Is That All There Is ?

Spending some time yesterday evening and this morning thinking about the "Why ?" of the huge rally, the refrain of a melancholy, yet popular song of the late 1960s came to mind: "Is That All There Is ?" sung by Peggy Lee, which was a hit in 1969 when I was a youthful high school student.

UBS reports a big writedown, fires its chairman, announces a large rights issue, ... and the stock pops up. The rights issue was underwritten with big current holders indicating they will buy.

LEH sells $4B preferred stock with a huge book of potential buyers unfullfilled.

The US manufacturing ISM rises to a bit over 48 - indicating no followthru to the slowdown - hence no increased economic deceleration. And the absolute number was just a smidge on the contraction side.

Blog readers know that the Fed is actually increasing the monetary base now.

So if one was a beefer bear, seeing an infinite amount of money ready to buy bank and bank stocks at book value, one might ask, "Is that all there is to a crisis ?

Ditto a fearful bull loaded with cash on the sidelines, who must also ask, "Is that all there is to a correction ?"

And on first day of the quarter, as asset allocation manager must think, "Is that all there is a slowdown ?

So the bears started to cover, the timid bulls started buying, and the asset allocators hit the "rebalance" button. The stock market closed at the highs quite strongly, Treasury bond prcies fell considerably as did gold prices.

Here's the refrain of the song:
"Is that all there is, is that all there is ?
If that's all there is my friends, then let's keep dancing.
Let's break out the booze and have a ball.
If that's all there is. "

PS: I remember hearing it on the radio in the basement of my parents's home, as I was doing a chemistry experiment with my home chemistry lab. Memory is so fascinating ... it's odd how almost 40 years later I still have an eidetic memory of that event, as if I was watching it. [For "eidetic", see March 17 "Word of the Day"].

PPS: I sold those LEH calls for a fine one day profit. I had planned to hold them until next quarter's earnings report by LEH, but my polydaemonist fears of the trading gods induce me to accept my quickie gain & sell ... pigs get slaughtered. [See March 10 blog "word of the day" for "polydaemonism"].

Word of the Day

"Idiographic" - adjective [$100] from Greek "idios" meaning personal.
Idiographic is a term from psychology meaning pertaining to or involving the study or explanation of individual cases or events.
Sentence: Today's idiographic blog about the causes of the rally adduced probable human reactions to the news of yesterday.
Compare to "nomothetic" which was the word of the day for March 25, 2008.