The stock market rallied this week, but a British financial article from Tuesday, now being passed around American trading desks, postulates that the worst is yet to come:

The avalanche of bankruptcies has begun. Six US companies of substance have defaulted on bonds over the past fortnight, against 17 for the whole of last year.

As a "non-believer" in the instant rebound story, I am not easily shocked by gloomy reports. But the latest note by Standard & Poor's -The Bust After The Boom - gave me a fright...Diane Vazza, S&P's credit chief, says defaults are rising at almost twice the rate of past downturns. "Companies are heading into this recession with a much more toxic mix. Their margin for error is razor-thin," she said.

And here's the (ahem) money quote:

US consumers are juggling plastic to put off their day of reckoning. The Fed survey said credit card debt had jumped 6.7pc in the first quarter to $957bn, or $6,000 per working American, despite usury rates near 20pc.

"My guess is that many Americans continue to run up massive credit card debt because they have little intention of paying it off," said Peter Schiff at Euro Pacific Capital. Quite.

Is the market's staying power, in some sense, being fueled by a new surge in "subprime" borrowing--that of plastic form? The numbers suggest that this may be, at least to some degree, the case. If so, we may have a long road to tread before the true economic consequences--and the political realities they create--shake out.