Category: Brian Belski

USA Today: Bull market on solid footing

“The dizzying 2013 stock market rally was reignited Tuesday by multiyear highs in home prices and consumer confidence, a sign the bull run reflects a healing economy and not just the Federal Reserve’s easy-money policies.”  The front page USA Today article quotes two popular permabulls: Brian Belski…

“The economic numbers we’re seeing are confirming what the U.S. stock market has been telling us all year: The economy is on a stronger footing and improving longer-term.”

… and Jim Paulsen:

People are having trouble understanding why the market is going up when the economy is growing slowly, jobs are hard to find, and corporate profit growth is slowing, and they are left with the idea that the rally is just a sugar high from the Fed.  My take is that rising confidence is driving the stock market higher, [adding that investors now believe the worst-case fears they’ve harbored since the 2008 financial crisis won’t be realized].

So there you have it: the 2008 meltdown in the stock market and economy was simply a technical malfunction caused by credit locking up.  The Fed diagnosed the problem correctly, applied some anti-freeze to the credit radiator, and got the economic engine back up and running.  Mission accomplished.  The Fed’s mechanics can now do a victory lap and go back to their auto repair shop and watch paint dry. But what if the sugar high metaphor is more appropriate?  Could the recovery in housing be artificial?  Consumer confidence baseless?  The economy on quicksand?

Does a bull on the cover of a popular mainstream newspaper signal misplaced optimism and impending doom?

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