When you’re being chased by a bear, you don’t have to run faster than the bear; you just have to run faster than the other guy.

Good advice when you’re camping in bear country. Good advice, too, when you’re thinking about how to allocate your money in the current very chaotic financial markets.

The U.S. economy and stock market don’t look especially attractive right now in absolute terms. But they do look a lot better than most of the alternatives. For the next few weeks, a couple of months, or maybe as long as a quarter or two, the U.S. stock market and the U.S. economy are the best in the world.

Yes, you heard that right: In the short-run that deeply in hock, struggling to grow, politically dysfunctional United States economy is the best in the world—and you need to make sure you own enough of its stock market to take advantage of that temporary superiority.

How can that be?

Mostly because being the best economy and stock market in the world isn’t a very tough test to pass at the moment.

Look around at the other contenders.

The European Union? Puleeze.

The euro debt crisis has progressed from leaving investors wondering which country will be the next to send shivers of fear through the financial markets to the question of how many euro-toting countries can be in crisis simultaneously.

Currently, the count is two—Greece is about to reenter crisis (assuming you’re willing to say that it ever exited) because Greeks are clinging to a long tradition of not paying taxes. (Alcibiades never paid taxes on his bribes from the Persians, for example.) And it’s hard to balance an austerity budget if no one is paying taxes. Ireland is about to pass an austerity budget but the government that put it together will be out of office by the time it comes time to inflict the pain. No one is certain that the next government won’t repudiate the entire package. (For more see my post https://jubakpicks.com/2010/11/22/so-what-happened-to-the-euro-relief-rally/ )

But the count could go to three very soon. The financial markets have stopped lending to Portugal’s banks and Lisbon is totally dependent on the kindness of the strangers at the European Central Bank. No telling how patient that group will be.

China? In the long run, sure, it’s a bet I want to take. In the short run? Food inflation. Run away bank lending. A real estate bubble that won’t deflate. Out of control local spending that has, for example, towns of 100,000 bidding for their own high-speed train lines. The only thing that’s keeping this all aloft is a financial system that says nobody is bankrupt until Beijing says they’re bankrupt—and faith on the part of investors that somehow the government that buried the bad debts of the Asian currency crisis of 1997 will pull more bookkeeping magic out of its hat that will enable the markets to kick the problem down the road. But this isn’t an economy or a stock market that’s looking forward to taking even a tiny dose of medicine. The idea of another half or three-quarter percentage point increase in benchmark interest rates sends the gamblers on the Shanghai market screaming for the door. (For more see my post, https://jubakpicks.com/2010/11/23/can-beijing-fix-its-run-way-bank-lending-problem-does-it-really-want-to/ )

Brazil, the China of Latin America? Inflation ran at a 5.2% annual rate in the most recent period that ended in mid-November. Banco Central do Brasil will almost certainly raise interest rates in early 2011 and the betting is that the current 10.75% rate will head to 12% or 13% before the end of 2011. Financial markets seem determined to test President-elect Dilma even before she takes office on January 1 and are just waiting to punish the economy if she doesn’t start reducing government spending.

India’s stock market is high enough to raise fears of a bubble and the Reserve Bank of India has still been unable to get inflation under control despite a series of interest rate increases.

Things aren’t perfect in the United States by any means, but as I said at the start of this piece, they don’t have to be perfect. Just comparatively better.

For example, the U.S. economy grew by just 2.5% in the third quarter according to revised figures released last week. But, hey, that’s better than the 2% growth in the first revision or the 1.7% growth in the second quarter.

Sure, the Federal Reserve is worried about deflation not too far down the road, (See my post https://jubakpicks.com/2010/11/17/core-consumer-price-inflation-is-still-on-track-for-0/) but at the moment the U.S. has got a modest but positive 1.2% annual rate of inflation. Certainly not enough to push the Fed into raising benchmark interest rates anytime soon. (Do I hear 2012? 3012?)

The federal budget may be generating horrendous deficits but the U.S. formal banking system isn’t showing any big banks on the verge of a crisis in confidence that would prevent them from raising money in the capital markets. (There are Freddie Mac and Fannie Mae, of course.)

The unemployment rate may be stuck near 10%, but hourly wages and consumer spending are actually creeping upward and retailers are predicting a decent holiday shopping season after a dismal 2009.

Does all this say that the long-term trend of the U.S. deficit is anything other than dire? Or that the U.S. is about to turn into a job-generating machine in the next decade? Or that the Fed hasn’t flooded both the U.S. and the global economies with so many dollars that inflation is almost guaranteed and that the dollar isn’t headed downhill in the long term?

Absolutely not. All those problems haven’t gone away; they aren’t even being seriously addressed; and in fact, while they’re neglected they’re getting harder to fix.

But who’s talking long-term? In the long run, as John Maynard Keynes noted, we’re all dead. In the slightly less long-run China’s economic rise runs head on a demographic nightmare as this still relatively poor country ages. In the slightly less long-run continued growth in Brazil and India confronts the barriers of low literacy rates and shoddy university training.

But that long run doesn’t stop anyone—and it shouldn’t–from putting money into China, India, and Brazil today because those countries have years and years of comparatively superior growth ahead of them before the obstacles hit the fan.

Think of the United States in a similar light. The U.S. has weeks, perhaps months, of a superior mix of unexpectedly decent growth and temporarily lower risk ahead of it. You should put some money to work—in that time frame—to enjoy that comparative advantage. While it lasts.

And the best way to play those weeks or months?

Less than a month ago, on November 2, I suggested retail. (See that post here https://jubakpicks.com/2010/11/02/im-dreaming-of-a-green-christmas-for-these-five-retail-stocks/ ) I’m suggesting it again. The best retailers will participate disproportionately in the relatively modest improvement in holiday sales. I suggest shares of Apple (AAPL), Coach (COH), Best Buy (BBY), Whole Food Market (WFMI), and Amazon.com (AMZN).

U.S. bank stocks, especially the shares of the big money center trading banks, are another way to leverage this end of the year relative superiority. These banks look to see a big pickup in trading revenue this quarter. I’d suggest JPMorgan Chase (JPM), Morgan Stanley (MS), and, of course, Goldman Sachs (GS), the stock so many investors hate to love.

The fourth quarter is usually good for technology stocks, but the only one that I see that combines some momentum with positioning to share in the fourth quarter U.S. “growth surprise” is Hewlett Packard (HPQ).

That’s not a long list for the “world’s best economy,” but then the U.S. isn’t likely to keep that title for very long either.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. Coach and JPMorgan Chase are members of my Jubak’s Picks portfolio https://jubakpicks.com/the-jubak-picks/. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. For a full list of the stocks in the fund as of the end of the most recent quarter see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/ )