In 1987, the Dow Jones Industrial Average began and ended the year in the neighborhood of 2200. In July it topped out above 2700 and hit a low of 1700 in October. A lot of sound and fury to end unchanged!
It looks like we have a repeat performance this year. After the big rally in the first half of the year and the huge slump at the end of the summer, the Dow and the S&P are within a day's rally of being unchanged on the year. Not bad given all the bad news and disappointments.
Look for a big rally in 2012. 2011 isn't over yet, but it certainly seems to be about to finish about where it began, if not better.
Europe is a mess. US government policy is a mess. But, business is getting better and profits are improving. If you're looking for a job and you are in the bottom half of the nation's skill set, you're still in trouble and things aren't going to improve much for you in 2012. But, for the highly paid and for government employees, next year looks pretty good. Stocks will do well, bonds won't. Europe will adopt something akin to a monetization of the sovereign debt of the Eurozone countries -- a big mistake, but one that will give them a few years' breathing space until disastrous inflation overtakes them.
So, the long run future is pretty bleak, but the next couple of years will be good for stocks, good for rich people and good for protected government employees. For everyone else, let them enjoy the liberal rhetoric, because the liberal policies have undermined their future.