…many investors have been hesitant about entering the market because of the slow recovery of the economy. Now, a number of recent data points suggests that the recovery may be gaining traction. This week, new claims for unemployment benefits fell to the lowest level in five years.

Even many optimistic strategists say that a short-term break from the market rally is likely until there are more indications that the economy is growing. And given that January is historically a strong month for stocks, more bearish analysts have said the recent rally is likely to fade. One drag on growth could come from the recent increase in payroll taxes.

There is also a sizable contingent of investors who think that the European debt crisis and United States fiscal position still represent significant threats.

But Russ Koesterich, the chief investment strategist at BlackRock, said that the current threats were “mundane” in comparison to what investors faced the last few years. “We’re not talking about big crises anymore,” he said.

Uh-Oh: Small Investors Propel Stocks

I thought that Clinton’s speech at the Democratic Convention was disgustingly dishonest, even for him. The simple fact is that both Parties are owned by the Oligarchs and nothing is going to change until the system is reformed. If Romney is so concerned about the “47%” eating and getting medical care, why isn’t he equally worried that government intrusion into private capitalism, orchestrated by a former CEO of Goldman’s, pretending simultaneously to represent the interests of all the Republic was bailing out banksters who weren’t allowed to lose. Hypocrites all.

When it collapsed, due in part to bank-friendly policies that Rubin advocated, he made more than $100 million while others lost everything. “You have to view people in a fair light,” says Phil Angelides, co-chair of the Financial Crisis Inquiry Commission, who credits Rubin for much of the Clinton-era prosperity. “But on the other side of the ledger are key acts, such as the deregulation of derivatives, or stopping the Commodities Futures Trading Commission from regulating derivatives, that in the end weakened our financial system and exposed us to the risk of financial disaster.”

“Nobody on this planet represents more vividly the scam of the banking industry,” says Nassim Nicholas Taleb, author of The Black Swan. “He made $120 million from Citibank, which was technically insolvent. And now we, the taxpayers, are paying for it.”

Rethinking Robert Ruben

Americans – especially wealthier ones – are feeling pessimistic and cautious this month. An index of sentiment from Thomson Reuters and the University of Michigan slipped to 73.2 from 79.3 in May, marking its first decline in 10 months and reaching its lowest level since December.

A measure of consumers’ feelings about their current conditions and an index of their expectations over the next six months also reached lows for the year. The main gauge, however, remained higher than last June’s 71.5 level.

The data don’t bode well for consumer spending, which is responsible for the majority of the nation’s economy. Households with annual incomes above $75,000 propelled the declines as they cut back on plans to buy cars and make other major purchases.

Less than a quarter of the group, whose spending patterns hold more weight than their less moneyed counterparts, expect their finances to improve in the year ahead compared with 37 percent in May.

Just 10 percent of Americans like current economic policies – a record low, driven by “a growing recognition that federal policies to bridge the fiscal cliff will not even be discussed until the very last minute,” according to a statement from Richard Curtin, the chief economist for the study.

That has consumers saving more while scaling back purchases, the government said Friday.