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Unreal Rally

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by Felix Salmon
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Apr 01 2008 12:00am EDT

Unreal Rally

While I've been trying to catch up with my RSS feeds, Jeff Cane noticed that the stock market surged today, for no discernible reason.

One big bank writes down $19 billion. Another shores up its capital to put to rest rumors that it could be the next Bear Stearns. Those are reasons to start buying up shares of financial companies?

Jeff is wary about reading too much into this rally; I am too. I particularly mistrust this kind of thing:

It's the first trading day of the second quarter. The market slumped in the two previous quarters, and it has been three decades since it has had three consecutive down quarters.

There's a hell of a lot of once-in-every-thirty-years events going on right now. If someone offers me better-than-even odds, I'll happily bet on a stock-market decline in Q2. Not because I think it's going to happen, but just because I think it's a coin-toss out there.

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