It will be a very good year for small firms that (1) have cash (NO DEBT AT ALL!), can be very nimble and are not saddled with legacy costs and lines they cannot repurpose or shut down on short notice, and (3) have products and/or services that remain in demand.

It will be early, I suspect, for the "big flush" asset buys, but there will be some opportunities that will be worth salivating over bigtime -- if you're positioned (or can become positioned fast) to take advantage of them.

Congrats on another good year for you Karl, including release of your book!

One question/quibble over the issue of continuing resolutions:

Quote:

Remember too that the House and Senate both have permitted "Continuing Resolutions" to run the government now for two years. This was agreed to by both Houses, ergo, it's both of their fault and those claiming otherwise are liars.

What is the problem with operating on continuing resolutions? Essentially this means that government spending is frozen, right? GOP can claim "victory" because they have stopped the increase in government spending, and Democrats can claim "victory" because they prevented a reduction in government spending. "Points" to the GOP since they can claim the Senate hasn't passed a budget (although thats really irrelevant since it would be a waste of time given the House).

I still contend GOP/Tea Party strategy should allow the debt limit to be raised to something like $20T; and then campaign and run on getting fiscal house, using that $20T as the limit, and putting through necessary reforms... and not going past $20T. Thus, explaining that once we hit $20T the budget will be balanced.

As a voter I would buy into this approach rather than the current, lame, approach the GOP/Tea Party takes... in which there doesn't appear to be any limit to the debt ceiling as long as they pretend that cutting our projected debt from $30T to 29T is useful.

(Edit to add)
Politicians should be forced to name what they think the national debt level should be, and forced to stand by that number. I can't even remember if this question has been asked during the GOP debates.

Is this because they wouldn't find any donors to their campaigns if there was a balanced budget?

Quote:

What is the problem with operating on continuing resolutions?

A CR is facially unconstitutional and thus void on its face -- the Constitution requires the passage of a BUDGET.

Unconstitutional seems to be the current modus operandi across the board, Karl. Sadly.

Yes it does.....

This is SOP for the State

Continuing resolutions are essentially suicide on the installment plan*. No one is held accountable, and the deficit keeps getting bigger.

(*song title)

Doug Kass put out his "15 surprises for 2012." Let's just say that he and Gen are on completely opposite sides on some things.

1. The U.S. stock market approaches its all-time high in 2012. [Gen says we finish lower than we began; Kass doesn't indicate anything of the sort.]

2. The growth in the U.S. economy accelerates as the year progresses. [Gen has a recession call for Q2-Q4.]

3. Former Presidents Bill Clinton and George Bush form a bipartisan coalition that persuades both parties to unite in addressing our fiscal imbalances. [Gen says lots of noise is made, but no one really does anything.]

4. Despite the grand compromise, the Republican presidential ticket gains steam as year progresses, and Romney is elected as the forty-fifth President of the United States. [This makes no sense in light of 1 and 2 above - but more importantly, Gen's call for a 3rd party candidate would likely undercut the GOP.]

5. A sloppy start in arresting the European debt crisis leads to far more forceful and successful policy. [Gen says Europe's failures become realized.]

6. The Fed ties monetary policy to the labor market. [Gen says they have to take rates up, whether they want to or not. Of course, one could say Kass is saying the same thing - because if 1 and 2 happen, you have to figure the labor market significantly improves along with the economy and interest rates would be ticked up as a result ... but if the labor market really improves, why would the Fed need to formally tie monetary policy to the labor market in the first place?]

9. Financial stocks are a leading market sector. [:rofl: Will they show that 57% gain in profits this year?]

15. Israel Attacks Iran. [Gen's remark on this: "I've got my suspicions on who starts it and why, but the story told in the papers has a less-than-50% chance of being the truth so I'll leave that out."]

Someone ... is going to have some serious explaining to do in just under a year from now.

the voting Fed members rotating in this year are way more dovish almost across the board. i hadn't considered that. significantly increases likelihood of QE3.

you're right about political pressure being against QE3 but tough to discern whether that would be just more toothless posturing or something more (for once)