Market psychology, knowledge, truth, mergers, and acquisitions should now result in an historic surge in stock prices.

Obama and the media were over the top during the campaign when they began using the "D" word. President elect Obama now realizes continued use of the "D" word is detrimental to himself politically as well as to America and he has stopped using it. But he still needs to get the media and his people to stop forecasting the worst of all possibilities every time they open their mouths.

Economic news is relative to the outlook and knowledge of investors. The growth now of a positive outlook will bring the realization that the market descended too far in anticipation of a great "D" and now has to correct upward to be consistent with only 1970's type stagflation. Investor knowledge should bring the realization that after the market bottoms it takes on average of six months for the economy to bottom and an average of 12 months for unemployment to peak. Therefore further news of deterioration of the economy and employment should have little negative effect provided President Obama sticks with capitalism and the economy bottoms by the summer of 2009.

America's unemployment will be dampened by the natural reduction in outsourcing and Democrat plans to tax outsourcing and other economic sins that rob Americans and give away our trade secrets. But America already has the lowest unemployment in the world. The European socialists like to reduce unemployment by reducing full time working hours from the standard USA 40+ to something usually well below 36 hours per week. So effectively you have to add at least 10% to their unemployment figures to be consistent with American unemployment statistics. Therefore Britain, Germany and France have more than 18% USA equivalent unemployment.

Socialism does not ease economic pain by encouraging innovation and growth with incentives. Instead socialist countries like to tax innovators and have everyone share the pain. Socialism benefits from the calming mean spirited psychological benefit that arises with the knowledge that everyone else is either just as bad off or even in worse shape. Socialist nations like to use pravda (the socialist word for truth) to delude their population into thinking their way is more equitable and that they have a higher purer appreciation of people and the environment. The Soviet Union's pravda effectively deluded American and European socialists who openly argued that the Soviets were helping not raping their environment and had no Gulag for protestors as we eventually learned.

The Asian markets seemed to be bottoming sooner than the USA and are up sharply again today.

^SSEC Shanghai Composite up 3.57%, ^HSI Hang Seng up 8.66%, ^N225 Nikkei up 5.20%,
^KS11 Seoul Composite up7.48%, ^TWII Taiwan up 4.57%.

The European markets are also up sharply and are waiting in anticipation of a great rally in the USA. They will be open most of this morning and will respond to the direction of American markets which appear ready to start with a small positive momentum after a 6% swing upward Friday as shorts began to worry.

^FCHI CAC (France) up 6.85%, ^GDAXI DAX (Germany) up 6.10%, ^AEX up 6.66%,
^OSEAX OSE up 5.90%, ^OMXSPI Stockholm up 5.05%, ^FTSE (Grand Britannia) up 5.05%.

So far president elect Obama is giving no hint that he wants to make the USA a socialist state. He may do as President Clinton did and abandon his party's far left and steal the best Republican ideas forcing Republicans to come up with new greater ideas. He could do that without political consequences because his support would grow immensely.