Today is the day we decide to hold or fold. Will they sack America too?

If the media continues to report raw data we should soon see a fall off in job losses starting in March. That would help a stock market rally. Of course if they want to continue "great depression" talk and to attack Wall Street they could begin reporting seasonally adjusted data as that would now be helpful in depressing the markets. But there is at least a chance that March will bear more favorable news in spite of the Obama Administration's apparent desire to create a worldwide depression by spreading fear and financial market chaos.

Yesterday, Obama decimated the Health Care sector by announcing his plans to reduce government maximum payments for pharmaceuticals and medical procedures. The health care stocks tanked in one session. Obama has tanked the automotive stocks, the financials, the coal stocks, the oil stocks, the infrastructure stocks, the alternative energy stocks, an now the health care and medical research stocks. But Obama could continue to do this indefinitely. He could start a whole new round of selling on Monday and drive stock values down another 20% in just two or three weeks.

As we said before our analysis showed that this week (today) is when either the window for being long in stocks will slam closed or we will begin to see it open up again. What has complicated that analysis is that the decision to possibly sell out occurs just when the market is extremely oversold. Usually times when the market is oversold are technically good buying opportunities but the apparent perceived competence level of Obama and his advisors has all the financial markets and all the market sectors trembling with fear. And today President Obama will speak again. What he says will either begin the next rally or will probably have the market collapsing in free-fall next week.

In light of what President Obama has accomplished in economics to date it would only be fair to give Attila the Hun a second chance to redeem himself. Attila believed in the redistribution of wealth too. He observed that the Romans had acquired vast wealth and had selfishly kept it to themselves and did not share much of it with the Vandal Tribes that had great needs for educational opportunities, homes, and medical care. Instead the Roman welfare system only provided the illegal immagrant Vandals with food, jobs, and land. Attila started as a community activist beheading and stealing from just a few when he started his career and became a great and vastly popular leader. He was one of the great socialists of his time and redistributed the vast undeserved and obscene wealth of the Romans to the poor and down trodden.

In retrospect the only poor and down trodden people that Attila helped were the Vandal tribes that followed him. He was their messiah of the underprivileged. But he did not help the poor and down trodden of other ethnic and racial backgrounds, just the hoodlums who helped him as he systematically sacked Rome. So grieved were his followers when Attila died that many of them cut off one of their own ears to show their love and affection for their messiah. Attila brought economic and educational equality to the Roman Empire. The Romans became as poor as the Vandals and education advanced into the period now called the Dark Ages. The great socialists such as Attila the Hun, Hitler, Lenin, Mao, and Stalin invariably can rise to power because they and their followers slaughter and eat the geese that lay the golden eggs. And when they run out of domestic geese they survive by invading their neighbors and eating their geese too. The origin of our word vandalism goes back to the great socialist experiment started by Attila the Hun.

Does President Obama aspire to become a great socialist too? Today, February 27, 2009, he will talk and the stock market will interpret his capitalist or socialist intentions.


Market Outlook

The broader market indices continue their white-knuckled hold at what could be a rocky bottom or just the edge of a cliff. The recent stock market behavior could support a major advance if it continues upward today. The oversold American stock markets dropped again yesterday and the futures for today indicate a weak opening. It looks like a critical day for the market and perhaps President Obama's last chance to stop an all out stock market collapse next week.

Last night Asian markets were down with China down 1.8%, India down 0.7% but Japan up 1.5%. Hong Kong was down 0.7%.

At this moment most European markets are down 2.5% to 3.3%. Perhaps socialist Europeans recognize the current administration as one of their kind.

Ben Bernanke yesterday declared that the banks would not be nationalized.FBI funds were cut to stop the investigation of political corruption.

Market Outlook

Irrational fear of risk has depressed markets and prices. The administration ignorance of the relationship between the equities markets and the American economy is profound. The markets lead the economy by at least six months. The more the administration tries to destroy the stock market with socialist code words the more they endanger the American economy. The administration has to become rational before the markets will become rational. The return of rationality in the market will cause a rapid substantial recovery in stock prices in a very short time. The economy will then recover quickly.

The broader American market indices held yesterday supporting the double bottom. The recent stock market behavior could support a major advance if it continues upward this week.

Last night Asian markets were mixed but edged lower ranging from +0.6% to -0.9% with only the city of Shanghai down 3.9%.

At this moment most European markets are up about 1.8% on average.

The broader American indices are still holding above their November lows and the futures indicate a good start for today. There remains 30% to 40% headroom for this American market to rally before hitting substantial upside resistance level. However the 50-day moving average could be a new resistance level limiting the advance to about 15% until the Obama administration becomes rational.

The window for selling out of equities started closing January 20 and is almost shut now. The oversold market condition right now will hold the window open and a continued surge this week could crack the window open further and make continued holding of any equities worth while at least into this next rally. This week is critical. We would wait to sell into the next rally if the rally continues this week.


Administration irrationality caused and continues the crises

The oversold American stock markets rebounded from lows again yesterday and the futures are up significantly today indicating that the market will do better today. Ben Bernacke spoke intelligently like a capitalist yesterday causing the market to recover earlier losses and to go into positive territory.

President Obama later talked again in vapid generalities just like a well meaning empty headed socialist and subsequently drove the market back into negative territory as the market closed. The administration of "social activist czars" hasn't got a clue about what makes an economy grow. They seem preoccupied with acquiring more power not the needs of the American people. One of their most revealing quotes is, "Never waste a good crisis." They seem to enjoy creating crises and blaming it on others. They have witch hunts going on everywhere against Bush's war on terrorism, persecution of terrorists at the Cuban Club, against Christians for the socialist's definition of hate speech as anything spoken against immorality, and against radio show free speech for their criticism of socialism and totalitarian power grabs. They are against intelligent working Americans who object to taxation to pay for hoodlum Acorn political hacks, illegal aliens, and the slackers who want socialism and a free ride. The administration cut the FBI funds from the stimulation package to stop the investigation of political corruption.

Last year the Obama campaign ignored the fact that no responsible Americans have used the term "depression" since FDR said, "The only thing we have to fear is fear itself." Obama won the election at the price of creating the fear that caused the current crisis. This continued administration irrationality causes irrational fear depressing equities markets and the American economy. Unless Obama becomes rational he will cause another Great Depression out of the crisis he caused during his campaign.

Bernanke (from the Bush administration) said yesterday that stock market ignoring fundamentals.

Federal Reserve Chairman Ben Bernanke said on Wednesday that recent sharp declines in stock prices mostly reflected investor attitudes about risk and had become detached from real U.S. economic fundamentals.

"The stock values reflect not so much the fundamentals, the long-term profitability of the economy, but they also reflect investor attitudes about risk and uncertainty which right now are at very high levels."

Bernanke said that while the stock market was one of the important financial indicators, other key variables like credit markets were painting a different picture.
"It does reflect the profit expectations of a large number of firms, therefore it is closely tied to expectations about the economy," he said, referring to stocks.

Bernanke attributed the rapid and sharp decline in stock prices to investors being "skittish about holding any risky assets under the recent administration hints such as socialist nationalism and (who) have moved in a very substantial way toward the safest assets like Treasuries. Bernanke declared that the banks would not be nationalized.

This rally needs to grow legs this week

Market Outlook

The broader market indices held putting in what could be a double bottom. The recent stock market behavior could support a major advance if it continues upward this week. The oversold American stock markets rebounded yesterday and the futures were soaring minutes ago but they are dropping even faster now. It looks like more chaos ahead plus another Bernacke speech today. “It is often better to keep one’s mouth shut and appear to be a fool than to open it and remove all doubt.” But lately Bernacke is looking very good when compared with the Obama administration.

Last night Asian markets were up with China up 0.3%, India up 0.9% and Japan up 2.7%. Hong Kong was up 1.6%.

China actually bottomed November 4 at 2201 and is now up 30%. Hong Kong is today up 18% from its November Low. Evan Japan is up 17% from its November low. In contrast the broader American indices are at their November lows.

There is 30% to 40% headroom for this American market to rally before hitting substantial upside resistance level. However the 50 day moving average could be a new resistance level limiting the advance to 15%. Of course under democrat-socialism fundamentals there is no predictable market bottom.

As we have reported before in a virtual countdown… the window for selling out of equities started closing January 20 and is almost shut now. Only a continued surge this week would crack the window open further and make continued holding of any equities worth while according to our technical analysis. This week is critical.

At this moment most European markets are up about 1% on average. But socialist Europe is all down and still declining from November 2008 levels.


President Obama spoke:

The president’s message last night apparently informed the more informed Americans that Obama doesn’t really care about the American economy but he cares about his power base and government socialism.

1) He is going to double the number of windmills and solar panels instead of making America energy independent with nuclear power. His advisor Warren Buffet no longer thinks that makes any economic sense and Warren now himself recommends nuclear power. Obama is going to make America the producer of electric cars and electric batteries but Americans won’t be able to charge them until we have sufficient electric power. That requires nuclear power. That is his energy policy which will fail and make American automobile ownership too expensive and will encourage mass transit as in socialized Europe.

2) He is going to help strapped taxpayers subsidize college union teacher’s salaries by giving a tax credit to offset the cost of some of professor perks. The local school teacher’s unions will get their money directly through the state stimulation packages. That is his socialized education policy which will is designed to make states dependent on central government subsidies and eventually state control of education as in socialized Europe.

3) He is going to scrap American human experimental cancer research into new medicines and spend less money instead trying to first find a cure for cancer in laboratory rats. He is going to get rid of doctors who are specialists and have unionized general practitioners like they have under socialism in Europe. In France the local doctors publish the days they plan to be on strike each week so that it is not an inconvenience and so the French know not to get sick those days. That is his American dream version of the European socialized health plans.

To do all of this President Obama adds that he will save 1$Trillion by moving the war on terrorism back to American soil where he thinks it belongs and where it costs less money to fight. He has computed and plans to show in future budgets that the destruction of the twin towers in NYC (in just two hours) actually cost Americans less in dollars and slightly less in lives than fighting terrorists in their back yard in the Mid East (for the last 6 years). However, Obama seems to hate Wall Street somewhat less than the terrorists hate it. Little of this savings from bringing terrorism home to America will actually go to build our infrastructure but is instead designed to put money in the pockets of people who support Democrat-Socialism by giving supporters cash, administrative paper pushing jobs and task forces to work on.

The stimulation package is designed to tax the portion of the population that is willing to carry the water and to grow the portion of the American population that wants to just sit there and drink it. That is how Democrat-Socialists plan to win elections.

One thing is absolutely certain; in the future the people who work for a living will no longer be stupid enough to contribute to the campaigns of Democrat-Socialist so the socialist will have to add a new priority to their list namely,

Priority 3) Limit opposition campaign spending with a spending cap below what unions and government workers can support.

The others are:
1) Suppress religious freedom and moral judgment by defining it as “hate speech”
2) Curb free speech criticism by imposing a “fairness doctrine” to make it economically impossible to air free speech by forcing equal time for dull socialists who can't find anyone willing to listen.

Democrat-Socialism takes away incentive to work and achieves uniform distribution by making everyone poor.

Corrupt socialist politicians and their socialist friends in corporations are the only ones to profit initially from nationalization but eventually the corrupt Soviet Union demonstrated that even the corrupt politicians and their friends become poor though they remain dangerously powerful right to the end. We saw the money flowing from Soros and other socialist currency market manipulators and mortgage con artists into the coffers of the politicians at unprecedented rates last year.

The Democrat-Socialist petrified stock market is now so undervalued that the current prices have built in the worst possible socialist state. To go lower we need to visualize something like a Socialist Revolution or something completely insane that perhaps only corrupt Senators could conceive. But if their corrupt associates are in hedge funds shorting the market they could all be at extreme risk of the FBI.

Look now for the Socialists to become alarmed about FBI and other surveillance of theft and corruption. They are already alarmed with free speech on their socialist air waves. Yes the socialists think they own the air we breathe and the sound and radio waves that pass through it. They have defined hate speech in such a way that church pastors are afraid to preach about morality in California and other strong Democrat-Socialist states.

The lows of the broader market indices held again. The S&P yesterday was at its November low as was the NASDAQ. The S&P close was actually a fraction below its close on its November low.

The stock market behavior could support a major advance if it turns upward this week. The NYSE, S&P, NASDAQ, and QQQQ all barely held their November lows. This recent decline has low volume unlike during the November capitulation. The market will gain confidence late this year as the FBI removes the moral hazard from the world financial systems provided the Democrat-Socialists don’t outlaw investigations as too intrusive or prejudiced and hateful of the corrupt.

Market Outlook
Last night Asian markets were mixed with China down 4.5%, India down 0.2% and Japan down 1.5%. Hong Kong was down 2.9%.

China actually bottomed November 4 at 2201 and is now up 29%. Hong Kong is today up 16% from its November Low. Evan Japan is up 15% from its November low. In contrast the broader American indices are at the November lows.

At this moment most European markets are down about 1.6 % on average.

Socialist Germany is down 4.5% from its November 2008 low. Socialist France is likewise is showing no bottom.

The US market futures indicate a slightly positive opening this morning. There is 30% to 40% headroom for this market to rally before hitting an upside resistance level. Under democrat-socialism there is no predictable bottom.

As we have reported before in a virtual countdown… the window for selling out of equities started closing January 20 and is almost shut now. Only a surge this week would crack the window open further and make continued holding of any equities worth while according to our Re-spiral method that uses MACD and Parabolic SAR data.

Our cash flow index still says hold but says that on very little net cash flow. Our trend indicator seems to be peaking and may portend the end of the Obama honeymoon rally. This week is critical and will determine if the next leg is up again or down. The Democrat-Socialists have brought the stock market to its knees with American workers and retirees begging for some signs of mental activity, competency, and integrity.

Will the FBI take out the Senate Moral Hazards soon?

Perhaps not soon enough.

Senators Dodd and Rangel brought down the banks by shielding the mortgage fraud from investigation. Dodd took a cozy deal from Countrywide while Rangel has been accused of other real estate opportunism. Has the FBI put a tap on Senator Dodd so that they can find out why he is trying so hard now to destabilize the stock market? Again, he has been suggesting that a short period of nationalization could be needed. What does Dodd have to gain by spreading reckless rumors that imply US shares could be rendered worthless by incompetent, reckless, and no doubt corrupt government officials that perhaps have gone short against the future of America? Dodd seems to be doing everything in his power right now to bring down the American financial system.

Citi just retaliated by converting government cash investment infusions from preferred stock into common stock which means incompetent, reckless, and corrupt government officials will be red faced if they nationalize Citi because the government would lose value proportionately and thus the relative ownership of the common shareholders would be maintained. Therefore shareholders could be made whole again once the markets recover. It does not matter that the government could now vote their common stock because they are already dictating to the banks in spite of the fact their preferred shares gave them no voting rights. Converting the government held stock from preferred to common puts a limit on how much financial stocks could fall.

Seriously, the “Ab Scam” type investigations by the FBI of elected officials that cleaned out the morally hazardous politicians who were selling America down the river to Arab princes in the 1990’s is sorely needed again now. The stock market needs to see that the obscenely corrupt Senators are put away… not just the obscenely greedy corporate thieves. They worked together to set up the mortgage Ponzi scheme and just like Madoff… everyone could smell the corruption from the fact that no one could explain how it created any real value.

As we stated last week the performance of the blue chip DOW took a beating and hit new lows because the extreme fear of the financial talking heads in the media caused investors to shift into the Blue Chips last year. That resulted in the DOW being overvalued relative to the market as a whole. Consequently the Dow capitulation in November was not as low, and the current level of the DOW is now more consistent with the broader averages. Of course Russell got a DOW sell signal. But the fat lady has not yet sung. Bob Brinker said to get back into the market on dips starting on January 15, 2009. We have been recommending selling on advances since January 20, 2009 because that is when the market entered a whipsaw period where the market could end up going both south and north thus whipping investors. It is a dangerous market now even for traders. This is the critical week for our indicators when our selling window of opportunity could either close or could open further if the market advances.

The market is now so undervalued that the current prices have built in the worst possible depression. To go lower we need to visualize something like a revolution or something completely insane that perhaps only Senators Dodd and Rangel could conceive. But if their friends are in hedge funds shorting the market their friends could be at extreme risk (of prison) if the Senate moral hazards are driven out of office.

The lows of the broader market indices held again. The S&P closed 4% above its November low and the NASDAQ closed 10% above its November low.

The stock market behavior could support a major advance if it turns upward this week. The NYSE, S&P, NASDAQ, and QQQQ all held above their November lows. This current low has no volume like the November capitulation had. The market will gain confidence late this year as the moral hazard is dissembled and removed from the world financial systems.

China bottomed at the end of December and is now up 29%. Last night Asian markets were mixed with China up 2%, India down 2.2% and Japan down 0.5%. Hong Kong was up 3.8%.

At this moment most European markets are up about 0.8 % on average.

The US market futures indicate a slightly positive opening this morning. There is 30% to 40% headroom for this market to rally before hitting an upside resistance level. We could sure use a short squeeze right now.

A full market recovery is now possible as the FBI dissembles the financial moral hazard

The lows of the broader market indices held again. The S&P closed 5% above its November low and the NASDAQ closed 11% above its November low. The moral hazard is about to be punished by the FBI.

The stock market behavior appears set to support a major advance not just another bounce. The NYSE, S&P, NASDAQ, and QQQQ all held above their November lows. The market will gain confidence as the moral hazard is dissembled and removed from the world financial system.

The DJI's low in November was not a full capitulation because investors were fleeing to the Blue Chip stocks under the mistaken belief that they represented quality. Jim Cramer, the Money crowd, and others were pushing favorite portfolio picks from the Blue Chips then. But more recently investors discovered that the dumbest and most corrupt executives were in the big trusted companies reaping the obscene bonuses like Bernie Madoff and Allen Stanford.

In fact the whole Financial Crisis is the consequence of a Subprime Mortgage Ponzi Scheme that required the debt demand of people who wanted to buy a house. The corrupt mortgage lenders had to gradually drop borrower acceptance standards because they could not get enough mortgages to fill the demand for the high interest junk mortgage derivatives that the banks were selling. Ultimately some investors, Goldman Sachs, and hedge fund managers suspected that it was a fraud and began betting against the Ponzi scheme.

We have finally reached the stage when that moral hazard is about to be taken down by the FBI. The FBI says more than 500 companies were involved. This purge and punishment stage is necessary for confidence to be restored to banks and the world financial system. This punishment of the morally obscene and stupid executives who caused the crisis and thought Americans were dumb enough (like G. "W" Bush) to not go after them… is the final requirement for a full market recovery.

China bottomed at the end of December and is now up 27%. Last night Asian markets were mixed with China up 1.6%, India down 2.2% and Japan down 1.9%.

At this moment most European markets are down about 3 % on average.

The US market futures indicate a negative opening this morning but still only the DJI is below the November low at the opening for the reason we explained above… that people in November fled to the DJI on the mistaken belief they were of better quality. Yesterday the S&P closed 5% above its November low and the NASDAQ closed 11% above its November low.

Options expirations will help the market that is ready to advance after several successful tests of the market's recent lows. There is 30% to 40% headroom for this market to rally before hitting an upside resistance level.

The stock market behavior appears set to support a major advance not just another bounce.

Yet the fear gauge, VIX, remains at 48… a high level which prior to 2008 only occurred during short intervals of panic! People are highly hedged and under those conditions the people selling PUTs have a great interest now in reducing volatility, not fear. Cash flow has been low and slightly negative which is not bad. But when the market hovers so close to bottom resistance levels it is at risk of setting off panic selling. The stock market would normally rise during the next two days as options expire this week and the people selling the puts buy shares so the PUTs expire worthless. People who like to channel stocks would say this is the best time to buy into this market.

According to our Re-spiral indicator the market now has less than two weeks left to start a rally or we would normally liquidate our stock holdings in anticipation of another downward leg. The administration yesterday predicted that unemployment would still be under 9% at the end of the year but there would be some contraction in the economy. They have so exaggerated the fall off in retail sales with their -2% per month talk that now their predicted 2% year wide contraction sounds like an improvement. President Reagan saw unemployment peak at 12% after Jimmy Carter's "malaise" and stagflation. Most economists are still predicting the economy will turn around before this year ends.

Bob Brinker said, "We expect calendar year 2009 to be a significant positive year for the stock market."

China bottomed at the end of December and is now up 26%. Last night Asian markets were up with China up 0.8%, India up 0.3% and Japan up 0.3%. Hong Kong was up 0.1%.

At this moment most European markets are flat, up about 0.1% on average.

The US market futures indicate a positive opening this morning. Options expirations will help the market that is ready to surge after several successful tests of the market's recent lows. There is 30% to 40% headroom for this market to rally before hitting an upside resistance level.

Are the Treasury and FED Reserve now taking over the toxic banks?

This could be a brilliant move on the part of Geithner and Bernanke!

Yesterday it looked like the stock market was being manipulated to take over the toxic banks without setting off a stock-selling spree. Think of it this way. In the past when a bank failed the short sellers made a killing, the stock holders lost everything, and the FED had to absorb the cost of toxic assets. The stockholders and FED were first the victims of irresponsible management and then the stockholders were victims of the short sellers and the FED. Now here is an equitable solution. The Fed cuts out the short sellers by selling the toxic banks short (diluting the stock) themselves thus raising the money needed for the takeover. Once they short the toxic banks and have cleaned them up they can use the remaining money from the dilution of the stock to buy back shares until all the money they took out of each bank (less the cost of its toxic assets) is restored to the shareholders. That leaves the banks/insurance firms private, solvent, and with new management when they are done. Could this be what was happening Tuesday February 17?

The market performed like the market of a socialist country where the government determines the valuation. It opened down about 4% and stayed there. Every small rally was followed by a sell off that seemed to keep the values near a government fixed level. If that is what the Fed is doing it would be an excellent way to stabilize the market and restore shareholders to a fair market value when they are done.

Bob Brinker must be ready to commit himself to an asylum after his January 15 alert telling his followers that the market had bottomed. He was about 8% late and the DJI has since then dropped 660 points or 8% back to the real bottom.

According to our Re-spiral indicator the market now has less than two weeks of life left to rally or to completely liquidate our stock holdings in anticipation of a major down move. Cash flow wise, the market is still sound but when the market is so close to resistance levels it is at risk of setting off panic selling. Yet historically the stock market should rise during the next two days as options expire this week.

China bottomed at the end of December and is now up 25%. Last night Asian markets were down with China down 4.7%, India down 0.2% and Japan down 1.45%. Hong Kong was up 0.55%.
China is worried about America. I have worked with the Chinese at Beijing University and they have had very pleasant experiences with Americans. We only faced off against China in Korea and in North Vietnam and the Chinese do not particularly get along with either of those two very aggressive nations. At this moment most European markets are down about 0.75% on average.

The US market futures indicate a flat opening this morning and perhaps a continuation of yesterday's manipulation. There is 30% to 40% headroom for this market to rally before hitting a resistance.

The financial stocks are now apparently under the able hands of surgeons Geithner and Bernanke

Bob Brinker declared the US market bottom is behind us

Bob Brinker was on time when he first called the market top in 2000 but then equivocated giving a QQQ buy recommendation just before it plunged. He was four months late when he called the market bottom in 2003 but held firm with that decision and correctly said we were in a long secular bear market. However he equivocated again in early 2007 and said it was no longer a secular bear market but had become a bull market. He then failed to call the market top in November 2007 (13 months late). He recently called the bottom of the bear market Late January 2009 (two months late by our count).

So we see that Bob Brinker tends to be cautious and late on his market timing calls. But it is good to know he is back on board and we hope late once more. Implicitly when one has seen a market bottom it means the economy will bottom in three to nine months. So it is clear Brinker does not buy into any of the Obama Administration depression hysteria either.

Perhaps the Obama campaign hysteria was necessary to demonize Republicans and win the election but it is time for the Obama administration to drop it. If he continues Obama could eventually create a second "Great Depression" just like FDR's with the expansion of ineffective and inefficient government programs and with additional debt burden when there already is excessive national debt. Only in the case of FDR his administration there were no signs of corruption with taxpayer money going to groups that serve to register only democrats and to corrupt the census and to divert money to political hacks, handlers, and hoodlums.

According to our Re-spiral indicator the market now still has about three weeks of life left to rally. If the indicator tanked now it would have at least a week left to completely liquidate stocks. Cash flow wise, the market is still sound but when the market is so close to resistance levels and when the administration is hysterical and seems clueless they destroy hope, trust, and confidence and become an economic liability. President Obama himself is now the world's greatest liability of a Great Depression. Even if his hysteria does not cause an immediate depression his taxation and spending will leave us with a stagflation bubble much larger than the Jimmy Carter malaise left forever optimistic and greatly successful President Ronald Reagan.

China bottomed at the end of December and is now up 30%. Last night Asian markets were down with China down 2.9%, India down 2.9% and Japan down 1.4%. Hong Kong was down 3.8%. At this moment most European markets are down about 2.2% on average.

The world markets (excluding China) are waiting for the US markets to indicate that the Obama Administration is no threat to a recovery.The US market futures indicate a lower opening this morning and another test of the upward US market trend line.

There is a lot of headroom left for this market to rally. Geithner realizes there has to be a worldwide effort with uniform banking and stock market regulations on reporting and shorting. At home Geithner will likely propose the US invest 25% in failing mortgages with the money to be paid back from the profits on the eventual sale. That would put an end to the mortgage melt down. Commodities remain weak so inflation is no immediate threat.

Today we expect the market to bounce and rally strongly.

"The market is deeply cynical of what’s going on and no one in Washington has any more idea than a goat what they’re doing," said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Management in Cincinnati. "Unemployment numbers are going to be bad for a while."

Yesterday American markets recovered in the last hour when short sellers concluded the resistance level would hold again and the rally would likely resume.

According to our Re-spiral indicator if all goes well our indicators show the market now still has at least three weeks of life left to rally. If the indicators tanked now it would leave at least a week left to completely liquidate stocks. Cash flow wise, the market is sound but when the market is so close to resistance levels and when the administration is hysterical and seems clueless they themselves destroy the hope, trust, and confidence needed for economies to function. Obama himself is now the world's greatest liability of a Great Depression. Even if his sky is falling hysteria does not cause an immediate depression his taxation and spending will leave us with a stagflation bubble much larger than the Jimmy Carter malaise left to President Reagan.

Last night Asian markets were up with China up 3.2%, India up 1.8%, and Japan up 1%. Hong Kong was up 2.5%.

At this moment most European markets are up between 0.5% and 2.5%. The US market futures indicate a higher opening this morning.

There is a lot of headroom left for this market to rally. The CBO TV special last night may make Americans more confident that we can clean up the sub-prime mess. Geithner also now realizes it has to be a worldwide effort for two reasons. First banking and stock market regulations need to be uniform or else they break down to the least restrictive code. Stimulus packages weaken the currency so they need to be done together to reduce national currency imbalances.

Today will be another market test of strength

Yesterday American markets recovered but are dangerously close to past support levels. Still the administration has no plan to resolve the mortgage toxic waste banking crisis that Rangel and Dodd created. A poll this week shows Dodd now has an unfavorable rating and could be unseated just as his father was for corruption. His father also took small gifts from those he helped. Dodd got a special mortgage deal on his house from Countrywide and refuses to disclose the interest rate or whether the price was inflated so that he could take out more cash than it was worth.

The market gains last week have given the market longer life so that according to the Re-spiral indicator the window for exiting this current rally is two and a half weeks now. Cash flow wise the market is sound but when the market is so close to resistance levels and when the administration is hysterically proclaiming the “D” word every other day it cannot be to good for retiree 401s and consumer sales. The Obama administration is the major financial crisis right now until they stop talking and come up with a real plan.

Yes, the spending plan can give the economy a bounce but it will also create a bubble of inflation much worse than President Regan had to cope with after Jimmy Carter. And as everyone knows that Carter inflation bubble caused a recession just as bad as the one we face today so the next bubble will be much much worse. A run on stocks today by short sellers would be very dangerous.

Remember from the 50 year period of socialism in once prosperous Eastern Europe and once prosperous Cuba that they did accomplish an equal distribution of wealth by reducing everyone to equal levels of poverty. But Stalin had to kill an estimated 80 million people in the Eastern block to do it and about 25% of the Cuban population had to flee for their lives as well. So Obama’s socialist vision is not a pretty sight to look forward to. The democrat-socialists already want to silence critics with a new FCC restriction of the broadcast of any free speech that is critical of government tyranny and corruption.

So Obama Socialism is no less dangerous than it was in East Germany. For example. American Socialism can be expected to completely wipe out investments because zero value makes it inexpensive for government to nationalize. Just look at what they have already done to their first victim, the banking industry. Geithner was the person who during the last administration recommended and got the complete failure of one American bank before the Bush administration stopped listening to Geithner.

Last night Asian markets were down with China down 0.6%, India down 1.6%, and Japan down 3%. Hong Kong was down 2.3%.

At this moment most European markets are down between 1% and 2%..

The US market futures indicate a slightly lower opening level. Sales figures should continue to get worse most of this year because they are not quoted correctly on a seasonally adjusted basis from month to month. Instead they make sales look twelve times worse by quoting it on a year to year basis. They think that is ok because it is comparing season to season but it is not OK for this reason. When sales decline just 2% and stay down 2% for the entire year they report it in such a way as to make investors think it has continued down another 2% every month so that after 12 months … investors are thinking sales dropped a total of 24% when in fact sales are down only 2% for the entire year not 2% every month.

These hysterical socialist doomsayers want to look like Leninist - Castro heroes when in fact they are Leninist - Castro economic disasters waiting to happen. These new Democrat-Socialists are the economy’s greatest threat today. They have yet to admit the new political party they have become.

Unemployment numbers will continue to get worse but the layoff rate should drop substantially in February and continue at a lower rate but one that exceeds the rate by which jobs are created. In fact the stimulus plan will have almost no effect this year unlike a tax cut or a check for every taxpayer. But then the socialists do not care because this is not an election year.

Most likely, the market will continue to trade in a very wide 25-50% range until the democrat-socialists can be voted out of office in 2010. The market for stocks continues to be characterized by favorable valuations and improving market cash flow and market breadth. The market action is bad because the world fears that the last bastion of economic liberty and reason (America) is becoming more socialist-Marxist.

American socialist-Marxists are even publicly talking about limiting American free speech, gagging the critics of socialism, and Jimmy Carter recently said the state of Israel is the Mid East problem. If they gagged all the democrat-socialists that would probably unleash a raging bull market.

But today Obama has the market where he wants it and he wants to see all rich people lose all their investments so they will believe capitalism has failed and will then buy into his social revolution. Unfortunately America is the last island of economic and social freedom, the last hope. Only when you give up hope will socialism reign again as it did from the rise of Germany’s National Socialism until the fall of the iron curtain.

The socialist require that we give up hope and turn to government for everything. Only when you have your government job will the socialists be able to truthfully say it is not your money anymore it is the money they decided to give you and that they can take away. You will no longer be able to say, “No it is mine because I earned it!” And if you don’t show up and wave the red flag on May Day you will have a new job sweeping the streets.

Americans discovered their four pillars of financial catastrophe. They are called Obama, Geithner, Rangel, and Dodd.

Yesterday American markets plummeted with the realization that our American economic administration is without a plan.

Last night Asian markets were down slightly with China down only 0.2%, and India and Japan down only 0.2% Hong Kong was down 2.5%.

At this moment European markets are down fractionally.

The US market futures indicate a slightly lower opening level but my conclusion (see below) is that America is not going into a depression and we will recover with capitalism regardless of the our

President Obama finally succeeded in terrifying Americans. Americans are now terrified of President Obama. And they said President Bush wasn't smart enough. At least President Bush and McCain were smart enough not to tear down confidence in the American economy. In comparison, President Bush was a wise man because he knew; "It is better to keep ones mouth shut and appear to be a fool than to open it and remove all doubt."

Stocks dropped precipitously and Treasuries advanced in utter disbelief that the administration hasn't got a U.S. bank-rescue plan. Federal Reserve Chairman Ben S. Bernanke says he has initiated a review of the information it provides the public after Congress criticized the central bank’s poor disclosure and control during the unprecedented expansion of its holdings.

Rangel and Dodd created all the toxic waste and said if realtors and Wall Street did not make toxic waste marketable they could not participate in mortgage lending. The housing industry either bought into it or government cut their clients off from mortgages altogether. And so Wall Street came up with a method to hedge the risks of defaults but the socialists running the Senate Banking Committee (Rangel/Dodd) kept heaping on more concentrated toxic waste until it brought down the world banks and Fannie and Freddie.

Last week's market advance was largely based on Wall Street's hope that current mark-to-market rules will be abandoned or modified. President Bush Sr. instituted a policy of forbearance to be more forgiving in previous banking collapses here, in South America, and in Asia. Doesn't anyone in the Obama administration know anything? Didn't they at least take Economics 101?
Wall Street has just concluded Americans were right on Election Day. This administration is pompous, arrogant, and clueless and so the stock market plummeted once again .

Most likely, the market will continue to trade in a very wide 25-50% range until the congressional socialists are voted out of office in 2010.

Until we restructure the banks the mortgage industry, the real-estate industry and Wall Street... the credit markets will remain cautious and tight. The restructuring needs the 1933-type banking regulations applied worldwide. The reason our regulations were removed is because America could not compete with European and Japanese banks that did not have the same fund co-mingling and margin restrictions .

The market for stocks continues to be characterized by favorable valuations and improving market cash flow and market breadth. The market action is bad because the world fears that the last bastion of economic liberty and reason (America) is becoming more socialist-Marxist. American socialist-Marxists are even publicly talking about limiting American free speech and gagging the critics of socialism. If they gagged Obama that would probably unleash a raging bull market.

Stimulation package or is it just a toxic slush fund? China refuses to pay for it! Should Americans?

Last night Asian markets were mixed again with China up 1.8%, India Up 0.7% and Japan down 0.3% with concern over Obama apparent administration meltdown.

At the moment European markets are mixed ranging from, -1.7% to +0.8%

The US market futures indicate a lower opening level with the stimulus package not passed yet and with the scheduled "Toxic Bank" unveiling of Treasury Secretary Timothy Geithner's today. We expect financial stocks will someday get a big boost under the new plan. That will help the entire stock market and economy.

Good luck on your investment journey.


On the disappointing side.

Obama is now arguing with radio commentators such as Rush Limbaugh indicating some kind of an administration breakdown is taking place. The immediate effect is to cause investors to question his administration's ability to oversee any community activist economy much less a national economy. The fear mongering could eventually create a depression if it does not stop.

ACORN, the Chicago group that registers people and cadavers multiple times for party line voting gets $4.19 billion from Obama’s toxic stimulation package. Republicans cut a similar disgraceful slush fund from the original $700billion TARP bill last year but this time the Democrats have the majority to do whatever they please. How does stimulating Illinois con artists from ACORN help the economy? ACORN claims it is not illegal to register people to vote multiple times at different places if they don't actually vote multiple times. They say it is only illegal if they get caught. ACORN sent hoods that got arrested last November on election day when they stood at polling place doors and intimidated the 80 year old retirees who worked at the polls as voter identity checkers.

If Acorn were a large sized Chicago group with say 1000 members each member would be getting $4.19million from the toxic stimulation package for having registered voters for Obama. They are a completely Democrat political action committee getting taxpayer dollars. But they don’t even have 1000 members. How much of the stimulation package goes into a political slush fund for 1010? If Obama demands this nonsense we can only hope no republicans or independents vote for this because corruption is based on the idea that everybody has to do it and corruption always wants total complicity so nobody can point a finger at anyone else. They should take that 4.17 billion and give it instead to the FBI to investigate toxic Stimulation Package related corruption. The biggest joke going around now after three cabinet members were caught cheating is that Democrats do not support tax cuts because they don't pay taxes. But that is not funny. Forty percent of eligible voters do not pay taxes and that block of voters now controls the House, Senate, and President. China said they would no longer support American deficits by buying toxic US treasuries.

This is no stimulation package; it is a toxic inflation package three times worse than what Jimmy Carter left to Ronald Regan. Ronald Regan had to quell a 16% inflation rate that Carter left him. Who is going to be able to quell a potential 48% inflation rate that Obama leaves behind? These bubbles then explode and become deflation cycles that are growing larger and more unstable each time.

The Bush tax cut deficit was needed to avoid a financial crisis caused by the Dot-Com bubble that popped in 2000 and the 911 attack in 2001 and we funded by money from American consumption of China's products being reinvested in America by China.

This new 2009 toxic-spending package will be just as toxically wasteful as the recent uncontrolled diversion of taxpayer money by Rangle and Dodd to people who never paid taxes but got toxic home mortgages at taxpayer expense.

The Rangle/Dodd toxic mortgage scheme caused our current financial crisis and the 40% of Americans who don't pay American taxes elected the current administration and will get the new toxic federal handouts just before 2010 election.

The current administration won election with irresponsible "depression talk" that frightened people who started to believe them. The stock market has already discounted a depression. The current administration continues "depression talk" to divert more taxpayer money which will become available mostly in 2010 after the recession is over but just in time for elections. We are witnessing the wholesale corruption of the American political process.

But America is still strong and resourceful and the market already capitulated in the plunge that began with the election of this administration. Recovery will likely occur before the end of 2009 in spite of this administration. We will profit from putting our grandchildren further into debt. We expect the current rally to continue and the inflation caused by this administration probably will not be felt until 2011 after the toxic stimulation-spending package takes effect. Right now the stock market faces risks every time Obama and his adinistration opens their mouths.

Layoffs are already plunging this month for reasons explained yesterday… and that would be good news coming out in just three weeks. People who are gullible enough will credit the new administration for the improvement.

Stock market rally now has legs that are about four weeks and 40% long!

Last night Asian markets were mixed with China up 2%, India Up 3% and Japan down 1.3% on an announcement of an 8% layoff at Nissan.

At the moment European markets are mixed ranging from, -0.7% to +1.2%

The US market futures indicate a lower opening level with the stimulus package not passed yet and with the Toxic Bank announcement pushed off until tomorrow.

The first Bush Administration solved the 1989 banking crisis and South American bank meltdown by being a little forgiving on capital ratio requirements that then were and now are causing the liquidation of bank assets. Tuesday, this rally should again surge forward with the announcement of a "Toxic bank of America" and a new forbearance towards maintaining bank debt ratios. HIG was down sharply on Friday even as other financials rallied in advance of Geithner's anticipated Tuesday announcement. HIG cut dividends apparently to set aside more capital since they insured the peanut butter manufacturer that sold contaminated product causing the deaths of seven people. It is possible the manufacturer criminally violated laws and HIB will not have to pay anything.

What is a 40% profit given stocks were down about 50% from the high?

A 40% increase from the -50% low puts you still 30% down from the high. That is why a 40% rise in this first rally is not that high an expectation. You could do better but what if you then miss the rally altogether? Typically if you miss the first rally after this significant a decline then you miss half the market rise for the entire year. If you are afraid to buy low then you have no alternative but to buy higher. But if you buy higher and sell high you don’t make much. And worse yet, if you buy higher and we get the sell signal then you lose just like investors lost in late 2007 after we were warning for four months before the 2007 peak.

The S&P market trend channel now shows about a 15% rise is possible to the 1000 level of the channel resistance area. The 200-day moving average resistance level is closer now to 1055 or 20% higher than the S&P closed Friday Feb 7, 2009. So a 40% rise from the December 2008 low is about a 20% rise from where we were Friday. Already the first leg of this first Obama rally is about half over!

People with any human resource knowledge of retirements and layoffs know these reductions tend to be planned for the end of the year for very good business reasons.

First, to entice employees to retire with higher self-esteem, the best time for a corporation is usually October 1 to December 31. October is better if the corporation plans to have a layoff later in the year. Hinting to low performers that a layoff is coming gets greater participation in the retirement package and frightens short-term employees into working harder or looking outside the company for another job. By making retirement a few months earlier the corporation can add all the unused vacation time to the severance pay as well. That vacation was earned the previous year but the retiring employee gets that and the normal severance package all in one fell swoop. They are completely off the books by Dec 31 and earn not more vacation. The employee's income is thus maximized for his last year and that is good for setting social security level and for employee bragging about the good deal! The corporation could care less about the employee's taxes because they are withheld and never actually become spend able income.

Secondly, to layoff employees with minimum expenses corporations want them out the door before they earn next year's vacation rights so they have to be out by December 31. But corporations prefer to hint of layoffs to poorer performers a year or two in advance so that they find a job and leave at their own expense. To maximize corporation profit they try to get the maximum work out of the employee so they vaguely announce the coming layoff early enough so that all employees put in an extra good effort right up to the time the unfortunate few are walked out of the building.

For those two reasons and more, the workforce unemployment/layoff rate rose sharply this December and spiked in January 2009. Therefore the layoff figures will drop sharply in the February 2009 reports but the percent unemployed will continue to rise even as the economy recovers. President Obama's can then declare his imaginary "Bush depression" has been averted and the stock market rally could go on longer. He has to hurry with the stimulation package because if the February reports occur before the package is approved… then Congress will know there was no need for the spending bill in the first place. This whole financial and stock market crisis has been the result of media and Obama's "Great Depression" political campaign propaganda undermining confidence in thee Republicans to win the election.

The Obama enamored media think the tail wags the dog. They say the market went up last week because people think higher unemployment will force Congress to approve the wasteful government-spending package. The opposite is actually true. The Obama administration is trying to get the stimulus package through as fast as possible now because it knows that at this very moment layoffs have dropped sharply. Therefore Obama is more willing to compromise and cut some of the spending which he knows most Americans do not want. Next month when the low layoff numbers are announced the US Pravda media will of course credit the decline in layoffs to corporate confidence in the Obama administration's astounding performance in turning our economy around from the precipice of a Bush depression to a golden era of Obama. Still this Orwellian fantasy could be good news for the market's rally if it lasts that long.

Market surge is imminent, take profits but do not short!

Well the great news yesterday was that the MACD for the S&P broke through to positive territory. The MACD currently is the re-spiral method’s signal for when the current rally will be over and when we should be on the short side of the market. We would be hesitant to short the market at this time unless specific stocks in certain sectors get highly over bought. The re-spiral window for getting out of this rally is almost three weeks farther to go and the chances of this opportunity opening a lot farther grew enormously yesterday. So we can go back to cherry picking by setting exit levels at least as high as the stocks high in the past month or two.

Last night China was up 4%, Hong Kong was up 3.6%, Japan was up 1.6% and India was up 2.3%.

Today European markets are up an average of 0.6% waiting to see if the American markets surge higher today.

American market futures are slightly positive at this early hour.

On February 9, U.S. Treasury Secretary Timothy Geithner’s team will decide if American banks can survive or if America will need to nationalize them including Bank of America. One strategy to aid America’s banks will likely be guarantees of toxic assets by creating a so-called aggregator bank just for the toxic waste. That “Toxic Bank of America” could very well be highly profitable after a few years of inflation provided we do not pay too much for the toxic waste. It is likely that this action will cause a stock market upward explosion. On the other hand if Geithner’s plan is nationalization I believe he will ultimately be thrown out and forever be regarded as toxic waste himself. This decision on Feb 9 could be the spark that sets off the short squeeze that sends stocks through the roof.

There is a tendency in the market for everyone to pile on to a particular stock and Jim Cramer is a leading advocate of that method of selecting stocks. That is why they are all piling into Wall-Mart right now. For that reason I would not touch Wall Mart right now. A few months ago Jim Cramer said his charitable trust was buying NAT but a very similar company, DSX, was up 45% when I sold the other day and NAT is still down from when Jim Cramer recommended it. Why? Jim Cramer seemed depressed and said the problem with the dry ships is they have too much debt. Yet NAT has no long term debt and very little short term debt.

I personally will not publicly say what I buy or sell short nor would I even give that away by making specific stock recommendations because there are people who have sufficient resources to pound you down if they do not like you. One analyst downgraded NAT after Jim recommended it... possibly because the analyst did not like Jim because it looks like in this case Jim makes sense and the analyst did not. How could Jim call it best-of-breed and the analyst finds it worst-of-breed for twin sister stocks in the same sector? It is possible because emotional decisions are often illogical. Neither Jim, that opposing analyst, nor anyone else knows tomorrow’s best selection. They have based their selections on what most people said was valuable in the past and their advice may not be on the mark. Investors have to look themselves for the best opportunity because after a run up that shooting star stock could have transformed from best of breed to worst of breed. That contradicting analyst may actually dislike Jim and be letting emotion rather than reason govern his downgrade decision.

We recommend watching one's portfolios carefully to use these rallies wisely to reduce holdings when you show 40+% profit peaks. After Feb 9 we will have a better idea of the market strength. Remember that the re-spiral had its window of short holding transition to covering and buying long from Nov 6 to Dec 5, 2008. The long holding window transition to selling out and then selling short is what is open now. Obviously you do not want to short this market until the very end! If you short you need to wait until this window is about closed or else you could be caught in a short squeeze yourself!

Good luck on your investment journey.

News is still being manipulated to the negative.

Asia/Pacific markets were down about 1% on average last night with China down 0.5% and Japan and India down over 1.1%. European markets are currently down about 0.8% watching US futures that currently show the DJI opening slightly below 8000. The last DJI low was the recent 7949 but the low on November 21 was 7392.

We recommend watching one's portfolios carefully to use these rallies wisely to reduce holdings. Some of the high dividend and Asian market investment we expressed interest in have advanced significantly. Yesterday DSX was still paying a dividend of over 28% per year and was up over 40% from when bought it. We never mention specific stocks just categories and conditions to screen for. High dividend is not enough. The ability to pay the dividend is equally important and that means they need to be cash cows today. But the window of opportunity to sell and take profits is open now and we will reduce our profit expectations so that we can liquidate most profitable investments in the rallies until the window of opportunity closes. The earliest the window could close is still a few weeks away but it could stay open longer. In 2007 the selling window was open June20 to Nov 2, 2007. Even if we cannot get out of some of our investments right now with a profit, their high dividends and their low debt and plentiful income, and cash cannot be beaten. It makes some of them worth holding into the next rally.

A gauge of the private sector job market showed that the nation’s economy lost more than 500,000 jobs last month, down from a December record level. The ADP National Employment Report, which is put out by ADP Macroeconomic Advisers, showed that the cut in January was basically in line with economists’ expectations. The US Pravda however gave it a negative spin because it is too early to report any good news because people might realize that the improvement was before the new administration has done anything. It is extremely important to continue to pretend we are going into a depression so that if Obama actually puts us in a depression with his socialist policies, he can still blame Bush. It would be counter productive for US Pravda to point out that normally in recent years January sees about 80,000 more layoffs than December because sales forces are trimmed after the holidays. So the fact that January payroll force reductions were less than in December was indeed very, very good news that the US Pravda media had to work very hard to spin as negative news. The current administration is still considering a fairness doctrine to reward US Pravda for their fair minded spin and silence any press that tries to report truth or refuses to distort statistical facts to make the past administration the fall guy for the fabulous new administration.

President Obama finally did what President Bush should have done and told greedy incompetent Wall Street elite that if they want government welfare then the top level they can scam taxpayers for their shoddy work is $500,000 a year. That is more than Stalin, Hitler, and most world famous cannibal leaders ever took home in salary and bonuses. Goldman Sack executives immediately responded and said they would like to pay back U.S. TARP money soon. CFO Skinny Vinny said Goldman Sack Plunderers Inc. wants to repay the $10 billion it got from the U.S. Treasury last year to signal the firm is legit and to escape limitations that were just imposed for treasury usury, GM's Scareface and Chrysler's Lefty Do-little said they had nutin to say to da press. Dey got udder income Obama don't even know about.

Good luck on your investment journey in this Orwellian politico-economic wonderland we have entered as we flirt with socialist nationalization of America.

Fortunately for America, FDR abandoned socialism.

Asia/Pacific markets were up about 2% on average last night with China up 2.3% and Japan and S. Korea up 2.7%.

European markets and American Futures are up fractionally at this time.

Our indicators still show that down market days continue to be on lower volume than up market days and that is a sign that the market wants to move higher. But the history of the expansion of world socialism is based on failure and low expectations. And socialist expansion in America is what is happening now.

The assumption that we would get an “Obama Rally” was based on the belief that Obama was a smart guy and the conservatives were just saying he was a socialist to frighten people into not voting for Obama. That was our reasoning too for expecting a 30%+ rally. Unless the market rallies very soon this rally will be short lived and the window for selling out at a profit will be closing in a few weeks.

Socialism is the government that non-competitive and lazy people love because government jobs are designed for people whose life work consists of pulling levers for the right unions and politicians. Read “Ironwood” about politics in cities during the rise of socialism in America prior to WWII. Government jobs proliferate and government workers think the folks who do real work are just too dumb or disloyal to get a cushy government job and benefits.

All the advances of socialism and communism were made by destroying the capitalist market driven economies from the inside or by overthrowing competing tyrannies (Nazis, fascists, head-hunters etc) from the outside.

The socialists advanced first in France during the late 1800’s. They destroyed the French army and government from the inside with strikes. Germany over ran France easily because the socialists got soldiers on the front line to go on strike. It was so bad that the French punished their army by having the lines of French soldiers count off one-to-ten, and then they executed every tenth soldier because they did not know who was instigating the strikes. This is the real history of socialism that they have removed from French text books and want us to forget.

Hitler rose to power due to the chaos of socialist and communist strikes and the greed of socialist bankers who walked off with everyone’s money and left the people who had saved for retirement penniless. Hitler pretended to hate strikers but the truth is they provided him with the chaos he needed to rise to power. NAZI is the German acronym for the German National Socialists Party.

Hitler actually provided Lenin with secret protected passage through Germany and into Russia because Lenin promised to overthrow the Russian government and promised not to fight against Hitler. Stalin first loved socialist Hitler too and signed a treaty with Hitler whereby Hitler could take the western half of Poland and Russia could take the Eastern half. But Stalin was lazy and wanted Hitler to do all the work so Hitler just kept all of Poland.

Karl Marx claimed that socialists would never have wars… that only Capitalists had wars but in fact the socialists started WWII and Hitler and Stalin went at each other’s socialist throats at the end.

Stalin turned against Hitler when Hitler reneged on the deal to split Poland. America then equipped and created the first Soviet Army which was driven by Hitler all the way back to Moscow before it was experienced and strong enough to stop the German Army in the cold of winter. All the first Soviet tanks were made in America and we fed the Russian people. Most of the German army on the Russian front lines froze to death that winter the same way Napoleon’s army was defeated by the Russian winter.

The most shameful American part of this history of socialism was that America and Great Britain sacrificed Eastern Europe to make peace with Stalin. Stalin demanded that his deal with Hitler be honored and that was the only reason he helped overthrow Hitler. Stalin demanded that FDR and Churchill give the Soviet Union the eastern half of Poland as Hitler had promised him. Then Stalin demanded that the communist in western Poland be given eastern portions of Germany to settle the Polish people displaced by the Russians who took the Polish lands.

The result was millions of refugees fleeing into Western Europe and to America and hundreds of thousands of innocent refugees executed along the way by the socialists. This history of the shame of socialism in Europe is not taught in our universities. The socialists went so far as to remove all history of freedom fighters that fought against Hitler and to declare that Hitler was a capitalist defeated by just socialists. And for the next forty years the socialist started revolutions around the world. That reached the absolute bottom of inhumanity in Cambodia where in the “Killing Fields” socialists murdered every educated person, everyone who could speak a foreign language, even every person who even wore eye glasses because they might be free thinking and thus enemies of socialism.

The great socialist and communist advances in the last century were made possible with incompetent government leaders and by turning what used to be business cycles into “Great Depressions” in different areas around the globe. Economic depression is what makes a nation ripe for social revolution.

That is the fear the conservatives had of electing Obama which Americans did not take seriously when electing him. It is the fear that Obama will allow a depression in order to grow American government with pork jobs and replace American liberty with socialism. Then America would be as corrupt and repressive as one-party cities like Chicago and Detroit where the Democrat primary is now their local election.

This is now the cloud hanging over the stock market because Americans see that their investments are completely whipped out by the process of nationalization. That is today being seen live with the continuing collapse of value in the financial sectors. National Socialism destroys all the equity of shareholders and leaves the corporate mangers working directly for government regulators.

FDR won his re-election overwhelmingly but FDR saw that socialist policies were causing the Great Depression. Fortunately he was intelligent enough to stop that process and fire up American Capitalists again with hope and the war effort.

Obama may not be as smart as we hoped. Socialism would bring the nation the economic equality of universal poverty and universally poor health care. Obama’s negativism is feeding the American fear that he wants a Great Depression so he can succeed with his socialist vision.

Obama administration and the admiring media all blind or asleep at the wheel?

Asian markets were mixed last night but generally positive with China up 2.4% and India up 0.9%.

European markets are fractionally mixed at this time and American futures are pointing to a potential positive day for Wall Street today. Our indicators show that the down market days continue to be on lower volume than the up market days. The market is like dynamite now, no more like unstable nitroglycerine now, ready to virtually explode upward if the gloomy, hapless administration showed the slightest signs of belief in the future of the American economy and free market capitalism.

It appears that the biggest drag on the U.S. market to date has been the disappointment that the Obama Administration did not hit the ground running as he had promised, that the stimulus plan that Obama had wanted to sign on his first day in office is still a pork plan bogged down in Congress, and that the administration still blames capitalism, Bush, Wall Street, and people (rich) making more than $60thosand a year for our tough economy instead of focusing on free market solutions, tax cuts, and economic incentives instead of handouts and welfare.

Unlike President Regan who inherited three times the current inflation rate and 1.5 times the current unemployment rate from Jimmy Carter, the Obama administration continues to be a cry baby saying they are victims, everyone else is at fault, and that the American people’s expectations are too high.

When times get tough the tough get moving but the babies just cry and that continuous crying drives most normal people to despair and the economy and financial markets to hell.

Great depressions just don’t happen. It took FDR several years to turn his recession into a depression. Communism and socialism where the world fads in the 20’s and 30’s when they were new and FDR and all the Harvard boys wanted to give socialism their best try. And so FDR started creating collectives for reforesting farms and doing many environmentally thoughtful and socially progressive things that unfortunately did not address the real problems and just sunk America into a depression. Then finally FDR went back to capitalism and used the world war to focus on the tyranny of the National Socialist Party, NAZI, in Germany and we dug our way out of our own socialist experiments with failure. We focused for the next forty years on defeating the tyranny of socialism and won the cold war.

The first signs of tyranny are their “fairness doctrines” that the socialists say level the playing fields by eliminating the free speech of anyone who opposes their socialist tyranny. And today we see the embryonic tyrants focusing their hatred of free speech on Rush Limbaugh and all the commentators who have the courage to speak up against tyranny. In our NPR Orwellian world socialists who hate free speech have already invented politically correct speech, then recently defined hate speech as defending family and moral values, and now they are defining fair speech as all speech that supports their tyranny and suppresses real free thinkers and political dissidents of socialist group-think tyranny. Hitler was a self proclaimed socialist as was Lenin and Stalin.

If we want a disaster in medicine… then we just have to believe the socialist NPR and their absolute continuous stream of nonsense saying that we are not the world leaders in medicine. They are so deluded and blinded by their own propaganda that they claim Americans are at the bottom of the list in medicine. Anyone who has lived abroad knows that Stalin, Hitler, Mao, and Hussein were not nearly as good at lying about America as the NPR is. These socialists are so socially and economically ignorant and blind when it comes to reality and they could create a world wide depression if we follow them.

We need economic stimulus now not welfare handouts. Ronald Regan ran a 6% deficit for a short period of time giving the economy real private enterprise stimulus. A socialist program to flush American currency down a government make-work toilet bowl is the current socialist concept of economic stimulus. FDR tried it and it gave us the first "Great Depression."

“Group think” socialist media continues to accentuate the negative.

Most Asian markets closed down over 1.5% on reports of Japan’s poorer earnings but China was up over 1% last night. European markets are down an average of 2% this morning. American market futures are pointing to a lower start at the present moment.

The media and the new administration continue to grossly exaggerate the current recession which looks no worse than the one President Regan encountered when he took office and ended Jimmy Carter’s inflation bubble.

For instance the big fuss the media made last week was over the 0.9% decrease in the GNP (gross national product) in the last quarter of last year. Yes, it decreased only 0.9% that quarter not 3.6% but the media miss-reported it. The media reported that the GNP was down 3.6% on an annual basis (what it would have been if it declined at a 0.9% quarterly rate for an entire year)! At the same time the government reported they only expected one more down quarter and then two quarters of zero growth. So in reality the decline for this entire one year recession (four quarters) will be on the order of just 2%.

The media reported the GDP as though they were expecting a 5.4% decline on top of their grossly exaggerated 3.6% decline thus alarming the average investor who does not understand that the Pravda USA machine is trying to lower expectations to make the current administration’s big government pork bill look more appealing. Statistics do not lie when they are used properly but the socialist "group think" media lie extensively by reporting the statistics incorrectly.

Also Pravda USA is raising the “Fairness Doctrine” again saying that they want Radio stations that broadcast conservative talk show hosts to provide equal time for the socialist media’s talking heads. The socialists already completely control the National Public Radio and they don’t allow conservatives to have regular shows there. They will need to first appoint a few more socialists to the Supreme Court since the Supreme Court turned down their big brother law the last time they tried to ban dissidents in America.

We believe we have been in a secular bear market since the Clinton bubble burst in 2000 and we have been fighting it with deficit spending ever since. The real problem will be at the ending of this period with stagflation (the sum of the inflation rate and the unemployment rate). Unemployment will increase while inflation raises its ugly head. While CD’s rose to 16% interest during the Carter stagflation secular bear market of the 1970s, people on fixed income lost most of their pensions due to the inflation. Then President Regan popped that inflation bubble and caused the short recession that ended the secular bear market of the 1970s. We appear to be seeing a repeat performance now with President Obama filling in for President Carter and setting the USA up for stagflation again.

The stock market represents such a bargain at current prices that it is ready to surge with even the slightest increase in investor interest. The declines have been on very low volume and just small increases in buying pressure have resulted in enormous rallies The media has distorted economic news so negatively these past few weeks that the market is overdue for a rally. Both the Asian markets and the USA markets appear to have bottomed and are ready to surge:

http://finance.yahoo.com/q/ta?s=000001.SS&t=3m&l=on&z=m&q=l&p=p,m20&a=m26-12-9&c=

http://finance.yahoo.com/q/ta?s=QQQQ&t=1y&l=on&z=m&q=l&p=p,m20,e100&a=m26-12-9&c=