More bubble trouble: Market, reporters and company so optimistic that they can feel the earth move.

Caterpillar, the heavy-equipment company, reported monumental losses and plummeting sales, prompting the company and reporters to proclaim that the company is speeding along the road to "rapid" recovery.

The market certainly bought into it: Caterpillar's shares hit a 12-month high today and it was the Dow's top performer.

The WSJ's Bob Tita writes that Caterpillar's third-quarter report is "one of the most bullish assessments for a global economic recovery as the U.S. heavy-equipment maker exceeded third-quarter profit expectations by a wide margin."

The world's biggest bulldozer company sees enormous future profit in the housing market worldwide and even in the U.S.

A vital part of homebuilding in the U.S., Caterpillar is well-known in the rest of the world for erecting Israel's apartheid wall, bulldozing Palestinian homes in the West Bank, and various allegations of human-rights abuses. Oh, and for crushing to death peace activist Rachel Corrie with one of its big ol' D-9s.

The company's own profit expectations had been exceedingly low. But expectations that the Great Recession is finally over are absurdly high. And the market seems so eager to believe this that some observers are ignoring reality. While Caterpillar was the Dow darling today, figures from the U.S. housing market were gloomy.

The enthusiastic WSJ story notes:

The corporate welfare for Caterpillar, sure, that helps the company. But it's hard to see how the company and analysts can be so enthusiastic about the housing market. Since December, the company has fired 18,700 full-time workers and an equal amount of part-timers. They probably aren't prospective home buyers.