The glum mood on Wall Street could be summed up as follows: “I wouldn’t put any new money into the stock market now,” the treasurer of Tishman Realty & Construction Co., Larry Schwarzwalder, tells me. “I’d rather go to Las Vegas, it amounts to the same thing because they’re both a crapshoot.”

Against this background is a raging debate that could drive anyone bonkers. On one hand, the bulls offer compelling arguments that the worst is over and that any decline is a buying opportunity. The bears, currently the dominant force on Wall Street, make an equally compelling argument that the worst is yet to come and any rally should be viewed as an opportunity to sell.

So, whom should you believe? For some thoughts, I rang up TrimTabs Investment Research, a well-regarded West Coast-based liquidity tracker with a substantial hedge fund following in which Goldman Sachs holds a minority interest.

Why TrimTabs? Because last October, its CEO, Charles Biderman, a former Barron’s reporter who has been a bull since early 2004, threw in the towel and turned bearish. It was perfect market timing, as it coincided with the recent market high, and averages since then have skidded about 13%.

He has just switched gears once again, taking a sunny view of the market based on record bearish sentiment (usually a good contrary indicator), tremendous cash on the sidelines, and signs the economy is beginning to pull out of its six-month slump.

To Mr. Biderman, it all suggests “we’ll see an explosive rally in the next couple of weeks.”

He regards the plethora of bears as an especially bullish signal, pointing, in particular, to such pervasive bearish signs as:

• Last month’s short interest (a bet stock prices will fall) surged 0.8% to a record high on the New York Stock Exchange and 5.7% to an all-time peak on Nasdaq.

• The dumping of $50 billion worth of American equity funds in the first quarter, the highest level since the third quarter of 2002.

• Astonishing cash inflows of $130 billion into retail money-market funds in the first quarter, versus $178 billion for all of 2007.

• A record $532 million was invested last week in short-oriented exchange-traded funds, the highest weekly inflow this year.

• About 58% of all hedge funds expect the S&P 500 to decline this month.

• Bond funds, a haven for safety, posted an enormous inflow last week of $900 million a day.

“Bears should go back into hibernation,” Mr. Biderman says. “The widespread fear is unwarranted. It’s a time to buy, not to sell.”

Mr. Biderman is putting his money where his mouth is. In his personal account, he said he recently bought home builders Kaufman & Broad and Toll Brothers, public hedge fund Fortress Investment Group, and Goldman Sachs.

As for the economy and all the recession talk, he says, “Wall Street is clueless about what is happening.” In the face of all the economic gloom and doom, he points to what he regards as a very positive note. Namely, based on income tax withholding data from the Treasury, the wages of all salaried workers rose 5% year-over-year in the past four weeks, which is almost triple the 1.8% year-over-year growth rate in the first quarter.

He describes the 5% growth rate as particularly impressive because the impact of the Federal Reserve’s rate cuts, the government’s tax gifts, and efforts to unfreeze the mortgage market have not yet hit the economy. With inventories of distressed homes disappearing fast and so much stimulus in the pipeline, economic growth is more likely to surprise on the upside than on the downside late this year, he believes.

As for a recession, he asks: “What recession? It’s a myth, unless you believe in writing about fairy tales.”

SEC PROBES GIANT OFFER

Trading in Yahoo Inc. — the subject of an unsolicited $44.6 billion buyout offer on February 1 from Microsoft, which it later rejected — has become the subject of an investigation by the Securities and Exchange Commission, according to a regulatory source familiar with the situation.

In addition, I have obtained copies of SEC documents that show the agency is seeking the identities of brokerage clients who traded in Yahoo securities in the three weeks prior to the February 1 disclosure, and in the eight days after the announcement. Two separate SEC requests for such information were made in early February and around mid-March.

A spokesman for Microsoft declined comment. Yahoo did not respond to calls seeking comment. An SEC spokesman said: “We do not comment on investigations.”

dandordan@aol.com