It’s hard not to notice that the markets have completely forgotten about fundamentals and instead are trying to bring “irrational exuberance” back into style. Raging bull markets that have lasted for years and years with one bubble after another, and a year of economic slump is just too much for everyone to handle. Instead of markets moving up on good news, they are now moving up on bad news with the only silver lining being it’s not as bad as expected. All of the news outlets and of course CNBC are on hand to announce a bottom, and ready to light the fuse on another economic ICBM on every up day. This of course is all in light of tragic 1st quarter earnings and jobless claims that are reminiscent of the early 80’s.

Oil is trading as if there was an immediate shortage and demand was burning out of control. The real story is that the storage facilities have enough oil to make everyone realize there is plenty of oil in the short term. Even gasoline supplies were up and that alone should have signalled that the recovery has not started. Stephen Schork, the well known oil analyst is throwing his hands in the air with the sheer frustration of the mob rally. So why is it happening? Why all of the forward momentum? Why are the fundamentals being ignored? I couldn’t answer those questions today from a fundamental sense any better than yesterday, but something hit me last night as I was taking an evening walk with my wife through town. It was a beautiful night that was warm with the scent of spring, and I just had that incredible happiness that comes around this time of the year.

Throughout town there was one empty retail space after another, and one going out of business sale sign for every other one that claimed a bankruptcy sale. Definitely not the signals that a recovery was in play nor one that would let me know that it was time to start making investments.

In my own mind which I so proudly gauge as rational, I had an incredibly irrational thought. For a moment I ignored all of the evidence of an obvious economic decline right in front of my eyes and instead, thought that things are getting better all based on how I was feeling. It dawned on me that spring was here and everyone across North America and Europe must be feeling this. Could it be possible from a biological perspective that we are all feeling better physically and it is affecting our mental state positively enough to change our perspective, and in turn, our confidence? Could the markets and the economy have temporary spring fever? If so, what happens when the fever breaks?