Posted on 11/05/2012 1:34:59 PM PST by blam
DOUG KASS: 'The Global Economic Cliff Is Disappearing'
Lucas Kawa
Nov. 5, 2012, 2:58 PM
Over at The Street, Doug Kass writes that "meaningful market downside" risk has been removed and that the risk/reward profile has improved.
Kass sees the S&P 500 ending the year as high as 1450-1470.
He writes that "the global economic cliff is disappearing" in light of numerous indicators: An improving labor market: the economy added 171,000 jobs in October; PMIs for both manufacturing and service sectors are above 50 (considered average); Housing has bottomed; Inflation is under control; Interest rates low and expected to remain at low levels; Increased consumer confidence is spurring retail sales; Strength in the revitalized automobile market; and Hurricane Sandy, while tragic, will add to GDP in the first half of next year.
Kass believes we are on track to resolve three (economic, fiscal, and geopolitical) cliffs, while a fourth cliff (earnings) remains an impediment to market performance. Here's how he sizes up the 'cliffs' facing investors:
Economic: averted due to positive American economic indicators (as listed above). Fiscal: “some fiscal drag should be expected next year, but...the fiscal cliff may not be quite the fall that I (and others) might have feared it would be.” Geopolitical: much lower odds of an Israeli air strike on Iran's nuclear facilities. Earnings: since 90% of guidance provided by S&P 500 companies has been negative, this remains Kass' "overriding concern."
Pent-up demand will find its release, according to Kass, if the fiscal cliff is adequately resolved and the gap between consumer and business confidence narrows.
In closing, Kass writes:
(snip)
(Excerpt) Read more at businessinsider.com ...
“We Are Surrounded By a Nation of People Who Will Not Step Out of Their Perceived Reality”
"You can rest assured of this: We are heading for collapse. You have very little time to get mentally prepared, and then get physically prepared for it."
Business cycle theory 101. The market will eventually turn around. But the question is whether you want the government to pick how it grows or you.
“Wrong way” Kass has been calling for a grand bottom in the market for two years now. He is a partisan Dem who trades on his political convictions, to his detriment...
This person is delusional
I’ve never heard of this guy before but I’m betting he’s been called “Kass the ass” his whole life.
...And not because it’s an easy rhyme.
Thanks for adding that second link Blam.
Math is math.
This is a bit off topic, but I never liked the term “sovereign debt.” The people are supposed to be sovereign, at least in more modern states. I realize they aren’t actually—otherwise there’d ne no such crime as treason—but we pretend they are. You can argue that since the people run the government via elections at least to a certain extent they are ultimately responsible. Really, though, it’s government debt, not popular debt. Methinks “sovereign debt” serves merely to throw the public off the scent.
How about 150000 when todays dollar is worth just a penny! The stock market prices are in inflated dollars.
Look for a false recovery as they try to squeeze the last of the wealth out of the “commoner”.
The casino will put on a show of “everybody’s winning!”,
right before they turn out the lights and leave you with a bunch of worthless plastic chips.
bump
North Korea should be booming any day now
“This person is delusional
Amen! Lefties always think that they can defy the laws of mathematics. There is absolutely no Conventional way to get out of this that does not involve a Depression the likes of which we have never known. I also believe there is no way out that does not involve major riots from the left as their government Teet is cut off.
True. So was the press conference where official unemployment went up from 7.8% to 7.9% and they handed out candy at the “good news”.
we owe more per capita than the socialists in Greece. what does that make us? A country on the precipice of socialism overlooking the fiscal cliffs.
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