Both the FTSE 100 and Dow were expected to make modest gains by the end of 2012, according to a survey of 100 senior representatives of investment firms. The Euro was expected to deteriorate further compared to sterling, while the US dollar would increase in value. However, the majority interviewed thought that President Obama’s government had not done enough to stimulate the economy in the US.

In respect of improving business and the economy in the UK, there were calls for tax cuts both for individuals and for businesses together with the elimination of stamp duty on share purchases. A number of respondents also demanded that the government did more to simplify rules for pensions, stopped changing pension rules and improved the level of understanding of investments, particularly those which were more tax efficient, e.g. ISAs.

Those interviewed were asked to predict the best FTSE companies for capital growth in 2012. Vodafone was the most popular choice in the FTSE 100, followed closely by Barclays and BT. Balfour Beatty and Centamin Egypt featured well from selections from the FTSE 250.

A wide selection of funds were also selected. These included iShares FTSE 100 and Liontrust UK for capital growth and the Artemis and MG Optimal for income.

Other predictions included:

Inflation                                 To fall to 4.25%

Base Rates                           To remain at 0.5%

Unemployment                     Increasing to 2.75 million

Price of Unleaded Petrol      GBP1.43 per litre by 31st December 2012

The survey was carried out by financial services management consultants, Goodacre UK and sponsored by TD Wealth Institutional.

Commenting on the responses, Stephen Pinner, Goodacre’s MD, said

“The survey responses suggest that markets will remain slightly ahead of where they are now. There was a high degree of confidence that levels of inflation would reduce throughout the year although further increases in unemployment were predicted. With base rates estimated to remain so low, most of those interviewed thought that the best investment returns would come from equities and funds”.

The survey was based on personal interviews of 100 selected representatives from UK based investment companies. The survey was conducted from November through to December 2011.

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Contradicting Europe’s right-wing rise, the Danish Social Democrats have won the Danish Parliamentary election on September 15. The election have ended a decade of center-right majority in the Danish Parliament whilst electing their first female leader, Helle Thorning-Schmidt.

According to three polls released on the 14th September, voters were ready for a change as they prepared to cast their vote on the 15th, in order to elect the 179 members of Parliament. The Prime Minister in office Lars Loekke Rasmussen, who took over two years ago, replacing Anders Fogh Rasmussen who went on to be NATO Secretary General, was not taken too kindly by the Danish people as early voters cast their ballots and criticized his policies. Rasmussen lead a coalition composed of pro-market Liberals and Conservatives and was supported by the Danish People’s Party (DPP), a far-right and xenophobic party.

The election is expected to usher in the end of market reforms and strict border control, while the Socialist Democratic party will make a comeback as the majority leader in the Parliament, after 10 years in opposition.

Even though significant changes aren’t expected, Thorning-Schmidt, 44, hopes to protect the welfare system by raising taxes on banks and the rich and refrain from several austerity measures formulated by the government in order to avoid waves of contagion from debt-ridden countries. Altough Denmark did not hop on the Euro train, its economy relies on the export of national products to other European countries and its currency is subject to the uncertainty attached to the Eurozone.

According to a recent Associated Press interview, “We have a government that has believed that austerity was the right way to achieve more growth in Denmark,” Thorning-Schmidt said, “Austerity and tax cuts are not the right course for Denmark. What we want to achieve is to create more growth, kickstart the economy and then after that create the foundation for a new sustainable growth.”

The votes of Thurday’s election have been accounted for and resulted in a narrow win for the Social Democrats, with 92 seats, against the 87 seats won by Rasmussen’s coalition. Thorning-Schmidt must now manage a left-wing alliance consisted of former marxists, environmentalists, social democrats and liberals, who don’t see eye to eye in a small array of topics. There is some evidence of possible disagreement among the coalition parties. Margrethe Vestager, leader of the Socialist Liberal party, agreed to the austerity package presented by the previous government and is not backing away from that decision:

“We have made a deal which we believe is really good. It means that we will get more money in the chest and a sound economical starting point,” she said. Thorning-Schmidt’s toughest challenge has proved to be finding room in her Cabinet for the leaders of the Socialist Liberal Party and the Socialist People’s Party. According to political analyst Rune Stubager of the University of Aarhus “Her two coalition parties will try to almost tear her apart. The early retirement issue will be a big one for them to deal with.”

Hopefully, the election have created a turning point in immigration policy, as ten years of strict immigration and refugee legislation come to an end.

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Speaking to Congress in Washington yesterday, President Barack Obama outlined the centerpiece of his re-election campaign in the form of a $447bn jobs package designed to alleviate the deflated US economy.

Following the painful deadlock this summer over the debt crisis, Obama made sure to urge swift agreement between the Democrats and the Republicans: “The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy.”

In the televised joint session, Obama proposed a package of targeted tax cuts and government spending which aim at reviving the American job market. Unemployment rates has been steady at 9% or above for more than two years now, the voters are frustrated and the President saw fit to call the situation a ‘national crisis’.

Bloomberg reports that the package includes a $105 billion infrastructure proposal for school modernization, transportation projects and rehabilitation of vacant properties. Infrastructure spendings are expected to deliver most of its economic impact next year while some areas have to wait until 2013.

The president explained that he expects the recovery to be driven by businesses and workers — not by Washington. Instead, the administration is gearing up to help from the sideline. An estimated $35 billion is proposed as direct aid to state and local governments to stem layoffs of educators and emergency personnel, according to Bloomberg.

Furthermore, the main targets of the package will be the workers and small business owners who would be able to look forward to cuts in payroll taxes as an incentive for new hiring and development.

A final highlight proposes to grant states the authority to pay unemployment benefits to people who have been out of work for more than six months while they train for jobs at businesses for up to eight weeks. To encourage employers to take in these long-term unemployed, the unemployment-insurance funds will make sure the training will be at no cost to the business.

Obama’s proposal was met with both standing ovation and stony silence but some Republicans were willing to admit that the package promoted some common ground. Eric Cantor, House Majority Leader and a frequent critic of Obama, said that areas such as extending the payroll tax and especially the tax reduction for small businesses did appeal to Republican politics.

“That’s something we Republicans have been advocating for quite some time now,” he said to Bloomberg.

Anna Frajtova / Shutterstock.com

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Not long after Rep. Joe Walsh stated he would not attend the “idiotic” president’s speech, Senator Jim DeMint echoed a similar sentiment. The Tea Party leader from South Carolina dismissed the speech before four days before the President is scheduled to give it.

“I’m, frankly, very tired of speeches. I don’t want to be disrespectful to the president, but what I want to see is something in writing,” the Republican told ABC’s “This Week.” “If he’ll send a written proposal, I’ll give it every chance. But I’m not interested in his speech right now.”

Although Obama’s speech on job creation in front of a joint session of Congress is highly anticipated, the Republicans are already biting back and complaining without knowing what is in the proposal. If you had any doubt that the Republicans have not been playing politics the entire time Obama has been in office, put those doubts away now.

How can you already be against something when you don’t know what the something is? Maybe Obama wants to eliminate corporate taxes completely? How would the Republicans suddenly be against that?

DeMint has voiced his opposition to tax cuts and business tax credits, a remarkable turnaround for a political party that has for decades pushed for exactly that. “The things that have been leaking out of the White House, none of them are like what I’ve been hearing from businesses all over the country,” DeMint said.

“You know, extending unemployment [insurance], cutting payroll taxes, offering tax credits when you hire someone, I haven’t heard one business say things like this.” Rather, DeMint argued, business want the government to oppose unions and eliminate regulations, which he said would create “certainty.”

“What they want is some certainty. They want the regulators off their back. They want the National Labor Relations Board to stop pushing the union agenda and try to help companies that create jobs. So I don’t think the president is going to come out with things that are really going to create jobs,” DeMint said.

A nationwide survey of small business owners by McClatchy, however, found that most small business owners want no such thing.
Christopher Halloran / Shutterstock.com

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