are we possibly headed into further stagnation? >> well, you know, the political strategist side of things i've never had to look so much at politics to figure out where the economy was going. i tell you, it's like watching the keystone cops. it's gotten ridiculous. going forward we do have momentum carrying us into 2012. that's the good news. we hope we don't lose it because of political ineptitude. that's what would kill it. we have a lot of icebergs ahead. we hope politicians are better at navigating turbulent water than the captain of the titanic. that said, where are the positives? the positives are there is a glimmer of hope in the labor market. looks like the situation bottomed out after things fell apart last spring and the summer. we're seeing momentum return to job hiring. not enough momentum, but some is better than none. particularly small business hiring, new business burst, that's very important to the back bone of the u.s. economy and where we're looking for strength going forward, is looking for new business creation to begin picking up again. not enough to take down unemployment to the point where it gets to long-term employed, which is what we really worry about but taking down unemployment nonetheless. we have a chance of reaccelerating in 2012 and doing a little better. >> to be fair, even the best projections of when we get to 5% unemployment where we were before the recession started, 2017. not talking about a big burst in 2012 but anything makes a difference. harvard university professor, neil ferguson is the author of "civilization, the west and the rest." you bring a great perspective to this, the debt ceiling debacle or the super committee's plan to create a reduction plan, 201 was a year of political gridlock or keystone cops in washington. leadership deficits have held us back. how do you see this playing out in 2012? >> well, it's hard to be too optimistic. one of the things that gave us signs of life in the last quarter was a plunge in the savings rate. i'm not sure americans can really postpone deleveraging for more than a quarter before balance sheets begin to hurt them again. on the political side, i think we're in for surprises in 2012. my sense is that the republican nomination race could end very badly, indeed, with an unelectable candidate getting the nomination. in other words, not mitt romney. then we're suddenly going to see the possibility of a third candidate entering the race. that's going to increase the uncertainty hugely. if americans elect can get somebody like mike bloomberg to enter the list, it's going to be very, very hard, indeed, to predict the outcome of the presidential election. while that's going on, don't expect any insanity to prevail between republicans and democrats in congress. i think total fiscal mayhem seems an almost guaranteed feature of next year. certainly nothing is going to help the economy. it's quite possible we'll get things that will hurt it. that's to say, we'll end up heading towards this across the board sequestration, budget because -- budget cuts all around if they can't agree on some strategy. >> that's the thing that could hurt the economy more. bill gross, co-founder and chief investment officer of pemco. we spent a great deal of time together in 2011, bill, in a market this uncertain, there have been some opportunities. what is your prediction for what happens to global economies in 2012 particularly from your perspective being a key bond investor. >> well, i think, ali, 2012 will resemble 2011 in that 2011 was dominated by delevering. niall mentioned it and it speaks to countries balancing their deficits and some on the verge of default in greece, for instance, banks forced to shed capital, key investments, individuals fleeing risk markets like stocks for bonds and safer havens, delevering risk reduction, long-term but destructive short-term because it reduces growth and lowers asset prices. does that continue in 2012? to our way of thinking it does. what does that mean in terms of what you should buy and what you should sell. you should prepare for euroland instability that speaks to greece and perhaps one or two other countries dropping out. i think you should prepare for currency instability. that speaks to a stronger dollar. i think you should speak in the bond market for a bottom in yields in those what we call clean dirty shirt countries, united states, united kingdom and germany. they can only go so low. >> your analogy of clean dirty shirts and you're traveling, trip gets extended, you try to find the cleanest dirty shirt in the pile. at this point, the cleanest dirty shirt tends to be the united states when it comes to its borrowing. neil ferguson to what degree is this stuff happening, disagreement and some degree of ineptitude in washington and what degree does this threaten the western world and america as a great economic power? >> you know, i think right now the biggest threat threat to western economies is coming from the other side of the atlantic. i think if it weren't for the fact europeans were in such disarray, things might be looking rosier in the united states. there are signs of recovery, there's no question of that, whether you look at unemployment or housing. if you cross the atlantic there's a far bigger mess there. it's almost impossible to sort out the euro zone without a shift towards what amounts to the united states of europe. in other words, some system of federalism. the political obstacles to that are absolutely enormous. i think the headwind from europe is probably the strongest headwind for everybody right now. it's after all appropriate from my point of view as somebody chronicling the crisis of western civilization the epicenter of crisis have been athens and rome. i don't think this crisis in europe is in any way over and i anticipate further blood shed as europeans struggle to overcome a profound german resistance to long-term transfers to a less productive periphery and profound german resistance for easy money to the bank. the ecb would like to be the fed. i'm sure mario is itching to do qe, quantitative easing, but the brakes applied by berlin that means we're certainly going into a european or eurozone recession which can't be good for the united states. >> we're close to it now. hang on for a second. rome and athens haven't been this important in 2,000 years. diane, niall, bill, stick around. let's talk about the economic future of the united states and whether our obsession of what's going on in washington is actually founded. maybe they can only tinker around the edges. we'll talk about your economic future and how it's going to look in 2012 next on "your money." wouldn't you like to get away? ♪ ♪ ♪ sometimes you want to go where everybody knows your name ♪ ♪ ♪ you want to be where you can see ♪ ♪ our troubles are all the same ♪ ♪ you want to go where everybody knows your name ♪ ♪ picking up where we just left off. niall ferguson said the threat to america's coming have been coming from places like rome and athens. europe's debt crisis puts the global economy at risk and could drag america, showing signs of recovery, back into a recession. diane swonk joins us again. you say it's possible we've only seen the tip of the iceberg when it comes to europe and the political leadership in the united states needs to steer this country in the right direction not only to protect itself but try and veer off any trouble, further trouble europe can get into. that begs the question what role, if any, should the united states play in dealing with eurozone crisis. >> it's a very difficult question and has a very difficulty answer. i think the most notable answer is what the federal reserve has already done. we saw a coordinated effort by banks around the world, notably in the eurozone but canada, and japan joining in, switzerland joining in, all these banks a around the world doing a coordinated effort to provide liquidity to european banks. the bottom line is we're all interconnected. nobody is an island in global economy. through the financial system is where we're most at risk for contagion. should europe go down, as we already know from 2008, we need to have our oars in the water to get through these it turbulent times. that's an important role the central bank makes. listen, the ecb would like to be the fed but they can't, law prohibited and berlin making a huge wall of that. and it puts the onus on the fed to continue to provide support, not because they're trying to rescue europe out of their own al true wichl, we're trying to protect our own system from the repercussions should europe's financial system worsen as europe's debt worsens which is a real probability and one far too high at this stage of the game. >> bill, what do the numbers say? you look at what the world is saying about these countries and their futures based on the yields, on their bonds. how serious does it look for you? >> the global markets, ali, say stagnation and in some cases recession in euroland is going to continue for sometime, certainly for 2012 and maybe beyond because bond markets are basically anticipating no change in what we call policy rates, that would be the feds fund rate in the united states for 25 basis points for the next two, three, four, perhaps even five years because unemployment is still high and inflation remains contained. global bond markets say things aren't going to improve any time soon. there's another point to consider here. i agree with what diane said in terms of interconnectedness. to the extent that yields are to low, it reaches a point where there are disincentives to invest. we're seeing money market funds, for instance, close down because they can't properly offer a return to their asset holders. we're seeing banks close branches because there's no longer the profit that was assumed at higher yields. >> sure. >> as we move lower and lower to what we call zero bound in terms of interest rates, it might have a deflation flairry impact. every time we see blips in economic growth in the united states they depend on the savings rate dipping. while we're trying to get people to build up the savings rate there is no incentive to do so and the federal reserve and other central banks sent out the message there will knob incentive for savers for some years to come. how do we fix this economy? we keep money cheap to invest, then they don't use money to invest, then we don't do anything for folks who are saving. >> i agree with bill gross. i think you begin to see diminution returns from near 0 interest rate policy just as we've seen diminishing returns from fiscal stimulus. the u.s. has run a huge deficit, 10% of gross domestic product in an attempt to deal with this crisis and the payoffs have been meager. we're learning valuable things about economics including the facts that economists don't understand the way the world works as well as they thought they did. massive monetary stimulus, massive fiscal stimulus and a very, very anemic recovery. the good news is the u.s. is not in a situation of a country like italy, which despite being an extremely depressed condition is seeing an uptick, more than that, a huge spike because of fears of default or even the possible breakdown of the eurozone. my worry has always been at some point -- i don't know when it will be, at some point people will start asking the same kind of questions about u.s. fiscal policy they started to ask about italian fiscal policy this year. is this credible in the medium term. the answer is it's not credible. >> a very good question. the day that starts to happen, bill, how quickly will we know? what is the tipping point when someone says the cleanest dirty shirt in the bond pile isn't that clean? >> i'm with niall there. it ultimately will happen to the extent the fed has to at some point raise interest rates in order to support a declining dollar. i don't see that in the next few years but it can happen. to the extent the fed is limited in terms of buying through quantitative easing, treasuries are at risk. a downgrade here, a downgrade there. all of a sudden the cleanest dirty shirt is a little dirtier. that's something two, three, four years down the road. the u.s. is certainly not the cleanest shirt in all this mess. >> so diane we've maybe got a little bit of a window in that two or three years to try to get the things that matter to americans to make them feel more prosperous going. we've seen a relatively unproductive stock market. a tepid but okay housing market. we've seen a little bit of a move to the upside on jobs. what's the thing you're looking for to tell you we're going in the right direction here in the u.s.? >> unfortunately i wish i could say it was just the economy, because the economy we're getting to that point where really there is only so low you can go, pent up demand, auto market up as well, lending in that market which is important. i do agree deleveraging is still a problem. frankly the political uncertainty adding to a weak economy. if we were growing 6 to 8%, it would be noise. these issues can make a difference. i don't want to be a doomsdayer here. i agree with my colleague, the bottom line two or three years down the road, if we don't make tough decision, even if we're not out of this entirely. that's just not -- it's something completely avoidable. that's an iceberg we can avoid yet don't have any leadership to do so. >> i wish the three of you were involved in coming up with solutions, things might look a little brighter than they do. diane, thank you for your good friendship and advice this year. neil is the author of "the assent of money" and professor at harvard university. we are talking about the survival of civil kwagss. thank you for that. bill gross, you have been very helpful to us as well. bill gross the founder and co-chief investment officer of pemco. happy new year to all of you. >> you, too. more than a million -- 13 million americans are still out of work. what needs to be done in the new year to get them back to work and solve the unemployment crisis for good in this country. that's next on "your money." you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪ we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? 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[ female announcer ] phillips' colon health. hey, welcome back to "your money." there are all sorts of things that gone in the economy. only a few things make you feel more prosperous. the value of your home going up, your retirement investments going up and the fact you have a job. jobs are the most important leg of the economy. let's take a look at the jobs situation in 2011. how did it look? i would say choppy, to say the least. looks like we got off to a good start and got set back in may and june. then we started to pick things up. that's a hard map to make a trend out of. the bottom line, of those legs of the economy that make you feel prosperous, jobs are not looking as bad as they were six months ago when someone was talking about a double dip recession. we all want to know whether the job market in the united states is likely to improve in 2012. stephen moore editorial writer, for "the wall street journal," chrystia freeland and christine romans, my co-author. how to speak money, host of cnn's "your bottom line." chrystia, let's start with you. job growth was somewhat uninspired and inconsistent in 2011 but it's been a little bit steadier. are we likely to see more job growth in 2012? what are your thoughts? >> look, i do think that the trend although slow and unsatisfying is positive. it's now going into 2012. three years since the real depth of the economic contraction in two. -- 2009. we have learned subsequently that was a huge contraction. the economy just really ground to a halt. it is healing. i think the november numbers are encouraging. what's interesting about that chart you showed us ali, it also shows the economy is so fragile external shocks can knock it off course. you see the impact of the japanese tsunami slowing things down in the spring. in the summer both the debt ceiling debate and also real anxiety about europe causing problems. so i would say could be a better year but american politicians must avoid, which they are good at and everyone must hope the europeans keep it together. >> christine, there is a big distinction going into 2012 between the newly unemployed and the long-term unemployed. >> you and have i talked about this a lot. in you're newly unemployed, it's a little easier to get a job. it will be a little easier in 2012 than 2011. if you've been out of work six months or longer, the situation is basically the same for you. now you're talking about retraining, refocusing, moving, doing something very drastic to try to get back in the labor market and you run the risk of not being able to get back in the labor market. it's not monolithic when jobs start to come back, they're coming back so slowly it's not benefiting everyone. it's benefiting people newly unemployed having an easier time. when i talk to ceos in insurance, commercial real estate, other parts of the economy, trucking, for example, i know stephen moore has been talking to trucking people. they say we're ready to hire. we are stretched so thin. we are ready to hire. we just need one little bit of demand to tip us over the edge. hopefully that will be 2012. >> i have to say, stephen, if unemployment hangs around 9% like it did for sometime, president obama is going to be worried about his own job. >> no question about it. i think chrystia said the operative word on the u.s. economy right now on the economy and it's fragile. it is fragile. when you look at the jobs picture over the last three years, we lost about 8 million jobs in that horrible recession of 2008, 2009. we've only recovered about 2 million of them. this has been by far the most anemic recovery. hopefully under a normal kind of recovery pattern, we'd see big job growth next year. that would be the normal course of events. the worry i have, we were in the economy of 1970s you have periods of false prosperity where the economy would lift up and fall and lift up and fall. that seems to be the pattern right now. i don't think you'll see a real resolution. you're not going to see those employers really go out and hire, i think, until the election is held in november 2012. i really think people are in a holding pattern right now. >> chrystia, what's the best solution? what is the fix? we know the blame. we know why we are where we are largely. we know a lot of people share responsibility for this. what's the logical fix? it doesn't seem to be the thing we're talking about. >> i think there are short-term fixes and long-term fixes. on the short-term i tend to -- you're going to hear a scream from stephen right now, lean towards a little more keynesian rather than austerity approach right now because i do think that the economy still could use, if not a jump start, at least -- >> he atlanta screamed. >> he's getting ared to scream. >> a primal scream. >> the thing that worries me on the short term, something that has a huge impact on the jobs numbers is the government firing people. at a time when unemployment is such a concern it seems kind of crazy for important government workers like school teachers can be laid off. hang on just a second. a quick long-term point. okay, stephen? in the longer term it's more complicated, a nobel prize winning economist wrote a brilliant piece published in "vanity fair" arguing we're in a period of economic transition i analogous from a urban to rural economy which resulted in the great depression. it was very painful and deformity i think that's what's happening now. i don't think there are short-term fixes. i think it's a generational change. >> stephen. >> let me say something about this fiscal stimulus issue. one prediction i can make with pretty solid assurance, we're going to have another trillion dollar deficit in 2012. whether we have that increase in fiscal stimulus chrystia is talking about or not. if you add up the totals here, that's $5 trillion of debt in four years. that's a lot of debt. when we talk about the economy racing ahead, which we all hope happens, one of the things to think about is interest rates. you talked about this in a previous segment, interest rates as as low as they have been in 40, 50 years. if you start to see those creep up again that has negative effects on ability to -- mortgages, increase in deficit numbers. that's the other "x factor" i'm worried about. i'll make a prediction for you. a year from now interest rates are higher than they are today. that's not a bold prediction because they are as low as they can go. but that's another factor people should look at. >> but the last year has been counter-intuitive, we could have made that prediction a year ago and been wrong today. that's why we'll keep talking about it. thank you to all of you. you've been great friends to the show. chrystia, great to see you and stephen moore. we hope you have a great year and lots to talk about in 2012. a lot of carryovers in 2012. you might have heard a big presidential race. that's continuing. a huge decision from the supreme court on health care. the epic ongoing battle between will cain and pete dominick which is likely to spill into the new year. you'll hear from them next on "your money." if you're not satisfied with 50% more cash, send it back! i'll be right here, waiting for it. who wouldn't want more cash? 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[ powers down ] uh-oh, flobot is broken. the "name your price" tool, only from progressive. call or click today. a lot of questions about 2012. right now the biggest one is which gop candidate will run against president obama and who will be getting ready to take the oath of office this time next year, a few weeks after this time next year. pete dominick host of standup, will cain a cnn contributor. good to see you guys. you've been here telling us what's going on all year. tell us what you think, who wins the gop and who wins the presidency. >> i think mitt romney wins the nomination. the newt gingrich bubble has inflated and now deflated. >> will it deflate fast enough? there's a hint of inevitability around mitt romney not because he's great but his competitors are poor. >> what do you think? >> i think it will be mitt romney. i think in the end in iowa and some other states people will not vote for who they want to win, but who they think can win. i think voters really hate -- republican voters, tea party voters hate president obama so much, recent poll 52% of iowa voters are not sure if he was born here. still all that crazy is still out there. they are going to vote for not who they want but who can beat president obama. republican establishment is not lying newt gingrich getting near the white house. >> the conversation has been, if somebody other than romney wins, obama is competitive. if romney wins now we have an issue. who wins that battle? i'm asking you a question that's, you know, almost a year away. >> it's a jump ball, a 50/50 bet. there are firsts for everything. barack obama is the first black president of the united states. he would then become the first president in the modern era with an approval rating below 49 in the election. the year before the election. there have been five incumbents and they lost. he has the lowest approval rating, lower than carter, any presidents. with bad economy, high unemployment rate, the first incumbent to get re-election in that environment. >> we forget we used to focus on unemployment numbers. if they come up, that's an x factor, just a little more, a little better, even though we talk bowed what kind of jobs those are, that will help president obama and put him over the top. >> that's one economic indicators going in the right direction. many aren't. that's one of them. let's talk about occupy. do you think occupy wall street is going to have a meaningful influence on the general election in 2012, pete? >> absolutely. you see mic checks where they interrupt with newt gingrich and all the candidates, also with president obama and his fund-raising speeches. it's a leaderless movement still. i think that's a problem frankly. i absolutely think they are going to come out strong. it's going to change, develop over the next year as thing could change, as things may or may not get more dire, it's going to be a huge factor. look for it to be a factor against president obama. >> it's funny, will, they are not doing what the tea party do. i know the folks on occupy hate the comparison they are not rallying behind candidates running like elizabeth warren in massachusetts that might share some of the things they want to advance. can they be a force without becoming an electoral force. >> i think they are. i think they influenced the election. we saw president obama come out in a speech a few weeks ago and invoke teddy roosevelt, his campaign speech may revolve around this inequality. how you are doing compared to someone else is important. if that's his campaign message, he floated that balloon out there, you can credit occupy wall street for making it. one of the big issues of this year. >> occupy is focused not on politics but trying to strike at the root, campaign finance, inequality and corporate interest. campaign finance, that's a lot of what occupy is about. both parties take part in that. >> should there be -- there have been all sorts of people that moved into this movement to try and co-opt it and make it their on but not candidates. most candidates have distancesed themselves from occupy. should there be an occupy candidate? >> it's true american left, a democratic party more resemble their values, it will be to move the democratic party to the left, embrace concepts such as income equality. if the president of the united states does this, that suggests they are having a successful movement. >> buddy romer, could possibly be the candidate because of what he says about campaign finance, nobody else is saying that, but they're too far on some of the other issue, although he's been supportive of the occupy movement. i don't think they want a candidate. it's the system occupy is upset with, not the candidates, the party, it's the system, the route. moving on future of health care could lie with the supreme court. will the court rule against the obama health care plan and should they? pete and will and i will hash it out next on "your money." [ indistinct talking on radio ] [ tires screech ] [ crying ] [ applause ] [ laughs ] [ tires screech ] [ male announcer ] your life will have to flash by even faster. autodrive brakes on the cadillac srx activate after rain is detected to help improve braking performance. we don't just make luxury cars. we make cadillacs. also on the agenda for 2012 the supreme court will tackle what could be its biggest case in a decade, health care reform championed by president obama. the central issue, whether the, quote, individual mandate section that requires all americans to buy health insurance is constitutional. we're not going to get into a constitutional debate here. i'm going to ask pete and will what they think is likely to happen. pete. >> well, as will said on television, and still on this talking point many times, who is the most important vote in the 2012 election, justice kennedy, the guy in the middle. i think it's possible talking to dolly of slate.com, so good on these issues, it's possible it goes 7-2. it's very possible. we've seen low courts with very conservative judges say this is constitutional. but without getting into arguments, it does matter. this is a case that literally could predict the presidential election for the first time, except for 2000 when the court picked the president. >> i know you don't want to get into a constitutional argue. agreement. this question is massive, huge. defining the limits of the federal government's power. should and will. should it be ruled unconstitutional, if i were a judge it's clear to me it is unconstitutional. >> thanks god you're not. >> this revolves around the commerce clause. congress has the power to regulate trade among the states. that's grown and stretched, expanded over the years. one thing it hasn't done allowed congress to regulate your inactivity. that's a massive leap. regulate inactivity you will violate the law by existing in this country. if that's true we need limiting principles. can the government force people to join weight watchers. it's a legitimate question, kagan and thomas will be debating. >> the look on pete's face thinks they should. >> that debate will take place in the chambers. will it be ruled unconstitutional. i want to walk back on my anthony kennedy prediction. justice thomas is the only guaranteed no vote. justice scalia and others have viewed the commerce clause with broad powers over the last decade. it's not clear it will be ruled unconstitutional. >> it may be the most political supreme court decision in a long time. >> you can't answer that question without justin cane coming out and telling you. he's passionate as a lot of people are. then you have the immigration case which is two big supreme court cases and then the budget battle in september or october. >> although i will tell you, part of when i'm wondering about for my viewer what is the outcome of the matter of what has to happen in 2012. >> if it's ruled unconstitutional it hurts president obama. if it's ruled constitutional, it hurts, if it's mitt romney, a lot. >> if it's unconstitutional it's not dead. republicans will take it up in the legislature and try to have obama care repealed. they will not leave it up to the courts to do away with this law on their own. >> they have to have the white house or else they fail. obviously president obama -- look for it. we're looking ahead to next year. my x factor i want to predict this. americans elect, they are on 12 states ballots there's going to be probably all 50 states that say americans elect -- who that's going to be? i don't know. that is the "x factor" nobody is talking about. >> i agree. there are big people behind. the supreme court case could have a huge role. you have niall ferguson on earlier. if mitt romney is not the nominee you could see a third party candidate, whether that's ron paul, michael bloomberg, who knows. >> it's going to be an exciting year. hope you spend time with us in 2012. >> as long as pete will wear red sweaters for christmas. >> it's christmas eve. merry christmas. >> halloween. he thinks he got a red sweater. >> this is my christmas sweater i want to wish our viewers happy holidays, happy hanukkah, merry christmas. this is a chris may sweater. >> tune your sets to make sure it doesn't look orange. >> it's also my halloween sweater. >> good to see you guys. happy new year. 2011 was a rough year to figure out what to do with your investments. it's about to be a new year. the right approach to your money next on "your money." cushiony . uh oh. i gotta go. 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>> okay. so i'm recommending s&p ishares fund because basically what you want to do is participate in the u.s. recovery short term, participate in the long-term emerging markets growth and get some protection from the problems in europe and the best way to do that is in big conservative stocks such as an in an s&p i-share funds. >> companies maybe based here in the united states but they're global, but they're global. >> general electric type of company. >> company wheres the majority of their earnings growth secularly in the markets but benefitting from the cyclical uptick in the united states. >> very good. we're getting these calls. i'm hearing from people who say that, you know, i like to rebalance at the end of the year, but in addition to rebalancing where you should have been, should i be taking a more conservative look at my portfolio and staying away from heavy investment in the u.s. and europe? >> it's a time to be emphasize quality. i would be selling low quality companies, low quality debt in i would be lightening up on small cap stocks on the united states. i'd be lightening up on come mod it is because they require a high growth in the world. and in europe there are certain value place but you have to understand the odds are stacked against you when the economy is shrinking as europe is likely to shrink for the foreseeable future. >> even if you have a value play, even if you have a stock that seemed undervalued. the fact is the overall economy and what it's doing in europe may have more of an impact than the companies you're investing in. >> and you're better off anything good happening in europe you'll capture through large cap united states companies with a global franchise. in europe there's no way to change the fact we're going to have a long period of headwinds, even significantly larger than those in the united states. so you've got to be careful over there. >> you arer still a believer that for the average investor who does something else for a living and investing is what you do for retirement, dollar cost averaging is the smart thing to do. buy shares on an ongoing basis and your price will even out. >> we have tremendous volatility. a lot of individual investors have left the market. there's a lot of computer trading. so you're getting much higher volatility than usual. the only way to escape getting caught in that is to rebalance monthly or quarterly and dollar cost average. and that's particularly true in the emerging markets where they're even more volatile in the united states. >> which is opposite of loading up the truck and backing up or loading one day. >> don't get caught in emotion, don't get too bullish or bearish. have a portfolio allocation a rebalance towards it on a regular basis. >> tweet me with your questions. and if there's something you didn't understand we'll get it cleared up and share it with you. jim, always a pleasure to see you. you have yourself a happy new year. >> to you also. >> jim awad managing director at zephyr management. for making smart decisions with your money to the dumbest business moves of 2011, we'll tell you the worst of the worst when we come back. [ male announcer ] tom's discovering that living healthy can be fun. see? he's taking his vitamins. new one a day vitacraves plus omega-3 dha is a complete multivitamin for adults. plus an excellent source of omega-3 dha in a great tasting gummy. one a day, gummies for grown-ups. >> personally i don't think we should vote for a republican or democrat. i really think we have to start voting for the person. >> we need a plan for running the country. >> it's time to stop spending. >> i'm going to go based on issues. is social security going to be around when i'm 65? >> i believe the presidency is a management position. >> there are over 15 million unemployed americans that are suffering. >> i have twice been laid off. i'm ready to go back to work. we simply cannot move into 2012 without revisiting some of the dumbest moments of 2011. for that i have brought in lex harris, the managing editor of cnn money and christine romans host of cnn's "your bottom line". the dumbest moment of the year in business was the debt ceiling crisis. >> i'd say -- was it 100 years or 50 years? >> really bad for congress across the board no. question about it. >> dodged a big bullet i have to tell you. for all of the fears of what not raising that debt ceiling in time would do, we probably suffered the fewest consequences other than being listed as a dumb moment of 2011. >> it was clearly the dumbest. but you know, when we went to gene sahadi, covering this for us. she was like, which one? remember the budget showdown in april. then there was debt ceiling. then what about the super committee and what's going on right now with the payroll tax? she was beside herself. she'd be writing right now if we didn't call the deadline finally. >> to say there were 25 different dumb moments of the congress of the year. you put them all under the debt ceiling debate. >> that ranks up there. next on the list is netflix double oops. they had loyal customers and their stock was flying high until they raised prices by 6 by 60% and announced quick-ster. >> they did it because they were afraid of being obsolete and not relevant. in a way they made themselves not relevant by trying to be relevant. >> a lot of people canceled their subscription. >> for the long term maybe it's the right play. it's one of the most stunning declines i've ever seen in business. i mean, their subscribers loved them. the stock was soaring. and then in an instant it all went away. >> they didn't get a lot of those customers back. they apologized for the way they handled it but didn't ultimately change the thing that affected most people. they lost a lot of customers. none of us can forget b.p.'s massive oil spill in 2010. after three long months they finally plugged that leak. but the bad decisions kept flowing into 2011. transocean the company that owned the rig that exploded in the gulf paid out big bonuses to executives this year based partly, are you sitting down for this? on its safety record from 2010. >> really? >> i went back and read the proxy statement. and it actually says, "the best safety performance in the company's history". i mean, it was stunning. and people were angry when that came out. >> that safety performance in the company's history in their view, worst public relations performance in the company's history in everyone else's view. what do you think? do we learn lessons from these things in 2011? certainly we've been talking all show about congress and its work this 2012. there's not a whole lot of people holding out a lot of faith that somehow congress is going to get its act together and make better decisions fours but we've they've got better decision toss make. >> they have to get it right. the time is now. i don't know how much longer financial markets, investors, consumers, how much longer we're going to give congress to get it all figured out. >> from an aaa credit rating downgrade that we've worried about for years, it finally came with a warning that it's congress and political will that is a real problem here. nothing has changed since then. nothing has changed. the end of the year they're arguing about how to pay for $200 billion in the extension of the payroll tax holiday. no big talk about structural problems in the economy, how to fix trillions of dollars of debt and deficits. 14 trillion and counting national debt. they can't even agree on a 2-month extension of the payroll tax holiday and how to pay for it. i'm not coming down on one side or the other. i'm just saying this kind of ineffective governing just shines a big bright spotlight on the decision the aaa rating. >> we have extensive conversations about process. not doing a two-month extension kicking the can one-year extension. most americans are waiting for solutions particularly to the big problems like you said. the big structural problems. rather than talk about unemployment benefits what are we doing about jobs? >> next year's dumbest moments is going to be the fight about the bush tax cuts. we're going to be arguing about the same dumb stuff again. >> same dumb expensive stuff again. >> let's hope something change. thanks to both of you. you can get great stuff on cnnmoney.com. christine romans with me every morning. on "your bottom line" saturday mornings you can catch us here. make sure to check out my new book with christine romans "how to speak money" step-by-step guide to understanding the language of money. everything you need to know how to deal with it. head to amazon.com right now and be one of the first to