eeemak's Blog : Market Trend

The long term trends may be intact, but the short term challenges remain the biggest concern and risk to the resumption of normal trend growth. Global Depression II may have been avoided, but there seems little cause for celebration yet. The limited green shoots that have been spotted are real enough, but they do not change the big issues faced by the real economy.
The return of some confidence, plenty of liquidity, good values, and sufficient time wallowing in misery are simply not enough to turn the corner. They are the triumph of hope and cash over fundamentals, as is the recent rally in the markets. Fundamentals, particularly when banks are down, always win in crises. The light at the end of the tunnel will only be turned on when the banking sector is fixed and cleaned of its toxic waste, ready to play its critical intermediary role again between borrower and saver. This depends on the Obama administration and the US treasury getting its act together to fix their badly flawed bank rescue plan. More fiscal stimulus ammunition will then be needed, but the banks are the trickiest part.