Investors would be wise to ignore the 'Goldilocks' recovery scenario

Filed under: Economy, Investing, JP Morgan Chase, Bank of America

Despite last year's mauling, some high-profile Wall Street analysts see a "Goldilocks" scenario for the economy. That would be one where inflation remains subdued and growth picks up briskly. But investors should think twice before betting on such a fairy tale.

Following a wave of recent bullish data, including a better-than-expected employment report and strong retail sales, some powerhouse investment banks are now raising their growth forecasts for the year ahead. JPMorgan, Credit Suisse and Barclays Capital all now predict that GDP will expand at 4.5% in 2010. That's more than the upper range of 3.5% that even the Federal Reserve recently predicted -- and double the 2% growth scenario that bond giant Pimco has pushed as part of a broader lackluster outlook for the U.S. economy.

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Read More... [Source: DailyFinance]