10 Predictions For 2012 From BlackRock's Bob Doll
By EconMatters
Bob Doll, chief investment officer at the world's biggest money manager-- BlackRock ($3.6 trillion in assets), who has produced an annual prediction for over a decade, just published his 10 predictions for 2012:
- The European debt crisis begins to ease, even as Europe experiences a recession.
- The US economy continues to muddle through yet again.
- Despite slowing growth, China and India contribute more than half of the world’s economic growth.
- US earnings grow modestly, but fail to exceed estimates for the first time since the Great Recession.
- Treasury rates rise and quality spreads fall.
- US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession.
- US stocks outperform non-US stocks for the third year in a row.
- Dividends and buybacks hit a record high.
- Healthcare and energy outperform utilities and financials.
- Republicans capture the Senate, retain the House and defeat President Obama.
Doll sees a 2012 recession in Europe, but China, India and the United States are three bright spots accounting for two-thirds of global GDP growth. The United States faces headwinds, but a recession is not expected with GDP growth of between 2% and 2.5% and QE3 is unlikely. The big risk remains that of a financial breakdown in Europe.
Regarding specific market and investing strategy, Doll noted In a separate Nov. 2011 CNBC interview (clip below):
- Adding stocks on weakness into the lower part of 1100-1250 range
- Continue to favor the U.S.
- Sector focus: Healthcare and Technology
Doll typically is biased towards the bullish side, but like many other fund managers and analysts, he is very bearish on Europe for 2012. Doll's prediction of a third straight double-digit gain of U.S. stocks in 2011 fell short (by a lot); but on the other hand, BlackRock is a $3.6-trillion 'market force' worthy of at least some attention from investors.
Related Reading - BlackRock's Crystal Ball into 2010 and the Next Decade
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Anything Dollboy says has the intent to further fill his coffers - anything! Definitely not to be trusted. Read his 2011 predictions - trash.
Just cut and paste 2011 to 2012 pretty much.
My version of this ten:
1. Greece defaults, ISDA rules not a credit event, CDS holders go to court for the next decade. Consequences too complex to fully predict.
2. USA continues with "jobless recovery" as official unemployment declines while labor participation declines, SNAP hits new record highs, housing continues to decline, food and energy prices increase, everything else gets cheaper as USD rallies due to greater concerns with all the other major currencies.
3. China and India do make up half or more of all the "growth", but not enough to maintain stability. unknown results other than pushing more money into USD and Gold.
4. more than half of US Corporations consisitantly miss earnings expectations, unless there is QEx.
5. short term treasuries increase in yield while 10 and 30 year stay flat or even decline with Twist 2.0, until events in Europe and Asia cause more inflows into UST
6. equity and mutual fund outflows hit new records, some stocks grow double digits, while some plunge spactacularly.
7. Greek stocks outperform everyone as they switch to Drachma and hyperinflate to amazing new heights, triple digit performace.
8. Agree with Bob Doll, no one has the confidence to invest, so they either sit on growing cash piles, or buybacks and boosted dividends to make sure they make their bonuses.
9. energy and utilities outperform healthcare and financials. precious metals climb while miners continue to perform poorly.
10. Republicans take the Senate but Obama stays in office, two more years of political paralysis as nothing major gets accomplished.
Bob Doll is only good at getting and keeping a very high paying job.
Pray tell, how are #5 and #6 not mutually exclusive?
Interest rates rise and P/E multiples expand? I don't think so.
This guy has been around forever and is in my book is a certified perma-bull. You'd do just as well listening to Abbey Joseph Cohen, who by the way is no Doll.
Doll seems to of taken up the crack pipe again. Europe might not implode, but Greece is done for and Spain is not that far behind, also I like how he seems to skip over the "minor" situation that if we/Isreal hit the Iranians, that might have a little effect on our weak economy. Also, the republicans taking the white house? Come on, the way these guys are running now, Stalin could get elected as US president over this republican field. Didn't I read somewhere that Blackrock has had record redemptions in the last quarter?
+10, Israel will lead us into this conflict, we are mere sock puppet's that lock step. Or, there will be a false flag in the strait of a ship hitting an underwater mine and it's on.
Is Stalin running again?
New campaign poster -
Stalin 2012, "Bring back the man of steel" (or nut job mass killer)
Other than number 10., everything else seems to be very "mainstream". 10. shows his bias. Even though Obama seems to be doing everything he can to not get elected, there seems to be a republican and associated media effort to make sure that every republican candidate is either invisible or looks like crap. (I also have another budding theory, that we may be entering "the big set-up" in which, as we approach the election there will be massive populist momentum for Ron Paul {the forbidden fruit} which would then result in him getting elected. The banking oligarchs then use the Paul election to teach the populace a lesson and at the same time fix all of their imbalances by throwing the US and Western countries into a financial turnoil, such as we have never seen before. Ron Paul will be forced to absorb the blame, complicit or not and the populist Western world will clammer for someone, anyone to fix the problem and go running joyfully into the outstretched clutches of the oligarchs... who, with their planned globalism will make everythings stable again. Alas, the greatest stability comes from the greatest distribution of power ... so it will be a failure.)
In other words, for it to be anything other than what he is saying then we would need am outside influence, such as "real" war with Iraq, a shutdown of oil supply or other outside stimuli (which I think a lot of people are depending on).
double digit us equity returns. i quit reading right there
The European debt crisis begins to ease, even as Europe experiences a recession.
This is such a f*cked up statement that only Bob Doll can dole out. Recession means less revenue, less taxes, more unemployment; consequently deficits increases making refinancing and rolling over gigantic sovereign debts more difficult, thus the debt crisis worsens, not begins to ease.
Maybe Bob Doll can add at the end of his report in fine print: And the fairy waves a magic wand.....
The banking oligarchs believe that they can create and distribute "fiat money" infinitely to solve any problem, since the issues are only one of quanity and location of the money and not the system itself.
The system makes everyone else dependent on them because they are the only ones with the power to create and distribute fiat money. And of course, this total control and their personal agenda is the reason that long ago man discovered that monopolies over any needed thing is problematic for those who are not part of the monopoly.
The worst scenario is where the oligarchs use their monopolistic power to eternally enslave the people of the world (oops too late). The best scenario for the people of the world is where there are multiple competing currencies and pure free market forces. At this point in time:
a) the oligarchs will never willingly agree to a move away from their monopoly to free markets and free competition. Even if they did, the transition to a global free system would most likely be quite painful at this point.... and all indications are that we are headed in the other direction.
b) I cannot imagine who or how or why anyone would want to create the levels of freedom required to perfect stability through freedom. All of the incentives of those in power are for the exact opposite. They have not recently shown any interest in doing what is right for "other people". They only serve themselves.
I appologise in advance, but I wouldn't take advise from Blackrock, let alone Bob Doll of how to exit a fukin telephone booth, just my opinion. And BTW, your #10 needs editing. Obama will stay, he ain't goin nowhere cause he is doing such a "bang up" job of destroying the USA. You can't install, errr, I mean vote another candidade in to actually make things better, God forbid!
"Never ask a barber if you need a haircut" (Buffett?)
When you manage $3.6Tn you simply CANNOT recommend that people stay in cash for a while....
I love predictions:
- The European debt crisis begins to ease, even as Europe experiences a recession.
Without saying how this is going to take place, it is far more likely the tragectory of the past four years will continue: debts accumulating while the means to manage them deteriorate. BTW, the euro is already dead it's just looking for a place to lie down.
- The US economy continues to muddle through yet again.
As long as Europe is collapsing, capital will flow to the US, this is amplified by end of dollar carry trade and flight from BRICs. This will be modestly bullish for stocks and PMs.
- Despite slowing growth, China and India contribute more than half of the world’s economic growth.
First of all, 'growth' is a scam, there is no such thing only an increase in visible, uh, 'residue'. India and China are devouring themselves but must do so faster to remain in place. This is the year when these countries lose their place, succumb to effects of rampant human population, uh, 'residue' growth.
- US earnings grow modestly, but fail to exceed estimates for the first time since the Great Recession.
Earnings flop but it won't matter b/c finance managers put flight capital into stocks anyway.
- Treasury rates rise and quality spreads fall.
Treasures are beneficiaries of flight to safety. This is the last hurrah of Keynes.
- US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession.
Again, multiples don't matter, that the companies are putatively 'US' makes them desirable ... for the moment.
- US stocks outperform non-US stocks for the third year in a row.
That's a good call, first one.
- Dividends and buybacks hit a record high.
Talk about throwing good money after bad but what else is there? This is the ultimate 'flight' of company money back to the company.
- Healthcare and energy outperform utilities and financials.
In what way? Rising tide lifts all boats, right?
- Republicans capture the Senate, retain the House and defeat President Obama.
Obama wins easily as the GOP candidate is a chimpanzee and the Congress turns over. Most Tea Party winners from 2010 are booted and a surprising number of independents are elected.
The black swan downturn is not in sight. As long as the US $ remains the world's reserve currency, equities and bonds will provide reasonable returns. The $ will remain "king" and provide economic security not because deficits are reduced but because the US militiary projects real power and confronts anyone who dares to cross us or the other world powers. The US spends 9 times more than China and Russia in military spending. Japan, Korea, Phillipines, and Indonesia as well as the Middle East oil powers are completely dependent on the US military for protection. The EU and UK will do whatever we want. So the deficits finance the massive military spending which in turn ensures the US$ remains the world's currency which in turn ensures massive miliary spending (and entitlement increases).
The defendant is clearly delusional. Bailiff, remove the bottle from his briefcase and pass it around - uh, bring the bottle to the bench, first. That's right. Then take him out and bitch slap him for thinking he could drink with real men and talk through his hat. Bring me his cufflinks, anyone who wears cufflinks irritates me today.
I wonder how this compares with BK's predictions? I have more trust in BK!
Anybody care to make a comparison...
Here they are !
http://www.zerohedge.com/contributed/2012-things-will-happen
He is more bearish on stocks and economy and thinks O'bammy will be elected. Just the key bullets.
BK=Burger King?
read the thread; bruce Krasting...if you read ZH you know him. Don't swallow your burger king too fast.
To think that somebody actually gave you a greeny...
sorry, just going for a free-form, associative funny. Yes, I may be relatively new here but I know how to click on links and look up people... sheesh!
sorry, just going for a free-form, associative funny. Yes, I may be relatively new here but I know how to click on links and look up people... sheesh!
http://www.businesswire.com/news/home/20110105006179/en/Predictions-2011-BlackRock%E2%80%99s-Bob-Doll
F*cking Nostradamus/ sarc
1. The European debt crisis begins to ease, even as Europe experiences a recession.
Once the credit cards are maxed out, the crisis cannot ease. Sure the USA can continue to bail them out with our paper, but our paper is bankrupt too. This CAN'T go away.
2. The US economy continues to muddle through yet again.
The US is not muddling through. It is throwing everything out of the gondola to keep the balloon in the air. Everyone's dumping our treasuries and agreeing to cut out the dollar as a reserve currency. Meanwhile, we are printing. This process is ACCELERATING. Yeah, that's muddling through, right.
3. Despite slowing growth, China and India contribute more than half of the world’s economic growth.
Psst! You have no idea how much growth there is in China. The USA was a creditor nation with huge gold reserves in the 1930s. Our situation was very similar to China. Did that protect us from The Great Depression? Most of China and India's customers are utterly bankrupt. The stories we hear about rich Chinese fleeing the country are probably due to all the expected growth, sure.
4. US earnings grow modestly, but fail to exceed estimates for the first time since the Great Recession.
US earnings are always a sham at the top of the bubble and underestimated after it's collapse so they can get their books in order and attract big sugar daddies (with insider information) that will protect their stocks during the wall of worry climb in the next bull market. Unfortunately, TPTB won't let stocks fall, so their books continue to add to their unrealistic lies. Sooner or later, those "earnings" wither because you run out of tricks to doctor your numbers.
5. Treasury rates rise and quality spreads fall.
Treasury rates cannot rise without utterly bankrupting the US. We have long passed the point where fiscal austerity and rising rates will attract bond purchasers. They know we are bankrupt and we have to keep rates at zero.
6. US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession.
Yes, they can print enough so stock earnings increase. For example, in Weimar Germany, the market increased 27x between Oct. 1922 and Oct. 1933 because they printed the currency into oblivion. So yes, even in this depression, they can make stocks go up, you just won't be able to buy much with those "earnings." You will see a devaluation of the dollar with respect to gold soon, as well as massive printing, so this one prediction may turn out to be right.
7. US stocks outperform non-US stocks for the third year in a row.
LOL, denominated in what? The only way to evaluate domestic and non-domestic performance is in gold, not fiat. Secondly, the government is supporting the market with your tax money, so it's not company performance that is reflected in the price. That support can be withdrawn at any moment, and likely will just before the devaluation, because that will create bargains for insiders to vacuum up.
8. Dividends and buybacks hit a record high.
Maybe so. Mon and pop have fled the market. Inasmuch as mom and pop are always the ones to hold the bag, you are probably right. They have to lure in buyers to hold the bag, so juicy dividends are as likely as any other bait.
9. Healthcare and energy outperform utilities and financials.
How much did you get paid for this stunning bit of enlightenment?
10. Republicans capture the Senate, retain the House and defeat President Obama.
This was the most amusing prediction of the whole list. It tacitly asserts that there is one scintilla of difference between the shameless liars, thieves, and whores on the right, verses those on the left. The only thing that changes with the parties is the rhetoric, not their actions.
As soon as I saw that prediction, I noticed how incompatible it was with the rest. Number's 6-9 should've been each of the Four Horsemen, with number 10 being the end of time.
Well Said.
I will add that I wouldn't bet on the GOP taking contol in 2013. The three leading GOP Presidential candatites: Mittens, Grinch and (Sanitarium or Sanitation, you choose) are all dismal. Unfortuately the odds of Ron Paul winning the nomination are slim to none. In the end it doesn't matter since the Union is doomed no matter who takes control.
One reason the Republicans could take control of the Senate in 2013 is that a Obama-Romney or Obama-Gringrich presidential election would probably generate a record-low voter turnout. There is very little passion amongst the left for Obama any more, unlike in 2008. Romney or Gingrich doesn't fire up the Right either. Independents would probably rightly conclude that there is no difference between the two candidates. Low turnout elections tend to favor Republicans.
The union is doomed because both parties are the same party...and you and I aren't invited.
We would all come up with similar 10 predictions if we were overpaid by Blackrock. But if Doll where unemployed ,as he almost was with previous employer, his 10 predictions would be;
1) European debt crisis worsens--- Greece defaults
2) Us economy slumps in 2012 as consumer rollsover
3) China and India experience major recession and civil unrest
4) US corporate earnings drop after domestic and overseas demand shrinks first time since Great Depression
5) Many treasury and and municipal bonds default sending interest rates to 18 % ( Doll was right )
6) US stocks return to 2008 lows
7) European and Asia stockmarket closed for imposed Holidays
8) 90% of US corporations cancel dividends. Russia buying overseas assets of major US multinationals
9) Gold rises to $5,000 . beating growth of all asset classes and industry sectors
10) Ron Paul wins Presidency, Ben Bernanke resigns, Bob Doll fired by Blackrock
Take issue with 4 and 10...Analysts will ratchet down expectations as they always have so that beats occur...Obama wins in a cakewalk given the utter disarray of the Republican Party...as the papers said this weekend, unemployment rate is less important than the fact that it is moving in the right direction...Ecomomy appears to be improving, finished with wars, he got Osama, Quaddafi and Mubarek out and outside of Solyndra, nothing to taint him...Romney doesn't appeal to enough of the Rep party which he would need ALL of plus Independents...he comes off as liberal, elite and too nice...Reps are done
Yeah, they're done, but not because Obama has anything to offer anyone with a brain. Every 'success' you listed for him is wrapped in failure. President Puke is the perfect leader for an America in denial, and the perfect instigator for public unrest. Strap in.
2nd term presidential elections are always a referendum on the incumbent. If things are holding together, Obama wins easily. However, if we are in a state of crisis come November he probably loses to anyone else.
Fail on even considering using the term "muddle through" and then "Republicans defeat Barrack Obama" (not without Ron Paul they won't).
could mr Doll so-called chief investment officer PUBLISH HIS FORECAST FOR
USA FEDERAL BUDGET DEFICIT?
thank you
alx
$3.6T buys an awful lot of crack.
"The European debt crisis begins to ease, even as Europe experiences a recession."
Any historical precedent for this, or just wishful thinking?
Make no mistakes, Obama will NOT lose the election.
Who's going to be him?
Hahaaaa! Xactly! just label the Nominee "Enemy of the State" as per NDAA S-1867 and he get's a free trip to Gitmo... One fukin way! Problem solved, crisis = solution. Jus sayin'.
Bullish on Healthcare assumes that people have something to live for. What if the world adopts George Eastman's attitude at the end of his life (i.e. "why wait?")? At least he didn't need to see his company's long, sad demise... Until "we the people" decide it is time to take back the country and our government, hard to be bullish on much of anything.
Bob Doll, isn't he the Viagra guy?
Or is he that guy that said "I just can't win" Oh wait, that was Dole.
Pass the hopium pipe dude, you have had enough.
yeah, time for an intervention...
This is his wish list - bordering on a wet dream he might of had. Like all "money managers" they will say anything, ANYTHING to encourage investors to give them money to gamble with. Outflows are hedge fund cancer...hence, everything is rosy on Wall Street.
Yes, his predictions of Republican wins cater to the wealthy yet uninformed... hoping to cash in on the anti-Obama right.
I can't imagine, short of everything going to hell in a handbasket in October, how Gingrich or Romney could defeat Obama. To beat Obama the Repubs have to have someone who appeals to young people and independents. I don't see how either Gingrich or Romney get much about 40% of the vote.
B O is toast - ANY Republican will win easily.
The GOP already raped themselves by shitting all over Ron Paul and his supporters, and they don't even know it, or don't care. Too many people are awake now. They'd prefer a ruinous and awake-making Obama to a Gingrich or Romney who will just prop up the ponzi and drag this mess out another decade. RP12 or no one, for me and millions.
11) 5 out of the 10 are wrong! Flip a fucking coin.
like the short treas. though...