Higher oil prices now are a stick in the eye of world economic recovery.

Market forces June 8

Investors who think that a rising oil price is bullish are mistaking it for one of the opportunities of the last economic bubble. But this time the bubble is not from a growing economy it is from price inflation and currency weakness. Fools on Wall Street think every market change is the same but this increase in fuel prices kicks airlines and consumers in the stomach. It is a stick in the eye of the economic recovery.

Obama Czars, Gestapo, and rattlesnakes:
A Gestapo is to be created to closely regulate American firms. The Obama Czars told financial industry representatives Thursday that it will propose massive, coordinated supervision of financial firms and stronger regulation of consumer financial products as part of regulatory and affirmative action to redistribute wealth to the people who deserve it.

A raid by a regulatory agency can bankrupt a prosperous private company by freezing activity before the company can cover all its trades profitably.

But sources said the Administration has not resolved one major issue in this already enormous expansion of government into the private sector… the future regulation of insurance companies.

One industry participant said that some stakeholders and lawmakers in the debate favor a new federal “council of regulator Czars” to improve and coordinate supervision. The Administration has previously suggested giving the Federal Reserve and other existing agencies more oversight powers too.

Administration officials put meeting participants on notice that their plan will include affirmative action proposals for consumer financial products, like no credit check mortgages, credit card bailouts, and other products to redistribute wealth. Participants discussed whether the additional regulation should be managed by one or multiple new government agencies.

The Stanford case:
DeGuerin said he expects Stanford to be harassed with criminal charges to be filed even though Stanford is innocent. Dick DeGuerin a Houston attorney who was once counsel for Stanford on the civil matters has been replaced with the appointment of a new law firm so he has no interest in the case now. He said,
“This is a very complex case—Stanford didn’t do anything wrong," “The problems with the Stanford Financial Group Companies stem largely from what the SEC did in their Gestapo-like attack on the Stanford companies. They cause a run on the banks and they caused tremendous damage.”

DeGuerin went on to say, “He (Stanford) is not cooperating with the SEC,” “You don’t cooperate with a rattlesnake.”

Regulation and corruption often go hand in hand as it has recently with the SEC. They let Bernie Madoff steal $50 Billion because he was "their man" but Stanford apparently didn't make "wise" campaign contributions like George Soros and many others do.

Market Outlook
Last night most Asian markets were down. China’s was up 0.5% Hong Kong down -2.3%, India down -2.9%, and Japan up 1% on a weak yen which is good for exports.

European markets are down sharply today in the range of -1.2% to -1.7% mid way through their day.

US futures indicate the markets will be starting lower today. A sell-off of up to 20% is becoming more probable now as investors realize this economic bottom will last another year not one month.

The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom.