Despite rising Treasury Note yields, US stock markets yesterday closed at their highest level for 2009. Also, commodities were driven higher by reports indicating that the recession is abating, but the US dollar retreated on concerns of the huge issuance of government bonds.

Elsewhere, Chrysler completed its deal with Fiat, the US Treasury Department announced that ten banks would repay TARP funds, and the Obama administration is dropping its plan to cap salaries at firms receiving bailout funds and has backed away from a large-scale reduction in the number of agencies overseeing financial markets.

Coverage of these events on camera this week included discussions with John Hussman, Chris Whalen, Peter Peterson, Paul Krugman, Mohamed El-Erian, Laszlo Birinyi, Jim Rogers, Jim Grant and Francisco Blanch.

The selection kicks off with the highly regarded John Hussman sharing his wisdom and concludes with an interesting snippet on Africa as an investment destination.

It seems that the market’s 500 point positive reaction to the US Treasury’s Public Private Invesment Program was a resounding vote of confidence. Then again, given the many headfakes the market has given us over the last year (anyone remember October’s 900 point day?), the market doesn’t seem the greatest judge of fiscal policy effectiveness. So, what exactly is this new plan and why is it going to save the day? 

The Proposition The exact numbers seem to be conflicting. Some claim that the government will take an 85% equity stake. Others a 50% equity stake. What we do know is that the entire plan is to create upwards of $1 trillion in availability to buy so-called “toxic” assets off of bank books. $200 billion in equity capital will be contributed and the FDIC will provide a non-recourse loan to lever this capital up to 5x.

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