David Tepper Touts Stocks On CNBC

Hedge fund manager David Tepper appeared on CNBC's Squawk Box this morning. Tepper is the founder of Appaloosa Management $ 12.4 billion. The fund manager made around $ 7 billion in 2009 by buying bonds and stocks in distressed financial companies. Personally he raked in more Than $ 4 billion, making him the Highest-paid hedge fund manager That year and 258th Richest Person In The World.

Tepper Outlined a bullish for stocks Which theory is exceedingly simple, yet Equally unsettling. Tepper Told CNBC viewers thats in His mind their are Two Different Scenarios That are Likely to play out over the next few months, Both of Which Should Be positive for the stock market. The first is thats the economy improves on Its Own.

He said, "Either the economy is going to get better by Itself in the next three months ... What assets are going to do well? Stocks are going to do well, bonds will not do so well, gold will not do as well. Or the economy is not going to pick up in the next three months and the Fed is going to come in with QE. Then what's going to do well? Everything, though not in the near term bonds ... So let's see what I got - I got two differential Situation: One Itself by the economy gets better, are better stocks, bonds are worse, gold is Probably worse. The other situation is the Fed Comes in with money. "

The theory certainly makes some sense, but the big picture Implications and it certainly bring up some questions. Essentially, the market is now in the business or front-running the Federal Reserve and the Fed is in the business of propping up the stock market. This is still going on, despite the fact thats the recession supposedly ended back in June of 2009.

Tepper's comments coincided with a meaningful uptick in the futures this morning, and once the market OpenedFilesView, stocks Began to roar higher. We are currently trading up 176 points at 10,838 on the Dow. One thing from Tepper's CNBC appearance needs some clarification. Some outlets have mistakenly quoted as saying Tepper That he was going "balls to the wall" long stocks. Actually he said the exact opposite - we are not going "balls to the wall" long, but we certainly are Increasing our allocation to equities based on the thesis That Things Will Get Better on Their Own, or compromise the Fed's liquidity pour Into the System . You Can check out the video, as well as Additional commentary on the video over at zero hedge.