"Relief rally": Relief from what?

Of course, the news du jour was that something triggered a stampede of buying on Wall Street today sending the Dow Industrial to a fresh new all-time high of 13,861 and the Nasdaq to a new 6 1/2-year high of 2702. The bulls called today’s giant ramp-job a “relief rally.” A relief from what? From its prior ratcheting down from severe acute delusion and denial to just a heightened state of denial and then back again to severely delusional? So far, since mid-March, all the angst from a worsening housing and mortgage situation has spooked the S&P 500 into a nearly 4-percent correction in June. It should be noted that today’s fresh new high on the Dow industrials coincided with a fresh new high for the Canadian dollar, Australian Dollar, Swedish Krona, Euro and probably several other currencies. The yen, the currency backing the third largest portion of worldwide assets, was again about the only currency that dropped against the dollar. Its quite obvious that the world's paper money is being debased at a breathtaking pace, and that is causing asset bubbles across the globe....."Not so terrible" retail sales figures form the plethora of U.S. retailers were given partial credit for the day's biggest point gain in the Dow since 2003. The other assist were a slew of new LBOs and mergers. The headline, of course, was one that had been wasting ink for a couple of months now. Alcoa (AA) appears to have lost out on its pursuit of aluminum competitor, Alcan (AL) , which agreed to be acquired by Rio Tinto Group (RTP) for $38 billion. Alcoa's (AA) attempt to takeover the Canada-based aluminum producer was officially withdrawn later in the day. Shares of Alcan leapt $8/share to $98/share on the final Rio bid. The buyout price, if finalized, would put Alcan shares at over $100/share. Shares of Alcan could have been had for $30/share about this same time last year. Seems that stock and financial assets become even more desirable near their tops for some strange reason, yet when it comes to shopping for milk and eggs we usually pine to make the acquisition at low prices. Funny thing, that stock market. That's the history of the corporate world; to buy near the peaks of asset values instead of scooping-up bargains during bear markets. Alcoa, which was in the mid-30s when this silly bidding war began a couple months ago, rose into the low $40s when news of their interest in Alcan emerged a couple of months ago. I guess because the current market sentiment is to conclude that any acquisition must be a good thing for both the buyer and the buy-ee. Alcoa rose another $3.50/share today on the news that they had lost out on the bidding war. Again, none of this really makes a lot of sense. When sanity ruled the day a decade or two ago, it was customary for the market to initially punish an acquisitive company and then reward it if a the deal fell thru. For this stock to end higher by nearly 20-percent over the span of this nonsense, especially given that their earnings have not grown over the past year, makes no sense other than the fact that apparently just making headlines reminds folks that their shares are available for purchase. The disconnect witnessed on a daily basis is hardly rivaled by the stupidity witnessed in the late 90's and the same just about a year-and-a-half ago in the bubbly housing and condo markets of London, Madrid, Sydney, Boston, Las Vegas, South Florida, Phoenix and California. In fact, the current M&A, private-equity, hedge fund, credit bubbles feel like the summer of 2005 as it concerned the mania surrounding real estate.