Where to begin this week? The markets got off to a rocky start, found their footing and never looked back. Commodities plunged, with crude oil reaching a 19-month low. (It was down 6% on the week, and 13% year to date. Retail sales were robust, up a seasonally adjusted 0.9% and above consensus of 0.7%.

The Dow gained 1.3%, and the S&P 500 tacked on 1.5%, but it was the tech-heavy Nasdaq where the real action took place: After lagging in 2006, the Nasdaq led the way (if we ignore a few late-week profit warnings from big names), with the Composite jumping 2.8%. Meanwhile, Apple ( AAPL) excited geeks and investors alike.

Jeez, another three-day weekend? Ok, let's set 'em up for your clicking pleasure:

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¿One of the more intriguing things about pulling the fest together each week is how clearly the two sides have hardened in their views. I cannot recall the last time the consensus was so split:

- Goldilocks still defies the bears: Investment managers do not generally believe in fairy tales, butthere is one that dominated all discussion as 2007 began. Unless a lotof investors are wrong, Goldilocks is alive and well and impervious tothe bears who believe the U.S. and world economies are on their way down.

- What if bulls are wrong about 2007? Contrarian forecasts global recession and market meltdown.

- Too Hot, Too Cold -- or Just Right?: A fair number of panelists don't expect theparty to end this year. The sort-of-consensus view: U.S. stocks willrally "not much" to 8%-10% in '07, dividends included, though some seea violent shake-up along the way. Bonds won't be terribly interesting,and the dollar will continue to struggle.

- Danger ahead? Stocks' early warning signal: According to the Stock Trader's Almanac, how the S&P 500 performs in the first five sessions of the year can be an indicator of how it will perform for the full year.

- Already in '07, There Are Signs the Conventional Wisdom Is Off.

¿ A Contrarian Approach to Investing.

¿ World's Assets Hit Record Value Of $140 Trillion. (fascinating chart, too)

¿ Cramer takes alot of grief from detractors (most of it unjustified), so when he utterly, precisely, and undeniably nails something, he deserves credit for it: 1/10/2007 9:30 AM EST Memo to the bulls: "this is what you have been waiting for: a DOWN opening. This is the opposite of the first day of the year. It is a godsend. YOU MUST BUY THIS DOWN OPENING" He couldn't have been more right.

¿ As Oil Falls, the Dow Becomes a Gusher. ( Barron's)

¿ How Wall Street 'Sweeps' the Cash. Gee, go figure. Wall Street firms have figured out yet another way to snake some coin from their clients.

¿ Marc Faber Says Global Assets Markets Face `Severe Correction.' Faber talks with Bloomberg about the outlook for the U.S.economy, the dollar, commodity and stock prices, and his investmentstrategy. (See also: Video.)

¿ Two inapposite columns in The Wall Street Journal: Energy Stocks May Lack Fuel To Help Market; and Rapid Plunge In Price of Oil May Fuel Growth. (If no WSJ, go here: Good for Retail, Bad for Earnings?)

¿ John Dorfman on why underfollowed stocks outperform: Wall Street Analysts Stumble on 2006 Stock Tips. (I wonder if this is merely a function of market-cap size.)

¿ Compare when the gains came about from the March 2003 lows until January 2007. I contrast Nasdaq Gains with Dow Gains and find some interesting differences.

¿ The bull market has at least a little further to run, according to the contrarian view.

¿ Big recovery seen for Big Biotech in 2007.

¿ Trader Interviews. Just what it says: interviews with various traders.


What Wall of Worry?

¿ Art Laffer on the Yield Curve: He says "It's different this time."

¿ Is the 'Growth Recession' Ending? Incoming data suggest a stronger pace of economicactivity than thought likely a month ago, leading Morgan Stanley to raise GDP estimates. Also, Harris of Lehman Expects 2.5%-3% U.S. Growth in First Quarter. (video)

¿ Better-than-expected December retail sales give economy boost.

¿ Old Economy Rules Need Modernizing: Some economists talkabout the U.S. economy as if it were still 1890. Their old-economy concerns seem to have little relevance to today's new economy.

¿ Bill Gross Says U.S. Nominal GDP Growth Will Drop to 3.5% Range. (video)

¿ Anyone notice how the banks and credit unions across the country haveincreased their interest rates on bank deposits? You can get 5.5% to 6%now on 1- to 3-year maturities. What is it that Banks know that all these analysts don't (See also: Banks' Cry: 'Give Us Your Cash!')

¿ Fortune's Best Company to Work For 2007. Guess what firm grabbed the top slot?

¿ Study says tax cuts aid richest-report: The 2001 and 2003 tax cuts offered the biggest benefits to familiesin the highest income categories, according to a Congressional study by the nonpartisan Congressional Budget Office study. Families earning more than $1 million a year saw their federal tax rates drop more sharply than any other group.

¿ What are the jobs Americans won't do? Dirty Work.

¿ Best. Greenspan Art. Ever.


Real estate remains the most vulnerable sector of the economy, and the data flow continues to be bleak:

¿ The National Association of Realtors sees Home Prices Rising in '07. I figure they are suffering from blunt head trauma. (No, really -- they are tripping.) As if on cue, 3 home builders announce record setting cancellations of sales.

¿ File this one under Holy Snikes! California Company Announces No Mortgage Payment for 12 Months.

¿ Fascinating study by a Wellesley College prof on Buyers vs. Sellers: It paints a picture of a market nearing a standstill, where would-be sellers take their homes off the market rather than accept markdowns. Over such a lengthy period, even in a slow market, 70% of these homes should have sold. But only 30% moved in the current market: The Standoff could lead to recession.

¿ The Phantom Rebound in the Housing Market. (See also: Housing market pain not revealed by stats.)

¿ Whoops! Pricing Error on Mortgages Led to Lender's Collapse.

¿ Foreclosures increase 51 percent nationwide -- but they are still not at a record level yet.

¿ Through a Glass, Darkly: How Data Revisions Complicate Monetary Policy.

¿ Housing Trend Spotting for 2007.

¿ The WSJ's Real Estate Journal moves older housing articles over to their free site, for you cheap %$@*s who don't subscribe.


¿ Herb Greenberg on Contrarian Investing: If Your Friends Jumped Off A Bridge, Would You? My own take on the subject is here: Contrarian Approach to Investing.

¿ If you don't stay humble, the market will humble you.

¿ Contrarian or conformist?

¿ Four Overlooked Qualities of Successful Traders.


¿ Thanks, Goldie! GSCI Cuts Energy Exposure (Again). Note that the last time they did this, the markets lit up from July 'til December.

¿ Ethanol Bandwagon Picks Up Speed.

¿ FRIEDMAN on Green Coal.

¿ Surprise -- BP Chief Executive Lord John Browne will retire early in July.

¿ Lots about Iraq:

- Iraq Dominates World Politics, but Not Markets. ( NYT)

- Bush Breaks 150-Year History of Higher U.S. Taxes in Wartime. ( Bloomberg)

- Murtha Outlines StrategyTo Restrict Troop Surge. (free WSJ)

- Same Old Fatal Mistakes on Iraq. ( Bloomberg)

¿ Our approach to fighting terrorism is pathetically inadequate: Make Them Fight All of Us.

¿ Meanwhile, U.S. command requests new troops to fight Taliban in Afghanistan.

¿ Doomsday clock ticks. Nuke programs push world to 'perilous period.'

¿ YouTube History of the Middle East in 2.5 Minutes.


In case you somehow missed it, Apple introduced a new mobile phone. Long story short: It's Drool Worthy.

There's a lot of other coverage on it, but here are some of the more interesting items you may have missed:

- What the iPhone Means for Everyone, from Cellular providers to chip makers to handset competitors.

- Steven Jobs: iGenius.

- Good comparison of various smart phones: The iPhone is here.

- Why use Cisco's ( CSCO) trademarked name iPhone if you know it will invite litigation? Free publicity. (Also, expect 3G speed eventually.)

- Full iPhone roundupabout all the rest.

¿ Record Warm Year for U.S. in 2006.

¿ Oh, and uh, CES was this week. The WSJ blogged it.

¿ Duo Envisions Merging Best of TV, Web: KaZaA and Skype's founders are backing a video start-up that promises to let users watch broadcast-quality movies and TV shows on their PC.

¿ Mystery of world's biggest flower solved.

¿ Gartner: Vista still not 'done.'

¿ The 46 Best-ever Freeware Utilities.

¿ The Snoop Next Door: Bad parking, loud talking -- no transgression is too trivial to document online. WSJ reporters on new Web sites for outing fellow citizens.

¿ Octopuses are the ultimate chameleons. (Amazing video)

¿ 2 0 0 6 P R I V A C Y Y E A R I N R E V I E W.


¿ The indie cult classic flick Tao of Steve is showing this weekend on IFC; If you never saw it, definitely check it out.

¿ We mentioned Ray LaMontagne recently; Here'a great free concert of his for download.

¿ I just love the name of this band: Ferocious Bubbles.

¿ Extras, the hilarious show from the creator of The Office, returns Sunday.

¿ Stephen Colbert and Bill O'Reilly will appear on each other's respective shows on Thursday, Jan. 18.

¿ The missus is finally reading a book I gave her years ago, and is loving it: The Time Traveler's Wife.

¿ Nice roundup of the Detroit Auto Show from the NYT.

¿ The New Yorker film critic David Denby's take on the present and future of movies: Hollywood looks for a future.

¿ Time lapse of Pablo Picasso painting in oils, allowing us to see his creative process at work.

¿ From the same maniac that brought you the stop-motion classic Amateur comes Everything (Hyper).

It's another rainy weekend in the Northeast. I have a ton of movies queued up, too. In addition to the Tao of Steve, we have War of the Worlds, Memento, Superman Returns, and Kill Bill, part 2.

Enjoy the extra day's rest!

At the time of publication, Ritholtz was long BP, although holdings can change at any time. Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback; click here to send him an email.

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