Global markets celebrated the New Year on Wednesday with a rally in appreciation of the U.S. fiscal cliff agreement, now known as The American Taxpayer Relief Act of 2012 (ATRA). Many European, Asian, and North American markets closed the day sharply higher, including all the Canadian Markets.
While markets embraced ATRA with unabashed enthusiasm, pundits were less keen on the new law. They greeted the changes with the excitement – or lack thereof – many readers reserve for books with cliffhanger endings. That’s because ATRA failed to resolve key issues related to the fiscal cliff, including automatic spending cuts and the debt ceiling limit. As a result, Americans can soon expect new additions to the fiscal cliff series. The next, which may be called the Debt Ceiling Debacle, will undoubtedly be accompanied by considerable melodrama and bipartisan bickering.
I guess the U.S. fiscal cliff agreement inspired the NHL and the NHLPA to realize that if the U.S. could figure out how to handle their multi-trillion dollar problem, maybe they should be able to figure out how to divide up the billions of dollars the fans pay every year to watch them play a game. It seems like the only way to resolve a negotiation now is to wait until the very last minute to put your final cards on the table, don’t expect that to change in government or private enterprise anytime soon.
The Year in Review
2012 was a surprising year. Although many of the most notable events reflected ongoing economic and fiscal issues – including crises in the European Union, slowing growth in China, growing debt in the United States, government intervention in Brazilian, and worries about fiscal cliff – investors remained optimistic and many global stock markets delivered rather attractive performance for the year. Here are a few of the headline events which caught our attention during 2012:
- China became an economic power, officially
All debate about when China’s economic importance would rival that of the United States was put to rest when The Economist added a section devoted entirely to China. The last time the publication introduced a new country was 1942. It was devoted to The United States.
- It’s all relative: the U.S. and global recovery
China’s growing importance did not diminish the role of the United States. U.S. economic growth may have been modest during 2012, but it was positively robust relative to that of other developed nations. In fact, the U.S. was called the sole bright spot in global economic recovery.
- Greece? Really?
Greece’s ATHEX composite index was the top-performing stock market in Europe during 2012. Despite five years of recession and record unemployment, it closed about 33 percent higher at year’s end, beating Germany’s DAX. The ATHEX remained significantly below its previous highs.
- “For Euro Crisis Relief Bang Head Here”
Bloomberg BusinessWeek’s tongue-in-cheek headline reflected ongoing frustration with events in Europe. While Europe faces complicated issues that are likely to take time to resolve, there are reasons for optimism including the region’s pursuit of a banking union.
- The Supreme Court did what?
Offering headlines that rivaled the memorable ‘Dewey Beats Truman,’ both CNN and Fox News misreported the Supreme Court’s ruling on the Affordable Care Act. The Act remains controversial.
- Like a phoenix, Bank of America rose from the ashes
After delivering the worst performance in the Dow Jones Industrial Average during 2011, Bank of America became the best performer for 2012. One of the biggest beneficiaries was Warren Buffet who stepped in when no one else would. He invested $5 billion in preferred shares and received 700 million in warrants.
- Not ready for prime time: NFL replacement officials
Early in the season, pundits tried to identify the biggest blunders made by the NFL’s temporary referees each week. It wasn’t easy. From cheap shots to reviews for teams that had no time outs to the infamous simultaneous catch call, the temporary refs made fans appreciate the real thing.
- Australian police said Apple Maps can kill you
Apple maps were called a lot of things during 2012, but accurate was not one of them. San Francisco had a French Quarter, Stratford-on-Avon disappeared, and the town of Mildura moved to the middle of Australia’s Murray Sunset National Park. Since the park has no water supply, Australian police issued a warning.
Weekly Focus – Think About It
Don’t tell people how to do things, tell them what to do and let them surprise you with their results.
–George S. Patton, U.S. Army general