A Sucker's Rally?

Buttonwood warns:

Teun Draaisma of Morgan Stanley, who has made some good market calls in the course of this crisis, does not think the bear market is over yet. He thinks there are further hits to be taken on earnings and house prices and there is still bad news to come on banks' balance sheets.  He makes a very good point on housing, the subject of many posts on this blog; the average duration of downturns has been 43 months, against 28 so far this time. And US house prices have never bottomed when unemployment is still rising.

So the balance of evidence suggests this rally will peter out before long.  Alas, we probably need to plumb some greater depths of despair before this crisis is over.