Market has been rallying these days. The street is taking good news at face value, and taking bad news as excuses for more and longer Fed’s easy money policy. It is hard to find a bear among the participants. Yesterday, as I wrote in this piece, even Meredith Whitney could not find anything that could derail the stock market’s climb, short term. “People want to be happy”, she said.
Doug Kass of Seabreeze Partners has a pretty good record in calling the market tops and bottoms. His most recent success was calling the market button in 2010. But as you will see in the last video clip, he probably has called the top of the year too many times in 2010.
Sticking to his bearish sentiment, now he is suggesting economy may not be as rosy as it seems. Late last month, he questioned whether the underlining recovery is real recovery, or simply just “recession fatigue”. He sees the economy facing headwinds from this point on: fiscal in-balances, inevitable high marginal tax rates, a weak housing market, gridlock in congress that won’t address the unemployment issues, rising interests, higher commodity prices, and high corporate gross margin that is about to reverse to the mean.
He does not see the market keeping on rallying. Here is an interview on December 27, 2010:
And just a couple of days ago on Jan. 6, 2010, he disclosed that a large portion of his portfolio was in cash and “waiting for the big short trade”, as he said. He outlined the risks to U.S. economic growth: “Wimpy Syndrome” in Congress, Structural Job Loss, Rising Interests, and “Screwflation”:
This morning, he defended his bearish calls during the 2010 rally and tells CNBC he sees opportunities in commodities going forward.
Making macro-calls is a dangerous business, Kass found himself in a rather uncomfortable position in this clip.
He disclosed that he made good money in 2007, 2008, and despite being bearish, he was positive in 2009.