1. We will start seeing the economy as "half full."
The economy should continue to sputter along next year, but I'll bet (and hope) we start to see a bit more of a consistent pickup in growth than we saw in the past year. More of us will start thinking of the recovery as "half full," even if bad things keep happening. The economy should keep making headway even with the drags of unemployment and real estate. GDP will be more like a high 3 percent, than the2 percent expected by some economists.
2. Sovereign debt will be one of the bad things.
Europe'ssovereign debt risk is not going away, and there could be more bailouts and threats to the single euro currency. For some of the same reasons, U.S. municipals are an area to watch—too much spending and too little revenue.
3. Stocks can keep rising in 2011, but it's no moon shot.
Gains should be tempered and there will be setbacks. There will also be more mergers, dividend increases and share buybacks so it would be wise to look at individual companies for growth. The emerging world's markets could have even bigger setbacks but should bounce back.
4. The dollar doesn't look so sad.
If the recovery continues to build, the dollar and yields could be higher going into 2011, as the Fed looks like it might step back from some of its programs.
5. Global tensions and terrorism unfortunately stay in the headlines.
Iran, Korea, Pakistan are places to watch for possible sources of friction. Yemen could be a target of more U.S. military intervention as the U.S. seeks out terrorists, and we increasingly are on watch for attacks from cyberspace.
Call it a split decision.
- I said economists thought unemployment would be just shy of 11 percent. So far, they are wrong (thankfully).
- I said the Fed hopefully is keeping rates low to heal the system, not fire up another disaster; the jury is still out on that one.
- I hoped double dip forecasters were wrong. They were.
- I said it would make sense for rates to rise this year. Wrong. They're lower.
- Green shoots! A big one has been the stock market and corporate profit growth.