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The markets are certainly shrugging off any thoughts of Seasonally Affected Disorder - they're happy as Larry after the Fed chopped interest rates by a whopping 50 basis points last Tuesday. Run on the banks you say? U-turn by the Bank of England? Another crisis waiting round every corner? Piff and fipsy say the markets - "We've got a one way ticket to the MOON!" they holler.

Things were certainly buoyed by the results of several investment banks last week. Top of the class goes to Goldman Sachs who saw a 79% increase in net income in the three months to the end of August. Those clever clogs earned a gold star by shorting the credit markets. Bear Sterns skulked in the corner wearing the dunces hat after seeing their earnings tumble by 69%.

But the longer term picture is gloomy - particularly Stateside where new house starts are at a 12 year low and there is real fear that a serious slowdown or even a recession is on the cards. However, their strain of economic 'flu may not be what the rest of the world catches - what with Asia and Europe being less reliant on US sales than they used to be.

The story in the UK is harder to predict - former Fed supremo Alan Greenspan thinks that the UK housing market is about to take a turn for the worse. He reckons that the greater proportion of variable mortgages in the UK compared to the US means we will struggle more as the cost of borrowing rises. Tough times lie ahead for the corporate buy-out market as well with lending set to stay expensive for the foreseeable future.

But what does it all mean for the markets this week? At the moment, there is a seriously worrying amount of incautious optimism out there. It's as if everyone thinks a big dose of wishful thinking will see things through to the other side. But the drip drip drip of bad news hasn't dried up yet. A fund house collapsing, another bank getting in to trouble - that trickle could become a flood.

Do you agree? Are we out of the woods yet or can't the market players see the wood for the trees? Cut through the mixed metaphors and make your view pay

This month so far, the FTSE has averaged a 10.2 tick gain each day, compared to a 2.6 tick loss per day in August.

For the last three weeks the FTSE has seen 2 down days and 3 up days per week.

There is a 72% correlation between the direction the FTSE moves on the day and the direction the DOW moves on the day over the last 3 months.

Alistair Darling dyes his eyebrows on a weekly basis in order to (quote) "scare little children".

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