Only Patience and Microsoft Fit This Setup

This column was originally published on RealMoney on Aug. 22 at 1:59 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

The economy's cooling, but corporate bond spreads remain at historic lows. The savings rate is negative, but the consumer's cash flows and asset ownership are at all-time highs.

Housing's cooled and home inventories are spiking the way inventories of optical components did back in 2000, but corporate net cash balances are at all-time highs.

Tech inventories are stockpiling higher, but they've done exactly that each of the last two years, and it turned out to be a great time to buy tech. The stock markets can't catch any traction, as evidenced by the puny single-digit performance results in the broader indices in the last couple years, but investment managers have more cash on hand than ever before.

Rates have gone from "please take this money" to "ain't no such thing as a free lunch," but they're still at historic low levels.

A few crosscurrents for us to navigate and analyze? You betcha. Whether economically, fundamentally or technically speaking, it's a tough juncture out there.

The markets have been acting poorly for a reason. The outlook for the economy and earnings is tough to decipher at best, and ugly at worst. Not that it's every "easy" to decipher, but so much of the excess cash that is lying around has its roots in a profligate Fed juicing the economy with free money.

That free money is over for now. And crossing that shift from free money to money that'll cost you if you want to use it is a big, tricky beast of burden to this market and economy.

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