Bears Face Heavy Odds

The world's central banks have made it clear: Until the earnings come back, until employment comes back, they are going to keep the pedal to the metal. I don't know how you fight that if you are a bear. I don't know how you decide to go against every single central bank in the world.

I am stunned by their view this weekend. They are so not fearful of inflation that it is a delight to anyone who might feel that the risks to a double dip could be ratcheted up. Of course, the new double-dip prognosticator, Nouriel Roubini, is in the Financial Times saying it is likely, even as the central banks are committed to it not happening. I wish I could say he is a broken record, but he is more of a revisionist, meaning that if you read his stuff, you are most likely thinking that he called the bottom in the economy, something he definitively hasn't done.

To me, the issue will simply be, how strong will the economy be? How much industrial capacity is going to be used? How much infrastructure worldwide will be built?

Oil says a ton. Gold, if it takes out $1,000, will confirm that (thanks to my colleague Matt Horween for that tidbit).

Anyway, I have always been taught not to fight the Fed. Now you have a half-dozed important feds you are fighting! You will be fighting the feds if you short credit -- like Capital One (COF - commentary - Trade Now) and American Express (AXP - commentary - Trade Now) -- and if you short companies that are needed to build roads and bridges - like Caterpillar (CAT - commentary - Trade Now), which had bad monthly figures but went up anyway -- and housing, which would include Toll Brothers (TOL - commentary - Trade Now) and Pulte (PHM - commentary - Trade Now).

To me, going against them is a pure sucker's bet. Especially going into a holiday where the volume is light and the bulls need to catch up to the averages.

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