Confidence trick

The Reuters/University of Michigan final index of consumer sentiment is out, and Bloomberg reports confidence among U.S. consumers rose to its highest level since November.

Record low mortgage rates, cheap gasoline and surging stock prices are providing some relief to the beleaguered American consumer in the face of mounting unemployment and tumbling home prices. Improved confidence may keep consumers spending, helping to pull the economy out of its slump in the second half of the year.

Well, let’s have a look at that. Will mortgage rates stay low? Will stock prices keep surging? Will gasoline stay cheap? Well, maybe, if the stars continue to align, and financial institutions continue to monkey with their numbers. But it doesn’t look as though unemployment has stopped falling or that house prices have stopped sliding (not in those key FL, CA, AZ and NV neighborhoods, anyway. Not to mention MI).

There are plenty of people calling recent stock movements a bear market rally. As Henry Blodget over at Cluster stock puts it, pundits agree: It’s a new bull market. So be very afraid.