IMHO, I've come to believe that some of the TARP/TALF money is being used by banks as investment capital, with, I'm guessing here, some level of collusion between them, to drive stock prices up through coordinated buying. No one will investigate this because everyone is winning right now.
I see being in the market as being on the right side of the trade, right now. Last Wednesday, everyone freaked because there appeared to be a reversal to the downside, but that was just a head fake, maybe just to keep things looking honest.
Many people swore off the stock market in February and definitely in the first week of March. These are people that will probably take a long time to become reacquainted with market trends. Since things have been going up for almost three months since then, some of those people might be changing their minds and cautiously buying back in (finally).
The trouble is, as I see it, in three months, the market has roared back up to a level that usually takes several years to reach. Of course, on March 9th, everything was priced for Armageddon, so maybe this is partially a technical bounce. But, so much almost "free" money from the government is out there, and probably not even a third of it has been invested, at this point.
If these banks play it a little smarter this time, given all the PhDs on their staffs, they might actually get out near the top, with some profit. Something good to show their shareholders, maybe? Then, again, that'll make the markets go back down.
Then what?
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