15 Reasons Stocks Should Be Falling

This post by Doug Kass appeared at 8:45 a.m. on May 10 on TheStreet.com's Street Insight.

"I deserve good things. I am entitled to my share of happiness. I refuse to beat myself up. I am an attractive person. I am fun to be with."
-- Stuart Smalley, Saturday Night Live

Every morning over the past two months, I have woken up at 3 a.m. and looked at myself in the mirror. I say to myself, "Self, I am a worthy human being. Are stocks cheap enough, liquidity strong enough and, doggone it, interest rates low enough, for the stock market to continue to rise?"

Then I go back to sleep for maybe an hour. I get dressed in my yellow button-down shirt with a powder blue cardigan. Soon after, I start my day by writing my opening missive for "The Edge."

I typically stare at the blank document on Microsoft Word for a few minutes, and I think to myself, "If this advance continues forever, I'm going to die homeless and penniless. No one will ever love me."

And then I write what I believe to be a soundly structured fundamental argument that seems to differ drastically from those on the opposite pew -- the bullish cabal, who seem to have a total and complete grasp of the market.

I anxiously await 9:30 a.m. and the trading day to begin for my "Market's Daily Affirmation With Dougie" -- that is, with the expectation of some confirmation of my market view. The opening bell rings, and it doesn't take much time for me to be, shall we say, a wee bit disappointed these days....

With every data point of stagflation -- a weakening U.S. dollar, slowing economic growth, moderating retail spending and weakening housing -- my pulse quickens as if my general thesis is confirmed, but we see little confirmation in the market's immediate response to these downward-trending government releases or in the face of other recent earnings/economic warnings.

In the current one-way market, all problems are overlooked -- and rationalized. Here are some examples:

1. The price of gasoline rises to a new high, serving as the functional equivalent of a tax increase for the U.S. consumer.

2. Tech bellwether Cisco's (CSCO Quote) U.S. business enterprise is weak, and guidance for aggregate sequential revenue growth (of +4%) is disappointing.

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