by Rick Ackerman
The stock market has been acting as though truckloads of oral vaccine will show up on supermarket shelves by the weekend. Of course, we know better than to attribute the robust uptrend of the last two weeks to careful or even rational calculation. The market after all is not a thinking creature, just a dumb beast that has been annoyed by a swarm of flies, or excited by pheromones washing over the olfactories. Far from thinking past the crisis, surging stocks are simply adjusting to the temporary exhaustion of sellers who bailed out when it seemed like the news couldn’t get much worse.
There is little to encourage at this point, since we all understand that social distancing, with its ruinous effect on the economy, could continue indefinitely. So, do Warren Buffett, BlackRock’s Laurence Fink, Bezos and other whales dive for cover, dumping their shares in a panic? A better question to ask is: To whom would they sell? Since there are no buyers big enough or dumb enough to take these Leviathans out of their positions, they will simply continue to moderate their offers as short-covering bears drive stocks further into the insanity zone.