The markets may be stuttering…with the euro suffering in overnight trading and stock indices down over a percent at today’s open…but a continued rally still seems the foregone conclusion du jour. We’re not necessarily going to question it.

They’re tearing down houses out west…as you’ve probably heard. It’s cheaper than going through all the necessary steps to get the houses mortgaged out, so banks are just bulldozing McMansions.

Ben Bernanke – the “Sultan of Spin” himself – came out Wednesday and echoed the misguided hopes of CNBC’s Trillion Dollar Survey from January.  He optimistically believes that the crisis will be resolved before the end of 2009…that 2010 will be a year of recovery.

We’ve been in a thirty-year bull market for US Treasuries, says Matthew Collins. And near-zero yields mean little reward for the risk of potentially buying into a bubble. Matthew says investors would do better to put their capital in select high-grade corporate debt or gold.

High yields don’t always mean high value, says Matthew Collins. Some Real Estate Investment Trusts (REITs) now yield an attractive 16%. But commercial real estate is in a perilous position right now. And Matthew says investors should resist the temptation to go bottom fishing just yet. Later in the year, there could be some great opportunities to cash in on a recovery bounce.

Tax-free municipal bonds with historically high yields might look attractive to many investors. But Matthew Collins says the risk is still too high. Bloated and inefficient local governments are facing funding emergencies as revenues tumble and credit is squeezed. As the recession deepens in 2009, Matthew says muni bonds should be avoided.

Obama’s ever-growing stimulus package isn’t giving the markets a boost. Matthew Collins says the Fed’s zero-rate interest policy has created a liquidity trap, in which businesses and consumers prefer to hoard cash than make risky investments. That makes stimulating the economy very difficult, and dampens hopes of an ‘Obama rally’ in the near future.

We are all being deceived by the nature of our banking system, says Matthew Collins. Fractional reserve banking is corrupt. And with the Fed at the heart of the scam, it’s no wonder things are so messed up. Matthew says it’s time we stand up and demand answers.