Fellow contrarians, it's gut-check time. As a standard bearer of the camp that believes that the Federal Reserve is not omnipotent, I can tell you that this moment is as difficult as any that we have had to endure in many years. I speak to many of the most hard-core stock market bears (our circle is a small one) and it is clear that their confidence is on the ropes. I'm not sure if I can characterize it as despondency, but it sure is close. I can hear the depression over the phone. Their tone is subdued and there's an air of despondency.
I'd be lying if I said I wasn't feeling the pressure.
Someone left me a message this week whining that with the housing market in a total collapse, the Fed will never allow the stock market to fall because the consequences would be so awful. It was his conclusion, therefore, that stocks were destined to go higher. Resitance was futile.
It is the notion that the Federal Reserve is in complete control of the markets that is propelling this latest bout of insanity.
~ Fred Hickey, editor, The High-Tech Strategist, "Is Resistance Futile?," October 4, 2007