I know it's been posted before, but if you have it handy can you show me the Dow 32' to '38 again?
FWIW, I think from an FA standpoint the economy is flying into more than one headwind:
1) Trade deficit has only marginally improved in spite of massive US Dollar fall and global growth. (41 bil per month down to 38 bil last month)
2) Jobs still being created largely outside US
3) Fiscal decifit looks terrible. Not much on the horizon to improve it. Stock market gains more taxes? So many have loss carry forwards. We'll see.
4) Doesn't look like we're going to pull out of Iraq anytime soon.
5) Most of the gov stimulus was 1-time in nature. This coming April (refund checks) will be the last of it.
6) Consumer hasn't repaired balance sheet.
7) Tech is coming back, but will it have pricing power? Too much capacity still imho and barriers to entry from China and Asia continue to fall.
8) Valuations
9) PPI inflation, but CPI and wage disinflation.
10) Housing market, bond market, china? More bubbles anyone?
Other than the "virtuous" cycle of economic prosperity feeding on itself I can't come up with too many bull side catalyst to carry this market much higher. Maybe that'll be enough along with rampant speculation which Greenspan is again encouraging. But I think this ends very badly... eventually.
