"Disaster has a way of not happening."
Back then, I made that call based on a combination of an assessment of the Administration's policy decisions (that would likely be forthcoming), in anticipation of the Federal Reserve's aggressive monetary response to the developing financial and economic disaster, dramatically deflated investor sentiment and an assessment of the emerging low valuations (see above linked article).
The disaster, a world wide failure of our financial institutions, was well on its way nine years ago -- but was averted. But, not before stocks experience a dramatic 1 1/2 year decline and not without bringing the world's economies to the brink.
Today, the S&P stands at about 2,740, a multiple to the "Generational Low."
To me, its more value added to look to the future rather than deal with the past (and the magnitude of the recovery in the indices over the last nine years).
In doing so I will remind all of several observations I have made:
- Bull Markets are formed and are the outgrowth of bad news (e.g. 2009) and Bear Markets are formed and are the outgrowth of good news (2000 and 2007).
- Major market inflection points are rare and infrequent conditions.
From my perch, the conditions for a bear market/correction appear to be falling in place -- my diary is littered with reasons for this view.
Today we have economic policies that are pro big spending, pro big deficit, pro bigger income inequality, pro Wall Street deregulation (in bad ways like lifting limits on leverage). And we also have a tightening Fed.
I don't see how any of this is good for stocks over the balance of the year.
(An earlier version of this column originally appeared on Real Money Pro, our premium site for active traders and Wall Street professionals. Click here to get great columns like this from Doug Kass and other market experts even earlier in the trading day.)