Obama Pravda spreads false market optimism. Obama wants to double taxation.

Market forces May 5,

Buyers have exhausted themselves before reaching their January highs. MSNBC/GE/Pravda and the press do their best to get people into the market as it peaks thinking that somehow MSNBC/GE/Pravda can make Americans believe the collapsing housing bubble is over. On Monday they claimed that housing sales rose. Housing sales did not rise they declined a little less steeply than last year and that is called an inflection point which mathematically usually occurs when a decline is about half over. What did go up over 2% was sales to first time buyers who are taking advantage of their new tax write-off. But that is a drop in the bucket. For house sales in Connecticut and most of the country they were actually worse than last year and housing prices in Connecticut fell 22% over the last 12 months. So it is clear that MSMBC/GE/Pravda/Jim Cramer are into the same scam they were in November 2007 advising investors to be fully invested at the market peak. Their new method is to set imaginary expectations so low that they can claim imaginary good news. It is common used car salesman sleaze. Fox news is the only bright spot as they still attempt to maintain objectivity and avoid political spinning of economic news.

Remember the peak in 2009 was between one and two weeks into January and we have not reached even that height yet. We need to exceed that peak to declare the market has probably bottomed the beginning of March. Remember back in January we said we had to exceed the early December 2008 peak to declare the bottom was in November and when we failed to set a new high then the market plummeted to an all new low in March. Even if we set a new high (above S&P of 935) this time we can expect a subsequent test of an S&P of 682. We are currently at an S&P closing price of 907. All the American markets have very similar patterns with successive lower lows and lower highs since mid 2008. Jim Cramer blatantly lies when he says we have a bull market signature. Cramer's advisor who picked the last low was likely correct two weeks ago when he said the market was peaking. That was the week Cramer was a bull once and a bear twice.

Obama is now proposing double taxation of international companies. Currently, international companies and their employees are taxed by the countries where the work is done. They have a division set up where ever they are taxed. When I worked in France my company paid my French income tax for me and I paid my American income taxes that were lower. I was therefore taxed fully by both France and the USA. That is already double taxation on USA employees. Similarly Obama wants to tax those overseas plants twice, once in the country they product and once by the USA. Obama should know that it is illegal to pretend a corporation's work was done somewhere where they pay no taxes or lower taxes. A law already exists against such fraud. But double taxing overseas production will make all USA international corporations less profitable and will likely cause them to sell off their foreign plants and result in not USA tax benefit. In effect Obama will then be redistributing USA international company wealth abroad and it will make the USA a poorer nation. Obama knows nothing! He knows nothing at all!

Market Outlook

Again don't look to MSNBC/GE/Pravda or Jim Cramer for any objective news or advice. GE should shed its media interests. Disney, an economic barometer, is expected to report poorer earnings.

Last night's results: China is up 0.3%, Hong Kong is up 0.3%, India is down 0.1%, and Japan closed.

European markets are in the range of -0.2% to +2.7% mid way through their day.

US futures indicate the markets will start slightly lower today.

We recommend cherry picking back into the market during retrenchments. This however still is not a long-term investor's market. Sy Harding yesterday affirmed his original prediction that the market will not bottom until next year. When the Clinton March 2000 DOT Com bubble peaked and then burst. Then 911 occurred in 2001 and it was March 2003 before the stock market became bullish again. It was November 2007 when the mortgage bubble peaked and burst. It was in September that the banking crises hit. If this current Bush/Obama recession is no worse than the Clinton Dot Com/Bush911 recession then Sy Harding may be correct. But the effects of Obama's failure Democrat-Socialist policies could be similar to FDR's early failed socialist policies that created a ten-year Jimmy Carter type economic malaise.