Abby Joseph Cohen, the perma-bull who is chairman of the Goldman Sachs investment policy committee, declared today that there is a new bull market. But keep in mind that she is ALWAYS bullish and very often staggeringly, pathetically wrong. For example, on January 19 of last year, when the Dow Jones Industrial Average had dropped to 12,099 from its October 2007 all-time high of 14,164, Cohen asserted that the index would rise to 14,750 in 2008. It plunged 34%, the third worst drop in history, winding up the year at 8,776. For awhile it was well below 7,000 -- back to levels of April, 1997. In the dot.com/tech crash of 2000-2001, she kept repeating that she was bullish on tech stocks. The tech-heavy NASDAQ index peaked above 5,200 before that crash and is still below 2,000. Stocks go up 4 out of 5 years, even if barely, so someone who is permanently bullish can look good most years, then run and hide in a bad year, when the previous five years of profits are wiped away.

I continue to believe the Dow will hit 9,500 this year and end the year at 9,000. But this is a result of artificially created liquidity (near-zero short term rates, very low long rates thanks to Fed manipulation), as well as $12 trillion of government money thrown at the current deep recession. The REALISTIC economy is still not doing well. Note that spending by consumers, which is 70% of the economy, continues to fall. The stock market, buoyed by the liquidity, is far ahead of economic performance. I will have more on this tomorrow (Friday) when employment numbers come out. They will likely be manipulated by the federal government. I will have more on how that is done tomorrow.