One thing I cannot comprehend is that we are witnessing a recession or we are, in fact, in a recession but the equity markets still rally on poor corporate earnings,poor personal consumption expenditure, poor consumer sentiment as well as the housing bubble as well as the credit bubble.

is it due to speculation or that the additional liquidity injected into the financial markets by the Fed has found its way to the equity market so that the excess liquidity fresh from the printing money has been doing the magic ? or that the loose monetary policy, enhances fiscal stimulus as well as the additional rate cut by the Fed of another 25 bps have converged to become the magic touch ? In this investment climate when the dollar continues to tumble whilst the prices for food, energy have all shot up as well as other commodity prices so that the impact of inflation has become very massive that we may not only witnessing recession but probably stagflation instead and even with the dollar as the world’s reserve currency could not save the U.S. from a recession that how could we have a revitalied stock market?

Are we in for another South Sea Bubble? or going through bubble cycle? and very likely Ben Bernanke is repeating the same old game of Alan Greenspan by keeping the Fed Funds rate to the ground ( 1% ) so as to jet up the economy irrespective of hyperinflation or stagflation?

I personally believe we may be in for a big storm.