Bottom?

If you look at various blogs that discuss financial matters there is a lot of discussion about the current rally in the stock market. The most prevalent view seems to be that this is not a "legitimate" rally, but any of the following: Bear Market Rally; Sucker's Rally; Government Manipulated Rally and I'm sure quite a few others. You don't see too many arguing that it is a legitimate "bull market" rally.
The reason the rally is questioned is because there are still many problems with the economy. Unemployment is still increasing although based on the latest numbers not as quickly. There are still a lot of potential credit issues in the market, including bad mortgages, credit card debt that may default, commercial real estate and significant reduced economic activity. These are all real concerns.
The recent financial crisis was in my opinion caused by the bursting of the real estate bubble. It led to a reduction in equity to almost all property owners. Equity in homes had been considered a source of funds by many people in this country. When the equity went away, not only did we have all the foreclosures (still continuing) but also people in houses that didn't go to foreclosure, didn't have enough equity to refinance or take out a home equity loan. So the economy will bottom when housing stops losing value.
The latest statistics seem to indicate we may have reached that point. Prices are down from a year earlier, but may have stabilized on a month to month basis. If that is so, and the data is inconclusive, we will see increased economic activity. However, with all the wealth that was lost, we can't expect a jump to the levels of last year anytime soon. If you start from a lower overall level of economic activity, the recovery may be very slow with bumps along the way, but a recovery none the less.