To me it’s interesting to ponder the catalyst for the most recent upswing on Wall Street. We’ve seen steady gains for almost a month now, most of which came on the heels of positive news from financial institutions and actions by the fed to monetize some of the debt incurred in the latest stimulus package. But I really think that the bullish trend has caused some people to misdirect their optimism when it comes to the speed and momentum of the imminent economic recovery. Perhaps investors have also been too lenient in their assessment of the state of affairs we currently find ourselves in globally. Many other economies are reporting that their GDP has shrunk by larger amounts than they were previously expected to.

Investors have gotten used to bad news on top of bad news lately and it seems that people are trying to turn bad news into good news because of the simple fact that it’s not worse news, just more of the same. How is that good news? We’ve still lost over 600,000 jobs in March alone, housing starts are up but only likely because there is still a huge oversupply of houses that are already built, and there is now talk and sufficient worry that inflation or even stagflation may appear on the scene and gobble up what little gains we have made so far. With all the negativity it’s hard not to get swept up in the pessimism, but are we really seeing a market bottom or turnaround when the situation we are all faced with in terms of the economy, the job market, and the housing market hasn’t really changed for the better over the past few months?

I’m not trying to talk investors out of their optimistic attitudes; after all I think we need more of that from everyone when it comes to really taking charge of their own financial responsibilities and paying down their debt. I just question the foundations of the latest bull trend. Banks are beginning to pay back their TARP money, creating a two-tiered environment where we have the banks that have paid their TARP bailout funds back early and those who haven’t. Another sector that has stayed strong and had a significant role in the recent upswing in the stock market is the heath care sector. This scares me quite frankly. What will happen to the health of this sector is we socialize healthcare. Don’t get me wrong, I’m all for healthcare reform, but how will this pillar of economic strength behave if private healthcare companies are nationalized?

These are just a few questions that have to be answered if we are to realize any real form of economic recovery. I don’t really buy that the latest bull on Wall Street has much validity or the true performance to back up the gains. I’m not complaining, but I wouldn’t be too surprised if the bull turned bear and we found ourselves back in the same place we were two months ago, which is ironically the same place we are essentially in today.