Rallies keep emerging out of potentially disastrous economic scenarios like a relentless zombie in a ' i thought it was dead' horror movie. The bulls look at the market this way.
Greeks will pass minimal legislation and a template for EU debt will emerge.
Stocks represent lean mean cash machines which are offered at a discount to future earnings.
All domestic government spending is going to decline which will please those who have jobs.
Those who have jobs represent a solid base from which further real declines are not likely and are enough to make the economy expand ever so slightly.
A drive out of government fixed income and into all corporate risk is about to take a giant leap.
Spreads between after debt service on rentals and the rents paid is widening which means the housing bust is over.
Bears on the other hand see it as a simple matter of jobs. They will give in when big job growth appears.
There is an interesting article in MarketWatch by Brett Arends reviewing data from Trim Tabs of corporate buying of their own stock to the tune of $124 billion in the first quarter. This money came from profits and a whopping increase in corporate borrowing by non financial firms of a $100 billion dollars, raising corporate non financial debt to a record $7.3 trillion.
