Democratic socialist Iranian State bans "Star" students.

World Outlook
When the best students in Iran support any candidate other than the ruling leftist party candidate they are now considered dangerous radicals and are given a star by their name. That star means they are no longer permitted to have an education or hold a government job in Iran. They can be farmers instead. It is political correctness carried to an extreme. In Quebec the French leftists go around forcing the stores to have their signage written in French. In the USA the leftists picket news commentators who speak against giving illegal aliens drivers licenses or amnesty. Leftists force Americans to have signage in Spanish the language of most illegal aliens. The leftist culture in general despises competition and free enterprise.

In France yesterday the courts threw out the French tax on CO2 emissions. It seems sunlight causes tree rings to grow larger, and temperatures to rise not CO2 as the leftists decree. It is known that heating the oceans causes the dissolved CO2 to come out of solution and into the atmosphere too. So sunlight causes more CO2 and higher temperatures. CO2 and temperature rise together due to the sun and that is the reason for the corelation.

JAL is headed for bankruptcy! This is quite incredible as it was once considered the most successful airline (at least by the Japanese). It was said that the flight line mechanics are under such cultural pressure to report "perfect" results that problems are sometimes signed off on as though they do not exist.

Market Outlook:

This Week
Seasonal retail sales are up 3.6% and newly unemployed were down slightly. Retail Sales in U.S. Increased 2.3% Christmas Week on Last-Minute Shopping.
Treasury bill auction Demand held strong at the weekly 3- and 6-month auctions, posting solid coverage at 3.39 and 3.57 with the 3-Month Bill Treasury Rate at only 0.110%.

Consumer Confidence rose slightly to 52% but appears to be relatively flat and uninspiring. See:
http://www.martincapital.com/chart-pgs/Pg_conco.htm
Jim Cramer likes to quote the Baltic Index of international sea trade in goods carried by ships. But with Jim he is a broken clock and only quotes it when it is good. But now it is showing another dip.
http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND
The Institute for Supply Management-Chicago Inc. said today its business barometer PMI rose to 60, exceeding the most optimistic estimate of economists surveyed by Bloomberg News and the highest level since January 2006. But remember Chicago is Obama's hometown and is being flooded with stimulus funds.

Underscoring the continued weakness of the nation’s housing market, new home sales declined 11.3% in November 2009 to a seasonally adjusted annual rate of 355,000 units, according to figures released by the U.S. Commerce Department.

Thursday, Dec. 31
Unemployment Claims

Friday, Jan.1:
Markets closed for New Year's Day


Market forces December 31
During the past week the news came out that investors all year were leaving stocks in droves moving to corporate bonds driving up the bond market thus relieving the pressure on interest rates. That bubble will burst as interest rates begin to reflect the trillion-dollar infusion of stimulus in the US alone. Interest rates will then rise independent of the FED and gold and other commodities will rise. Higher interest and inflation historically neuter the overall stock market.

We estimate the NYSE must still rise 3% from yesterday's close to be interpreted as a continuing rally not a declining head and shoulder sell signal. That reflects both the price change and volume of shares being traded. However the Spiral (Parabolic SAR) indicator and the MACD are now more optimistic.

Asian markets were up slightly over night; China up 0.5%, Hong Kong up 1.8%, India up 0.8%, and Japan down -0.9%.

European markets are declining with the average in a range from -0.9% to 0.2% this morning about half way through their day.

US pre-market futures flat at about 0.1% today at 9:00 AM EST.

We are now 66% Money Market preparing for a possible market decline in early 2010 that could take prices down to the old high where they were at the end of May seven months ago.