Ok, let’s pause and look back about what is actually going on here. After a crazy rally from the March lows in the 30 to 40 percent range, we have been moving more or less sideways for the last couple months. While investors have been sceptical about the extent of the rally and were expecting some pullback, the investors’ overall sentiment was rather positive as many believed we have reached the bottom of the bear market. But with the new higher than expected unemployment numbers this week, it seems we have been pulled back to reality after weeks of seemingly endless euphoria. Sometimes I get the impression that the stock market is manic depressive. We moved from infinite despair to tremendous optimism within days and weeks. Now the mood has changed again, investors are starting to worry again. Will the US consumers ever spend again like they have in the recent years or will they save as they are traumatized of the aftermath of the spending spree so many have engaged in? How can we possibly have a consumer led recovery while so many people are unemployed? Now voices for a second stimulus are getting louder, although many investors do not see increased economic activity as sustainable and are concerned about the increased government deficit.

 I also have doubts that a second stimulus will have the desired effect any time soon, and that a recovery led by increased demand from other countries that are not export nations would be more promising. Of course the problem is we are in a world wide recession and it seems nobody is really having lose sitting wallets. The question really is when will we return to growth again, 6months, 12 months, or will we be stuck in a secular bear market lasting 10 years with regular ups and downs but no clear upward direction? I hope it is not the latter. At least we currently don’t have to worry about inflation with the lack of growth we are experiencing momentarily.