Wednesday, August 22, 2012

Kass bearish

“It is time to say good bye to the bullish days of summer,” says Doug Kass, a hedge-fund manager at Seebreaze Partners. “We might now be approaching a crucial inflection point in the world’s equity markets.”

Kass says he is “more bearish” now than he has been in quite some time, largely due to several metrics pointing toward extreme levels of complacency. He notes sentiment polls, fund-flow data and a low VIX as well as troubling economic fundamentals as evidence to be cautious.

“I am very concerned about the potential for a disappointing downturn in corporate profits, the likely deterioration in China’s economy and a more rapid decline in the eurozone’s economy than is generally expected in the months ahead,” Kass says. I will move back into a long position when conditions dictate, but, for now, with extreme levels of complacency, I am more bearish than I have been in a while.”

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