06 May
Is the rally real?
Much of the rally has been predicated on increased optimism because the recession may be slowing. Many recessions have double dip bottoms and most bull markets are not led by the same groups that led the last bull market.
In addition, the US still has a lot of problems with the deleveraging consumer, potentially insolvent banks and a financial system whose accounting has reverted back to off balance sheet trickery and mark to make believe models.
How can we believe the rally is real if it is within the context of one of the sharpest downturns the world has ever seen, where the fundamental macroeconomic picture has not improved and nor has there emerged a true cyclical leader for the next bull market?
