Our special guest on the Lykken-on-Lending blog talk radio show today was Doug Duncan, the Chief Economist for Fannie Mae. Doug provided his thoughts on the economy, housing, Europe, and inflation, but the most interesting comments had to do with his answer to a question asking how he would characterize what will happen in 2012. Doug answered by directing the listeners to a Fannie Mae research paper entitled 2012 – Year of the Political Economy. This paper can be found on the Fannie Mae web site at http://www.fanniemae.com/portal/about-us/media/financial-news/2012/5609.html. Doug explained that 2012 will be very heavily effected by the number of regulations just added to the books, as well as the many new regulations to be issued in the months to come. The consequence of the huge number of new regulations is UNCERTAINTY. He estimates that uncertainty will cost the economy 1% in Gross Domestic Product or $500 to $750 billion in 2012, effecting both the consumer and businesses.
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