Kass: Free at Last

This blog post originally appeared on RealMoney Silver on June 24 at 8:44 a.m. EDT.

"Free at last; free at last; thank God Almighty, we are free at last."

-- Martin Luther King, Jr.

Pardon the hyperbole, but I have been waiting for this moment since last fall.

Growing Acceptance of a Shallow and Lumpy Recovery

Even after I suggested in March 2009 that we were approaching a generational bottom, I have always warned that the economic cycle in 2009-2011 would be inconsistent and lumpy, difficult for both corporate managers (who had limited pricing power) and investment managers (who would be challenged by a range-bound and trendless market) to navigate.

The constant thread in my view over the past two years was that, at times, it would appear to many (this year and next) that we were out of the recession, and at times it would appear that we are embarking on an economic double-dip. By contrast, the (growing and almost universal) consensus was for consistent and self-sustaining growth (steady at 3.5% for 2010-2011) and unrealistic stock market expectations -- it was only three of four months ago that leading strategists consistently paraded on CNBC and expressed the view of a strong first half in equities and an eventual price target of 1,300 for the S&P 500 in 2010, nearly 20% above the current price.

As retail spending faded, housing disappointed, the growth in employment remained stubbornly slow, fears of euro zone economic weakness intensified and confidence in our government disappeared, many are now finally adopting my scenario of lumpy but positively trending shallow growth.

When Bulls Turn Bears, Take Notice

Stated simply, the economic soft patch we are now in has reduced the ranks of economic optimists, which is a good thing from a market standpoint. The previously heightened economic and market expectations are now more realistic and, in many corners, downright pessimistic. Even my pal, Sir Larry Kudlow, has serious economic reservations today.

Nary a Bull in CNBC's House

When stocks moved ever higher during the winter and skepticism was nowhere to be seen, CNBC had a constant procession of uber-bullish commentators -- nary a negative view was expressed for months. By contrast, recently, and most significantly this morning, the opposite expressions of view have been advanced -- since 6:00 a.m. EDT, five consecutive bears have appeared. And as I write today's opening missive, Howard Ruff's Cassandra-like utterances can be heard, and none of my pals "Squawk Box" pals, Joe, Becky or Carl (who are normally skeptical of extreme views), appear to be questioning his "wisdom"!