The last two weeks have been a bit encouraging. Looks like the banks will survive, we have had some better than expected numbers in both housing (a shock) and consumer sentiment (downright amazing) and the markets appear to be coming back a bit closer to normal.
Ben Bernanke (whom I happen to respect a lot) made a comment that is refreshing. Rather than the same old lines of "everything is great' or "everything is doomed" he took a moderate approach. He went on to say that while things are far from where they should be, it looks like the credit markets are starting to come around a bit, and as we all know, the credit markets are what has powered this country (and now the world) since WWII.
Bernanke is in a tough spot. The laissez faire approach that led to the largest housing bubble, and an outright meltdown of the financial markets has happened on his watch. Did he create it? No. Did he exascerbate it? Maybe. But he is doing a few things right in my opinion. With some luck, we will make it out of this mess by year's end.
For the recovery, I still love the XLF to take part in the upside, while hedging the risk by being in an index.
Good luck all
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