The Dow is over 11,000, and could be into 12, 000 range by next week.  The reason for the recovery?  It is not stimulus, but the cheap money available. The recovery has not taken us back to where we were, but we are slowly on our way.  Kudlow is his optimistic self, but the rest of the cast throw some water on the recent recovery for a few reasons:

  1. The recovery numbers are not as high as it should be
  2. This is a W-shaped recovery, not a V.  That means the downturn is coming.
  3. Inflation is beginning to appear.
  4. Tax rates are going to increase.  These increases are going to be a market Killer (viz the tax hike on everyone proposed by the Obama Senate to 40% on our market investments, which could, yes, include your retirement fund).
  5. GDP is not a reliable measure of the economy.

Throughout the rest of 2010, the Dow should continue upward.  This might be good for the Democrats in November.  Much can happen between now and when the huge tax increases hit.  Perhaps the traders know this and are playing hard, fast, and living in the now.  If there is something to be made before the bad economic turn comes, the now is…..now.

There is much speculation inflation is coming.  Investing in inflation protected bonds may be the way to go.  As Gold continues to fall, keep watching it. Ok, to the digital file: