The Market's NOT Going Down Due To A Change In Fundamentals....

An exaggerated lift in risk premia is the source of the month-long decline, not a material change in fundamentals.

I watched "Fast Money's" halftime segment on CNBC, and I was comforted by the unanimity toward an unfavorable market view.

That further confirms my views that an exaggerated lift in risk premia is the source of the month-long decline in share prices, not a material change in fundamentals.

Further: Despite the hyperbole (and fear of lower stock prices), there remains no evidence of stress in funding or in liquidity in European banks over the last week.

Nor are credit spreads, while up from a month ago when equities were much higher, at levels that show stress either.

What has happened is that stocks have fallen because of a combination of hyperbole and the frightening void (and loss of confidence) exploited by high-frequency trading strategies (in the face of hedge funds' "de-risking" and in the absence of retail domestic equity inflows).

In support of my view, Barclays, ISI and Morgan Stanley raised their forward U.S. GDP forecasts.....