This blog post originally appeared on RealMoney Silver on May 22 at 7:27 a.m. EDT.

Yesterday was the type of day in which the shorts and the underinvested rip their hair out as the S&P downgrade to negative of England's credit rating

raised concerns

that the U.S. credit rating will have a similar fate. U.S. government bonds and notes fell precipitously, and the U.S. stock market briefly looked like it would go into a mid-afternoon free-fall. (Note: The notion of a crowding out and higher interest rates was an integral part of my

correction call

over the past two weeks.)

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Instead, equities halved their losses late in the day, and in this morning's trading, futures are solidly in the black.

Trust me, I have been there on the short side, and I have felt the pain of days like this.

I continue to surmise that there are so many hedge funds that failed to believe in the recent market surge and that are underinvested and underperforming as a consequence. They recognize that they missed the bottom, and after their dismal performance in 2008, they cannot afford to continue do that path. Stated simply, their

businesses

are at risk. The only question is when to enter for many, as they simply can't afford to continue to trail the market averages.

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Then there is the issue of the large U.S. pension funds that are markedly skewed toward fixed income exposure - after the material outperformance of bonds vs. equities - over the course of the last 18 months. With

bonds tanking and stocks rallying

, a reallocation by these funds out of bonds and into stocks is almost inevitable as these pension plans become the important marginal buyer, ultimately providing classical fuel to a march higher in stocks during the summer, even despite the wall of worries.

It's the revenge of the longs.

Doug Kass writes daily for

RealMoney Silver

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Know what you own: The most active stocks in Friday's midday trading include Bank of America (BAC) - Get Report, General Motors (GM) - Get Report, Direxion Daily Financial Bear 3X Shares (FAZ) - Get Report, SPDRs (SPY) - Get Report, Citigroup (C) - Get Report, Direxion Daily Financial Bull 3X Shares (FAS) - Get Report and American International Group (AIG) - Get Report.

At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Long/Short LP.