This blog post originally appeared on RealMoney Silver on March 8 at 8:01 a.m. EST.

"He cannot wait much longer. The rise in credit-card rates, as well as the drop in consumer confidence, home sales and bank lending, all foretell more suffering ahead for those who don't work on Wall Street. But on these issues the president, too timid to confront the financial industry backers of his own campaign (or their tribunes in his own administration) and too fearful of sounding like a vulgar partisan populist, has taken to repeating his health care performance. "And so leadership on financial reform, as with health care, has been delegated to bipartisan Congressional negotiators poised to neuter it. The protracted debate that now seems imminent -- over whether a consumer protection agency will be in the Fed or outside it -- is again about the arcana of process and bureaucratic machinery, not substance. Since Obama offers no overarching narrative of what financial reform might really mean to Americans in their daily lives, Americans understandably assume the reforms will be too compromised or marginal to alter a system that leaves their incomes stagnant (at best) while bailed-out bankers return to partying like it's 2007. Even an unimpeachable capitalist titan like Warren Buffett, venting in his annual letter to investors last month, sounds more fired up about unregulated derivatives and more outraged about unpunished finance-industry executives than the president does." -- Frank Rich, " The Up-or-Down Vote on Obama's Presidency," New York Times op-ed column (March 6, 2010)

Notwithstanding the tendency of

TheStreet.com's

readers to the right to hiss and

TheStreet.com's

readers to the left to cheer Rich's always left-leaning words, his weekend op-ed reminded me of how much political and economic factors have worked in favor of the bulls over the past several months.

• Political: As stated by Frank Rich, the president's initiatives, especially his centerpiece health care legislation, are moving backwards, and, as is typical, gridlock is being celebrated by investors.
• Financial and Economic: The benefits of monetary and fiscal stimuli have successfully thwarted an unprecedented credit crisis and, in many areas, have led to an improving or stabilizing economic recovery. For example, though the housing market remains moribund, retail sales seem to be on the mend. In addition, the residue of that policy has not yet yielded higher inflation and has provided a value-enhancing backdrop of still-low interest rates.

For now, as we mark the first anniversary of the March 2009 low, the stock market is clearly disregarding (or putting on the back burner) secular headwinds and

nontraditional influences

in favor of the near-term cyclical recovery in the world economies. And market participants seem to be paying little attention to the structural issues that will remain a challenge to the slope of growth in the years ahead.

To some degree, as an investor and economic observer, I feel very much like I did as the world economies appeared to be so healthy late in the last expansion. Though not anywhere as dire as then, the current foundation still appears far shakier then generally assumed. The consensus forecasts for profit and economic growth seems to be moving back toward normal and away from the more shallow expectations of even three months ago.

We can argue to what degree and to the timing, but looking ahead, so many value-deflating factors appear to be moving higher (especially interest and tax rates) while government stimulus is receding. At the same time, our country's fiscal condition (and that of many local municipalities, state governments and a growing list of other countries) is in jeopardy unless some hard and unpopular growth-flattening policy decisions are instituted.

On so many bases, 2008 was a year of shock and awe. For example, as I mentioned on

TheStreet.com

("

Six Reasons to Short Asset Managers

") on Thursday and again Friday night on "

Fast Money

," the investing shock of that year will have a long tail and helps to partially explain the weak inflows into domestic equity funds since the U.S. stock market hit a

generational low

a year ago. Other shocks, especially in housing (prices) and a dribbling out of phantom home inventories, will require many more years until normalized activity returns, even as affordability approaches record levels and new-home production continues to fall well below household formations.

The confluence of these factors represent some of the more important challenges to the growing consensus view of $80-plus in

S&P 500

profits and a self-sustaining recovery in the world economies (capable of a duration similar to past cycles). I find it hard to believe this plays out smoothly. Even as we move further away from an abnormal past economic cycle, the expansion cycle should, too, be different this time.

As I have written, all is not bleak, and some balance would be wise. While upside appears limited to this observer so does the downside. Stocks, unlike other assets classes (e.g., fixed income, private equity, residential and nonresidential real estate and commodities), have not had their valuations stretched. Most already expect a relatively shallow economic recovery. Also, inflation and inflationary expectations are subdued, and an elevated unemployment rate and large output gap are among the many reasons why the Fed will be on hold and the curse on cash will be intact for the year.

So a lengthy

tug of war

seems the most likely outcome in 2010. My good pal, a legendary technical analyst who has seen it all, pointed out to me this weekend that there is a lot of historical precedent for a pause after the first year, even of multiyear bull moves: in the late 1930s, 1993-1994 and 2003-2004. Today he sees "more uncertainty than confidence" in the sentiment indicators, but he would still not be "excited" that this is the start of a new bull leg. Hedge funds have been increasing their net long levels back up to January levels but remain well below previous peak invested positions.

Investors Intelligence

and

AAII

surveys have bears back to January lows, but there are fewer bulls. Put/call ratios are giving mixed signals.

In summary, Warren Buffett has written, "Price is what you pay, value is what you get." Grandma Koufax put it another way when she used to say, "Dougie, buy wholesale, sell retail."

In partying like it is 2007, it is my position that market participants are, once again, being somewhat myopic in their investment vision and too readily extrapolating the better economic data points. As stocks have climbed over the past two weeks, there has been a growing "see no evil, hear no evil, speak no evil" quality to economic commentary these days. As a consequence, it is my view that the risk/reward ratio for U.S. equities is turning less attractive than in recent memory.

Wholesale values are increasingly scarce, and I won't pay retail in today's U.S. stock market.

Doug Kass writes daily for

RealMoney Silver

, a premium bundle service from TheStreet.com. For a free trial to

RealMoney Silver

and exclusive access to Mr. Kass's daily trading diary, please click here.

At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is the general partner Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.