"Those who have succeeded at anything and don't mention luck are kidding themselves." - Larry King

Is The Street Too Optimistic?

"In Barron’s look-ahead piece, not one strategist sees the prospect for a market decline. This is called group-think. Moreover, the percentage of brokerage house analysts and economists to raise their 2011 GDP forecasts has risen substantially. Out of 49 economists surveyed, 35 say the U.S. economy will outperform the already upwardly revised GDP forecasts, only 14 say we will underperform. This is capitulation of historical proportions." in The Big Picture

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), SPDR Dow Jones Industrial Average ETF (NYSE:DIA)

Goldman Sachs: 2011 Will Be The Year Of The USA.

Improving growth, falling unemployment and a sense that the U.S. is returning to "normal" could fuel a 20 percent stock market gain and make 2011 the "Year of the USA," according to Goldman Sachs economist Jim O'Neill.

Jim O'Neill,expressed the view this week that the U.S. will be a bright spot in the world economy, with growth rates of 3.4 percent in 2011 and 3.8 percent in 2012.

"This growth is likely to be strong and robust enough to lead to declining unemployment which, if correct, should mean that the worst of the social consequences of the credit crisis should start to ease. Bond yields should continue to rise further, and the dollar could rally quite a bit."

Related: General Electric Company (NYSE:GE), 3M Company (NYSE:MMM), Netflix, Inc. (NASDAQ:NFLX), NIKE, Inc. (NYSE:NKE), Bank of America Corporation (Public, NYSE:BAC) , Goldman Sachs Group, Inc. (NYSE:GS) , Visa Inc. (NYSE:V) , MasterCard Incorporated (NYSE:MA), Apple Inc. (NASDAQ:AAPL) , United States Steel Corporation (NYSE:X), Alcoa Inc. (NYSE:AA) , Ford Motor Company (NYSE:F), Lennar Corporation (NYSE:LEN)

The Public Is Always The Last In.

"History shows us that the public tends to be the last in. From the shoeshine boy in the roaring 1920s, to buyers of the Nifty-Fifty in the Sixties, then dot com stocks in the 1990s, and once again with bonds in the 2000s, main street joins Wall Street when their greed overwhelms their better sense. It is sad but don’t blame me, I am only pointing out this truth.

Don’t be surprised if the public’s rush into commodities marks that as a top, as well — including Gold."

in The Big Picture

Related: SPDR Gold Trust (ETF) (NYSE:GLD), iShares Silver Trust (ETF) (NYSE:SLV), ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF), PowerShares DB Agriculture Fund (NYSE:DBA), Powershares DB Base Metals Fund (ETF) (NYSE:DBB), United States Oil Fund LP (ETF) (NYSE:USO)

Australian Dollar Is Fully Valued. Not Advocating Long Positions.

“While the Australian dollar has good fundamentals in terms of interest rates, its valuation means we’re not recommending buying it at the moment. The same goes for the New Zealand dollar.”

Bilal Hafeez, head of currency strategy at Deutsche Bank AG in London

Related: CurrencyShares Australian Dollar Trust (NYSE:FXA)

6 Themes For 2011

Credit Suisse recently detailed their 6 dominant themes for 2011 and how they’re likely to influence markets:

(1) The rise and rise of the emerging market consumer remains the most dominant macro theme – for the third year in a row.

(2) Investors should focus on corporate spend areas in the stock market, one of our key themes since mid-2009. Corporate free cash flow, profitability and investment intentions are all abnormally high, while corporates have seldom been as under-leveraged. We believe corporates will want to focus on non-discretionary or short-cycle areas, i.e. areas where there is a relatively quick pay-back.

(3) Plays on abnormally low real interest rates: we believe that the monetary authorities in the developed world will keep real rates artificially low to facilitate the deleveraging of $6.3tn of G4 excess leverage. If real yields rise too far and threaten the economic recovery (which they would if QE2 ended, in our judgement) or if the fiscal authorities over-tightened, we believe QE would be renewed in the US – and via a weaker dollar would force other developed market central banks to respond.

(4) M&A is set to increase sharply

(5) Investors will pay more of a premium for both growth and pricing power. Growth will be at premium because the discount rate is likely to remain abnormally low (increasing the value of long duration earnings), while it is hard to see how this will be a normal recovery, with $6.3trn of excess leverage in the developed world, making growth more valuable. Companies with pricing power deserve a premium, given excess capacity of around 4% of GDP in the developed world on our estimates, increasing Chinese competition and rising input costs.

(6) Investors should avoid companies exposed to increased competition from Chinese companies.

in The PragCap

Rosenberg`s US Economy Outlook. Beware Of Global Multinational Cyclicals.

"In my view, real GDP growth in the U.S.A. is set to slow from around 3% in 2010 to 2% in 2011, or possibly even lower. This is not a double-dip but it is a slower growth profile. We went to 3% in 2010 from -2.6% in 2009 so the second derivative was positive. But for the coming year, the second derivative is likely going to decline. This augurs for a non-cyclical exposure; more defensive and still yield-oriented. As the Bank of Canada strongly suggested, global growth is going to slow and hence a sense of caution over global multinational cyclicals is warranted."- David Rosenberg, Gluskin Sheff

Related Stocks: General Electric (GE), Procter & Gamble (PG), Microsoft (MSFT), Apple (AAPL), John Deere (DE), Nike (NKE)

Rogoff On The Eurozone: We’ll Be Very Lucky To Avoid Restructuring.

“They can’t just be in a state of denial. They’ve tried to guarantee everything, to say, ‘Well, Germany is behind it and the IMF is behind it, it’s inconceivable for a euro-zone country to restructure.’ We’ll be very lucky to avoid restructuring in countries such as Greece, Ireland and Portugal."

in Bloomberg

The Story Of 2011 Will Be Interest Rates.

"The market story of 2011 I believe will be interest rates. In Asia, central bankers will raise them in order to normalize the level relative to growing inflation. In Europe, sovereign stress will keep them elevated and in the US, a recovering economy and rising inflation will see them higher in the face of the Fed’s best attempt to suppress them. With respect to equities, this rising rate environment will create a challenge in terms of impacting still overleveraged economies and companies and in pricing risk. Because of the influence of rates, a good economy doesn’t always equate to a good stock market as the past two years saw a good stock market and a weak economy."

in Ritholtz.com

Related: ProShares UltraShort 20+ Year Trea (ETF) (Public, NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (Public, NYSE:TLT) , SPDR S&P 500 ETF (Public, NYSE:SPY) , SPDR Dow Jones Industrial Average ETF (Public, NYSE:DIA)

Relying On Economic Data To Trade Is Difficult, If Not Impossible.

"Relying on government statistics to track the fundamentals of the economy is a lot like driving by looking in the rear view mirror—and a foggy one at that. The data comes with an unavoidable and sometimes significant delay, it is often manipulated and estimated, and many series are subject to substantial revision long after the fact. That's why it can be more rewarding to watch market-based indicators (i.e., prices), since they reflect real-time information, and they incorporate the collective knowledge and decisions of hundreds of millions of economic actors with access to every conceivable piece of information."

in Calafia Beach Pundit

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), SPDR Dow Jones Industrial Average ETF (NYSE:DIA)

U.S. Economy Adds 39,000 Jobs in November, Far Fewer Than Expected; Unemployment Rate Up to 9.8%