Economy Bright Spots for 2012; Economic Bright Spots For 2012
KAYE: Stocks are in positive territory right now but where do they stand for the year that ends this weekend? Alison Kosik joins me now from the New York Stock Exchange. Hi, Alison. So where does the S&P; 500 stand for 2011?</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT:: : OK, Randi. So the S&P; 500 is back in positive territory for the year but just barely. And you know what? It looks like it's really going to come right down to the wire on this one. But either way it goes, up or down, it's really likely to be the smallest yearly change for the S&P; 500 since 1970. Now as for the Dow, it's done better. It's up about 6 percent year- to-date, but we like to look at the S&P; 500 because it's the broader index, Randi, the one that investors really should focus on because it's the index that most closely tracks our 401(k)s or our retirement accounts. So chances are those are looking pretty darn flat this year. So to peek or not to peek at that portfolio at the end of the year, that is the question -- Randi.</s>KAYE: Yes, I'm sure -- and I'm sure you're also keeping a close watch on the stock winners and losers?</s>KOSIK: Yes. So we put together some of the winners and losers. The best performer in the S&P; 500 is actually Cabot Oil and Gas. Now that stock has more than doubled in price this year and here's why. Because the natural gas industry is booming in the U.S. El Paso Corporation, that's also a natural gas company. That came in at number two. MasterCard comes in at number four. And that's kind of an encouraging one because it shows that consumer spending is up as the economy recovers. You just hope that everybody is going to go ahead and pay their bills on time. All right. So you flip the coin over, we get the worst performers. First Solar. Solar stocks, they've taken a beating. Some solar companies have actually gone bankrupt as the price of solar panels essentially collapsed. MEMC comes in fourth on that list. It also got caught up in the solar decline as well. And then who can forget Netflix. Yes, Netflix took quite the beating this year following its PR disasters over the summer. Netflix stock was trading above $300 in July. Guess how much it's trading today -- Randi.</s>KAYE: What? Do we even want to know?</s>KOSIK: Under 70 bucks, under 70 bucks. I know.</s>KAYE: Wow.</s>KOSIK: It's tough if you own that stock. It's tough to take, yes, it's trading under $70.</s>KAYE: Wow. Not good. How are the markets doing right now?</s>KOSIK: Markets are holding their own. The Dow is up 100 points. All the major averages are in the green. That's after of course the big sell-off from yesterday. But you know a lot of these moves are being accentuated by the fact that few people are trading so, you know, a lot of the trading right now is kind of -- kind of holiday time trading. But at least we're in the green in a strong way -- Randi.</s>KAYE: All right, well, here's to 2012, as we say good-bye to 2011.</s>KOSIK: Yes.</s>KAYE: Thank you, Alison. Well, it's been a gloomy few years, we don't have to tell you that, for the economy. But will 2012 get any better? Here are some of the brighter economic signs. Holiday online sales surged 16 percent over last year. Overall sales rose 4.5 percent. Twenty leading economists surveyed by CNN now say we have only a 20 percent chance of falling into a second recession next year, whereas three months ago they were estimating it was 30 percent. And despite today's increase in first-time jobless claims, we've had several weeks of claims falling. In fact the week before or last jobless claims were at the lowest level since 2008. Joining me now is the president of Optimum Capital Management, Ryan Mack. Ryan, nice to see you. So what do you think? How will the economy fare in 2012?</s>RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: I think that 2012 is going to be defined by an economy of less risk projecting a small rate of growth in GDP. But you know what? I'll take a 2 to 3 percent growth rate in GDP as long as it's sustainable. We've had for quite some time now an unsustainable norm that was essentially individuals over-borrowing, over leveraging themselves on a personal side and corporate side and the government, essentially not being able to pay that debt off so now it's less risk. Corporations are taking less risk and hiring individuals and they're doing it by keeping more capital reserves. We had the -- even the government is trying to figure out ways to cut spending. And even individuals. I mean despite what we saw with the retail sales numbers, which did uptick a little bit, we still have a slightly higher savings rate than we've seen over the last few years. So I do think less risk and being able to mitigate these risks was going to lead a slower growth rate in the economy is going to be better for the long run but is going to lead to a slightly slower than what we're used to seeing.</s>KAYE: Let's talk about housing prices. A lot of people focused on that. Some economists are saying that housing prices will finally drop a few more percentage points than stabilize next year, maybe even hit the bottom. But others are saying it may be another two to five years. Where do your sources telling you.</s>MACK: Well, I definitely feel that housing -- we're in it for the long haul in terms of seeing any uptick in prices. We're seeing the level of shadow inventory is still relatively high. We're seeing the excess in supply. We still have one out of four individuals that have homes under water. One out of five individuals essentially in 2007 have been over 90 days late on their payment so we still have a very dismal market in the economy. But on the other side -- plus tighter credit requirements, look at Fannie and Freddie, they are still requiring individuals to have a about a 762 FICO score just to get into a piece of property. But we're buying homes more responsibly. I think the days of that no zero money down on a piece property where we just think that we could just buys homes and flip homes and try to have capital appreciation getting in and out. Those days are over. Those days are behind us. So it's going to lead to slower rate, but we're going to be more responsible and more people who purchase homes today are those individuals who more likely to be able to keep those homes for the long run.</s>KAYE: So when we look at, trying to get back on track, getting the economy back on track, I mean, what's the most important thing that you think needs to happen?</s>MACK: I think right now individuals need to try to retrain themselves into different industries that are hiring. In the optics industry, it is about 2.5 percent unemployment rate. Mathematics jobs are increasing four times the rate of unemployment. However, the U.S. is about -- out of the 29 developed countries, we're 27th in terms of bachelor's degrees that have been awarded to science, technology and math. So if you've been laid off, now it's time for you to try to find a new industry that you can get re-trained and re-certify to get back into the job industry, create your own company, try to create your own business and create your own opportunity. And then mitigate your risk in the most responsible way. It is going to be slower, but we will get back on track.</s>KAYE: Yes, we're chugging along. Ryan Mack, thank you very much.</s>MACK: Thank you.</s>KAYE: A war story of sorts from Afghanistan, but the victims are not on the battlefield. Why girls and women are being tortured and what some are doing to try and stop it?