All you need in this life is ignorance and confidence, and then success is sure.” So said Mark Twain in words worth pondering as markets digest whether a late winter rally can blossom in the spring.
Policy makers are trying to supply the confidence. Just like Barack Obama, the US president, Ben Bernanke, the Federal Reserve chairman sees the contraction in markets subsiding, the first necessary step before a recovery.
Wen Jiabao, the Chinese premier, sees the world’s third-largest economy in “better than expected” shape as its massive stimulus package starts to bite in the second quarter. Saudi Arabia, believing crumbling oil demand will stabilise in the second half, is not rushing to cut output further, even as oil inventories overflow.
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