Here we go again…The market had its best week since November. And just like that, there is chatter of light at the end of the tunnel.

Could the market actually be bottoming or near bottoming? Could the economy be showing signs of recovery?

Sorry. It’s going to take a lot more than consumer confidence edging up in March. I want to see…

• Manufacturing increasing. It went down by 18 percent last quarter. I guarantee you that it’ll keep going down next quarter.
• Non-defense capital orders increasing. They went down 5.7% in January.
• Productivity increasing. It went down in the fourth quarter. Too many workers standing around doing nothing as plants ratchet down production.
• Auto sales increasing. GM, Ford and Chrysler suffered through another month of sales falling 41 percent compared to this time last year.
• Retail sales increasing. They dropped “only” 0.1 percent in February – hailed as a sign of better things to come by several pundits in the mainstream financial media.

Give me a break…

Could it be that the financial media is reacting to complaints that it’s “talking the market down” by reporting on all these downward trends?

The popular media is not doing anyone any favors by reporting bad news as good news. So, what the heck is going on with the Wall Street Journal? Why is it getting into the “bad news as good news” act?

Listen to this dribble from Saturday’s edition (talking about last week’s market bounce)…

The rise in the stock market, even if it isn’t always a reliable predictor of the direction of the economy, could offer a sorely needed boost to confidence. ‘What you’re trying to do is reverse psychology,” said Robert Barbera, an economist at ITG, a research and trading firm. “‘You’re trying to get people to think of the glass as a third full instead of 97% empty. Once you do that, the enthusiasm about things improving can do a lot of the heavy lifting.”

Listen, I have nothing against Robert Barbera. I’ve never even heard of the guy. BUT WHAT HE’S SAYING DOESN’T MAKE ANY SENSE…

A “sucker’s rally” isn’t – and more to the point SHOULDN’T –make people feel confident.

Not when the economy is losing over 650,000 jobs a month…

Not when one out of every eight households is behind on their mortgage payments or in foreclosure. By the way, foreclosures surged in February…

Not when companies are cutting dividends and taking $41 billion away from shareholders last year and another $33 billion so far this year…

Not when people are seeing $11 trillion of net worth disappear over the course of a single year (in 2008).

And I haven’t even mentioned the 800-pound gorilla in the room yet…

NOT WHEN THE GIANT $27 TRILLION MORTGAGE DERIVATIVE MARKET HASN’T FINISHED UNWINDING.

Even if just $5-10 trillion of this giant market has to be paid off by the banks providing the insurance on these derivatives, that’s a big sum that the banks have no idea how to “handle”.

So, forgive me if a couple of banks cooing about revenues going up in the first two months of the year doesn’t get me excited.

And if you want to jump up and down in sheer joy from Ben Bernanke’s qualified statement that the recession could end by the end of the year “if the financial markets stabilize,” go right ahead.

But if that was the most bullish statement Ben could come up with, I’m thinking his heart just wasn’t in it.

Anyway, you know how I stand on this: There’s no way that the financial markets will stabilize.

Seeing the glass as a “third full” is dangerous if it leads you back to the stock market too quickly. As far as I’m concerned, even the “97% empty” take is too optimistic.

How about “99 percent empty”…

The market is taking a little break right now. Before long, it’ll be heading down – all the way down to near 5,000.

And this little interlude we’re having right now will be completely forgotten.

But there will still be some who blame the media … and others who blame a lack of confidence.

Give me a break.

Source: The Most Dangerous Con: Selling Hope