China is pressing Rio Tinto PLC (NYSE ADR: RTP) hard for a sharp reduction in the prices the company charges for its iron ore. But mining companies like Rio, who have had their bottom lines eviscerated by a slump in commodities prices, may have a hard time acquiescing.

China’s 470 million ton demand for steel is considerably lower than the country’s annual production capacity of 660 million tons, and to that effect, China announced a three-year ban on new mills The New York Times reported.

“Disorderly competition” has pushed up iron ore prices, caused a glut of production capacity and resulted in “serious losses,” said China’s Information Minister Li Yizhong. “My ministry will not approve any expansion-related projects in the iron and steel industry. I would like to call on the whole industry, all iron and steel producers, not to construct any new projects

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As someone who likes to be optimistic, I'm finding myself in the uncomfortable position of being a bear. Bluntly put, I don't think the current rally is going to stick.

There are 3 reasons why I'm bearish.

The recession is getting worse. The ISM manufacturing index set a new 26-year low. Black Friday sales were not enough to prevent a steep drop in November retail sales. 553,000 jobs were lost last month - the biggest drop since December 1974. Valuations are not as cheap as they could be. The Dow Jones Industrial Average still trades at a double-digit P/E. There have been previous periods where the average has traded at single-digit P/Es. On a technical basis, the Dow had been setting lower highs and lower lows - a bearish trend. (Today's rally could break that trend, but we would need follow-through buying to support it.)

Despite these reasons, stocks are rallying. The only plausible

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There is a lot of hope being priced into the markets.

I don't know of any of other reason to explain why the stock markets rallied during Thanksgiving week and held onto much of their gains this week.

Let's look at the facts.

The recession is getting worse. The ISM manufacturing index set a new 26-year low. Black Friday sales were not enough to prevent November retail sales from being horribly down. 553,000 jobs were lost last month - the biggest drop since December 1974.

Valuations are not as cheap as they could be. The Dow Jones Industrial Average ($DJI) still trades a double-digit P/E. There have previous periods where the average has traded at single-digit P/Es.

On a technical basis, the Dow has been setting lower highs and lower lows - a bearish trend. My colleague, Kevin Matras, described the chart pattern as a "sloppy descending triangle"; in

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Thailand's economy grew at the fastest pace in seven quarters towards the end of last year as exports of rice, automobiles and computer chips all steadily rose. Southeast Asia's second-biggest economy expanded 5.7 percent in the fourth quarter, accelerating from a revised 4.8 percent in the third quarter, the government said today in Bangkok. Exports grew by 24 percent, almost double the pace of the third quarter, even as the baht's rise to a decade-high made them more expensive. Exports, which account for about 60 percent of the economy, accelerated from a 12.6 percent year on year rate of increase in the third quarter, according to central bank data. Exports reached a record $14.6 billion in November as demand from China and eastern Europe offset waning orders from the U.S. and Japan. Quarter on quarter gross domestic product expanded by 1.8 percent in the fourth ...

What you see may not be what you get, especially when analyzing historical stock market performance. One would be excused for thinking that global stock markets were on an uninterrupted upward path when considering their good gains in US dollar for the three months ended July 31, 2007. But that is only part of the markets’ story.