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We Are Doing Just Fine - By Larry Kudlow

If things are so bad according to the polls, why are they so good according to the stock market?

I am one of those who believe that stocks are the best barometer of the health and wealth of our nation, and our nation's businesses. Poll after poll keep telling us how unhappy people are with the President Bush, the economy, the Iraq war, and the direction America is going in. Yet stocks are telling a decidedly different story. They are making five-year highs among the broadest averages, a completely different message altogether.

Some important indexes like the NYSE (about 2500 stocks), the Transportation Index and the small-cap Russell 2000 are registering all-time highs. Today's inflation report shows diminished price pressures. With respect to interest rates, the Wall Street rumor mill is discounting "one and done," or at most, only two more Fed rate hikes to 5 percent. Profits continue their surge, consumers are spending, and the economy is healthy.

My guess is large-scale troop withdrawals from Iraq are already in the planning stage. The U.S. military knows what it's doing, and President Bush is listening to them. We are about to open up new talks with Iran concerning their mischief in Iraq, and you can bet these talks will include nuclear weapons as well.

With all due respect to the many fine pollsters out there, I'll take the stock market as a better indicator of American health and wealth.

We are doing just fine.

- Larry Kudlow, Host of CNBC's Kudlow & Co.