The rosy outlook …
and how you could read it 
We learn again, that it is not the news, but the expectations around it what makes markets move.
Means … if you expect the world to end … everything less is positive.
Today’s news was taken again positive as markets rebalance after the huge March expiration and ahead of the end of Q1 and … more important … end of Japan’s business year.
Still deleveraging going on as commodities still unwind and chinese market still under pressure as trades with paper profits on are unwound to meet margin calls.
OK … here we go …
News 1: JP Morgan will hike offer for Baer Stearns from 2$ to 10$ and takes 39.5% of Company via a share sale by Bear (allowed by Delaware law)
Market thinks: Good … so … more value at BSC as expected … means situation of the whole market should be better.
I think: Even more confidence in the american system shattered as even the highest paid lawyers are not able to do a deal without STUPID ERRORS. This costed JPM around 1 billion $ and makes the deal even riskier as before. If one looks at the current solution … issuing 39.5% in new shares to make it work … this could have been done earlier as well … 
News 2: Existing home sales up(?) first time in 7 months.
Market thinks: UP … good … the bottom is in …
I think: Figure still about 23% DOWN year on year and(!) prices down a RECORD 8.2% year on year … everyone who reads a bottom into this … Good luck
News 3: Former Countrywide executives form new Company to profit from buying mortgages, repack them and sell them at a profit.
Market thinks: Good … bottom in … it is backed by BlackRock …
I think: As long as there is too much money around, which is used so wrongly … this can never be the bottom …
News 4: Homebuilders complete a BULLISH “W” formation … now up more than 23% YTD … up more than 50%(!!!) from the bottom in January
Market thinks: Good … everything will be fine …
I think: So market action is NOT at all bearish … so maybe time to sell them again??? They had their day?
So … even as I lined out some days ago the BULLISH short term(!) reasons for the market to recover, I’m stunned … even close to being shocked, how RAPIDLY, everyone is BULLISH again … maybe after the end of the quarter we are due to some weeks of calm sideways markets???
Still by far too many real problems are not fully addressed … this whole thing needs more time … I don’t see any chance for “business as usual” as the market suggests today … especially its “cheerleaders” on the TV …
Tags: Bear Stearns, Countrywide, home sales, homebuilders, JPMorgan, outlook
