This week the stock market saw its largest increase since 1974, five straight days of hefty upticks. This surge occurred at the same time that a consistently awful string of financial and economic news was pouring in, not only in this country but around the world. So why this latest bubble? What spurred the great stock beast to its latest burst of excessive enthusiasm?
The answer is frightening. Really, really frightening. The U.S. government’s latest bailout, this time Citibank, demonstrated to all that any black hole any inept and greedy financial institution has dug for itself will be filled by government officials with control of the ultimate pile of OPM (Other People’s Money), taxpayer cash and assets.
Congress, meanwhile, is fixing to bailout the automakers, bringing back their own share prices. An utterly insane policy since these worthies’ problem is that no one is buying their cars, and this problem will not be solved even if government aid temporarily allows them to continue functioning and losing money.
We’re saving the market and forfeiting government solvency. That is what’s making the market so cheerful these days. Does it make you cheerful?