Baltimore — (TFN): How efficient are the markets? It is like asking how smart is the human race We all know the answer, but few of us are willing to suck in our pride and admit there are a few dim bulbs among us.

Judging by the sudden rise in fame of Levi Johnson or Balloon Boy’s antics, the human brain is far feebler than we give credit.

And so are the markets.

Our trip to Paris served as a brief distraction from the “good news” chatter that MSM floods us with. “Global confidence index holds at record high as signs recession has ended,” reads Bloomberg. Yesterday, Chairman Ben indicated that the recession is over, sending stocks and commodities higher.

The worst global recession since World War II is ending faster than previously thought, but the recovery will still be a slow one, the Organization for Economic Cooperation and Development (OECD) said today (Thursday).

A rise in existing home sales last month shows things are getting better in the U.S. housing market, but the still-dire unemployment situation and the looming possibility of a jobless recovery may halt the rally by the end of the year. That makes the extension of an $8,000 tax credit for first-time homebuyers imperative.

Even as investors get more and more bullish about the outlook for the U.S. economy, the economy’s underlying foundation continues to erode.

Yesterday, the euphoria on Wall Street broke for a while as investors paused for thought to digest crappy July retail figures. Even with the feds funneling borrowed cash into the economy and high-profile government boondoggles such as the “cash for clunkers” program working, Americans are still doing the sensible thing and cutting back on spending. July retail sales dipped 0.1%, and the Dow, the S&P 500 and the Nasdaq all took lumps.

The rally in US stocks that began on March 9, 2009 has seen a 49.4% gain. And despite our deep suspicions here at Notes, it’s lasted 22 weeks. Does this mean we’re tempted to buy into stocks now?

We love surprises! But only when we see them coming. We’re always wondering: how will we be surprised? What will happen that we don’t expect?

Bernanke sticks to the script…  Pound sterling comes under pressure…  China starts shopping for assets…  BRIC MarketSafe lights up the phones… And Now… Today’s Pfennig!