Easy Spirits

The weather in Brunswick is outrageously gorgeous today, and good spirits are easy to find. It seems that the case is the same on Wall St. Over the past few weeks, the mood on the Street seems to have taken a turn towards optimism. Many CEOs of the top banks--with the notable exception of Jamie Dimon at JPMorgan, have expressed a belief that "the worse is over." A favorable earnings season, especially for technology companies, has contributed to this sentiment. But, with credit spreads still high, it is clear that not all share this view. There are many reasons for continued pessimism--not least of which is the fact that systemic leverage has not down nearly enough to be realigned with historical averages. If consumers are forced to unwind, they spending will abate, with negative consequences for corporations, especially those burdened with considerable debt. Is the crisis near its end? Or has it barely begun? Time will tell...