BP strikes more oil in the Gulf than the North Sea reserves

Market forces September 3

The largest field yet discovered is six miles underground and opens the possibility of much more oil than ever imagined at these new depths. BP to bring the new oil on line in ten years.

Jim Cramer's natural gas play has taken a beating as Obama Administration moves far too slowly on alternative energy development.

Obama's foreign policy begins to unravel. Obama to open diplomatic relations with extremist Syria just as Iraq blames Syria for harboring terrorists. Afghan troops have been doubled under Obama but he may have to triple them as Obama creates confusion with his attempts to warm up relationship with radical socialist dictatorships in the mid east. Mid East nations are uniformly socialist welfare states run by corrupt medieval tribal families. Radical Islam is the major terrorist product under the hopelessness of the dark ages of mid eastern socialism.

International fear of destroying American free enterprise with socialism is now greater than world fear of deflation. It is driving gold prices higher.

The socialists in Europe want to put an end to free enterprise competition by suing companies that merge. Oracle Corp. faces an extended European Union antitrust probe into its plan to buy Sun Microsystems Inc. for about $7.4 billion after the EU regulator cited “serious doubts” about the market for databases. What do EU regulators need to know other than their mandate to suppress innovation and maintain the dark ages of socialist oligarchies of the corrupt who become rich from wielding power.

Market Outlook

Business pessimism at GE/MSNBC/Pravda has reached a new high. The run up in stock prices was caused by hedge funds that should not have stopped shorting the stocks after they fell 75%. What were they thinking? Did they expect the prices to all go to zero? The run-up was caused by all the brutal short covering of those short hedge funds.

Now the leadership of the banks is weak, as it is evident that toxic assets have still not been addressed. The leadership of real estate is weak as lawsuits pile up from defective communist Chinese sheet rock used 100,000 newer houses of TOL and HOV. Jim Cramer now even has nothing good to say about Wall Mart and the defensive cyclical strategy.

Asian markets were mixed last night, China up 4.8%, Japan down -0.6%, and India down -0.5%.

European markets are currently flat in a range from -0.2% to +0.3% this morning about half way through their day.

US market futures are slightly higher by about 0.2% at 7:30 AM EST before the opening today.

The stocks of communist China have dropped over 25% in the past month and Jim Cramer and GE/MSNBC/Pravda considered them a leading indicator for the economic recovery in the world. We warned that corruption and fraud could be expected to run rampant with their socialist experiment unleashing free enterprise. Socialism pays the indolent and incompetent and heavily taxes the people who try and do well. Aside from pet food that kills and building materials that poison and corrode electrical wiring in new homes, communist China distorts the world economy by maintaining an underpaid slave society so that the government communist bureaucrats can live in high style like their ancient emperor's. They may not be paid much but they are provided all their luxuries free of charge.

A sharp decline is now possible because many leveraged funds are fully invested, have hair-trigger stop sell orders in at about -3%, and the market was already down 2.5% this week. The market makers are doing their best to avoid triggering the selling by keeping the daily declines small. Our strategy now is to continue to take profits and wait for future buying opportunities. Market volume has increased and the FED should have more difficulty now supporting the stock market.