This blog post originally appeared on RealMoney Silver on March 16 at 8:22 a.m. EDT.
Since mid-2010, I have incorrectly maintained a cautious market outlook.
As mentioned in my "Mea Culpa," my concerns have been consistently dismissed in the marketplace as equities have marched higher.
In support of my cautious investment view, I had offered a series of arguments on why numerous secular headwinds would produce nontraditional challenges to the notion of a smooth and self-sustaining economic recovery that was the foundation of the bullish cabal's baseline case.Among my chief concerns have been:
- an increase in structural unemployment;
- rapidly advancing food and other input prices which raised the specter of lower corporate profit margins and disappointing (and more volatile) corporate profit growth;
- fiscal imbalances (and the austerity that ensues) at the local and state levels;
- an apparent unwillingness of either political party to address the federal budget deficit;
- a still-moribund housing market plagued by a large shadow inventory of unsold homes;
- a eurozone that has only temporarily deferred its sovereign debt problems;
- rising instability in the Middle East and the resulting sharp increase in energy prices;
- slowing growth in China; and
- unknown tail risks of the previous economic and credit cycle.
- One head is strong -- namely, the healthy and largest U.S. corporations.
- The other head stares in the opposite the direction -- namely, the wobbly head of the U.S. consumer.
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