It must be the political season, but there seems to be a bit more partisanship between the bulls and bears these days. Each with their own data to support it, the long and short speak of either the continuation of the decades long upward trend in stocks or the emerging bear break. Billions have been chipped into the bull side as the Fed and Treasury seek to stem any systemic downside brought about in part by the failings of Wall Street and as a result are ironically helping to preserve an obscene compensation structure whose excesses helped create the credit disaster. From the broadcast market pimps to the insiders gaming earnings expectations, the spin moves across the globe daily.
The bears have taken on a buyside monster which has massive forces in reserve to keep raiders at bay. There chief argument that bottoms do not appear until time and capitulation have bowed everyman may be right, but appears weak because it relies on the broker's logo, 'trust me'. The bulls have been riding a horse since at least 1982 and have legions of fund managers and little folk as members convinced of their unquestionable trading prowess, as long as the market does not go down. Their skills and those of what appears to be a group of extremely frightened policy makers have dropped a dam of money into a price area identifiable as the current bottom. As to whether it will hold, no one knows. Continued bad job numbers with unwavering tight credit will create an environment tough to fix and another repricing event would probably take place at lower levels.
