What The Market Is Saying Vs. What Is Real....

Here's what the market is saying. I hear it loud and clear:

1. If you don't have a job, you won't get one. The jobs market is moribund because we have no demand to meet, so what's the point of hiring? Plus, how much does it cost to hire in the new world?

2. There will be no lending. Banks are trying to figure out what they are allowed to do and not do and how much capital they have to hold in reserve. Good time to tell the lenders not to lend.

3. There will never be another house bought. The only reason anybody bought a house was because of an $8,000 tax credit. They aren't interested in 4.5% mortgages even though they save you a lot more money than the tax credit.

4. We will never build another house again. Why bother? No tax credit, no jobs.

5. We will never buy another car. Who can afford it? Why make them?

6. We will never export anything to China ever again. That's what its leading indicators are saying.

7. We will never use energy in the quantities we used to. That's what the low prices of energy are saying.

8. We have a government that wants everyone to join a union and wants stock prices lower.

9. We will never go out to dinner again, or even buy a cup of coffee.

10. Tech is finished. Done.

Now, here's the truth:

1. We have actually had job claims go down in recent weeks, and if we put together a stimulus based on how horrible the economy is, we can reverse this. It is reversible. We also know that overtime is running high. So it can flip.

2. Banks want to lend, they just need some small businesses to lend to and some guarantees to those businesses. The government can provide them.

3. There is huge pent-up demand for housing simply because household formation continues apace and there is demand, innate demand, for living space. The buying could start because mortgage rates are dropping to unheard-of levels.

4. We are building fewer homes than when we had half the number of people we have in this country now. That's not sustainable. Clearly not sustainable, especially with a decline in the inventory of homes. The Case-Shiller index that we saw today may have been inflated by the tax credit, but it's up substantially from a year ago and I don't think will slip that much because so few new homes are being built.

5. Car sales are going very well. We just heard that from KMX last week. Just last week. It can't change that fast. Plus, none of the auto companies are furloughing or discounting, so why should we think that sales are horrible?

6. We got ONE bad number out of China. Do we really think the government would allow the yuan to appreciate if things were really bad? And people are selling stocks to have money to buy the biggest deal of all time, the Agricultural Bank deal. That's the reason for the decline. Does anyone think the Chinese government doesn't know these indicator numbers ahead of time? And how many times do we have to say that they are cooling the property market and it is a positive, which is what produced the bad indicators?

7. Energy demand is running well in excess of last year. Coal inventories are down. Natural gas has had a big run. Oil's barely down.

8. Midterm elections are coming. Unless the Democrats are totally suicidal they will go with stimulus and create jobs and do what's right to reverse rampant deflation, as exhibited by the 10-year Treasury being under 3%.

9. DRI actually said things are trending better, not worse, when it spoke last week. They are the ultimate indicator of dining out.

10. If tech is finished, done, how do you account for the biggest sales of computer and computer-related products in history out of AAPL?

Look, I get the gloom. I know that things are bad. I don't want to be aggressive in buying anything. But at some point we will overshoot, and these negatives will be reflected even though they are WRONG. I'd say we're getting very close....

long AAPL