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Short Sellers & Perma Bears Losing Patience as Market Grinds Higher

On Seeking Alpha and other blogs there is a perpetual output of articles that attempts to call the top of the rally. Just this Monday morning I counted about six of such articles, and probably a couple hundred have been written in the past week alone on Seeking Alpha.

Once article I found amusing is titled Voices Beyond Rally Shows Disconnect. The word ‘disconnect’ should be replaced with ‘desperation’, because that’s how it comes across.

My response is as follows:

But when the dow crosses 10,000 and the S&P 500 crosses 1050 will we still be doubting the ‘realness, and ‘connectivity’ of this rally? How about 12,000? Maybe it’s just a bull market. These sources are propagandizing doom and gloom, but the market already discounted a lot of it, and there is no guarantee any of these scenarios will unfold. As the third wisest human in the world, I would highly advise against shorting this market.

But Paul Krugman’s level of vapidness and pessimism is unmatched. He recently wrote a list of four reasons why the market is going lower titled Green Shoots and Glimmers. Interestingly, the article is written in bullet point format, which seems to allude to some degree of desperation and panic. It’s almost as if Krugman so frantic to debunk the rally that he’s forgotten how to write properly, and is throwing whatever he can find at arm’s length at the wall hoping that something sticks. What he doesn’t realize is that the stock market climbs a wall of worry, and the United States is no longer a manufacturing nation.

In addition, ‘V’ shaped recoveries and employment aren’t mutually inclusive. You can have a ‘V’ shaped recovery in the stock market and the economy with high unemployment, which is known as a jobless recovery. Job losses aren’t so important, anyway as evidenced by the huge rally in stocks in the face of rising unemployment. Increasing efficiency, not payroll, is critical to enabling economic growth and prosperity. Employers as slashing inefficient manufacturing and finance sector jobs, and outsourcing the rest.

The question is how much higher must the market surge before Krugman, Roubini, and other perma bear economists become irrelevant to not only the public, but their peers? These doom and gloomers feed off mayhem and panic. They need to be vindicated. They need to feel relevant. They are irate that the market just refuses to go lower. The Nobel Prize won’t save Krugman from public humiliation when the DJIA eventually does cross 12,000 and fears of ‘recession’ and ‘financial crisis’ and ‘depressionomics’ become merely an afterthought.

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