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I am not buying that argument at all. They did pass the stress test but it was expected. Are we suggesting that the government was going to come out say Folks we are screwed, our banks have failed. Well I am not suggesting that they have massaged the results of the stress test but what I would say is that the economic criteria set for stress test by the regulators and the government simply can't incorporate all the uncertainties going forward.
Yes the banks had a good strategy that made them money in the first 3-4 months of 09. And the reason for that is simple the Dysfunctional market allowed them to make a huge spread on trading securities but this can't be a long term strategy. You don't need leverage these days to book a healthy profit because there are so much of bargains out there but as I said this won't last for very long.

Yes we are seeing the credit market starting to show some positive movements but by no means it's back to where it should be to support a speedy or sustainable recovery.

Folks are busy picking the bottom. I wonder why? Shouldn't we just take a step back and use our common sense. Well the reality is simple. The markets will recover but not today or tomorrow. I just hope that we just don't run out of Gas before we approach the recovery line. We should prepare ourselves for the road ahead. We are going to face huge tax rises, high interest rate and less government spending as the governments around the world try to fix their balance sheet. So I am quite confident that we are not going back to the growth rate of 05, 06 or 07 anytime soon. So why all this Euphoria? Yes I want to be happy too but let's keep it real please. As I said that the expectations are so low that anything above expectation is sending the markets into huge rallies. I never bought the argument about market being efficient and always forward looking.

What I am suggesting is that guys our future is at stake here so let's not screw it up. We are already paying for the mistakes made by some of our friends. Guys working for a profit making arm of an investment firm lost their jobs because the other guys at the same firm forgot to apply common sense and screwed up. We make a mistake that's not the point but we shouldn't keep repeating it. We have already borrowed heavily from our future generation, so let's apply some common sense.

Concluded.

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.