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Capital Market Excess; Still Bullish on Bon-Ton: Best of Kass

NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.

Last week, Kass wrote about capital market excess and Bon-Ton Stores.

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A Not-So-Funny Thing Happened on the Way to Capital Market Excess

Originally published on Monday, Aug. 4, at 8:21 a.m. EDT

Something familiar,
Something peculiar,
Something for everyone:
A comedy tonight!

Something appealing,
Something appalling,
Something for everyone:
A comedy tonight!

Nothing with kings, nothing with crowns;
Bring on the lovers, liars and clowns!

Old situations,
New complications,
Nothing portentous or polite;
Tragedy tomorrow,
Comedy tonight!

Something convulsive,
Something repulsive,
Something for everyone:
A comedy tonight!

Something aesthetic,
Something frenetic,
Something for everyone:
A comedy tonight!

-- Music and lyrics by Stephen Sondheim, "Comedy Tonight" (from A Funny Thing Happened on the Way to the Forum)

Things are not always as they seem; skim milk masquerades as cream.

That was the lesson Pseudolus (portrayed by Zero Mostel, Nathan Lane, Whoopi Goldberg and many others) taught us in A Funny Thing Happened on the Way to the Forum, and it's the lesson we might be learning in the markets right now.

Normalization of profits, profit margins and interest rates will likely be a headwind to domestic economic growth and an albatross around the head of several investment asset classes in the period ahead.

Until recently, markets have willfully ignored the above in addition to rejecting the possible adverse investment consequences of expanding geopolitical risks in favor of, as my pal Mike Lewitt describes, "cold-blooded focus on central bank policy."

As I wrote several months ago, a mini Minsky moment might be at hand -- thanks to an exaggerated exploitation of portions of the equity and fixed-income markets and a growing attitude of complacency that has followed the exploitation of these asset classes.

The road to investment hell is paved with good intentions.

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