Don't believe everything you hear about "core" inflation and the "CPI" rate. Try going to the Bureau of Labor Statistics web site (bls.com) and take a look at the rates of inflation for various goods and services. I love the fact that the only thing that was cheaper in 2007 was apparel as that was virtually all made in China.

And don't talk about wild extrapolations. Inflation is worse now than in 2007. Go to the grocery, buy gas, take a vacation, pay your utilities or try to get a job in trucking.

Also, remember that inflation has the greatest effect upon average Americans as this group (no matter how you define "average") has the most fragile disposable income and is the most exposed to daily expenses of fuel and food. Oh...that's right...the government DOESN'T count food or fuel in their posted inflation rates.

But you DO eat and drive, don't you? And don't listen to the line of BP (bull poop, for those with sensitive ears) saying that inflation is only when the dollar declines. Any time your purchasing power declines, whether via dollar decline or demand/supply imbalance, you get less for each dollar you earn and that is inflation.

To make matters worse, we have virtually no pricing power when it comes to wages, due to globalization, so we are left with price inflation, stagnant wages, shrinking purchasing power, tighter credit, declining home prices and less disposable (and savable) income.

When has this combination ever been bullish? Can the market really see into the future six months and this bull rally is really a vision of future bounty? Well...NO...if the market was so darn good, you would have not had the collapse of financials and Bear Sterns.

So, the lesson of the day is do your research, trust the facts (when you can find them) and see how your financial life is changing. If you expect to be better off in six months, then maybe the market can see the future. If you are not so sure, then why are you long financials? After all, you must be betting that the FED will continue to lend against (really buy, but that is another story) bad mortgages, the Department of Education will buy bad student loans, some agency will buy bad credit card debt, the Department of Are You Kidding Me, You Spent How Much on that Boat? will buy bad boat loans, the Department of Commerce (I'm running out of Departments) will buy bad corporate debt, the Treasury Department will buy 1/5 of 1% of bad derivatives (did I mention that amounts to about $1T US dollars?) and so on and so on...

The only full employment job category in the nation is printing press operators...pass me the oil, boys, she's gonna blow....