GE's situation will be the same as CIT on October 31

Unlike some corporate financial services such as GE that requested to be classified as banks to be able to get FED money and government guarantees on lending, CIT was strong enough to go it alone until now. CIT did not need to go directly to the FED window but now some of those financial organizations are in a similar situation to GE and are afraid to loan to CIT because they like CIT will loose their federal guarantees on October 31 when the program is set to expire. It is beginning to look like all the financial corporations including GE and Goldman will freeze up again come October 31 if the guarantees are not extended. That shows that the US banking system is now dependent on the FED life support system and they are getting weaker.

Market forces July 15

To socialist, profit is a dirty word. The socialists are throwing money down several rat holes creating disastrous entitlement programs that are unsustainable. They initially look good until people take advantage of the programs and run to the doctor for every scratch and runny nose. Then the waiting lines begins and we have the socialist system of equality of triage, wasted time, and euthanasia instead of finding new ways to extend life. Under socialism in Eastern Europe people were all guaranteed jobs but the socialists admitted the system was an unmitigated disaster and said,

"Government pretends to pay us and we pretend to work."

That is already the nature of state and federal union controlled jobs. The government workers are generally incompetent and arrogant and take out their frustrations on the people who need their services. But Americans do not know that unless they have lived abroad and needed services. Most Americans living abroad are there because they earn a good living. To the wealthy living abroad they tend to want to go to America for medical treatment even if they are not American. That is because they know America had the best medical services until the socialists took power this year.

We believe the socialists started this crisis when they took control of Congress in 2006 and the Senate Banking Commission (Rangel and Dodd) instituted corrupt mortgage practices and threatened to charge banks with racism if they asked questions about their loan applicant's ability to afford a mortgage. Then in 2008 the Obama campaign assailed the Bush economy as in a depression when just 60,000 people lost their jobs. Now under Obama's socialist system we are averaging a loss of 500,000 jobs a month. The Senate Banking Commission created the first depression bank runs in 2008 when Dodd revealed the names of some weak banks.

We believe the socialists started this depression and that it will not end until all the socialists are driven from power, all their programs and entitlements are terminated and there are massive eliminations of state and federal jobs. In the mean time it will become increasingly difficult to make a good living and anyone earning a good living will be attacked just as Goldman employees will be attacked if they are rewarded for making a profit. To socialist, profit is a dirty word.

Market Outlook

As long as there is still a free market there will be opportunities to profit even in a declining world economy. As long as profit is a dirty word the markets will be a difficult place to invest money. Ultimately the socialist will eliminate free markets again saying they are unstable and government central planning "Big Brother" will decide what products need to be produced. Ultimately under socialism America will experience starvation and massive migrations of indigent peoples who have cultures where people like to play, not compete, and want to have relaxed lives and enjoy the moment at someone else's expense. In effect productive people will be considered fools and will be allowed to work as voluntary slaves. The smart socialists want a government job where they get the best pay and benefits and pretend to work. Read Orwell's 1984 to get a glimpse of "Big Brother" who will care for our every need. The socialists have put America into very difficult times now and poverty not growth is what the free world faces with increasing American socialism.

The stock markets are testing their 65-day moving averages and still trending lower. We expect U.S. stocks to resume the steeper slide after the eventual realization that bank and other corporate earnings reports still do not reflect any write down of toxic and obsolete assets. The administration has proposed several ways to buy out toxic assets but has done nothing. Meanwhile residential and commercial real estate values continue to decline causing the toxic assets to grow more threatening. Corporations are shutting their doors. It is not hard to show a profit now by ignoring the write down of losses while charging Americans 4% to 5% interest and borrowing at almost no interest cost from the socialist government. But soon under socialism, profit will become a dirty word. Under socialism eventually no one will be able make a profit. Taxes will take care of that.

Last night most Asian markets were up: China up 1.4%, Japan also up 0.1%, Taiwan up 1.5%, and India is up 2.9%.

Today most European markets are up in a range of 1% to 2% half way through their session.

US futures indicate a 0.7% higher market opening this morning.

We believe the drop in international trade has hollowed out financial markets and emerging markets. We have been warning about this for a month now and even Jim Cramer has mentioned that weakness. International demand for their commodities and products has collapsed and their socialist governments are squandering their reserves on projects and internal consumption which helps the dollar but destroys the private sector which is the lifeblood of growing economies.

We will be cherry picking into the market during what we expect to be at least another month of market decline. We expect the decline will be the typical rotation with sharp drops in individual stocks while other stocks flatten out and then decline so the change in the market indices will be much more gradual. The new democrat-socialist administration destroys every free market sector they touch. Solar, energy, automotive, and medical sectors are all in decline.