On March 10, Barry Ritholtz, CEO of Fusion IQ, came on Tech Ticker and said the "mother of all bear market rallies" was upon us.

Given the appearance was within 24 hours of what proved to be a historical market bottom, that call alone would have put Ritholtz in the running as our top guest of 2009 and winner of the coveted (and fictitious) "Purple Microphone" award. Ritholtz's call was more notable because, until then, he'd been steadfastly bearish on the market, meaning he was one of the few pundits to successfully navigate the downturn of 2008 and play the upside of 2009.

But unlike many other bears who turned bullish last spring, Ritholtz didn't abandon bullishness as the rally continued through the rest of 2009:

• In May he said: Don't Call It a Suckers Rally
• In mid-September he said: The Rally May Only Be in 6th or 7th Inning
• And as of last week, he was still saying you have to give the rally the benefit of the doubt, suggesting the S&P could hit 1300 before faltering.

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What a difference a year makes: If 2008 was all about what went wrong on Wall Street, 2009 was characterized mainly by what went right, at least for the financial markets.

Stocks sure didn't start the year on the right foot, tumbling into early March amid the ongoing fallout from the September 2008 Lehman Brothers bankruptcy and fears of bank nationalizations. But from the depths of the March lows, major averages mounted a historic and pretty much unrelenting rally.

In the past 12 months, the Dow and S&P are each up more than 20% while the Nasdaq is up more than 40%.

Hindsight being 20-20, the bears were wrong for two major reasons, as Henry and I discuss in the accompanying clip...

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Is the U.S. economy running on fumes or picking up steam? That's a question many are asking after Tuesday's data showed a sharper-than-expected downward revision to third-quarter GDP but also a much stronger-than-expected November existing home sales report.

The recovery is on "reasonably solid footing," says Nariman Behravesh, chief economist at IHS Global Insight, who says Tuesday's downward revision to third-quarter GDP to 2.2% -- from 2.8% previously and 3.5% originally - contained some positives. These include strong corporate profits and a 2.8% rise in what the government calls real personal consumption expenditures, i.e. consumer spending.

But existing home sales weren't nearly as good as the 7.4% reported rise in November, Behravesh says, noting those results were "overstated" by the first-time homebuyer tax credit, originally set to expire on Nov. 30.

Behravesh predicts fourth-quarter GDP will approach 4% thanks largely to inventory restocking, but then growth will slip back into the 2-2.5% range in 2010...

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Oh the irony... On the same day third-quarter GDP was revised down to 2.2% from 2.8% previously (and 3.5% in the "advanced" report last month), market participants are discussing a sharp steepening of the yield curve, historically a harbinger of rapid economic growth.

The yield curve - the difference between rates on short- and long-term Treasuries - is at its highest level ever "and signals that investors are expecting a stronger economic turnaround ahead," The WSJ reports.

A steep yield curve has two major practical ramifications:

• It's a great time to be a banker, part 379: Because banks can borrow from the Fed at short-term rates near zero, higher long-term rates mean even bigger risk-free profits for the industry.
• It sucks for the rest of us, part infinity: Because most mortgages and many other types of loans are pegged to long-term rates, a steeper yield curve means a higher cost of borrowing for most consumers and businesses.

The yield curve typically steepens when investors shun long-term Treasuries because they feel riskier assets will do better because of economic growth and when they fear inflation, which erodes the value of fixed-income securities. Before this year, the last time the yield curve was near current levels was 1992 and 2003, i.e. when the economy was emerging from recession and on the verge of rapid growth. Many are drawing the same conclusions from today's levels.

The yield curve has historically been a better economic forecaster than other market metrics like, say, the stock market. Recall the yield curve inverted in 1999 (meaning short-term rates were higher than long-term rates), correctly forecasting the coming recession even as the stock market continued its bubblicous behavior for several more months.

"It's different this time" are the most dangerous words on Wall Street. Still, it's worth exploring why the steep yield curve maybe isn't signaling sharp economic growth...

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Big gains from Oracle, Research In Motion and Take-Two Interactive were powering the Nasdaq higher Friday but the broad market was struggling to rebound from Thursday's selloff.

As the dollar has rallied and financial stocks have struggled, the S&P has gone sideways for the past month raising questions over whether a change of trend is afoot, or if fund managers are just playing it safe at the end of a strong year.

"We haven't seen a change of trend yet," says Barry Ritholtz, CEO of Fusion IQ. "The market's bias is still to the upside. We're giving the rally the benefit of the doubt. Innocent until proven guilty."

Ritholtz expects the market to continue to go higher in the first part of 2010, suggesting 1250-1300 as an upside target for the S&P 500.

But Ritholtz, who correctly forecast the "mother of all bear market rallies" was upon us in early March, does not believe a new secular (as in long-term) bull market has begun...

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What a difference a year makes. The stock market has come a long way in the past 12 months and so have President Obama's approval ratings, but in the opposite direction.

The latest WSJ/NBC News poll shows Obama's approval ratings have slipped below 50% for the first time in his presidency and have suffered the steepest first-year decline in modern American history.

There's good reason Obama's poll numbers have fallen, most notably his mishandling of the banks, as Henry and I discuss here and in the accompanying clip. Obama may talk tough about "fat-cat bankers" but the actions of his administration suggest policy is still being conducted at their behest.

Beyond "bailout fatigue", Americans are upset with Obama about the ongoing spending spree in Washington. On Thursday, the House passed a $290 billion increase to the government's debt ceiling as well as a $154 billion package aimed at boosting jobs and aiding state governments...

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Stocks fell Thursday morning as traders reacted to a string of disappointments, from Citi's secondary offering to FedEx's third-quarter guidance and an unexpected rise in jobless claims.

Weakness in the stock market was also attributed to renewed strength in the dollar, which continues to benefit from concerns about the Eurozone generally, and Greece particularly. (Click here for a primer on sovereign debt risks.)

Still, it's worth noting the dollar came into Thursday's session at a three-month high while major averages were just a touch below their best levels of the year. In other words, the much-vaunted inverse relationship between the dollar and the stock market hasn't been working so well in recent weeks.

The question is whether the relationship is breaking down or this apparent change of trend is mainly a function of the calendar.

Dennis Gartman, publisher of The Gartman Letter, believes there has been a "WATERSHED shift" in the dollar's trend. (Caps his.)

"The dollar is moving sharply and violently higher, most notably relative to the [euro]," he writes. "And we are now more and more convinced that this is something more than a mere correction in what had been a long bear market for the dollar but is instead the beginnings of a long bull market instead."

If true, the implications would be profound for investors worldwide...

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Citigroup and Wells Fargo each set plans to raise billions this week to repay their TARP funds, the last of the major banks to do so.

On the surface, this seems like unalloyed good news for fans of free-market capitalism: The banks were able to raise huge sums from private investors and will now be able to operate as fully private organizations, most notably when it comes to compensation.

Moreover, "we are now on track to reduce TARP bank investments by more than 75%, while earning a healthy profit on that commitment," Treasury Secretary Tim Geithner said in a statement. More than $185 billion of the $245 billion of TARP funds invested in banks is now slated to be returned to taxpayers, according to Treasury.

In other words, everybody wins: Taxpayers! The government! And the banks, including their employees and investors!

But, alas, there are few true "everybody wins!" scenarios in modern America and things are rarely what they appear on first blush -- more especially when both Washington and Wall Street are involved.

"I don't like government stakes in banks, but I don't think these banks are nearly out of the woods," says Christopher Whalen, managing director of Institutional Risk Analytics.

Actions by the Fed, including its policy of zero interest rates (held over for another "extended period" on Wednesday!) and purchases of $2 trillion of securities, are enabling the big banks to avoid having to take big write-downs on their toxic securities. But Whalen thinks this is just delaying the inevitable and says increasing loan losses will be a major theme of 2010, as discussed in more detail in a subsequent segment.

By allowing the banks to repay TARP, the government will now have less control over their operations -- even when the White House and Treasury are simultaneously putting more pressure on the banks to lend. So why is this happening? Who is conducting this Kabuki theater of the absurd?

...

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Ben Bernanke has been named Time's "Person of the Year," for his aggressive actions to stem the global financial crisis.

"His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future," Time's Michael Grunwald writes. "The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world. "

Bernanke was clearly at center of the government's response to the financial crisis and remains "the most important player guiding the world's most important economy," as Grunwald writes. By his own admission, the chairman didn't see the credit crisis of 2008 coming and was too slow to react. Still, all but his most strident critics agree Bernanke helped prevent an even worse outcome, possibly a second Great Depression.

But does Bernanke deserve to be "Person of the Year"?

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Gold captured the attention of investors around the world in 2009 as it soared past $1200 before dipping recently. Heading into 2010, gold remains a favored "alternative" asset for individuals, institutions and central bankers alike who are looking to hedge against further weakness in the dollar, or a revival of the credit crisis.

But James Altucher, managing partner of Formula Capital, says you should be looking at alternatives to the alternative.

"I'm so bored of gold already - it's just a rock," Altucher says in the accompanying video. "I don't like betting on things where there's just one premise - ‘everybody's going to panic so let's buy gold'."

Instead, Altucher recommends stocks that are both correlated to the price of gold and have upside potential based on their own fundamentals. His favorites:

• Cash America: Pawn shops enjoy the "best business model on the planet" - charging borrowers high rates and holding onto their collateral, Altucher says. These days, that collateral is often gold, which the pawn shop acquires at levels far below spot market prices and then can sell if (and when) the original owners fail to make debt payments. "As gold goes up so does the asset value in [Cash America's] safe," he says, noting the company trades at a P/E of less-than 10 times expected 2010 earnings.
• Telecom Corp. of New Zealand: What does a New Zealand phone company have to do with the price of gold? Well, the New Zealand kiwi is the currency most closely correlated to the price of gold, Altucher says, in part because of the country's proximity to Australia, a major gold producer. What's good for gold is good for Australia, which is good for New Zealand and its primary telephone company. Telecom Corp. of New Zealand also boasts a 10% dividend and a P/E of 7. "It's just dirt cheap," Altucher says.

Both companies, he says, give you an indirect exposure to more upside in gold prices and much more...

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