Doug Kass, of Seabreeze Partners, who called the generational low in the market in March 2009, says the market is complacent about bad news now.
I do believe with some certainty that the market's vulnerability to disappointment and/or exogenous events has been elevated and that many apparent warning signs -- for instance, a 17.5% underemployment rate, weak consumer and small business (National Federation of Independent Business) sentiment, the unrelenting increase in the price of gold, a steadily declining U.S. dollar, the specter of cost-push inflation from higher commodity prices and so forth -- are too comfortably being ignored or are being rationalized away in a tide of rising world stock prices.
These days bad news is what is keeping interest rates at zero, and the stimulus flowing, so as long as bad news is good news, market ignorance is bliss.
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