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I am beginning to think that the lack of common sense is what got all us into this Mega Mess. The problem is that common sense is still missing and I wonder why?

The markets are rallying and it's good but shouldn't we do a reality check before we get too carried away? I mean the expectations are so low that any number above the bottomless floor is sending the markets into rallies. We all want rallies but sustainable rallies please that are supported by solid fundamentals and not driven by speculative play. Folks are talking about recovery against the backdrop of some pretty bad numbers. Yes we are now seeing some mixed numbers (some positives) come out from the 1st quarter but the real economy is still hurting.

To get some perspective let's just look at the numbers out today from the UK (May 01, 2009).

According to the Government figures out on (May 01, 09) nearly 5,000 companies in England and Wales went into liquidation in the first three months of 2009 and a record number of people succumbed to insolvency.

The Insolvency Service say that company liquidations rose 56 percent on a year ago to 4,941. Personal insolvencies rose 19 percent on a year ago to 29,774, the highest since records began in 1960.

The unemployment is now probably close to 8% in the UK. Not to mention the declining house prices.

Now let look at US. The unemployment in places like Detroit is over 14%. Average unemployment in the US is close to or above 10% already in at least 4 states. Consumer delinquencies are at historic high levels in the US. And what about EU well the unemployment in Spain is already around 17% and the growth prospect is pretty bad.

People on the street are still hurting. But some might argue that the consumer confidence numbers out suggest otherwise well. I wonder if the consumer confidence numbers are the type of real silver lining we should be looking for or a company loosing a little bit less money then expected. I surely think it is unwise for anyone to speculate about the earning prospect of any company in this current environment. Yes some companies will make money no doubt so if their stock goes up. There is a justification for that but I don't see the justification for a massive rally.

Let's let look at the Banks. Some of them have made money in the 1st quarter of 09 but the devil is in the detail. They are not making money on their Loan book but on trading securities, assets, commodities etc. Are they suggesting that their trading business will keep on generating enough money to cover for all their potential losses on the loan book?

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Sanjeev Kumar is Chief Executive Officer of Delamore & Owl Group of Companies (Website: www.delamoregroup.com), Toronto, Ontario, Canada. He holds dual Master's Degrees - one in Business Administration and another in International Finance. He has been the recipient of the "Southeast Asia Young Achiever's Award" for Year 2002.