Kass: The Lion's Share

While those lions in the grass are grazing somewhere -- one possible grass inhabitant might be the adverse implications of the current U.S. drought -- let's review the visible lions that limit the upside and the downside to the U.S. stock market.

Core Market Challenges That Limit Upside

More than at any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly. I speak, by the way, not with any sense of futility, but with a panicky conviction of the absolute meaninglessness of existence that could easily be misinterpreted as pessimism. It is not. It is merely a healthy concern for the predicament of modern man.

-- Woody Allen

Fundamentals: Top-line growth is moderating, and there is a limit to how long corporate profit growth (and margins) can be sustained. The U.S. bond market is delivering a more bearish economic vision than the U.S. stock market. While the U.S. economy stands tall relative to the other developed economies, any realtor will tell you not to buy the best house in a bad neighborhood.

Eurozone: These ferocious lions are running amok in Europe. They represent the greatest threat to the well-being of the equity markets. Last week, in a vote of no confidence, the euro has hit a two-year low against the U.S. dollar.

Central banks: With interest rates near zero, U.S. monetary policy is waning in its influence and could be pushing on a string.

Politics: Governor Romney is considered by most market participants as pro-market and pro-business relative to the incumbent, but President Obama's lead in the polls continues. He remains the favorite -- at this point in time, it's his election to lose.

Geopolitical: The Middle East is heating up and so is the price of crude oil.

Core Market Positives That Limit Downside

"Disaster has a way of not happening."

-- Byron Wien, vice chairman Blackstone Advisory Partners