What To Watch For In 2011

From David Rosenberg, Chief Economist & Strategist, Gluskin Sheff:Let's go over the 2011 risks one more time.

~Market sentiment is as overly optimistic now as it was pessimistic at the July-August lows.

~Eurozone fiscal deflationary shock.

~Anti-inflation policy restraint in emerging Asia.

~Widespread cutbacks at the state and local government level.

~Debt ceiling issue triggers major rounds of market volatility.

~Tax breaks that are temporary tend to have marginal economic impact with few multiplier impacts, hence GDP revisions will likely be to the downside post-Q1.

~Another downleg in home prices undercuts confidence and spending (with around two years' supply of total vacant inventory backlog).