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The irrationality of markets keeps on amazing me. Markets edge up by almost 1% in the US after Ben Bernanke tells lawmakers that the economy is in bad shape and that interest rates will have to be kept low.
Basically, markets cheered on the cheap credit that keeps on flowing, it sounded like free crack to junkies.
Short term cheers, but long term tears.
The US economy is still fragile: unemployment does not go down, the housing market keeps on suffering from foreclosures, small banks go belly up ever month (we reached more than 700 seized banks by now), and consumer confidence is dropping.
Perhaps the most important indicator is consumer confidence, because the best way to bootstrap the economy is to get consumers to spend again, like China achieved to do during the crisis. but with dropping consumer confidence, things won't get any better soon.
The rain is yet to come.
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