Silicon Valley is full of people who consider themselves "survivors" for having lived through the dotcom bust.

Max Levchin is a real survivor.

As Sarah Lacy details in her new book Once You're Lucky, Twice You're Good, Levchin was a sickly child who wasn't expected to live past three years old. Levchin's mother twice saved him from certain death, once from drowning and once from the fallout of the Chernobyl disaster.

These and other "real life" experiences have shaped Levchin into "the single most competitive person" in Silicon Valley, Lacy says, someone who is obsessively driven to prove that his success as PayPal's co-founder wasn't a fluke.

Every parent knows kids sometimes only hear what they want to hear. Follow the financial markets for a while and you'll see that traders are similarly capable -- generally speaking, of course.

Evidence of selective hearing was everywhere Monday where traders --determined to take the market higher after last week's slide -- simply heard what they wanted to hear and ignored the rest.

A warning from FedEx? Lousy numbers from MBIA? Already baked into the stocks!

The new Blackberry "Bold"? We didn't see that coming despite all the anticipatory chatter! This is the revolutionary device Research in Motion needs to compete with the iPhone. 'Bold' is worth $5.3 billion to RIM's market cap -- but we love Apple shares too!

HP buying EDS? OK, we didn't see that one coming and we're worried Mark Hurd has bitten off more than he should chew. But EDS stock is taking off like a rocket!

But the most glaring example of Wall Street's selective hearing had to be its response (or lack thereof) to comments from JPMorgan CEO Jamie Dimon.

From All Things Digital, May 12, 2008:

With its curvier edges, stylish silver trim, half-VGA 480-by-320 pixel screen and improved iTunes compatibility, Research in Motion’s (RIMM) new BlackBerry Bold should be a big hit with IT operations professionals convinced the iPhone isn’t an enterprise-class mobile device but driven to near-aneurysm by discontented employees demanding them.

The device is largely as expected–an iPhonish-looking thing with both GPS and Wi-Fi, 1GB of permanent flash memory, a 2-megapixel camera, full HTML browsing, 3G support on GSM networks with HSDPA access and, of course, the BlackBerry’s one-trick killer app: instant, secure email. That’s a compelling combination for business users and casual ones not easily swayed by the iPhone’s hype juggernaut as well. Indeed, Citigroup analyst Jim Suva says it could boost RIM’s quarterly shipments by 200,000 to 400,000.

But perhaps not without a bit of struggle. The BlackBerry Bold won’t ship until as late as August, which means Apple (AAPL) could beat it to market with the enterprise-friendly 3G iPhone it’s rumored to be uncrating at its Worldwide Developer’s Conference in June. Which has got to worry RIM. After all, the first-generation iPhone had claimed a 28% market share by the fourth quarter of 2007. That’s still less than the BlackBerry, which holds about a 41% market share, but the iPhone hasn’t even been on the market a year.

The eBay-Craigslist legal battle remains unresolved, but got a mainstream hearing Monday thanks to a front-page article in the New York Times.

"The phrase 'maximizing its own profits'" -- which Craigslist's corporate blog used in response to eBay's legal action -- "broadly outlines the fight between the two companies," the Times reports.

Sarah Lacy and I pick up the debate from there.

Sarah's point is that Craigslist founder Craig Newmark and CEO Jim Buckmaster are never going to seek to monetize the site to anywhere near the degree most of us expect in a capitalist society. For these and other reasons, Sarah thinks eBay has bigger fish to fry and hopes this Craigslist battle isn't a big priority.

Barring a settlement, the courts will ultimately rule if Newmark and Buckmaster acted improperly in seeking to dilute eBay's stake, as the firm contends.

My point is that eBay has a fiduciary duty to its shareholders to protect its interest in Craigslist and the accompanying board seat. eBay can't dismiss the possibility (however remote) that Craigslist will someday strive to reach its full value, which Henry Blodget estimates could be $5 billion.

Coming off its worst week in a month, the stock market was edging higher midday Monday, aided by oil's dip and better-than-feared results from European banking giant HSBC.

Not coincidentally, higher oil prices and weakness in financials were key components of last week's swoon, the former evinced by FedEx's warning and the latter by dismal results from Fannie Mae, AIG, Legg Mason, and others.

Beyond HSBC's surprising first-quarter profit, Monday also brought news of big losses from MBIA (whose shares were rallying nonetheless) and IndyMac, further evidence that all the talk about the credit crisis ending hasn't reached the corporate level yet.

More problematic, while the debt market seems to have turned a corner, bank lending standards are tightening, which is going to crimp the ability of consumers and businesses to borrow and expand. That, in turn, will ultimately circle back to curtail the profitability of financial firms, whose performance is still key to the broad market's fate.

Add to that complacency among traders after the S&P 500's big move off the mid-March lows and the market appears vulnerable -- or at best restrained in its ability to make much forward progress.

In addition to April retail sales and CPI data, this week brings earnings from Electronic Arts and Hewlett-Packard, as the tech sector attempts to prove it's an innocent bystander to the credit crunch.

A lot of news swirling around Facebook this weekend as the company announced it was borrowing $100 million for servers and the New York Times opines that Microsoft's investment in Facebook may have been one of the worst VC deals of all time. Meanwhile, Adam D'Angelo, chief technology officer and longtime friend of Facebook founder Mark Zuckerberg, is leaving the company.

This after Zuckerberg's co-founder and college roommate Chris Hughes already left, and Facebook continues to bring in new, seasoned management from Google. Aaron and I discuss the news and why the skeptics are wrong about Facebook -- including our own nattering knob of negativism, Henry Blodget.

It wasn't those planes that killed Kong... It was beauty that killed the beast.

The rally from the mid-March lows came to a screeching halt this week amid surging oil prices and renewed concern about financials after pitiful results this week from Fannie Mae, AIG, Legg Mason and others.

Those hurt but what really killed the market's momentum was overconfidence.

Last weekend the market chatter was all about the stock market's "breakout," which appears to have peaked, at least for the near-term, when the S&P 500 hit 1422 intraday on May 2. Traders everywhere seemed to be getting bullish and even veteran market watcher Richard Russell was uncharacteristically upbeat in Barron's last weekend, fueling talk of how "Dow Theory" was signaling a new bull phase. (Dow Theory is based on the relationship between the Dow Industrials and Transports, which are likely to be under additional pressure Monday after FedEx's warning late Friday.)

This week brought a lot of chatter from Wall Street titans, including Hank Paulson and Jamie Dimon, about the credit crisis being over, or in its final throes.

Too much optimism can be a dangerous thing because if everyone is bullish that probably means they've placed bets accordingly - and short sellers have already covered positions -- leaving the market more vulnerable to a decline.

On that note, kudos to Jeff Saut of Raymond James who warned about the "overbought" state of the market generally, and financials specifically, in an interview Monday on Tech Ticker.

Kudos as well to Helene Meisler, who correctly predicted more short-term upside but trouble in early May during her Tech Ticker appearance on April 21.

Meisler, a technician who writes TheStreet.com's Top Stocks newsletter, has been writing about other unconventional explanations for the market's recent moves. Specifically, the stock market's relationship to bond yields -- which fell significantly this week after hitting their highest levels since February on Monday -- and the yen's strength vs. the dollar.

Crude's remarkable run resumed Friday as "black gold" surged above $126 per barrel at its intraday peak. Not coincidentally, crude's rise has been accompanied by a falling dollar, which saw its recent rally halted this week by some tough anti-inflation rhetoric from European central bankers.

Specifically, European Central Bank chief Jean-Claude Trichet warned that Europe may be in for a "rather protracted period of high inflation."

The ECB, which left rates unchanged at its policy meeting this week, has always been more focused on fighting inflation than the Fed, which has a dual mandate of price stability and full employment.

Partially as a result, Ben Bernanke now finds himself in the bind of having to fight the inflationary ramifications of his aggressive moves to ease the credit crunch. The big problem is that the crisis itself shows little signs of abating, as AIG's results demonstrate, and the U.S. economy/consumer can ill afford a more hawkish Fed.

In other words, the Fed may continue to talk tough about inflation, but don't expect them to take any action anytime soon.

The stock market is taking it on the chin Friday as AIG's gaping loss has put the financial sector back in a harsh spotlight. But beneath the gloomy surface some tech stocks are shining, most notably Priceline.com and Activision.

Priceline.com reported first-quarter earnings of 76 cents per share vs. the consensus estimate of 60 cents. The company said it expects full-year 2008 EPS of $5.25 to $5.65 per share vs. the analysts' consensus of $5.12.

Priceline shares are soaring Friday as the online travel firm continues its long comeback from the depths of the post-2000 tech bust.

Separately, Activision reported fiscal fourth-quarter earnings of 14 cents per share vs. the consensus forecast of just 5 cents as its "Guitar Hero" and "Call of Duty" franchises continued to perform well.

Cowen & Co. and Kaufman Brothers upgraded Activision in the wake of their results, and the shares were responding accordingly.

Take-Two shares, meanwhile, have barely budged this week despite huge first-week sales for Grand Theft Auto IV, suggesting Electronic Arts may not need to raise its bid after all.