It's amazing what a government initiative can do for short-term sentiment. Witness the rocket-fuelled rise of major indices today, driven up by the US Treasury's announcement of its latest (greatest?) plan to get private capital to co-invest into its toxic debt rescue plans.
Whilst the administration is (slowly!) starting to move towards action, I fear that the plans are still vague and far from solid. In this case, it will be a while before we find out if private investors are playing the game. To a large extent it depends on the Treasury's rules, which they are still tweaking.
Why am I so bearish on stocks? This rally simply doesn't have any strength behind it, aside from fumes. Corporate earnings are going to be awful for a while yet, with a rising unemployment trend. Not a healthy brew for an equity market.
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