Ten Predictions for 2012

I've learned to severely limit my clairvoyant claims; even with what seems to be the perfect collection of data it only takes one tiny detail to derail an entire prediction.  It's like winning a Tesla sports car . . . with no key.
So I'm borrowing these Ten Key Predictions from Neuberger Berman, courtesy of AdvisorOne*, so that if they don't pan out I can simply return them.  I do agree with all ten, in principle and except as noted.

#10-  Sector rotation continues to be pivotal- They see "attractive" returns in energy, information technology, staples (like sugar, rice, etc. not paper staples) & health care.  Which means higher than normal inflation in those areas too.
#9- High geopolitical tensions- Although somewhat stable, there seems to be no place for security seekers.  China may not be the economic engine we imagined.
#8- Income oriented assets will be "an attractive source of income"  Neuberger likes master limited partnerships.  But for you and me, equity indexed annuities with income guarantees are safer.  Aviva is attempting to pull their killer annuity from the national market but Oregon won't let them do it quite yet.  Please take the time to let me explain this product to you.  It's going away soon!
#7- Favor high-quality equities if you simply can't resist the stock market.  In the short term I disagree with this in principle because I see little to support the current market bubble.
#6- Global Monetary Easing may make commodities and emerging markets attractive.  Key word is "may".  I'm still not sure what effect the $600 trillion in outstanding CDOs will have if and when they come home to roost.
#5- China will experience a soft landing.  What?  China's not going gangbusters anymore?  No, it isn't because no one can afford to buy their stuff.
#4-  European Debt crisis will reach a tipping point.   Failure to reach any workable solutions means the EU will by default (linguistically not financially) select "none of the above".  The tentacles from that mess reach around the world.  And the possible effect on us is exacerbated by the USA's shadow inventory of foreclosures.
#3- USA avoids double dip recession.  I don't know.  The really smart guys are saying 1.5-2% "growth" in our economy.  But I just don't trust the employment and housing data coming out.  Sure more people are getting jobs but are they real jobs?  Family wage jobs?  Full time with benefits jobs?  In most cases, no.  So who is going to buy all the stuff?
#2- Obama will win a second term.  However you feel about this, the stats show that with an approval rating at or above 48% and unemployment below 7.4% Obama should win.  And then there's the embarrassing inability of the Republicans to come up with a viable candidate.  Neuberger points out that Obama's successes outweigh anything else (e.g., nine straight quarters of economic growth, 22 consecutive months of private sector job gains, the death of Osama bin Laden, Libya)
#1- Prominent Politics:  significant in Europe, sound and fury here.  Neuberger is far more optimistic than I that the EU members will come up with viable solutions to their fiscal ailments.  And stateside it will be impossible to guess whether Congress will finally accomplish meaningful budget and tax reform.  It appears many of the Congressional crazies will lose their seats this round.  None too soon.
Best Always,
Gary 

*http://www.advisorone.com/2012/02/27/10-key-predictions-for-markets-election-in-2012-ne?utm_source=dailywire22712&utm_medium=enewsletter&utm_campaign=dailywire&page=2