Inventory Recovery

This evening I had the privilege to listen to Bob Doll, BlackRock Vice Chairman and Chief Equity Strategist, speak in Phoenix about events driving today's global markets. The presentation was very enlightening and interesting. Mr. Doll sounded a definite long-term bull, especially on US equities. He pointed to the very healthy earning season and improving job market yet still acknowledging the head winds facing the US and global economies. Mr. Doll seems to be a believer in the inventory buildup cycle and the comeback of the US consumer. He attributed the tame inflation to the lack of the multiplier effect of the huge stimulus plan. Far be it from me to disagree with an established and highly regarded money manager and Vice Chairman of a company with well over $1.3 trillion under management. However, it seems to me that a lack of a multiplier effect is inconsistent with a spending consumer and growing economic activities. Hence, I would argue that unless the inventory buildup cycle, which I believe is mostly business-to-business, reaches the end consumer, the US economy runs a real risk of double dip.