The price of a barrel of oil has passed the $122 mark for the first time. US light crude hit a fresh high of $122.73 in New York trading, while London's Brent crude has passed $120 for the first time, hitting $120.99.

“The world's favorite season is the spring. All things seem possible in May,” said Edwin Way Teal. And so it seemed during the past week as we witnessed a further improvement in investor sentiment and risk appetite, supported by the viewpoint that the worst of the credit crisis might be behind us.

The last week was characterized by investors increasingly taking the view that the worst of the credit crisis was over. They seemed to be shrugging off further substantiation of the dreadful state of the US housing situation, as they digested the latest round of quarterly earnings reports.

It’s Earnings, Stupid! Or so it seemed during the past week as the stock market took its cue from a host of better-than-feared earnings reports, propelling the S&P 500 Index 4.3% higher – a bigger gain than for the entire 2007. And what a swift turnaround it was after the market got “GE’d” and was in sackcloth and ashes by the close of the previous week!

Another crappy day in the market as General Electric stoked concern about the health of corporate profits and the wider economy. The major indexes were at times down more than 1 percent.

A sense of relative calm descended upon financial markets over the past week. Although fears about the outlook for the US economy persisted, a perception crept into markets that much of the bad news related to the credit crisis was now out in the open, with the result that the equity bulls had reason to feel rather pleased with their performance by the close of the week.

A breakdown of the economic advisers and general biases of the three likely presidential candidates - McCain, Clinton, and Obama. Interestingly enough, all three seem to lack hands-on experience in economics and all three have assembled teams very reminiscent of themselves. McCain has a roster of 37 advisers all of whom are supply-side, free market guys and Republican power players.

“This is one ‘mother’ of a market,” 83-year old market veteran Richard Russell aptly described what market participants were again faced with during the past week. Sentiment was fragile as the outlook was still dominated by the familiar cast of deteriorating economic data, housing woes and concerns about the financial sector.

What is the outlook for US bonds, especially as yields have edged up since their recent lows? Considering both technical and fundamental factors, I conclude that continued base formation is likely, but that long-dated bond prices could be hit hard once yields adjust to more realistic levels. Be careful – we're in injury time.

Phew – what a tumultuous week! Once again, the fall-out of the subprime mess had a lot to do with it. For some variety, however, it was not only financials that were in the limelight, but also commodities that corrected sharply.

The financial sector led a furious stock-market rally Thursday, with banks and brokerages snapping back from a deep selloff a day earlier, while commodities prices continued a rapid retreat from record levels.

Just a little oil news. Doesn't seem to be following any logic here. Expect a turnaround and to see the prices go up.

Oil futures extended their declines Thursday, sliding below $100 a barrel at times as concerns about the economy and demand for oil grew and the dollar strengthened.

Can money trees in fact grow to heaven? It was certainly beginning to look that way when considering the frenzied surge of many commodities to new highs week after week. But the past few days have seen commodity prices pulling back from their lofty levels. What should one read in this?

Follow the link to a short article on the outlook for commodities.

Sorry it took so long to post this article. Surprised no one else has.

The Federal Reserve on Tuesday slashed a key interest rate by three-fourths of a percentage point, moving aggressively to contain a credit crisis threatening to push the country into a severe recession.

Reams of articles and comments have appeared over the past few days on the Bear Stearns debacle. A particularly interesting viewpoint has just been penned by John Mauldin and is republished in this post.