Wall Street and Bank management incompetence is proportional to the bonus check.

The financial, commodity, energy, and wireless sectors of the stock market are now highly overvalued thanks to spin. If the stimulus package ever works then real growth will be in the sectors that create jobs. The federal funds flowing into the banks and Wall Street is being scaled back now because it has created gross excesses and unearned bonuses from all that money Obama is suddenly ashamed he threw at them. Obama plans to cut $250 billion in what had been set aside for future TARP bank aid. After all, the more incompetent the bank and wall street management is... the more likely they attribute the firms profits to themselves rather than from great Fed interest spreads and big American taxpayer bank welfare checks to get the banks re-started. Obama and the taxpayers want Wall Street and the banks to put the money into the economy not their pockets… DUUUHHHHHH.

Jim Cramer was right. Wall Street Journal truth does nothing to help inflate stock prices and bonus checks for incompetent fund managers. Little white lies and half truths (spin) is what gets the US market up 50% and China penny stocks up 80% in just 5 months. For instance if new home sales went up because prices fell 30% from their peaks, forget their peaks. Only report the prices down 12% in the last year. That way Wall Street can falsely spin it like prices have stabilized while sales are increasing. Certainly don't mention that the new homebuilders are hemorrhaging because the new home sales prices are lower than the cost to build the new homes. Yes Cramer is right. Telling the truth about the dismal economy cannot sustain current price levels.

One thing is sure about this current administration. While they burden the nation with debt, wealth redistribution, and corruption they will spare no effort to pay the health care costs of illegal aliens, and will release all dedicated anti-American terrorists and captured combatants and will punish those nasty American CIA intelligence agents for nine successful years of keeping terrorism out of the USA. With the Obama administration no good deed will go unpunished.

This blog could be removed within two weeks if it continues criticisms of socialist and other lunatic left policies. Suppression of the freedom of speech is something new to America and now you can report blogs like this and the government will "encourage" the blog masters to shut it down. Yes, there is now an official White House blog in which the Obama administration asks supporters to report back sites like this that dare to criticize waste and fraud. And apparently someone reported us for the crime of anti socialism. For more information use these terms in your web search.

Foreign policy censoring voice America August 2009


Market forces August 27

The following is worth repeating because it explains the recent run-up in the face of continuing world economic decline. Twelve months ago the financial meltdown began. Consequently any economic statistic that is quoted on a 12-month basis will actually look more favorable on a relative basis because 12 months ago it was such a disastrous rate of decline. So while the recession is continuing the changes relative to 12 months ago gives stock hawkers and spin masters leeway for a lot of positive spin. The false appearance of recovery is due to quoting the change in 12-month statistics. When that doesn't work raw month to month changes (rather than seasonally adjusted changes) is sometimes used to distort the reporting to give it the Jim Cramer spin factor. The secret to recent spectacular stock price rises has been Jim Cramer type spin not Wall Street Journal type truthful journalism.

This spin factor could backfire and destroy the year-end rally because last year the sharpest declines were over by the end of the year. So on a relative basis the declines will look worse this November and December unless they switch from a 12-month relative basis to a new spin methodology. What will they dream up next? Whatever it is we can expect a sharp market drop at any time because spin has propped up the market with fiction and false hope. Spin is what got Obama elected too and now we look ahead to several $trillion just in budget deficits not counting the $trillions in on going bank bailouts and job stimulation projects.

Asian markets were down in the range of -0.7% for China to -1.6% for Japan last night. The Yen climbed on worries that rally has overtaken recovery. The MSCI index of Asia-Pacific shares excluding Japan dropped 0.2 percent. It has lost roughly 3 percent since hitting an 11-month high earlier this month amid investor worries that share prices have run too far ahead of economic fundamentals.

European markets are currently flat -1%1 to +0.3% awaiting direction from the American markets. Consumer spending is down.

US market futures are moving lower at 7AM EST to about -0.2% before the opening today.

The speculation that caused the run-up in copper, oil, and energy was based on the hope that China's infrastructure buildup would sustain demand. That has faded. Jim Cramer thinks the Apple wireless explosion is due to fashion conscious teenage girls who buy electronic gadgets to be color coordinated. We believe those industry sectors had their run. Now the $trillions of stimulation are starting to be directed to the American green industries. Lets hope some of that welfare gets into the economy not just into the bonuses of corporate management.

Our strategy now is to continue to invest in stocks in sectors typically when they are out of favor and to take profits that exceed 5% in a wk and 10% within a month. Profits that high and fast are not sustainable in a recession.