Beginning in August last year, our credit-addicted financial system began to fail. And for the next 15 months, the government tried to intervene in that addiction with increasing urgency.

Unfortunately, the time between interventions halved following each attempt. Ultimately, with the collapse of Lehman Brothers and AIG (AIG), the patient was rushed to the emergency room, with its government “family” demanding that extraordinary measures be taken to save its life.

Hank Paulson, head of the ER, called “Code Blue,” bringing a team of specialists from around the world runningg to perform financial triage - effectively putting the system on life support. The Federal Reserve and central banks attempted to breathe life into it through immense liquidity facilities; Congress and other national governments tried to stimulate blood flow through promises of fiscal stimulus.

But while the patient is stabilized today, I would caution those who look at yesterday’s rally as the bottom. The patient remains on complete life support. Worse -- and at the risk of mixing metaphors -- the credit cancer remains in the body and is clearly growing.

To those forecasting a “V” shaped recovery, I would offer that, for that to happen, our financial system would, in effect, need to rise up off the operating table and proceed to dance like a Rockette in the Christmas Show - and that would have to happen today.

Unfortunately, that isn’t likely to occur any time soon. Notwithstanding the improvement in the short-term credit markets, the patient, after its numerous heart attacks, is extremely frail. Worse, rather than beginning the recovery process, I fear we have opted to put the system into the economic equivalent of a coma, in hopes of postponing recognition of the credit losses unfolding before us (through the suspension of mark-to-market accounting, for example).

Though the patient appears to be resting comfortably, it’s actually breathing only with the help of a respirator and being fed through a tube.

Even worse, the cancer continues to grow. With housing prices still falling, unemployment rising, and consumer balance sheets in disarray, credit losses are only getting worse. To me, it’s unrealistic to think we can begin any kind of economic rehab process before our enormous credit disease is destroyed - either through repayment or, more likely, thrpugh default.

Don’t get me wrong, a coma is better than death - and for that reason alone, we may continue to rally and rally hard from here. (Again, I would remind Minyans that homebuilder stocks rallied some 30% from their summer lows in 2006.)

But recognize we’re only now just out of triage. And, more importantly, please appreciate that the system has been artificially stabilized through an enormous increase in the Federal Reserve’s balance sheet. Finally, with the change in administration at hand, real treatment will only begin after the New Year.

Again, the good news is that the system survived. But the cancer remains. It’s growing. And while more medication is promised, until I see the system breathing on its own, any hope of a recovery is just that: mere hope.