Bond Outlook April 22nd

Whom do you believe? Geithner and his assurance that the banks have little need of additional capital, or the IMF and its figures of total losses worldwide at USD 4.1 trillion of which half is in the USA (being mainly in banks and far from being fully disclosed?). Is it the strength of US Banks that has led them to ask the US Government to repay bail out money early, or the relaxation of the rules regarding how Securities are marked to market? Are the green shoots of recovery as robust as Lawrence Summers contends, or is the financial system still a long way away from health, since deleveraging of the private sector has scarcely begun, as, for example, Martin Wolf writes in the FT today?

While there are always optimists and pessimists over the economic situation, these times demonstrate how a given...