One of the most important reasons to be optimistic is that corporate profits remain in a super-normal recovery. That’s been my main theme for the past two years. It still is, because it is still working. Last week, the Commerce Department reported some record breaking results for profits in the National Income & Product Accounts (NIPA) during Q4-2010. After-tax corporate profits from current production--i.e., on a cash flow basis reflecting inventory valuation and capital consumption adjustments (IVA and CCA)--rose to a record $1,250.2 billion (saar). It is up 61.4% from the most recent cyclical low during Q4-2008. It is 7.9% above the previous cyclical peak during Q3-2006. Undistributed profits with IVA and CCA rose to a record $504.8 billion (saar), up sharply from the most recent cyclical low of -$2.9 billion during Q4-2008. Dividends totaled $745.4 billion, up 6.5% from the most recent cyclical low during Q3-2009.