"'Because fear is leaving the market.' - Because they want Joe Retail trader to believe so."
-- Retail investors still, for the most part, aren't in the equities market; they seem to be largely in bonds.
"' 1) It looks like the Irish Banking system will be backstopped/bailed out by EU.' - If things are so great then why are bailouts continuing?"
-- I don't think things are 'so great;' I think they're improving. The risk of a double dip is becoming smaller.
"'2) Recent data suggests that inflation remains dangerously low, supporting the Fed's decision for QE2' - The shear abundance of debt is squashing artificial inflation. Artifical inflation is under heavy critique and won't continue much longer."
-- It is a risk, and it is possible that the incoming Fed governors will reduce QE2, but as very low inflation numbers continue to show up, the Fed will likely print the full $600 billion. (my opinion)
" '3) The GM IPO ...' - Over priced junk."
--That is your opinion; it happens to not be the opinion of the people ponying up the $22 Billion, none of whom are retail investors like us.
" '4) Lots of cash on books...' - Lots of debt also. Look at both sides of the balance sheet, not just one side. Why do you think companies are holding onto lots of cash. Incase the debtors come a knocking? "
-- Indeed, having cash on hand for another crisis is prudent and widely practiced right now by companies. But debt has been restructured and refinanced at very attractive interest rates. This helps the balance sheet: lower debt service, more cash to grow your business when the coast looks clear. Hopefully, corporate sentiment will continue to improve, and investment/M&A will accelerate.