Mark Fisher On Fast Money: "Psychology Must Change" (GLD, USO)

Legendary trader Mark Fisher appeared on CNBC's Fast Money this evening from the Futures and Forex Trading Expo in Las Vegas. If you weren't watching, you should have been. Fisher offered up a point of view that you are very unlikely to hear echoed by sell-side Wall Streeters. You see, Fisher actually makes his money trading, as opposed to the sell-side perma-bulls who make their living pitching and selling clients. He said that the economic environment right now is being fueled by "outright fear." He doesn't think that people are worried about just the next six months, either, but more like the next four years and beyond. According to Fisher, it is all about market psychology, and right now the psychology is negative and getting worse. This is not just the case in the stock market, but in the consumer market as well. He urged policymakers and American citizens to "take the pain now" and "admit the problems." He likened the U.S. to a potential Rome if we do not address the deep fundamental problems that have been ignored in this country for too long. Fisher offered a number of creative, if unconventional solutions, to the obstacles that America faces. On the housing front, he said that the government should force highly-skilled immigrants who want to come to America to buy a house. The proposition to these people would be that they could come here, as long as they agreed to buy a house. This is kind of a wild idea, but it certainly would be likely to stoke housing demand. In an unforgettable clip, Fisher said that everyone would immediately try to "front-run" the immigrant home buyers, and then added "Wall Street does this everyday." Priceless. How is that for telling it like it is? Another controversial idea that Fisher floated was to cut citizens' Social Security benefits by half if they have a net worth over a certain amount of money. In return for this sacrifice on behalf of affluent Americans, the government would pledge to not raise taxes on these people. Essentially, his point is that Social Security is a tremendous burden, it probably won't be there anyways, so why don't we deal with this problem now? This would alleviate some of the fear and concern about the deficit and would help to turn the negative forward-looking psychology. Fast Money panelist Anthony Scaramucci pointed out that there is likely not the political willpower to implement these types of drastic measures. Fisher, however, believes that the American people would be willing to make personal sacrifices in order to turn their country around. Unfortunately, it would take a very bold politician to catalyze such a movement. Therein lies the problem. Fisher was adamant that the outlook is not good if we don't address the structural problems that have overtaken the United States in the last few years. A growing number of Americans are starting to come to the same conclusion, and acting accordingly. The psychology has changed to where people are unwilling to take risk, are paying down debts instead of seeking credit, and don't want to buy things today because they figure it will be cheaper tomorrow. Just look at the housing market if you want a perfect example of this phenomenon. Fisher's outlook may not be bright and cheery, but it certainly seems to align with reality much better than the optimistic "reality" that the mainstream media and Wall Street seem to be promoting. Do not be fooled. It is time to be concerned. On the trading and investment front, Fisher said that he doesn't see the stock market going anywhere unless the psychology of the country changes. He said, "stocks measure the changes in people's perceptions." Talking about gold, he told viewers that the shiny metal is just a "barometer of anxiety." As such, he thinks that gold will continue to rise unless the social, economic, and political mood of the country changes. In the longer term, Fisher likes all raw materials, including agricultural commodities, crude oil and gold. He said that the price of "things that people need" will likely rise over time. The trader also cited Asian demand for raw materials. Two ways to play rising gold and crude oil prices are the SPDR Gold Trust ETF

and the United States Oil Fund ETF

. On the trading theory front, Fisher made an interesting comment with regard to gold, which holds true for any number of different markets. He said that one thing he has learned in his trading career is that he has no idea what price is "high" and what price is "low" but that, "when I buy the highs and sell the lows, I make money." Fisher has appeared on CNBC a number of times in recent months and had some pretty candid, if not optimistic, things to say. Investors and traders would be well served listening to his message.