At last some intelligent musings about 2012 and beyond. This weekend’s FT features a well thought out article by John Authers about what might happen in financial markets in the year ahead.

Scenario one is that markets take off once again and return to something resembling growth. Is a take off in the US plausible? It seems unlikely. As for Europe it seems very unlikely, with the structure of the euro preventing any sustainable solution to the current malaise (my words not his). As for Asia, things could pick up quite fast, but the connectivity of global markets would suggest that flat line growth in the US, or Europe, would impact other regions significantly. Overall the growth scenario is given a probability of just 10%.

Scenario two is disaster. Eurozone austerity packages virtually guarantee a recession and a break up of the Euro could trigger a collapse of the European banking system. This scenario is given a probability of 20%, which I feel is a low. I’d put it between 30-50%, with speculators probably shorting the major European banks or attacking individual countries in the next few weeks.

The third scenario is ‘the crab’, which is a nice way of saying that markets just move sideways for the next twelve months, which is more or less what the markets have done since 2008 (shades of 2012 being much like 2011 again).