The large part of the worst is not yet behind us

Market forces June 15

Mad Money thought the mutual fund money would flow in this week but they were off by two weeks. We pointed out that that money inflow occurs at the start of the month and it did very little this past month as banks have been selling huge blocks of stock smartly raising cash while their stocks are at a relative peak in prices.

Stocks were falling sharply worldwide last night and this morning as a stronger dollar took momentum out of the commodities rally and investors paused after the recent run on Wall Street.

The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.

The Dow had risen in 12 of the last 14 weeks, staging its biggest bear market rally since March 1975. But the dollar is now climbing against a basket of currencies, including the euro weakening crude futures, which are priced in dollars. Oil futures fell more than $1 a barrel in electronic trading on the New York Mercantile Exchange. Gold and other commodities are also under pressure. Iran and N. Korea continue to rattle markets around the world. The MSCI index of 23 developed nations slid 1 percent in London, led by raw-materials producers. Russia’s Micex Index fell 4.1 percent. Oil so far has declined as much as 1.9 percent in New York, while copper fell 3.2 percent in London.

The rise in yields is undermining Federal Reserve Chairman Ben S. Bernanke’s misguided inflationary efforts to pull the economy out of the recession. Nations now see the danger of inflation raising rates and crushing the recovery before it begins. The horse may already be out of the barn now as they plan an exit policy to shut the barn's door of inflation.

Americans' wealth dropped $1.3 trillion since socialist Obama was elected as the stock market and home values declined. Americans' stock holdings plunged 5.8% to $5.2 trillion, while home values dropped 2.4% to $17.9 trillion. Yet MSNBC/GE/Pravda still says we are in a bull market. GE/MSNBC/Pravda wants to profit as the propaganda mouth for corrupt Chicago type government as the socialists pass out $Trillions in contracts under ACORN type oversight. ACORN will bus protestors to our lawn to threaten our families and David Letterman will slander us if we don't conform.


Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most three business days of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of.

We do not believe in Obama's socialism and all those who apparently hate American human rights intervention and feel compelled to apologize for our human rights and peace keeping efforts, technological creativity, and the most socially equitable society the world has produced to date. Our Navy Seals are given water boarding as part of their training but the socialists say that is torture if done to terrorist killers while under medieval Sharia law children's arms are crushed beneath truck wheels for offenses such as stealing food or failing to kill when ordered. And Obama ignorantly declares that the USA uses torture and then apologizes to those world lunatics who use obedient children to slaughter others.

We reversed our former buy position last week on emerging markets. We now have zero confidence in Red China, India, or other emerging socialist markets because history has shown that socialist always cook their books, pathologically lie about growth and freedom, and then implode when convenient such as now when the free world markets are correcting.

The IMF managing director appealed for caution in assessing the state of the global economy. He said, "The large part of the worst is not yet behind us," in opening remarks at talks with Kazakh Prime Minister Karim Masimov.

Last night most Asian markets were down sharply. Hong Kong down -2%, India down -2.4%, Taiwan down -3.5%, and Japan down -1%.

European markets are down sharply today in a narrow range of -1.6% to -2% mid way through their day.

US futures indicate the American markets will be starting lower by about -1% today. Over the next three months we could see a sell-off of 30% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.

MSNBC/GE/Pravda/Jim Cramer was wrong as usual to be pumping stocks to small investors at the peak while his mutual fund friends were dumping stocks.