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The Economy, a Nice,Happy Rocket!

by John F. Tamburo, Editor in Chief, Publisher
Originally Posted: 1/9/2006 6:26:23 PM

January 9, 2006 marks the breaking of a major barrier:  The Dow closed at 11,011.90 today.  That is its highest mark since June 7, 2001. Retirees who, after 9/11, were thinking of what the best-tasting dog food would be when the Dow dipped into the low -7,000s, are now thinking of color choices for their new Cadillacs and Lincolns.  Despite the terrorists’ and liberals’ most peccant efforts, the American economy is in high gear, and it won’t let up anytime soon.

Now don’t get me wrong:  It’s possible for the Dow to flutter above and below 11,000 for a while.  the Fed has said that it may not raise rates anymore.  If the next Fed meeting happens and there is no rise, or if there is a 25 basis point hike and a statement that they’re done, there will be significant jubilation in the markets.  I personally believe that the Christmas season reports will be rosy and that should be good for a new baseline in the 11,250-11,350 range.  As the elections come into better focus, and people see that the GOP will solidify its position in Congress (I speculate that we’lll gain three in the Senate and nine in the House), a baseline right before elections of 11,700-12,000 will emerge, and that baseline will in turn give the GOP a well-deserved kiss at the polls.

"With those gains, the market is also bolstering the GOP for 2008.  I personally think that Dick Morris is onto something when he predicts Condi v. Hillary in 2008."

With those gains, the market is also bolstering the GOP for 2008.  I personally think that Dick Morris is onto something when he predicts Condi v. Hillary in 2008.  I see V.P. candidates of Feingold for the Dems and George Allen for the GOP, and the Rice-Allen ticket cruising to a victory.  All red states in 2004 will go red in 2008, plus one of these three states: Illinois, Michigan or Wisconsin.  I also think that Condi will be running on keeping a newly-enacted Social Security private account system (it will be enacted in 2007), and the market will be in the 14,000-15,500 range, depending on the date that these private account monies hit the markets.

The Democrats will run on the false notions that the GOP is corrupt, and that the Iraq war is a debacle.  both issues are losers outside the most extreme Democratic base.  It will be hard to overcome security as the primary issue.  A roaring economy with a booming stock market making seniors with IRAs  rich beyond the dreams of avarice will show the Democrats’ "soup lines and class warfare" party line to be as hollow as it truly is.  Booming tax revenues on lower rates will get a spiral of prosperity going.  It should be good for a seven to nine year expansion.

Today was busy, with Sam Alito going through day one of the Democrats’ defamation festival -- oops, confirmation hearings.  But the big news is the economy.  And it’s good news indeed.