"No green shoots, not even yellow ones"

Pessimism is our state of mind of the day.

After all, as I think I might have mentioned once before, even the chap who invented optimism defined it as the understanding that one has no right to expect things to be any better than they are.

It was reported yesterday that Sir Supreme Dalek reckons that the recovery will be italic I shaped: "A gentle rise maybe - back half of this year or second half of this year will look better than the first half. I think 2010 will see a recovery of sorts, a pretty anaemic recovery."

The cycle certainly appears to have bottomed earlier than a lot of people anticipated back in March, but aren't we still a bit, well...fucked? Indeed, are we not still, in the words of John Lanchester, "like the cartoon character who's run off the end of a cliff and hasn't realised it yet."?

In the UK national debt will soon hit 79% of GDP and will cost up to £47bn to service...more than the current transport budget. The average British household still owes 160% of its annual income. This is bleak enough and will surely take decades to sort out.

The optimist might say that everyone, banks included, is now starting to emerge from what was after all a severe, but temporary liquidity crisis. What would the pessimist say?

Some of the most important global financial institutions undoubtedly possess holes of an unspecified magnitude on their balance sheets. In a normal world we'd declare them insolvent, but in this particular world we've collectively decided that their situation is more like the kind of negative equity that many of their customers are suffering from — in other words, time for the banks to just carry on as best they can and hope a future rise in asset prices will provide the de-tox.

Bail-outs, recapitalisations, TARPs and TALFs have all been deployed to deal with the terrible uncertainty that has come to surround the solvency of the banking system. Truth is though that this 'uncertainty' is rather convenient, because it suits the banks (and now a whole load of taxpayers) that certainty about the true value of some of their assets should be postponed indefinitely. Like..walk slowly and hope your arm doesn't drop off and maybe nobody will spot that you're a zombie!