Sometimes the market speaks in a forked tongue.

For example, today it seems to be saying that the big spending boom is over -- hence the sharp selloff in retailers from

Wal-Mart

(WMT) - Get Report

to

Target

(TGT) - Get Report

-- but that the big spending boom could still be on -- the bonds are getting hammered.

I am surprised that we don't hear the bears talking about stagflation, where we get slowing earnings and roaring inflation: the so-called worst of all possible worlds.

We think the bonds are "wrong." We think that the stock market is going to lower consumer confidence to the point where we will see weaker sales but that's not such a bad thing because it gets the

Fed

off our back.

We had to start caring about the Fed because if the Fed feels compelled to take short-rates up to say, 8%, because of inflation (fat but not that far) that will be real competition for equities.

Oh sure, it wasn't competition when

Pilgrim Baxter

et al. were smoking. But it sure is now that they are being hammered. Dr. Pangloss tells me that this market had some nice things going for it, the end of excess, a return to fundamentals, a belief in earnings, and a potentially benign Fed.

Unfortunately Dr. Pangloss does not make house calls. Only margin clerks do that. And they are doing that with gusto as they attempt to get their money back before the bear gobbles it all up like so much honey.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Wal-Mart. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.