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Good article at the Financial Times from yesterday evaluating the current state of the economy and the potential for a government rescue.

In other words, fundamentals are dire and will probably remain so for the rest of the year. So why the rally today? Indeed, credit spreads have been resilient since the beginning of the year and have outperformed stocks. It seems that there is recognition that the only way the global economy will recover is with strong intervention from government. While there are some on the fringes who look to Hoover rather than Keynes, there is a consensus among most economists that a large fiscal stimulus is required to complement the relaxation of monetary policy. Preferably, countries running a surplus such as Germany would step up and increase their domestic consumption. China is playing its part. But the decoupling theorists have been improved wrong and it is imperative that the US reignites its growth engine.

I see things  much the same.  If we are going to be pulled out of this mess we are going to be pulled out by strength abroad.  The government will not be the growth engine of a new bull market just because they created a few million new infrastructure jobs and spent some money on the lawn at the Smithsonian.  Unfortunately, it could take many months before we begin seeing a translation from international strength to corporate balance sheets….And that’s assuming that international markets are stabilizing.  Still a big question….