Kass: Current Fears Are Overblown

In conclusion, with the U.S. and Chinese economies demonstrating a reacceleration in growth and with some stabilization in EU growth, there is now evidence that global economic growth is slowly reversing the first half of 2012's weakness.

Fears of an economic cliff are overblown.

But the Earnings Cliff Remains

I have tried to respond to the hyperbole of the cliffs with hard-hitting analysis and solid logic of argument, which has led me to a contrarian view on the cliffs' impacts on the equity market.

While I remain concerned about the prospects for U.S. corporate profits, one out of four cliffs ain't bad.

In my view, the earnings cliff creates a limit and ceiling (1450-1470) to the near-term upside to U.S. equities into early 2013, but I see the S&P 500 moving toward that ceiling as it becomes more clear that the cliff fears are overblown.

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