Holding up the stock market

Oil is over $100 per barrel and gold is approaching $1000 per ounce. Consumer confidence just hit a 15 year low and every statistic about the housing bust just keeps on getting worse. Unemployment has spiked upward and so has price inflation. How has the stock market managed to hold its own under these conditions?

One factor was the surprise cut in the Fed Funds rate, another was the announcement in the media of a bailout of Ambac and MBIA, the bond insurers. Now we have the rating agencies reaffirming their AAA rating on Ambac’s and MBIA’s credit ratings which must be maintained. The rating agencies are basically admitting that their rating services are nothing but a sham. What kind of strong arm tactics will they use next? 

All I can say is that its a good thing we have come “decoupled” from the Chinese market as they have lost 30% of the value of their stock index in the last four months (or 90% on an annualized basis:)