The obvious is obviously wrong?

Came across an interesting article by Fiend on the state of the US economy and an outlook on US financial markets in 2007. An excerpt:

The S & P 500 WILL BE UP 10 to 15% IN 2007?
For the first time since 2001 all the analysts surveyed by Barron’s are in unanimous agreement that the S & P 500 will be up 10% at the very least. Well the surest bet for 2007 isthat not only will the market NOT be up but it is my firm conviction that it will be down at least 10%.

THE FED’S Conundrum?
The question that most analysts and especially Bernanke are asking is: Why were long term interest rates still not rising in the face of 17 consecutive ¼ point discount rate increases? The answer my friends is both simple and very worrisome. All these Banks, Hedge Funds and other financial institutions that have had it so good for so long, making all that easy money are now between a “rock and a hard place”, as they are now locked since their positions are too big to liquidate (CASH OUT). They can’t get out because there is nobody to sell to. They are all forced to continue to keep playing the game until the bitter end.

The same holds true for all the Central Banks that have been buying up all the US government’s newly issued paper. They too are caught between the proverbial Rock and a Hard Place. In order to maintain employment in their countries, they must continue to export and protect the value of the US dollar. They can talk all they want about diversification of their reserves but they too, like the arbitragers have no one to sell to. They are all locked in and must continue to play the game. However, all this used to depend on both the US FED and the BOJ, but now it’s all in the hands of the BOJ and should the YEN start to appreciate especially against the Dollar and the Euro; watch out below as the easy profits turn into even easier losses on the biggest bets ever taken.

Read the entire article here.