Consumers shook off the cob webs and made an exceptional comeback over the past 12 months. They are still tenuously overextended, however, and are unlikely to provide a necessary boost to economic growth in the coming quarters without serious improvement in wage or credit growth. The household debt ratio remains above the long-term average, but is returning to a more appropriate level and indicates that the consumer balance sheet is slowly being realigned. Fortigent also comments on government responses to sliding stock prices, and the week ahead.

Despite the $1 trillion rescue package, Greece and other small European countries will probably still default on their debts. As it stands now, Greece faces two scenarios: default or endure years or even decades of deflationary growth. The root problem for the PIGS is lack of competitiveness within the euro area - an inevitable consequence of the one size fits all interest rate policy. Even if the PIGS governments could slash their fiscal deficits, the lack of competitiveness within the euro area calls for years of relative deflation.

News was generally supportive of equity prices last week following the decision by European countries and the IMF to provide financial support to the euro area. Fears of a 'double-dip' recession are beginning to creep into popular lexicon, however, after the possibility was raised by the likes of economist Nouriel Roubini and Research Affiliates chairman Rob Arnott. Those fears appear unfounded in the near term based on the recent Philadelphia Fed survey and the current steepness of the Treasury yield curve.

Last week's sell-off clearly resulted from a buildup of tension in technical factors coupled with overriding concern about the unfolding debacle in Europe. Numerous signs were flashing the caution light prior to last week. On the other hand, even though the technical factors were ready for a breakdown, a majority of the economic releases from last week suggest the recovery is still in its infancy. Investors should brace for another volatile week following the announcement that Europe will ready nearly $1trillion to bolster its capital markets.

Last week, Standard & Poors downgraded the credit ratings of both Greece and Portugal. Citing the blatantly obvious, S&P pointed to Greece?s 'political, economic and budgetary challenges' as the reason for the downgrade. More troubling for holders of Greek debt was the revelation that S&P only expects a recovery between 30 percent and 50 percent of capital should Greece be forced to restructure its debt. The recently finalized bailout from the IMF and European Union will stave off those concerns for the time being, but Greece will not be out of the clear for another several years.

It is clear that more and more people are becoming cautiously optimistic about the recovery unfolding around the globe, but a number of risks remain unresolved and will likely stay that way for years to come. That should provide plenty of fodder for both economic pessimists and optimists. Investors should brace for a bevy of news from every angle this week. The Federal Open Market Committee will meet on Tuesday and Wednesday to discuss the latest state of the economy. Expectations are for the fed funds target rate to remain within a range of 0 percent to 0.25 percent.

The world is entering a period of rapid aging unlike any we have previously seen. According to a recent report by Neil Howe and Richard Jackson there are several key implications due to an aging population. As populations age, decreased mobility and adaptability will restrain economic growth and entrepreneurship, leading to higher public deficits as governments shoulder a greater percentage of health and retirement costs. Fortigent also examines the impact of the SEC investigation of Goldman Sachs on equity markets, and the week ahead.

It may be convenient to assume that a revaluation of the Yuan would lead to a readjustment of the US trade balance, but it is more likely that production would merely shift to the country with the next lowest costs. Gains in Chinese imports in the early 90s came at the expense of imports from other countries. In addition, politicians fail to recognize that many manufacturers in the US import production inputs from China, and so a currency revaluation would directly affect their ability to remain competitive. Fortigent also comments on rising equity markets, and the week ahead.

As much as we would like to assume that a 30 percent peak-to-trough decline in home prices returned housing prices to fair value, that may not be the case. Housing markets are proving that an endless supply of liquidity can only mask underlying weakness for so long. Without jobs, no amount of principal forgiveness or interest rate reduction will allow homeowners to suddenly begin paying their mortgages again. Fortigent also comments on the IMF's plan to back Greece's debt, the new Federal Reserve public relations tour and the week ahead.

Equity markets posted gains last week on news that inflation was muted and that the Federal Reserve would continue holding down interest rates at low levels for an extended period. The core consumer price and producer price indices rose just 0.1 percent in February, and the Fed's target federal funds rate remained between 0 and 0.25 percent. Leading economic indicators, however, have taken a weaker turn in recent weeks. Negative contributions from a shorter manufacturing workweek and falling stock prices were the biggest detractors.

A number of reports released in the past several weeks confirmed that global trade is rebounding sharply from its 2008/09 lows. Relying on exports to drive economic growth is a perfectly plausible strategy, but final demand in many of the developed economies is unlikely to return to its previous highs in the near future. Maxey also examines the failure of small businesses to join the recovery, and the week ahead in economic news.

The Federal Reserve Beige Book confirmed that the economy shows signs of expansion, but that labor markets show only tentative signs of improvement. The S&P 500 went up 3.1 percent and the Dow Jones Industrial average increased 2.3 percent after last Friday's employment figures were not as bad as expected. Real estate activity is picking up, but officials are still apprehensive about what will happen when the home-buyer tax credit expires at the end of April. Maxey also looks at this week's upcoming events and releases.

While some in the financial press blame credit default swaps for Greece's fiscal woes, the impact of CDS on the country's finances is actually quite small. Greece racked up massive amounts of debt long before CDS even existed, and net CDS have hardly moved as the Greek financial crisis has spiraled out of control. Maxey also comments on rising equity prices, improving GDP growth, new restrictions on short selling, declining housing figures and this week's upcoming data releases.

Equity markets settled down tremendously this past week after a week of volatile trading, posting a 3 percent gain for the S&P 500 index. Subsiding fears about the impact of Greece on global markets support market gains. The CBOE Volatility Index fell in February to 20 from a high of 27. Maxey also comments on mortgages, inflation, and upcoming data releases.

Equity markets were still oversold based on a number of momentum and sentiment measures last week as buyers pushed the both the S&P 500 and the Dow Jones Industrial Average indexes to volatile 0.9 percent gains. Headlines this week should center on Greece's bid for explicit financial support from other Eurozone members, as well as a slew of new economic data.

Fortigent senior analyst Chris Maxley says equity markets are quickly approaching oversold territory. The S&P 500 lost a mere 0.7 percent last week despite heightened market volatility. Sovereign credit issues continue to loom over markets, and improved earnings are still not inspiring traders.

This is a review of last week?s market activity and economic data announcements, with a focus on the GDP announcements from the UK and the US.

?Some pundits saw fit to blame China for the recent pullback [in US equity markets], as a result of the monetary tightening occurring in that country, but such an accusation is unfounded in our opinio

The problem for the Treasury moving forward is twofold. For one, interest rates have nowhere to go but up. At the end of 2009, the average interest rate on all outstanding US debt stood at 3.3%, a f