While the dumb money is chasing the rally in stocks; the smart money is keeping a close eye on the economy. Bill Bonner has been hammering home this point in the Daily Reckoning. We’ve been doing the same here at Notes. (Consider it a friendly warning.)

Since the first day I started working in the stock and bond business, the old timers, who I have always sought out as a great source of advice, have said almost without exception, “The markets don’t change.”

Who says only Gen Xers can appreciate irony? Heck, François-Marie Arouet (a.k.a. Voltaire) was writing about “the best of all possible worlds” back in the heady days of 1759, when snotty wit like that could get you strung up by your thumbs in the Bastille.

Financial fraud doesn’t start out ugly…

Thank goodness it is 2009. The fourth quarter was crazy for the market. The wild swings and incredible volatility were maddening. Most investors don’t want to be reminded of how bad the market was in 2008, but the reminders were apparent in their monthly statements. The good news is that it is over.

Children didn’t make up Santa. Parents did. Santa may be generous. But naughty kids get nothing but coal. Santa is a ruthless administrator of justice. This is not a kid’s fantasy. But it is a parental one.

Quote of the week: I stopped believing in Santa Claus when I was six. Mother took me to see him in a department store and he asked for my autograph. – Shirley Temple

Here are eight stocking stuffers to unwrap.

Here are three things you can buy now to capitalize on spiking unemployment, crashing banks and the tumbling dollar. Earlier this week, Chairman Bernanke and his cronies on the U.S. Federal Reserve did the unthinkable, indeed the unimaginable.