Thank goodness for small mercies.

Going into the New Year with 100% cash was the best decision I made in 2015. It is allowing me to use the current melt down to cherry pick the best trades out there.

Shorting the Volatility Index (VIX) at $25 through the (XIV)? Thank you very much.

Nothing marks the bottom in a move better than bringing my old buddy, Marc Faber, on TV, when the Dow Average is down $400. Marc hasn?t had a bullish day in his life. His newsletter is entitled ?Gloom, Boom, and Doom? for a reason.

Who is next? Mr. Dow $3,000, Harry S. Dent, Jr?

These gurus are predicting that we are in a new bear market, that the average stock will be down 20%-40%, and that the worst is yet to come. Don your hardhat, man the lifeboats, and run up the white flag!

Let me tell you why my friends are wrong.

To get a bear market, you need a recession. There ain?t no recession anywhere on the horizon. US GDP is set to grow at a modest 2% plus this year, not the negative numbers you need to signal the end of this bull market.

In fact, things are about to get a whole lot better.

You know that $1 trillion de factor global tax cut in the form of cheaper energy? It just became a $2 trillion tax cut, thanks the collapse in prices that we saw in December.

That other great subsidy, free money delivered by the Federal reserve in the form of ultra low interest rates, looks to continue far longer than any imagined, except for me and Janet Yellen.

This means that the causes of every recession since 1945, energy and interest rate spikes, are absolutely nowhere to be seen.

And while the dollar was a big drag on US multinational earnings in 2015, this year I expect little movement. That's because currencies need interest rate changes to move. No, change, no movement.

If we are, in fact, in a ?one and done? world, there will be very little action in the foreign exchange market this year.

All of these positives will conspire to drive American corporate profits to new all time highs this year, probably to $130 a share for the S&P 500, or up about 10%.

Granted, we are certainly in no rose garden, and the global economy is facing some challenges.

In my book, the biggest concern is the $4 trillion in new debt piled up by companies in emerging nations over the past decade. The strong dollar has effectively doubled their interest and principal payments. But save for a few banks, that is their problem, not ours.

While the market is not cheap at a 17 times price earnings multiple, it is not expensive either. This historic range for this measure of share value is 9-22. I warned you that rising interest rates, however modest, could only translate into falling multiples, a point by my calculation.

Who knew this discount would entirely kick in during the first three days of January?

So what?s the big deal here? Why are traders and investors using the New Year?s tiding to throw up on their shoes? Did they drink the wrong Champagne?

Don?t tell me it?s all about China. The bourses there never really were stock markets in the conventional sense. They are really places where the government attempts to exercise its control of their economy. As a 45 year China veteran, I have always known this. They rest of you have known it since the summer.

And these are tiny markets, accounting for no more than a couple of percent of global market capitalization. What is the foreign ownership there ? A scant 2%, held by a handful of exchange traded funds and errant hedge funds.

Remember, the Chinese didn?t want to let us join their club while prices were rising. Now that they are falling, we don?t want to join.

So was it North Korea that caused the big dump? Fat chance. It is likely that what was actually detonated was a primitive nuclear weapon, more the product of a high school chemistry class, and not the H-bomb that was advertised. It really had more to do with the Great Leader?s birthday.

The Hermit Kingdom is so poor that it will take them another five years to build another one. Take this from someone who used to build nuclear weapons for a living.

I worked at the Nuclear test Site in Nevada before my math skills took me to Wall Street, where ?yield? had an entirely different meaning.

So is ISIS and the turmoil in the Middle East causing the sell off? Nope. The threat to the US posed by this criminal organization has been wildly exaggerated because this is a presidential election year.

I tend not to worry too much about military problems that can disappear with the push of a button, or the jiggle of a joystick in Nevada.

In any case, US bear markets are prompted only by domestic developments, not foreign ones, and there is definitely none of this currently at play at home.

So why are people selling? It is really all about psychology.

After nearly seven years, the fourth longest bull market in history is getting tired. Aged bull markets act differently than new ones. As conviction fades, they become choppier, with lower returns and higher volatility.

But they still go up.

I spoke with nearly a dozen managers of $1 billion plus hedge funds today, and nearly everyone has the same attitude. Go in light on risk during the first half of the year, and then pile it on in the second half.

That gives time for foreign quantitative easing to work, the global economy to recover, even for China, energy and commodities to bounce, and for the outcome of the US presidential election to become a forgone conclusion (as it already is for me).

That means this is no more than the 15% correction I predicted last week, of which we are already two thirds of the way through. That puts the final bottom for the S&P 500 at 1,800, but it may take months to get there.

In other words, don?t get too short here, lest a ferocious short covering rally rip your face off.

So as much as traders are distressed, I am very relaxed.

I think I?ll go watch the new film The Big Short, based my friend, Michael Lewis?s book.

One of the highlights of last year?s SkyBridge Alternatives Conference was the blowout party on Wednesday night (click the following for the blow by blow description at http://madhedgefundradio.com/report-on-the-skybridge-alternatives-conference/).

Seeking refuge from a band that was blasting my ears out, and fleeing the nubile young bodies that kept bumping up against me and spilling my margaritas, I sought out a safe haven.

There, cloistered in the quietest, darkest refuge from the event, far beyond the most distant swimming pool and palm tree, I found former congressman, Barney Frank, sitting in a lounge chair.

If this name piques your memory, it is because Barney was a co-sponsor of the 2011 Dodd-Frank bill, the most sweeping regulation of the financial industry since the Securities Act of 1933.

As chairman of the House Financial Services Committee, he became a familiar figure during the endless hearings for the controversial legislation.

To say that Barney is a man with strong opinions is probably the understatement of the century. If you voice an opinion he believes is factually incorrect, he will shout you down until he has the last word.

I watched him do exactly that when he sat on a discussion panel with republican strategist, Carl Rove. The two went at it like cats and dogs for ten minutes, the rest of the participants sitting there aghast, with their mouths hanging open.

Barney is upset that the US is still spending massively to defend Europe 22 years after the collapse of the Soviet Union, their only real enemy. The continentals can easily afford to pick up the tab themselves. The US has vastly overextended itself with military commitments. We can no longer afford to be the world?s policeman.

Sunni and Shia Muslims have been hating each other for a thousand years. We are not going to change that in a few years of spending a few trillion dollars and thousands of lives.

You can?t use the US military for social engineering. Attempting to do so just pisses everyone off and only creates more American enemies.

Banks are now bigger than they were before the financial crisis, largely because the government required them to post more capital. But ?too big to fail? has been solved.

The new Resolution Authority has the power to wipe out shareholders in the wake of future poor business decisions. That did not exist in 2008. No more bonuses will be paid for large losses.

Corporate tax reform is a big priority, but is far more difficult than people realize. The people you take money away from get much angrier than the beneficiaries of change are made happy. That is a problem in the current big money election environment.

Son of a New Jersey truck stop operator, Barney went on to obtain a degree from the Harvard Law School. He entered politics in 1972 when he joined the Massachusetts House of Representatives. Frank was elected to congress in 1980, representing the western Boston suburbs. He went on to win reelection 12 consecutive times.

Frank first went to Washington about the same time as I joined the White House Press Corps as a correspondent for The Economist magazine. I didn?t know him personally, but shared with him his frustration in trying to explain economic issues to then President Ronald Reagan.

When I asked the president from my home state of California why his tax cuts gave himself the largest percentage reduction, he answered that ?It?s because I pay the most taxes.? Go figure.

What I found most fascinating about Barney was his recollections of the Boston political scene during the 1960?s. In the past year, I have read biographies on John Kennedy, Robert Kennedy, Ted Kennedy, and the most interesting, their father, Joe Kennedy.

If you ever want to gain insight into one of history?s best natural traders, finest businessmen, and the first chairman of the SEC, read The Founding Father by Richard Whalen. Barney knew all of these men, and listening to his first hand stories about them was a real education.

All of this great information came at the price of sitting downwind from his cigar smoke for two hours. As a journalist, I long ago learned that if you want to get the real dope, you sometimes have to pay the price.

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