Weekend Reading, Nov 30.

The blog Global Economic Anaysis highlights many of the news headlines on current topics. Some of them are:

Japan’s Factory Output Falls as Turmoil Hurts Exports
LandAmerica Goes Bankrupt
Lead Falls to Two-Year Low as Auto Demand Slumps; Copper Drops.
Housing is bad enough, but wait — it’ll get worse
China downturn deepens, European rate cut sought
Malls, hotels next victims in new mortgage crisis.
Woolworths Near Collapse, Risking 30,000 U.K. Jobs
Shopping malls are running on empty
Satellite Halts Hedge Fund Withdrawals, Fires 30 After Losses
FDIC adds 54 more banks to its ‘problem list’
Survey says Texas manufacturing outlook is bleak

I think you get the idea. News in this blog is about recession and depression.

Well, there is one more news item in Bloomberg. This headline says:
Stocks in U.S. Climb; S&P 500 Index Posts Biggest Weekly Gain Since 1974 

So, what’s going on ?
Possibility 1. The Markets have already discounted the bad news. The bear market is over.

Possibility 2. The markets are going through a bear market rally, probably disconnected with the ‘real’ world. This happens often. (Example: the boom in real estate stocks in India. Since 2006 September, I have been saying on CNBC – “the real estate stock price boom cannot be sustained. Share prices are going up on the wrong premise that companies will buy land for pennies, then sell it for millions. The business model is flawed because land is a very sensitive issue in India. But, brokers and fund managers went on singing the praises of these stocks. They were completely out of touch with the Indian environment.)