As I expected, the Q4 GDP blew out to the topside, coming in at 5.7%, the strongest performance since Q3, 2003. This is clearly what the stock market was seeing as the rally extended through the fall and into the winter, delivering an increasingly gob smacking return. Inventory rebuilding from bare shelf levels was the main impetus. Take that out, and the GDP grew only at a 2.2% rate. Another ominous development was that consumer spending fell from 2.8% to 2%. How an economy can grow without healthy spending by individuals is beyond me. I guess you don’t splurge at the mall over the weekend if you’re worried about getting pink slipped on Monday morning. It’s possible that this robust growth will continue for another quarter, completing the first part of my scenario for the “square root” shaped recovery. You can also expect some major downward revisions in the headlines 5.7% number, as we have already seen in the past two quarters. For growth to continue from here you need a capital spending binge that will lead to hiring. But having just survived the near death experience of their lives, I don’t know a single businessman who’s will to go out on a limb here. So the “V” may be in, and we’ll flat line after that.