By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — It’s somehow fitting that the stock market would celebrate the fourth anniversary of Lehman Brothers’ bankruptcy by staging a huge rally in the wake of the Fed announcing more quantitative easing.
That’s because both the events of mid-September 2008, as well as those on Thursday, underline just how inscrutable — and, therefore, ultimately unpredictable — the markets can be.
Just take the rationale given for the market’s huge rally on Thursday. In essence, we’re told, the market rallied because the Federal Reserve concluded that the economy is in such horrible shape that it must be put on even more remedial life support.
Got that?
Far from seeing any irony in any of this, however, many investors have evidently decided that happy days are here again.
With the Dow Jones Industrial Average DJIA +0.40% now a couple of thousand points higher than where it stood when Lehman Brothers went belly-up, many investors are commemorating the fourth anniversary of that bankruptcy by telling themselves that any Lehman-like danger has passed.
If only.
Remember the London Whale? If nothing else, the sordid tale of that trader’s multibillion-dollar losses this spring should serve as a reminder that the financial markets have become so complex as to be largely undecipherable.
Read full article: http://www.marketwatch.com/story/it-hurts-so-good-2012-09-14
