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--Didn't anyone notice the "if?"

--Stocks in the U.S. were up overnight. Here in Australia, the blind are following where the deaf boldly lead. But is anyone listening? Or is everyone too busy hoping?

--What we're talking about are Ben Bernanke's comments.

The news headlines read that he predicted the recession will end later this year and the American economy will recover in 2010.

But that's not exactly what he said.

--Here exactly is what he said, "If actions taken by the Administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability--and only if that is the case, in my view--there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery."

--If you wanted to put it another way, it might go like this:

If our plan is successful to solve all the problems, then all the problems will have been successfully solved according to the plan.

--How inspiring is that? Does it give you confidence that these guys have any idea what they're doing?

--What the system needs is more instability, not less. That is, prices and asset values need to fall to their real level to restore confidence. In this sense, a proper recession is the cure for uncertainty and instability.

--Yes, we know this is in direct contradiction to what elected officials are telling you. But think for a moment of a man who's done nothing but eat greasy and fatty foods for a year. He's on his deathbed. His arteries are clogged with fat and cholesterol.

--Now you couldn't improve the man's health by telling him to feel better about himself.

"C'mon big fella. Buck up! Have another cheese burger. With bacon. And avocado. This whole being morbidly obese and killing yourself thing is all in your head.

You gotta get your mind right!"

--You could tell him all that. But it would be bad medical advice. In the same way, our financial mal-practitioners have mis-diagnosed the economy. Confidence is not the problem. Bad credits and loans are the problem.

--You restore confidence when you directly address the problem.

Investors get out of cash and back into shares or property when they have demonstrable proof that the banks aren't hiding/lying any longer.