Happy 2012

Happy New Year

Oh my.  Just look at the calendar!  I blinked and it is 2012.  When I was a boy of around 10, I remember thinking that when the millennium changed from 1999 to 2000 that I would be 53 years old.  Naturally, that seemed rather ancient to me at the time but I look back to 2000 fondly as I was “only” 53.  Alas.

With that bit of nostalgia out of the way, let me start my first blog by wishing everyone, including the Mayans who predict a 2012 catastrophe, Happy New Year!

Predictions for 2012

As with most companies, E-Tech must submit forecasts to its owners as to the business climate we expect to see for 2012.  A decade or two this was a simpler task as the world was a less complicated place.  Even though we are a small company, E-Tech has to look at the macro side of the world as the interrelationships of our little planet are so powerful in what we do.  So here is what I think is going to happen this year.  Note that these predictions are based on reasoning, not necessarily what I hope will occur.

1.       The Economy – This one’s easy as most analysis I have seen point to a continued improvement in the US economy in general and to other parts of the world in particular.  Are there blips out there?  Sure.  China will have to come to grips with many issues that endanger it including its banking system.  A consensus for US growth seems to be around 2.5%.

2.       Unemployment – Public sector losses will dampen employment so that by the time elections come around in November, the rate will not be much different than it is now.

3.       And speaking of the election… I predict Obama will be re-elected in a run against Mitt Romney.  Do not be surprised to see the president have a different VP.  In a move more toward a dysfunctional government, the GOP will capture the Senate thereby assuring that Congressional approval ratings remain in single digits.

4.       On a microeconomic level, specifically my own business, I predict 2012 to be a reasonable year though not as robust as 2011 was.  Most of E-Tech’s representatives share this view as well as customers who replied to our requests for their opinions.

5.       Inflation – Not too much of a factor.  For our own business, steel prices, at least for the time being, are stable or lower.  Natural gas prices by the end of the year figure to be $3.50 or so.  Take note, however, that the US is beginning to export large amounts of natural gas; though this is not probably going to have too much impact in 2012, we could see an upward blip in 2013 or 2014.  E-Tech is seeing increased pricing pressures due to scarce fabrication resources in the Tulsa area.  This could cause fabricated costs to rise with or without material price increases.

6.       The stock market – Oh boy, here we go!  I believe that long-term, the market is bearish as there are so many issues – debt, growth, political stagnation in the US, lack of a coordinated plan for adapting to a global market, education problems – that must (my word) be addressed at a macro level and won’t be.  With that caveat, I think 2012 and 2013 will be decent years with gains of 5% or so each year.  Beyond that, buyer beware!

7.       Sports – LSU over Alabama (I would have preferred to see Oklahoma State lose to one of these two but the BCS saw to that not happening).  And in the Super Bowl?  My money’s on Green Bay.

Finally, these are my own opinions and as anyone who knows me will say, I’m wrong far more often than right.  And to that end, you may all, at the end of the year, remind me of this fact – unless, of course, the Mayans were right after all.

For my first blog of 2012, it’s appropriate to have a New Year’s quote.

The proper behavior all through the holiday season is to be drunk.  This drunkenness culminates on New Year's Eve, when you get so drunk you kiss the person you're married to.  ~P.J. O'Rourke (born 1947)