But does it feel right? I know people exclaim, "who cares if its right, I'm making money".

The issue that everything seems to be pointing towards sacrificing the future for immediate gains.

How does a stock like 5/3rd bank go up 58% in one day and have that increase be attributed to anything but misguided speculation. The company failed the stress test and needs to raise a few billion dollars. The stock is up what 300% now in just over a month. There is nothign the company could have done in the past month that could account for that kind of growth.

At some point the big guys are going to need to take a lot of profit. A stock may go up but it isn't money in your pocket until you sell it.

Something is just really wrong and something is really dirty about this rally. All of the rational people think so. they have just been shut out by th epeople exclaiming, "who cares just make money, to hell with the consequences"

Iridium,

Thank you for your frequent thought provoking comments.

However, I would tell you that there are stocks in the market today that are still too cheap.

Last week I high-lighted WMB and said it would beat AAPL, GOOG, MSFT, and BRK... IT HAS and will continue to do so. It was too cheap.

Today I wrote about Olin... it is also too cheap.

Earlier I made the case for WFC being a $60 stock in three years. That would be more than 100% cash on cash return...even though it has more than doubled in a month, already.

Look again, there is still plenty of opportunity. I am ignoring peoples fears and continue to look at each stocks fundamentals on a case by case basis.

One last point. After all the additions to the money supply I believe we will have inflation. If the dollar is cut in half, you can look for commodities to double -- simple as that. Commodities and raw materials are the feed for all products, like oil as a prime example. Oil will be double in three years if not sooner.

What is your time horizon?

Don't mean to interrupt, guys, but ...

You both make excellent points. Iridium, though, is looking at the forest; Mr. Liber is looking at the trees.

Mr. Liber's argument, therefore, would seem to be illustrative of Iridium's " ... just make money, to hell with the consequences ... " complaint; while Iridium's argument will cut him out of the profits Mr. Liber says are there for those who choose to go on a case-by-case basis rather than examining the current market as a whole and its larger ramifications (social, even moral, etc.).

I would not expect either of you to convince the other, as you are not discussing the same concept of "market".

Me? I think The Fix Is In on a very broad front; that the market now caters almost strictly to the casino mentality; and that Insiders Only will prosper on a fairly stable long-term basis -- but can I prove it?

It is exactly what Iridium says -- a "feel" one gets from watching a roller-coaster untethered to any fundamental notion of "value" beyond tomorrow's bottom line.

"Value" is the track on which any roller-coaster good for the general welfare must ultimately run -- and a smash-'em-up thus seems more likely than not.

Thank you both for addressing your respective positions so articulately.

I would like to say this, and it based upon the history book and no my personal opinion. I do not expect a meteorite but I do expect a natural event that will screw up the works. While the street is doing good the rest of the place is not. Food dropped because oil and the cost of production and transport dropped. Oil is again on the rise and consequently, inflation pressure. The printing presses have been running 24/7 and the alleged bright spots are in the real estate market which is back in speculation mode. True, prices have dropped but this does not help the people that may be forced to sell due to job loss. Employment? There seems to be jobs available but these would be better filled with foreign (more skilled) labor, especially out where you reside. Slight debacle. Are we incompetent idiots that are not worth employment or do we require higher wages or is it that foreign workers are just more qualified?
The auto industry is in deep doo-doo, world wide. Consumption is so-so and falling, just look at Australia and Japan who are export economies.
While everything is precarious is a good time for the stalwart investor and they will make money simply because they will cash in the chips when, and if, the market turns South.
We all have to wait and see. My guess is that something is going to take the wind out and it will be a natural event. I am not predicting anything above a Katrina level, it will just be bad timing.
All should remember that the present economics are not exactly rosy.

I do see where people could wonder how these companies are suddenly 'more valuable' because their stock price went up. This is not necessarily due to the company being worth more, but rather the understanding that the company is worth more than what it is trading at. For instance there are a lot of companies that have share values that are much cheaper than the value of the companies assets. So if the company were to be liquidated tomorrow the value of the company would be less on the market than its assets abroad (manufacturing, patents, property). A perfect example is when Kmart went bankrupt. As soon as that company was available to purchase on the market again it gained value simply because of all of the stores and land that Kmart had. I see this happening all over with the current market. Ford for example being traded for little over a dollar six months ago. Now obviously that company is worth more than a dollar a share, and as such it is now over six dollars a share.

Jake --

OK, that is a passable explanation of radical "value" fluctuations for those companies with tangible, convertible assets such as Ford and K-Mart -- are we then to apply that formula to financial and related institutions, or to speculation in any sort of debt-driven endeavor?

That's where the bulk of our problem originated and resides -- that's where trillions of taxpayer dollars are being directed; that's where the largest (and largely unintelligible) fluctuations are occurring; that's where people sense The Big Con is being run.

The market is still running on the basis of the very tenets of accounting dodges and debt-repackaging that caused the current unpleasantness, which can be summarized as: Blow a bubble, and they will come.

Well ... maybe, maybe not. Best o' luck wit' da puffin', though, amigo ...