Besieged by Bidding

With Gold Fields (GFI - commentary - Cramer's Take) perhaps getting a bid, we are beginning to see that no company in any industry can resist the purge of cheap, abundant money around the globe. If an old gold company without much growth can get taken out, who can't?

One of the reasons why the bears hate this market so much is that many of the crummiest and many of the best companies are getting bids. There doesn't seem to be any rhyme or reason to what gets a bid. Four Seasons (FS - commentary - Cramer's Take), really expensive, gets a bid. Crummy auto-parts makers get a bid. Gold companies get bids. Paper companies get bids. Companies in housing, the worst industry, get bids. Tons of stocks are rumored to be getting bids, including many many tech companies. Newspapers, the worst business in the world, get bids like they are going out of style.

So you can't short. If you are short, you are going to be stopped out, and you are going to lose big money.

If you can't short bad companies, if you can't short overvalued companies, you can't short.

It's even more aggravating, given that the same companies that are getting bids are companies with rapidly declining fundamentals.

Some of the driver here is that the Fed is pumping money furiously into the system, perhaps in lieu of cutting rates. We don't talk much about it, but the money supply is exploding. Every one of these private-equity companies' deals has had no problems getting financing. Tons of money, low interest rates, the ability to take advantage of a market that doesn't like rewarding most companies with higher multiples -- that's what produces this environment.

Right now, we have had a great four-week run, in part because the shorts keep caving. Many have probably been taken out, so we may not have a good trampoline under us right now.

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