There are some confusions in the market. Is the growth in China real? Is U.S. on the verge of a V recovery? Is the market priced in 4% real GDP growth? Why crude oil went up over 100% with high inventory?
The growth is very high right now in China. How much is artificial due to Government intervention is debatable. But the growth is there and that is the reason couple with India and Brazil that pushed oil and other resources up.
U.S. is experiencing a deleveraging process which will last for several years. Most the liquidity provided by Fed went to treasury bill, emerging market assets and hard assets. The bubble in all these categories are starting to emerge. There will be pain when interest rate start to rise.
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