DOUG KASS: Four Reasons The Stock Market Is Ready To Surge

Business Insider ^ | April 25, 2012 | Joe Wisenthal

[lbryce]

Doug KassEarlier we mentioned a tweet from Doug Kass where he said that "frankly" the bears might be screwed.

The reason? It was all looking bad for the market a few days ago, but suddenly the bearish momentum has stopped. And if the bearish momentum can't continue in this environment, then there's really no hope for those on the short-side.

In a post up at RealMoney, Kass identifies 4 things that have changed.

Overall earnings and forward guidance were far better than many of the pessimists expected. Apple remains a pivotal stock and an important contributor to aggregate corporate profits, and its blowout results cannot be overstated in consequence and on investor sentiment. The general concerns regarding domestic economic weakness might have been overstated -- my baseline expectation of a muddle-through 2% real GDP trajectory still seems likely. Lower market prices began to discount the known economic and market headwinds and threats

[lbryce]

Full Speed Downward

[Buckeye McFrog]

5. George Soros has greenlighted Operation Kenyan Glockenspiel to swing into action.

[txrangerette]

That’s what I was asking...could it be enough to derail the stock market.

I know it wouldn’t change cash on hand for investing, but it could affect financials depending on how leveraged our institutions are to that debacle.

And you know how the market tends to “worry” itself out of rallies.

The prettiest girl at the dance could be ugly, but not as ugly as the others.

So, different imagery to your “tallest midget in the room”, same idea.

[andy58-in-nh]

Any discussion of our nation’s financial health without any mention of “debt” can be safely ignored. If stocks surge again (and yes, they might do so), it will not be due to corporate earnings or projected GDP growth - it will happen when the Fed announces the next round of quantitative easing (CTRL+P; rinse, later, and repeat).

[LRoggy]

Interesting! 20 some odd responses and almost uniform bearishness. Sounds like Mr. Kass might well be right . . . after all, contrarian investing is usually the best approach! The market will continue to rise if Obama’s re-election continues to look unlikely, which I believe it is.

[jdsteel]

I agree with almost everything you said. There are only 2 things where I do NOT agree with you.

#1: “Eating our lunch”: IMHO this is a vast exaggeration. They are barely the #2 economy in the world, just edging out Japan. Yes, Japan. 10 years in the toilet Japan. They are growing leaps and bounds economically but have a long way to go before they out-produce our GDP, which by all rights they SHOULD with about 4 times our population and about the same land mass.

#2: “Chinese do not yearn for individual rights”: There have been many, many documented “events” (riots) in China. Yes, the military comes in and basically kills them all. But they keep happening. There was a sea-side town last year that kicked the party leaders out and barricaded the roads; they wanted to be left alone. No word from that place for some time now; I’m sure they are all dead. But the “events” keep happening. IMHO it is a matter of time before the old leaders either die or there is some sort of change. This change might not be pretty, and it might not be Democracy or a Republic, but I don’t think the status quo lasts forever. Of course, I could be wrong, but that’s my opinion.