"We are rapidly approaching a pivot point," says Doug Kass, a general partner of Seabreeze Partners, "when all the stimulus factors -- such as abnormally low interest rates and government bailouts -- will be withdrawn, and investors will begin to discount that." Kass, who has grown more bearish recently, thinks that a continued weak consumer, an end to the cost-cutting that's fueled corporate-profit growth, and higher taxes, among other things, will mean self-sustaining earnings growth is "far less certain" than the market expects. -- Barron's (Nov. 2, 2009)Over the weekend, I was interviewed in Barron's Streetwise column by Vito Racanelli.
As mentioned in Barron's and last Monday night on CNBC's "Fast Money," we are now approaching the point of maximum fiscal and monetary stimulus.
That means that, statistically, we are moving ever closer to tightening.
Moreover, I have recently argued that not only did much of the fiscal stimulus merely have a temporary affect, less than one multiplier and borrowed from future sales (e.g., "Cash for Clunkers"), but that the underlying strength of the economy was fragile and that the consequences of massive fiscal and monetary stimulation had consequences (e.g., currency debasement and higher marginal taxes) that would serve as a brake on growth and profits in 2010-2011.
So, without further ado, Dave Letterman-style, here are the top 20 signs how bad the economy is!
- 20. The economy is so bad that Barack Obama changed his slogan to "Maybe We Can!"
- 19. The economy is so bad that Sarah Palin is only shooting moose for food, not for fun.
- 18. The economy is so bad that when Bill and Hillary travel together, they now have to share a room.
- 17. The economy is so bad that instead of a coin toss at the beginning of the Super Bowl in February, they will play "Rock, Paper, Scissors."
- 16. The economy is so bad that Angelina Jolie had to adopt a highway.
- 15. The economy is so bad that my niece told me she wants to dress up as a 401(k) for Halloween so that she can turn invisible.
- 14. The economy is so bad that I ordered a burger at McDonald's (MCD Quote) and the kid behind the counter asked, "Can you afford fries with that?"
- 13. The economy is so bad that I saw four CEOs over the weekend playing miniature golf.
- 12. The economy is so bad I saw the CEO of Wal-Mart (WMT Quote) shopping at Wal-Mart.
- 11. The economy is so bad that Bill Gates had to switch to dial up.
- 10. The economy is so bad that rapper 50 Cent had to change his name to 10 Cent.
- 9. The economy is so bad that they Pequot tribe built a reservation on the site of one of their casinos.
- 8. The economy is so bad that the Treasure Island casino in Las Vegas is now managed by Somali pirates.
- 7. The economy is so bad that if the bank returns your check marked "Insufficient Funds," you call them and ask if they meant you or them.
- 6. The economy is so bad that I bought a toaster oven and my free gift with the purchase was a bank.
- 5. The economy is so bad that the only company hiring this week is the one that sends people to scrape bankers off of Wall Street sidewalks.
- 4. The economy is so bad that I went to my bank to get a loan, and they said, "What a coincidence! That's just what we were going to ask you!"
- 3. The economy is so bad that a picture is now only worth 200 words.
- 2. The economy is so bad that Hot Wheels stock is trading higher than GM.(This is literally true!)
1. The economy is so bad that the guy who made $50 billion disappear (Madoff) is being investigated by the people who made over $1 trillion disappear (our policymakers)!
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.
