Dow HIts Record Despite Losses at Big Banks

So what is the cause for investors' bullish behavior. Let's consider various points of view. First, investors might consider the banking troubles to be in the rearview mirror for the banks. Secondly, investors may be assuming that the Federal Reserve has the situation under control since they lowered the interest rate by 1/2 point last week. However, I know a lot of the adjustable rate mortgages are not necessarily controlled by the Federal Reserve lending rates but rather indexes such as the LIBOR.
What other possiblities can explain this behavior? Does this reflect expectations for the economy's direction? Do investors feel little alternative except to put their investment dollars into stocks? Is this simply a false dawn like those of the dot.gone era? What are your thoughts? Of noted interest to this blog is, how does this all affect the local housing market? Be sure to visit me at www dot russellcook dot net