Neither Bull Nor Bear Will Rejoice Next Christmas

This content originally appeared on RealMoney Silver.

Last night was another fun segment with the "Fast Money" gang -- Melissa Lee, Guy Adami, Joe Terranova, Brian Kelly and Karen Finerman -- during which I discussed surprises No. 7 and No. 8 for 2011. Surprise No. 7: Partisan politics cuts into business and consumer confidence and economic growth in the last half of 2011. "The first thing we do, let's kill all the lawyers." -- William Shakespeare, Henry VI, Part 2 Increased hostilities between the Republicans and Democrats become a challenge to the market and to the economic recovery next year. As the 2012 election moves closer, President Obama reverses his seemingly newly minted centrist views, as newly appointed Vice President Hillary Clinton becomes the administration's pit bull against the Republican opposition. "The day the Fed came into being in 1913 may have been the beginning of the end, but the powers it caused took a long time to become a serious issue and a concern for the average Americans." -- Ron Paul, "End of the Fed" On the other side of the pew, as Chairman of the Subcommittee on Domestic Monetary Policy, Congressman Ron Paul's fervent criticism of monetary policy and the lack of transparency of the Fed leads to further friction between the parties. "'Refudiate,' 'misunderestimate,' 'wee-wee'd up.' English is a living language. Shakespeare liked to coin new words, too. Got to celebrate it!'" -- Sarah Palin Sarah Palin, who can see the 2012 Presidential election from her home in Alaska, continues her barbs against the opposition party and holds a large lead to be her party's Presidential candidate in early 2011, but continued verbal and nonverbal blunders and policy errors coupled with an announcement that she has separated from her husband causes Palin to announce that she will not run on the Republican ticket. Massachusetts' Mitt Romney, Wisconsin's Paul Ryan and South Dakota's John Thune emerge as the leading Republican Presidential candidates by year-end 2011. The resulting bickering yields little progress on deficit reduction. Nor does the rancor allow for an advancement of much-needed and focused legislation geared toward reversing the continued weak jobs market. The yield on the 10-year U.S. note, despite a stuttering economic recovery visible by third quarter 2011, rises to over 4.25%, as the bond vigilantes take control of the markets. The rate rise serves to put a further dent in the U.S. housing market, which continues to be plagued by an avalanche of unsold home inventory into the market as the mortgage putback issue is slowly resolved. During the second half of the year, housing stocks crater and the financial sector's shares erase the (sector-leading) gains made in late 2010 and early 2011. 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