The Tiramisu Market - TheStreet

The Tiramisu Market

This market might look appetizing on the outside, but underneath there are a slew of problems that no one wants to digest.
Author:
Publish date:

NEW YORK (

TheStreet

) -- One couldn't help but feel the optimism of the talking heads over the past couple of weeks as the espoused their rosy 2010 outlooks. Deep down I know that we're in for a Tiramisu Market.

My wife is not a big dessert person, but when she's offered tiramisu she always ends up ordering it, even if she initially demurs. Invariably, when the waiter walks away, she says, "I just like the top part." When the dessert arrives, she proceeds to eat the hard, sugary surface while bypassing the ... goo? ... that lies underneath.

Welcome to the 2010 market. The top may be good and pleasing for the short term, but underneath we have problems that no one wants to address and that are easier to push to the side of the table. Just give it back to the server.

Unemployment is hovering around 10%; growth is stagnant; housing is being propped up by, well, us; there's a wave of mortgage resets and foreclosures; there's a "new normal" in consumer spending (i.e., not a lot); the government printing press is smoking; and Congress is hell-bent on ramming through legislation that no one wants. Oh, and people are trying to kill us. All of us. And unfortunately they're eventually going to succeed, despite statements that "the system works."

I wish I could be more upbeat about the prospects for 2010, but after the party since March I'm feeling a little hungover ... and the bill just came. As first-quarter earnings season kicks off, the market will be looking past the cost-cutting efforts that boosted many bottom lines and looking for no kidding, old-fashioned profitability.

It's hard to be bearish. No one likes to be Eeyore. I'm long-term bullish -- I have to be. But I'm worried in the short term that the underlying issues will persist until we see job creation, housing stabilization, and restrained government spending. The government needs to halt the printing press; it's running out of ink.

We got to witness this Tiramisu effect in Dubai on Monday. The monstrosity formerly known as Burj Dubai was unveiled in a shower of fireworks and lights. The debut was interesting on several levels.

Dubai roiled the markets in December when it made the mistake of telling the world that it had spent more than it had. This apparently shocked investors, who believed their individual countries could never do such a thing.

Abu Dhabi decided that a foreclosure in its neighborhood wouldn't be good for home values, so it tossed a boatload of dirham to its neighbor. In a show of thanks, Sheik Mohammed renamed the Burj Dubai to honor his cousin (and new banker), Sheik Khalifa bin Zayed Al Nahyan.

It appears that the members of the United Arab Emirates recognize the value of a bailout. I wonder what would happen if U.S. businesses had such respect for folks that bailed them out.

"

General Motors

is honored to announce that we are renaming ourselves 'Government Motors' in honor of our vengeful but kind overlord."

"

AIG

(AIG) - Get Report

is proud to announce that we have changed our name to 'America Issues Us a Gift' and thank the American people for their generous contributions. We needed that money to pay our bonuses."

In a throwback to a 1988 cult classic, Lloyd Blankfein says

Goldman Sachs'

(GS) - Get Report

ticker will remain the same but going forward it will stand for "Got You, Suckers."

And lastly,

Citigroup

(C) - Get Report

is renaming its headquarters at 399 Park Avenue "Paulson Place."

Firing Line: This market may look sweet on the outside, but underneath there's a mess. Although I think a little hair of the dog might help for a while, I definitely plan on skipping dessert.

-- Written by Matthew Buckley in Orlando, Fla.

At the time of publication, Buckley had an iron condor options position on Goldman Sachs. Such a position benefits when the underlying security doesn't move.

Matthew "Whiz" Buckley is the chief strategy officer of

Options University

, a provider of options education for options traders of all levels. He is also the managing partner of

Check6 LLC

, a business-consulting firm specializing in leadership development, risk management and strategic planning for Fortune 500 companies and related organizations. Buckley flew the F-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings and flew 44 combat sorties over Iraq. After leaving active duty, he worked as managing director of strategy at a Wall Street firm and CEO of a financial media company. He is an internationally recognized speaker and combined his experiences in the military and corporate America in his book "From Sea Level to C Level." Matthew "Whiz" Buckley is the chief strategy officer of

Options University

, a provider of options education for options traders of all levels. He is also the managing partner of

Check6 LLC

, a business-consulting firm specializing in leadership development, risk management and strategic planning for Fortune 500 companies and related organizations. Buckley flew the F-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings and flew 44 combat sorties over Iraq. After leaving active duty, he worked as managing director of strategy at a Wall Street firm and CEO of a financial media company. He is an internationally recognized speaker and combined his experiences in the military and corporate America in his book "From Sea Level to C Level."