Goldman & Lehman Earnings

Those were not good earnings. Those were horrid earnings. However, the end of the world that many were expecting did not come. It's hard to say for sure but the realization the world is not ending today is likely what's behind this rally. The Fed's rate cut today that everyone is yapping about on CNBC likely has nothing to do with it.

Lehman may not be Bear Stearns but it is still leveraged 30.7 to 1. Citigroup and many financials are hugely leveraged as well. Eventually the market will have to face a deleveraging of those assets. Huge additional writeoffs are coming. Furthermore, many homebuilders are going to go bankrupt and today does not change that. But that is not today's business.

Today's business is simple: The much anticipated end of world did not come. Looking forward however, the underlying economic fundamentals have not changed.