These market spikes could be just a tease, as the real economic problems have not been solved
Surging markets have fuelled much talk that we may have finally reached the bottom of this recession. But these so-called bear market rallies have a history of turning bad. Japan had four such spikes during its Lost Decade in the 1990s. There were seven of them during the Great Depression. Some analysts argue that the fundamental problems with the economy still haven’t been resolved: from the housing bust to the huge losses that have yet to be cleared from the books of banks around the world. There are certainly positive signs that the economy is experiencing a spring thaw, but it may be a few months yet before we can start popping the champagne bottles.