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I've personally always seen the stock market as a basic trust based market. When trust in the overall economy goes up, so does the market.
While trust is good, I do not feel that it can help with the fundamental errors made by the banking industries that led us to this economic state. Deregulation and lack of oversight (OTS, anyone?) let the bank run giant bets without having to back any of them, and now the entire economy owns it all.
As we are bailing out these financial institutions, we as taxpayers are picking up all the penalties. I'm not an economist, but I don't see why we're not (temporarily!) nationalizing our banking system, breaking it back up into the smaller institutions it once was (before gross debt hedging allowed them to buy and merge with all their competition) and stabilizing the thing. Then, if any money was made, it could pay us back, and we could sell the resulting companies off to whomever wanted them.
Still, that's for another thread. What it really comes down to is that though a recovering stock market shows trust in the economy overall, it doesn't necessarily mean anything is fixed. Just that people think it's not going to get much worse.
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Don't mind me. I'm just releasing the insanity pressure from my headvalves.
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