Not done with bears but ...

Is it a sign of hope? A spring flower popping up early in our economic winter?

Because Bill Fleckenstein is thinking of getting a stuffed bull for his office.

If you follow the stock market — or are perversely drawn to contrarian doomsayers, as I am — then maybe you've heard of Fleckenstein.

For more than 12 years, from an office on Capitol Hill guarded by a stuffed grizzly bear, Fleckenstein has been Seattle's town crier warning of economic collapse.

"Danger: The wipeout is still ahead," reads a headline on one of his typical financial columns.

Or: "Market's worst is yet to come." Or: "Whatever we do, it will be wrong."

"Apocalypse Soon" was how one financial service summed up Fleckenstein's dour forecasts, on TV and in print, stretching back into the 1990s.

"When disaster does strike, he will have warned us, and warned us, and warned us ... " joked CXO Advisory Group, in a note last year that ranked Fleckenstein's predictions as "poor."

If only. Yes, he incessantly harped about how we bailed ourselves out of an irresponsible tech bubble with a borderline criminal real-estate bubble. He said extreme suffering was guaranteed. Maybe he wasn't right that day or month or year. But who can argue with him now?

Here's another downer of a thing Fleckenstein once said: "People will look back and ask two things: How did I get so greedy? And why didn't I realize I was taking such a big risk?"

He said that in 1995.

OK, so the Dow was 4,700 then. His explanation today is that the "insanity went to higher heights and lasted far, far longer than I ever imagined it could."

Enough about the past. I called Fleckenstein, 55, to talk about the future. Because suddenly Dr. Doom isn't sounding quite so gloomy.

He announced last week that come March 31 he is closing Fleckenstein Capital's bears-only short-selling fund, a hedge account that since 1996 has invested only in bets that stocks would go down, not up.

Why close the fund, at this, his moment of triumph?

Because of good news. The carnage may mostly be over, he says.

"I think the market will hit new lows in 2009," he said. "So I'm not done with the bears. But I'm putting myself in a position to turn more bullish, sometime next year."

Bullish? Is Seattle's "notorious bear" going soft?

Kind of. Fleckenstein said he had an epiphany of sorts two weeks ago when he was in China. He realized that "twelve years of guerrilla battling" against irrational exuberance and the U.S.'s easy credit, easy money philosophy had personally worn him down. Not to mention all those years of being called a jackal, a hyena, a fly on the carcass for being a short-seller.

"When you're a short-seller, it's true you're always sitting at the back of the bus, looking for trouble," he said. "When I was in China, I looked around and saw all these opportunities and growth that I found incredibly exciting.

"I realized I have a different mind set now. I'm more open to positive, new ideas, instead of focusing so much on the downside."

He's starting up a new fund that will do a mix of bullish and bearish investing. The office grizzly stays — for sentimental reasons — but a friend suggests pairing it with a bull.

People will know he's truly switched when he starts wearing his "Dow 10,000" hat. Last summer, when the Dow was at 12,000, the hat sat like a taunt on the grizzly's head. Now, sadly, it represents hope for brighter days.

Fleckenstein says he's proud of his bear period.

"It's not even debatable" America was greatly harmed by the two speculative bubbles he spent a decade railing against, he says.

But that was then.

"You know the other problem with being a bear? At the end of the day, if by some chance you turn out to be right? It's no fun."

Danny Westneat's column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com.