless Congress and the president strike a deal. But Congress and the president created the crisis because they were unable to reach a compromise months ago.
With most media eyes fixed on Washington, a financial caldron is simmering unnoticed.
Businesses throughout the country are losing steam. Corporate profits during the third quarter were surprisingly weak. Only 36 percent of the companies reported earnings that exceeded investor expectations for the months July through September.
Perhaps, they doesn't sound like such a big deal. However, Wall Street economists point out the norm is for 56 percent of the companies to perform better than estimates. Even more disturbing, business revenues have dipped one percent below year-ago levels after steadily rising throughout 2012.
It's true that profits inched upward at many blue chip firms, but improvements have been generated by reductions in both costs and people. Even with the austerity measures, profits rose a scant 1.1 percent from last year's third quarter. That is the lowest business growth in three years.
The laggard results portend a dramatic economic shift. In the third quarter of 2010, companies averaged earnings growth of 36.6 percent. In 2011, the increase was 17.3 percent for the same quarter. This quarter's 1.1 percent hike pales by comparison. Business momentum has stalled.
The list of companies reporting slowing sales and revenues read like a who's who of American business. Microsoft, General Electric, McDonald's, Google, Intel, IBM and Caterpillar all delivered disappointing financial numbers.
In an omen of things to come, many companies have begun shedding jobs. Since the year began, firms have laid off 352,185 workers. In October, job cuts spiked an alarming 41 percent, according to Challenger Gray and Christmas, the nation's oldest outplacement counseling company.
Don't expect the outlook to change in the fourth quarter. A Business Roundtable survey of corporate executives found their economic outlook had plummeted to its lowest level since 2009.
Some politicians and business people have blamed the fiscal cliff for the current business slump.
Their explanation is fallacious because most businesses already assume a compromise will be reached to avoid a catastrophe, according to surveys of corporate executives. The truth is a few businesses are blaming the "cliff " to shift the responsibility for their management's poor performance.
A more plausible explanation for declining results is the impending implementation of Obama Care. Businesses are reluctant to hire and expand because of costs associated with the plan. For instance, many service, hospitality and retail industry firms are trimming employee hours to avoid the threshold that requires mandatory insurance coverage, according to workforce strategy firm Mercer.
Despite the looming crisis, Washington bureaucrats keep cranking out cheery employment and economic figures. Declining business sales and revenues are reality, not some government report. The nation's economy is sinking into its second recession in less than a decade, no matter what Washington's flattering numbers say.
Unless the business climate improves soon, the fiscal "cliff" may seem more like a mere bluff.
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