Every deadbeat, every wino, every common thief has a sad story to tell you about this unfair world. The story is always the same: It wasn’t my fault, I inherited the problem! Usually they say it is their parent’s fault or their native country’s fault. Never do they take responsibility for their own situations in life much less really give a dam for the plight of others. They can't even take care of themselves.
Clueless in Washington
President Obama has had all the benefits of affirmative action. He got straight A’s at charm school, speech, acting, English, and teleprompter technology. But he obviously failed at economics, science, history, logic, and math.
1) The credit contraction accelerates, because the banks can not share their money or lower rates with stressed home owners all because Obama has their money going into vaults to raise their reserves to meet Obama’s bank stress tests… stupid!
2) The percent of unemployed actually getting unemployment insurance is now at 9.5% but there are another 7% unemployed now getting nothing while Obama said just four months ago unemployment would only be 7% now if congress passed the his spending bills… stupid.
Total US unemployment is 16.5% not 9.5%. Obama, Dodd, and Rangel created the mortgage crisis to get Obama elected. Their philosophy had been, “never waste a good crisis to introduce socialist policies” and totalitarian tactics to shut down critics. Rangel made it possible for people with no jobs or credit to buy 5% of America’s new housing. Dodd violated common sense and Banking Committee rules and announced a stressed American bank causing the first bank panic of the crisis Obama needed to get elected. Obama used the word "depression" when Bush was trying to avoid a crisis and maintain confidence in the US economy. Obama has already allocated $13.5 trillion and is now asking for more stimuli. The George Soros, the unions, government workers and ACORN just can’t get enough of Obama's largess.
Europe’s production declined 2.5 to 3.8% so far this year.
Market forces July 6
The Bear market rally ended three weeks ago and the market started its second leg down on Friday. We expect three or four down legs before we get another bear market rally. Fear and the underlying credit contraction are increasing. Obama may already have the whole world in an economic depression that probably will not bottom until 2012. Obama may very well be almost as bright as George W Bush but he obviously lacks the ability to select a competent staff and cabinet. He has appointed more than twenty socialist Czars with more power than his cabinet. The only thing we have to fear is Obama’s administration itself. The financial markets are beginning to more accurately reflect the deflationary credit contraction caused by deleveraging of financial institutions.
Emerging-market stocks dropped sharply last night as concern increased that the widest Indian budget deficit since 1994 will spur higher borrowing costs and Russian shares fell on lower commodity prices.
Market Outlook
We expect U.S. stocks to slide, sending the stock market into a fourth straight week of this correction. Last week a 33% higher than expected pace in job losses added to concern that rising unemployment will cause the mortgage crisis to get out of control. Treasuries are rising, and oil and gold/silver prices began a downward correction as expected in an economic depression. Taxes under the democrat socialists are now anticipated to double in two years. Their energy bill will require old houses to meet new energy efficiency standards before they can be sold just like they now require radon free certificates today.
Did you ever wonder why spelunkers (cave explores) don’t all die young of lung cancer from the radon they must breathe that supposedly settles low spots along with CO2 when those two gases are claimed by the EPA to be lethal. Did you ever wonder if perhaps many supposed brain damaged kids in the city whose parents claimed suffered from lead poisoning were just genetically dumb kids like their parents who let them eat the chipped paint and the dirt on the floors? Did you ever wonder if it were true that CO2 is now at a record high today because we have burned 10% of the fossil fuels stored in the ground, then why wouldn’t the CO2 in the air have been ten times higher before any of that fossil fuel was laid down in the ground? Didn’t the plants take that CO2 out of the air originally and store it as bio-mass? In a socialist world it is politically incorrect for us to wonder much less think.
It takes very little volume to move the market these days and the volatility index, VIX, is low indicating overconfidence in the belief that the previous market low in March will hold. That is how it was in September 2007 just before the market collapse. Oil and other commodities fall when deflation is occurring. The reason for the deflation is that the stimulus is mostly going to deleveraging the banks and to the wasteful black hole called government spending.
Last Thursday most Asian markets were mixed: Hong Kong down -1.1%, Japan down -0.6%, and India up 1.7%.
Last Thursday most European markets were down sharply this morning in a range of -2.3% to -3.3%
Last Friday most Asian markets were flat: Hong Kong up 0.1%, Japan down -0.6%, and India is up 0.1%.
Last Friday major European markets were flat in a range of -0.2% to +0.1% with no direction from the USA. Friday the US markets were closed.
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Last night most Asian markets were down sharply: Hong Kong down -1.3%, Japan down -1.4%, and India down -5.8%... yes -5.8%.
Most European markets were down sharply this morning in a range of -1.3% to -2.4% half way through their session.
US futures are down again about 1% early today.
We will be cherry picking into the market during what we expect to be about two months of market decline.
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