Kass: A Market on the Brink (Perhaps of Recovery?)

This blog post originally appeared on RealMoney Silver on March 7 at 7:46 a.m. EST.

"The hedge fund community (especially of a quant-kind) is disintermediated in 2008. Outflows accelerate, abetting an already conspicuous trend of rising volatility in a market that behaves more like a commodity than ever."

-- Yours truly, "20 Surprises for 2008"

Back in mid December 2007, I described the market as on the brink as rising inflationary pressures and slowing economic growth had increased the possibility of stagflation, a condition that has historically led to a contraction in P/E ratios and poor equity returns. I went on to describe the current credit crunch as "unlike anything we have seen in modern financial history" and stated that the "availability of credit will be markedly reduced in the years ahead." ...