What to Expect in 2012

These days, trying to predict what’s going to happen from month to month is a precarious exercise, but attempting a forecast for the coming year is like a surfer trying to predict which way a wave is going to break in a hurricane.

One thing most financial prognosticators seem to agree on is that 2012 is apt to be as volatile as 2011, financial firms will continue to cut staff and in the U.S., we will be held hostage by the grueling process of electing a president and all that entails.

Here then are some predictions for the year ahead, which according to the Mayans, ends on December 21, 2012.

1. Overall unemployment will come down in most sectors, except for the financial markets, which will continue to be under pressure to keep costs in line.

2. Regulatory issues will continue to play havoc with banks' ability to hire new employees as more of the Dodd-Frank 200 plus rules are adopted, while at the same time regulators will intensify their crack down on corporate officers accused of fraud or lying to the public and congress, and we just could see some well known figures sentenced to prison.

3. While hiring in many financial sectors will be down or flat, we expect to see financial technology, quantitative analytics, private equity, accounting and risk and compliance to be among those areas that increase hiring to the point that we’ll see talent shortages in some of those job categories.

4. What happens in Europe will still weigh heavily on the U.S. financial markets, and that could go either way in terms of whether the Eurozone can stay together and maintain a single currency in the face of various states grappling to pay down mountains of debt before landslides in the form of defaults threaten to topple governments.

5. Our fifth prediction comes from our UK Editor, Sarah Butcher, who believes Prime broking looks fairly bulletproof going into 2012. Various banks, from RBS, J.P. Morgan and Credit Suisse have declared an interest in expanding their prime broking businesses next year, while Cantor has announced its intention of launching a prime services business in Europe. Recruiters predict hiring in all areas of prime brokerage.

6. Based on a survey we conducted in 2011, we predict satisfaction with compensation could be a major issue for 2012. While most banks said their bonus payouts would be lower in 2012, most employees expect that their bonuses will be higher. There is one caveat in that most employees of large banks felt their bonuses would not go up next year.

7. When NYSE and the Deutsche Bourse complete their merger in 2012, we could see a shift in where the bulk of derivatives are traded from Chicago to New York, possibly resulting in jobs returning to Wall Street.

8. Wealth managers that had embraced social media sites to grow their business in 2011 could realize that the amount of work it takes to tweet and post blogs on a regular basis is not worth the return, and they might go back to more traditional methods of networking among the “one-percenters.”

9. We won’t see a recession in 2012, but we’ll see an increase in alternative methods of making money such as bartering products and services.

10. And finally, we could see a return of the mortgage market, which has been under pressure for the past four years, along with an increase in jobs related to the mortgage origination and securitization areas.

As always, we welcome your predictions for 2012, so please leave us your comments.

And have a Happy New Year, from eFinancialCareers.