Now that the current bull market for stocks has lasted for more than two years, small investors are wading back in again.

And there's much to support their optimism.

Unemployment is coming down, the economy is growing at a solid if unspectacular rate, consumer debt levels are declining, and, perhaps most influentially, stocks have nearly doubled in two years.

But don't fall for it, says economist Gary Shilling, of A. Gary Shilling & Co.

The stock market is rising because the Fed's free money policy is making the stock market rise, Shilling says. But the economic recovery is much less than meets the eye: Wall Street is doing well, while the rest of the economy suffers, and the critical housing sector is still a mess.  So the stock market's run won't last forever.

What does Shilling like instead of stocks?

Treasury bonds.

Unlike many investors, including PIMCO's Bill Gross, Shilling is not convinced we're headed for a bout of inflation. In fact, he thinks the opposite: Deflation is still the main concern. In times of deflation, Treasuries do well, and Shilling is still hot on them.

And how about housing? Isn't now a good time for contrarians to leap back into the housing market--at a time when everyone hates houses?

Nope, says Shilling. He likes the "contrarian" aspect of housing, but he thinks prices have another 20% to fall. So save your powder for a couple of years from now, he says, when you'll be able to buy in a lot more cheaply.

Provided by Business Insider, Monday, March 21, 2011:

Good morning. Here's what you need to know:

•Asian markets were higher in overnight trading, with the Hang Seng up 1.73%. The Nikkei was closed for a holiday. European markets have blasted higher this morning, and U.S. futures suggest a positive open.

•Yemen looks to be on the brink of a coup today, with generals turning against president Saleh to back the protesters. Yesterday, Saleh removed his government. Don't miss: The 11 countries at risk of becoming the next Libya.

•In Libya, Colonel Qaddafi's compound in Tripoli has been destroyed. The British Foreign Secretary has hinted that Qaddafi could be targeted in future attacks. Rebel troops are now advancing on government forces. Here's a guide to the military Qaddafi is using to crush his own people.

•As a result of the chaotic situation in the Middle East, oil prices have spiked higher. Crude futures now at nearly $103 and Brent prices are over $115.

•In Japan, the situation at Fukushima seems to be improving, with several reactors being cooled. Smoke is, however, billowing from reactor 3 this morning and some workers have been evacuated. Follow the situation live in Fukushima.

•Nissan intends to restart its production line in Japan this week, with six plants coming online today. Assembly of finished cars will restart Thursday.

•Boeing has flown the first test flight of its new 747-8 Intercontinental jumbo jet. The jet should hit the market by the end of 2011.

•AT&T is acquiring rival T-Mobile for $39 billion. The deal still needs government approval, but would make AT&T the biggest mobile phone company in America if and when completed.

•Existing home sales data is released at 10:00 AM ET. The consensus is for an annualized 5.15 million in sales for the month of February. Foll

•International reinsurance giant Swiss Re says the Japan quake will cost it $1.2 billion. Its shares are up in European trading as this number is lower than expected.

•Bonus: Prince William and Kate Middleton are considering honeymooning in Australia.

Provided by Business Insider, Friday, March 18, 2011:

Good morning. Here's what you need to know:

•The Nikkei surged in overnight trading, rising 2.55%, with the rest of Asia in positive territory as well. European shares are trading higher this morning, and U.S. futures suggest a positive open.

•The G7 have staged a coordinated intervention in currency markets in an effort to devalue the yen. The yen is now at around 81 to the dollar, and global markets have rallied on the news. Check out our complete guide to the $200 billion economic disaster in Japan.

•Last night, the UN Security Council voted to establish a no-fly zone in Libya, and now forces are preparing for an attack. France claims that air strikes are "imminent," though other parties are suggesting an attack will happen Sunday at the earliest. Here's a guide to Libya's military might.

•In Fukushima, reactors 1, 2, and 3 have been upgraded to level 5 accidents, the same as the Three Mile Island event in the U.S. Japan is now considering dumping sand and cement on the reactors. Click here for the latest on Fukushima.

•China has raised the reserve requirement ratios for its banks by another 50 bps. The move is part of China's tightening cycle, in which it is trying to tackle inflation and rising property prices.

•GE is assisting the the work to solve the crisis at Fukushima, and has set up an "emergency response center" in North Carolina to do so. The company designed the reactors at Fukushima, and its shares have dropped in the wake of the crisis.

•General Mills will buy half of the French food firm Yoplait in a deal valued at $2.2 billion. The other half of the firm will remain owned by the French farmers' co-operative.

•Quest Diagnostics has agreed to purchase Celera for $344 million. Celera is a genetic testing company.

•Nasdaq and ICE have been unable to come to terms on a rival offer for NYSE Euronext. There is now no time line on when an offer to compete with Deutsche Borse's $9 billion bid will be announced.

•Sony has announced that 6 of its plants remain closed in Japan. These plants make a variety of products, including lithium-ion batteries. Check out the 12 Japanese companies slammed the hardest since the disaster.

•Bonus: Sandra Bullock has donated $1 million to relief efforts in Japan.

Provided by Business Insider, Tuesday, March 15, 2011:

Good morning. Here's what you need to know:

•The Nikkei closed down 10.55% overnight, with the selloff spreading to China where the Shanghai Composite was down 1.38%. Shares in Europe are also plunging this morning, with the DAX down over 4%. U.S. futures project a sharp selloff at market open.

•The nuclear crisis continues in Japan today, with with two more blasts in the last 24 hours damaging the power plant at Fukushima. Japanese Prime Minister Naoto Kan has warned those in a 30 KM radius of the plant to stay indoors. The latest reports suggest the situation is stable, with no new radiation coming out. Follow out live coverage here.

•The Bank of Japan injected a total of 20 trillion yen ($245 billion) into the market today, in a bid to provide liquidity support to sliding markets. The move was seen as a reaction to demand for more cash from banks and to the worsening nuclear crisis. Check out photos of the devastation in Japan.

•The Saudi market is down nearly 4% today on Saudi Arabia's move into Bahrain to quell protests there. New protests broke out today in Bahrain. Don't miss: The 11 countries that could become the next Egypt .

•NASDAQ is considering a rival offer for the NYSE, and is working with Bank of America and Evercore to do it. The bid would be considered hostile, after the NYSE accepted Deutsche Borse's bid.

•Italian energy firm Enel SpA announced that its 2010 net profit fell 21%. The company expects profits to rise next year, and is still planning to launch a nuclear power project in Italy. Here are 15 oil and gas companies that have boomed since the Middle East crisis.

•HP's CEO Leo Apotheker announced a dividend increase during his strategy announcement yesterday. He also intended to refocus HP on cloud computing.

•The Empire State Manufacturing Survey is released at 8:30 AM ET. It is expected to rise to 16.

•Fighting continues in Libya today, with Qaddafi threatening to join Al-Qaeda if foreign forces invade. His forces are now close to the oil-important city of Benghazi.

•The FOMC makes its policy decision today, at the release will be made at 2:15 PM ET. The Fed is expected to hold rates steady.

•Bonus: Kate Middleton's parents are spending 6-figures on the wedding of their daughter to Britain's Prince William.

Provided by Business Insider, Friday, March 11, 2011:

Good morning. Here's what you need to know:

•An 8.8 on the Richter scale earthquake hit off the coast of Japan early this morning, and a destructive tsunami has now hit the country too. Over 100 people are confirmed dead, with many more missing. Check out photos of the aftermath of the earthquake and tsunami.

•Asian markets were down big in overnight trading, with the Nikkei down 1.72%. All of Europe is also in negative territory this morning, and U.S. futures suggest a lower open. Oil prices are sharply lower. WTI has fallen below $100. Copper is getting hammered. Gold and silver are sliding, too.

•There are concerns the tsunami that hit Japan has destroyed some Pacific islands and may hit Hawaii or the U.S. Northwest coast. There is also a nuclear emergency in Japan's north where cooling systems have failed at a plant.

•The Bank of Japan says that it intends to provide liquidity for the Japanese market in the wake of the disaster. The government has also pledged to rebuild, which will increase spending for a government that's debt already worries many.

•The market reaction to the destruction has seen reinsurance stocks slammed in Europe, including big names like Swiss Re and Munich Re. The yen has moved higher and copper has moved lower. Don't miss: Incredible video of the tsunami flooding a Japanese airport in less than 60 seconds.

•U.S. retail sales data for February is released at 8:30 AM ET. Sales are expected to grow 1.0%, month-over-month. Follow the release live at Money Game >•Eurozone leaders meet today to discuss alterations to the current rules around the region's bailout program. Leaders have two weeks to work out a deal, before the big EU summit. Here are the 14 countries more likely to default than Spain.

•UK PPI increased 5.3% year-over-year, due to rising food and energy costs. The month-over-month increase slowed in February to 0.5%.

•Nomura is on the brink of selling restaurant chain Skylark to Bain Capital LLC for around $3.6 billion. The sale of the Japanese restaurant chain will likely go through by the end of March.

•Apple's iPad 2 goes on sale today.

•Issues in the Middle East have cooled today, with the Saudi day of rage failing to materialize yet. European leaders are meeting on Libya today, with the likely result more stern talk, but little action. Oil has fallen bellow $100 a barrel. Don't miss: The 11 countries at risk of becoming the next Egypt.

•Bonus: Justin Timberlake and Jessica Biel have split.

Provided by Business Insider, Tuesday, March 8, 2011:

Good morning. Here's what you need to know:

•Asian markets were up overnight, with the Hang Seng up 1.71%. Major European indices are higher in early trading, while U.S. futures suggest a positive open.

•Both Brent Crude and NYMEX Crude prices are drifting lower this morning, easing pressure on the market. Gold and silver are both off their peaks, but remain close to their record highs. Here's why Ben Bernanke doesn't think the Fed needs to raise rates.

•Opec members are working together to release more supply into the oil market, joining with Saudi Arabia, which has already claimed to have done so. Participating countries include the UAE, Nigeria, and Kuwait. Don't miss: The 10 companies positioned to gain from the chaos in the Middle East.

•Libya's government continues to attack rebel forces in the city of Ras Lanuf today, after rebels rejected negotiations that would have seen Gadaffi resign. Some of the government attacks include the use of mobile rocket launchers on rebels. Check out this guide to Libya's military.

•Ivory Coast president Laurent Gbagbo has taken over the country's cocoa and coffee industries. The move comes as Gbagbo attempts to cling onto power against his elected rival. Cocoa prices have spiked as a result.

•China has a 60% chance of experiencing a banking crisis by mid-2013, according to Fitch. The crisis would be driven by problems in the country's real estate sector.

•Yields on fringe eurozone debt are spiking this morning as a result of impending debt auctions. Greece, Spain, and Portugal are all in bond market action this week.

•The trial of hedge funder Raj Rajaratnam on insider trading charges begins today in New York. Check out the details of the case here.

•Starbucks is bringing its instant coffee brand, Via, to the Chinese market in April. The company sees opportunity in the packaged goods space in China.

•Boeing just sealed a deal with multiple Chinese airlines worth $10 billion. Boeing will ship planes to Air China and Hainan Airlines.

•Bonus: Emma Watson has dropped out of Brown University for the time-being, so she can focus on promoting Harry Potter and working on other films.

Provided by Business Insider, Monday, March 7, 2011: 

Good morning. Here's what you need to know:

•Asian markets were mixed overnight, with the Nikkei down 1.76%. Major European indices are also mixed, with U.S. futures suggesting a positive open.

•Gold and silver have moved to new records today, partially the result of Middle Eastern uncertainty. Oil prices also continue to surge higher. Check out why Barclays thinks the oil price spike could crash the housing market again.

•China's government says it intends to control inflation and raise wages for the country's poorest over the next 5-year period. The focus for the government is now drifting from purely economic growth to "livelihood." Check out what China will look like in 2015.

•Fierce fighting continues today in Libya between rebels and forces loyal to Qaddafi, with Qaddafi's side making gains. Speaking yesterday, Qaddafi said that if he falls, Europe will be flooded with "millions of blacks." Don't miss: The 11 countries at risk of becoming the next Egypt.

•The euro is rallying this morning, even though Greece was downgraded by Moody's and Portuguese yields are spiking. It is expected that the ECB will raise rates at their next meeting to combat increasing inflation.

•BP has decided not to sell its oil and gas production assets in Algeria. The move is somewhat of a surprise, considering the uncertainty in the region and BP's plan to selloff some assets.

•Western Digital Corp. is acquiring Hitachi's hard drive business for $4 billion. Hitachi originally intended to IPO the business.

•French luxury goods firm LVMH is buying Italian jeweler Bulgari for $3.7 billion. The acquisition adds to LVMH's brands, which include Louis Vuitton and Moet & Chandon.

•The Russian government is putting together a $10 billion fund to invest in Russian business with PE funds. Russia wants Goldman Sachs to advise on the deal, and aims to get Blackstone and the Carlyle Group on board.

•The Russian ban on wheat exports is driving domestic producers to plant less. Wheat field planting is now expected to be at its lowest level in 4 years in the wake of wildfires that destroyed last year's crop.

•Bonus: The owner of the jewelery store that Lindsay Lohan allegedly stole from has sold the video footage on the market, potentially giving Lohan a better shot at a plea deal.

After the fall of President Zine al-Abidine Ben Ali in Tunisia, President Hosni Mubarak in Egypt and now likely Libya’s leader Muammar Gaddafi, many people in this country are beginning to wonder if the United States has gotten the best bang for its billions of dollars in foreign aid to the Middle East.

A new Rasmussen Reports survey found that only 20 percent of Americans support the continuation of aid to Mid-East countries, whereas 58 percent of people want to end all foreign assistance to that region.

The United States spends roughly $58 billion helping other nations around the world annually. Egypt alone will receive nearly $1.5 billion in aid this year -- the fourth highest allocation of U.S. funds behind Afghanistan, Pakistan and Israel.

With the age of fiscal responsibility upon us, one might reason that slashing this line item would go a long way to alleviating our $1.5 trillion dollar deficit.  But not really, since foreign aid accounts for less than 2 percent of the federal budget each year.

Perhaps more important than how much money is spent, is how that money is spent. “It is certainly the case that much of U.S. foreign aid has been miscast,” says Glenn Hubbard, Dean of Columbia’s Business School. “Most of our aid to the Middle East, unlike foreign aid generally, has been more military-oriented.”

Hubbard does not advocate cutting foreign aid, but does believe it should be repurposed to serve citizens, rather than continue to prop up militant regimes.

“If you look at what is happening in much of the Middle East, a lot of young people are saying, ‘look, where are the opportunities for me in the society [and] economically?’”, explains Hubbard, who is also the author of The Aid Trap: Hard Truths About Ending Poverty. “The best thing we can do is to encourage economic growth and prosperity in the rest of the world.”

As outlined in his book, Hubbard advocates something of a Marshall Plan for the countries that receive U.S. foreign assistance: Rather than give aid to foreign military, the U.S. should promote business -- a positive American value -- by giving money in the form of loans to local businesses in foreign communities.

"We have huge opportunities [in the Middle East], with a lot of talent, very good economic opportunity if only the business culture were there,” he says. “The more that we can create prosperity in the rest of the world, we create a sense of openness to our own business, and frankly to our ideas as well.”

A win-win for both the U.S. and our global counterparts.

U.S. investors returned from the long holiday weekend in a selling mode amid increased concern about developments in North Africa and the Middle East.

Global financial markets recoiled overnight as Libya appeared on the verge of civil war and continuing protests in Bahrain sent crude prices surging. After Brent crude futures approached $110 per barrel in London, benchmark West Texas Intermediate (WTI) surged above $91 per barrel in New York trading midday Tuesday.

Higher energy prices threaten the global economic recovery, on which much of the two-year rally in stocks has been based. Heading into this week, the S&P was up 100% from its March 2009 low, meaning both that continued growth is “priced into” stocks and there a lot of paper profits waiting to be booked.

In recent trading, the S&P was down 1.6% while the Dow was off 1.1% and the Nasdaq by more than 2%.

In addition to global equity prices the “risk off” trade was evidenced by strength in precious metals and widening default insurance on the debt of European sovereigns, most notably Portugal.

Financial markets have one eye on the fundamentals and one eye on unrest in the Arab world – and a finger ready to hit the “sell” button if developments worsen, says
Ashraf Laidi, chief market strategist at CMC Markets in London.

“Now there is the question mark what is going to happen next? Is there going to be a rise or escalation of an Islamic fundamentalist threat? ,” he asks. “In other words is there going to be chaos that will probably be against the strategic interest of the United States, probably worse than the devil that you knew?”

With the markets now facing up to the rising uncertainty in major oil producing countries, Laidi says there’s potential for oil prices to continue to climb back to the 2008 highs of $147 per barrel.  “Markets have a tendency to want to go back to where they were,” he says.

As to whether the markets are underestimating the threat of continued instability in the Middle East, Laidi notes: “It could be worse.” 

How much worse?

Iran could use the unrest to assert itself and encourage Hezbollah and other proxies to take advantage of the instability, which could provoke renewed conflict with Israel. And if that’s not scary enough, Laidi says the continued uprising of Shia Muslims in Bahrain, where the U.S. Navy’s Fifth Fleet is based, which could spur similar revolts in Saudi Arabia where there are already questions about King Abdullah's succession plans.

Just over a year ago in his State of the Union Address, President Obama pledged to create 2 million jobs by doubling exports by 2015.

U.S. Commerce Secretary Gary Locke – along with the President’s Export Council – has been tasked with making this goal a reality. “Last year we grew exports at 17 percent,” Locke tells Dan and Aaron in the accompanying video. “As long as we increase exports about 14 percent per year…we will reach the President’s goal.”

Locke, just back from a high-tech trade mission to India with a delegation of 24 U.S. businesses, is fairly confident that the pace of U.S. exports will continue to grow, but it is not going to be easy. “We gotta keep at it,” he says. “Only one percent of U.S. companies export, and of that one percent 58-60 percent export to only one country, typically Canada or Mexico.“

With unemployment hanging above 9 percent longer than any time since the Great Depression, the Obama administration is set on trying to create jobs any way it can.  “The more that companies export the more that they produce. The more they produce the more workers they need. And, that means jobs.”

Not only is there a lot of potential for U.S. behemoths like GE and Boeing to sell products in countries like India, there are also great opportunities for small- and medium-sized U.S. businesses to sell products overseas, but, it is not always as easy, he says.

To help the little guys, yesterday Locke and U.S. Trade Representative Ron Kirk kicked off the Export Council’s new “exports road show” called New Markets, New Jobs to help small- and medium- sized businesses across the country navigate their products into foreign markets.

Free Trade Stigma

In the last decades, the U.S. has signed a number of free trade agreements – like NAFTA and CAFTA – which have been hailed as U.S. job killers as companies shipped thousands of jobs -- not goods -- overseas.  But, the Obama administration is adamant that FTAs will spur U.S. export growth and lead to job creation in this country. 

Up until now there has not been the political will to push through three trade deals in particular.  The FTAs with South Korea, Panama and Colombia have been on the table for years waiting for Congressional approval.

But, time is of the essence, says Locke. There is an abundance of competition from other countries vying for the same business in foreign markets.  “Right now U.S. products and services face these incredible barriers,” says Locke in regard to the South Korean trade deal which is pending congressional approval.  “The trade agreement lowers the barriers and it will make it easier for American companies to sell made in the U.S.A. goods and services into Korea providing tens of thousands of jobs for America here at home.”

Made In America?

Yes, if you've been wondering, America does still make a few things for which the world is “hungry” for, Locke says. “There is a great desire all around the world. They would prefer to buy things made in the U.S.A. because they know that it is a superior product.”

India is one key place that is hot for our goods these days. According to a Commerce Department press release, the U.S. exports to India totaled $17.6B in the first eleven months of 2010, up 17 percent from the same period the year before.

You can bet the administration has its sights set on India, which saw 9.7 percent growth last year and does not show any signs of slowing.

Do you agree with President Obama that free trade agreements will help create jobs in this country?

Editors Note: Check out part one of this interview here.