Drowning, not waving

Markets reflect investors’ best estimate of long-term value. Markets also reflect the strength of investors’ own short-term cash-flow. Right now, the second may be more relevant than the first. Equity, credit and commodities markets had fallen so far that the latest uptick is really a «feel less bad» rather than a «feel good» rally. But it is still dramatic. The S&P 500 index is up 27% since March 6 and the iTraxx European index of investment grade credit spreads has narrowed by 24 basis points...