A few months ago economists were all but certain the U.S. economy would slow sharply at the start of this year, with many warning that recession risks were growing.

That pessimism has been shaken off by a string of surprisingly solid data that paint a picture of an economy with building momentum.

The jobs market is picking up, manufacturing is accelerating and the service sector is also flexing its muscle...

"We were among those people that had been expecting growth to slow. It now seems a lot less likely," said Jeremy Lawson, an economist at BNP Paribas in New York.

And the term self-sustaining is starting to be tossed around. Which makes me a bit uncomfortable.  Other terms that make me feel uncomfortable are "ring-fenced" and "priced-in".

I don't know - I feel and see signs of improvement all around me and the data is the data, but the Animal Spirits haven't yet shown up outside of the stock market itself.  But my piece from the weekend about getting your shit together went viral and the response I've received has been tremendous - so maybe those Animal Spirits are stirring from a multi-year slumber even now.

Maybe.

Source:

Analysis: Fears of slowdown fade as economy shows some muscle (Reuters)

Read Also:

Get Your Shit Together (TRB)

I have an icy-cold blast of reality thrown from a bucket over at Fortune Magazine today...

In this piece, I make the case that Facebook is already a de facto public company, having done a secret IPO  - not through any fault of its own but as a result of the modern marketplace.

Check it out:

Facebook already went public, you weren't invited

Facebook has ample access to capital and it's traded more shares per month than hundreds of Nasdaq-listed companies. Indeed, the de facto Facebook IPO happened long ago.

By Joshua Brown, contributor

FORTUNE -- On February 1, Facebook at long last filed its official S-1 document with the SEC, the first step toward an initial public offering (IPO) the company expects to do in the second quarter of this year. Despite the fact that it was widely anticipated, the financial media went absolutely bananas. Facebook was the only subject on television, the radio, the web and in the paper. For a week.

But lost in all of this saliva-covered enthusiasm was the fact that Facebook's de facto IPO had already occurred a long time ago. Yes, Facebook already went public, you just weren't invited.

Keep reading:

Facebook already went public, you weren't invited (Fortune)

chart above via my friend @aronpinson

So check it out:

Source:

MTV

And so it goes here in the early dawn of 2012 as two of the most well-regarded boutique broker-dealers have been extinguished against the backdrop of a raging bull market for everyone else...

From CNNMoney:

The 2012 surge in the stock market hasn't been positive for everyone on Wall Street: Hundreds of small brokerage firms on death watch.

Trading volumes and commissions are at their lowest levels since 2007. And so far this year, three small but well-known brokerage firms have already had to call it quits.

The swift unwinding of WJB Capital Group, Ticonderoga Securities and Kaufman Brothers has left investors to wonder who's next. Representatives from WJB, Ticonderoga, and Kaufman did not return calls for comment.

The problem here is a very simple one - the research is not driving trading commissions large enough or frequently enough to hold up the cost of running a firm.

Trading is now done at fractions of a penny, often with little or no research exchange between institutional brokers and their clients.  Buyside shops have brought research in-house at very little cost (unemployed analysts are practically swinging from the rafters here in NYC).  In addition, single stock selection has been de-emphasized a great deal as fund flows have turned from the open end actively managed fund complex to the passively managed ETF snackbar.  When the average holding time for a security is measured in water drips from a faucet, why should anyone bother to care about how this quarter's free cash flow stacks up against next quarter's estimate?

And if the research isn't generating trades, and the trades that are getting done are subject to commission deflation (2 cents a share!) and on top of all that the firms can't supplement by making markets at a decent margin thanks to decimilization - well, what exactly is it...ya do here?

There are 4066 smaller brokerage firms left.  I'm rooting for you guys, but it won't be easy.

Which Brokerage Will Be The Next To Fall?  (CNNMoney)

To get it done, to do it right, to be right and not be wrong.

That's a lot of pressure, isn't it?  But it wasn't always thus...

There was a time when no one was counting on you.  =When what you did mattered only very little and to a small amount of people.  You were young and free and if you chose to duck out and go for a walk in the middle of the day it wouldn't really matter.

There was no pressure and very little in the way of expectations.  Almost complete freedom to get it right or make mistakes.

And you hated it!

Freedom and apathy about your performance were the last things you wanted then - you wanted to be trusted, you yearned for responsibility.  You were dying to be counted on, to be important and noticed and to feel like what you did actually mattered.

Well, now you've got that responsibility.  Now it counts, kid.  Was this what you were looking for?  Okay then. Get out there and show 'em what you got.

Eddy: This earnings season is shaping up to be a disappointment. The “beat rate” will most likely be one of the worst of the past decade.  (CrossingWallStreet)

Meet the young, ballsy manager at Franklin Templeton who's been buying up Irish and Hungarian bonds.  (NYT)

Bobby Sinn's two most important charts of the day - the euro and stocks above their 50-day moving average:  (StockSage)

The Weez: This is what an explosion in risk appetite looks like.  (BusinessInsider)

Adam Davidson: Why do we still care about the Dow?  (NYT)

Dow Theory - will the trannies confirm the industrials?  (TBP)

Apple's market cap has gained $90 billion (or one Facebook) since Steve Jobs died.  (Fortune)

A dope set of charts about investing through the economic cycles.  (FranklySpeaking)

Adam Lee on religion and the apologist's turnstile.  (BigThink)

Mike Harris: "The last four trading days have resulted in a very rare pattern in SPY."  (PriceActionLab)

Sprint sells 1.8 million iPhones in Q1, 40% to new customers.  (AllThingsD)

Here's how we're all being vetted now before our ideas or proposals will be considered.  (SethsBlog)

Fellas: Here's the list of girls we'll be lusting after in 2012:  (GQ)

Don't miss my daily linkfest for financial advisors this morning!  (WSJFA)

The question was whether or not the market's moved too far too fast.

Let's watch:

Source:

CNBC

Chart courtesy of SentimenTrader.com.

This study plots the "dumb money confidence," the "smart money confidence" and the spread between the two.  The theory is that smart money will be a buyer during market bottoms a seller into rallies.  Dumb money, on the other hand, will enter the market after most of the gains have already been realized and become bearish after most of the decline has already occurred.  When the two groups diverge significantly from one another it marks an extreme sentiment reading that should be taken as a contrary indicator.

I've highlighted the extreme optimism spread readings since the bull market began in 2009.  As you can see, when the market was momentum-driven in 2010 the extreme optimism reading lasted a considerable length of time.  The extreme optimism readings mostly led to mostly minor corrections (although some of them were monsters).  My point is not to criticize the indicator.  In fact, the indicator nailed the bottom of the markets with great consistency since the beginning of the bull run.  It also nailed most of the tops during the previous bear market.  Obviously the lesson is context.  Yes, we are currently at a sentiment extreme, just within a larger context of a bull market.  The pullbacks are most likely buying opportunities and sentiment will remain optimistic for extended periods.  This is how the market is rolling.  Until it doesn't.  Sure, caution is warranted but don't expect Armageddon around the corner.

This is an amazing indicator and I would highly recommend having Jason Goepfert's research in your trading toolbox.  He's the man when it comes to quantitative analysis of a notoriously hard-to-quantify subject.  An important note about this indicator is that it is calculated using real-money gauges rather than subjective opinion polls.

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