A Beastly Premonition

The premonition is not mine, nor is it unique.  As a matter of fact it is an annual ritual.  That is of course the anticipation of the "October Bust".  There is a veritable poupouri of reasons, logical and illogical, to expect a market pull-back.  Most lean on history for the explanation of the possible depletion of what may ultimately be wasted anxiety medication.  But might it be the nearly 7-month rally, the rally with nary a pause?  Sure, why not.  October is as good a month as any to finally have a significant pull-back.  Could it be the potential winding down of the stimulus, meaning the sugar-based carbohydrates fed to stimulate our economic energy (gasoline on the fire) rather than strengthening protein (a fresh supply of long-burning wood).  Might it be the Fed's recent proclamation that it will continue to hold interest rates at extremely low levels, hinting at their less than factual confidence in the "recovery".  Is it the underpinnings of that "recovery".  Maybe the real fear is that investors, read that to mean regular people, are smarter than some in Washington and on Wall Street want to admit.  Can an economy that is 70% consumption, whose consumers have decided to borrow less at a recording setting pace, who are unemployed, whose home's have either been taken away, or their value, that is the "owners" wealth, is still 20% or more below levels of merely three years ago.  Could these minions of corporate and government manipulation be led to the slaughter just one more time, time enough to let the economy look "recovered" till the next presidential election?  I wrote recently in my client newsletter that if this is a recovery, then what was that period of time between 9/11 and the market peak in 10/2007?  Is a recovery a fleeting thing, to be followed up by a worse recession, to be followed up by a weaker recovery?  If so, then the long term trend is obvious.  But if that is not to be, we must ask from where will the impetus come for a better recovery this time around.  It can't come from the penniless pockets old Uncle Sam.  Sammy is broke.  And getting broker by the day.  So don't fret the green-eyed beast of October.  Fear the Reaper, for he lies in wait.