Greece Faces Potential `Stone Age.

World Outlook

Greece continues down the path of insolvency, as creditors demand higher and higher interest rates because Greek politicians ignorantly continue high deficit spending. It is the same policy the Obama socialist administration is following only we have had much smarter presidents and economic advisors in the past so we are about five years behind Greece but on the same path. However Americans will likely make major political changes this year and in three years. Hopefully Obama will get his wish being a famously notorious first socialist president of the United States and serve just one term. If not we can look forward to at least ten years of economic depression.

Market Week Reports:

Existing Home Sales were down a record 17% but the average existing home price rose 1% indicating deflation may be over.

Home prices and consumer confidence in the U.S. climbed indicating the economy is headed toward recovery and credit tightening could begin any time.

The S&P/Case-Shiller overall national home-price index increased 0.2 percent in November, the sixth consecutive gain. Home values since May have regained about one 10th of the record 32 percent plunge over the past three years and have much ground to make up.

The Conference Board’s confidence gauge rose this month to the highest level in more than a year 55.9% from 53.9% last month. It was over 140% when Bush took office and 110% when Obama was elected. It dropped to 885 after the 911 attack.
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New Home Sales: Ending for the worst year for housing since World War II, sales of new U.S. homes fell 6.5% in December to a seasonally adjusted annual rate of 342,000 after falling 9.3% in November to 370,000 the Commerce Department said Wednesday. It was the lowest seasonally adjusted new home sales pace since March.

FOMC: The FED decided to hold interest rates near zero for another six weeks when they meet again. However one member disagreed this time and wanted to raise rates.

Yesterday
470,000 more Americans filed for initial unemployment insurance in the week ended Jan. 23, after an enormous revised 478,000 filed the previous week according to the Labor Department. The 4-week moving average of initial claims was 456,250, up 9,500 from the previous week's revised average of 446,750. This is seven times higher than the highest rates seen when the Obama political campaign machine ignorantly proclaimed that Bush had put us in a depression and about six months before Senator Dodd began destabilizing our banks by leaking confidential Senate Banking Committee reports on troubled banks. The cause of the bank failures was due to Senators Rangle and Dodd forcing banks to give loans to indigents with no income under the Senate Banking Committee threat of being accused of redlining and thereby being restricted from offering FHA loans.

US durable goods orders rose slightly in December (0.3 percent) after two consecutive months of declines, the Commerce Department reported.

Friday, Jan. 29:
GDP
Chicago PM Index
Consumer Sentiment

Market forces January 28, 2010

We remain 75% out of the market but are setting price targets for buying. Jim Cramer was visibly panicky last night as he recommended put off purchasing stocks. The NYSE is within 3% of breaking through the neck of a head and shoulders sell signal. When adjusting for low volume on market advances and higher volume on declines we are within 0.4% of that market breakdown.

The longer the FED waits to take action to slow inflation the more difficult it will be to control and the longer and more severe the FED contraction will ultimately be.

Investors are now moving out of American equities that depend heavily on China for much of their revenues. All stocks dependent on China will likely be much more adversely affected by China's cooling off period than China itself will be effected. But yesterday the market began discounting Jim Cramer type technical stock hype and tech stocks fell precipitously.

Asian markets were up over night; Shanghai down -0.2%, Hong Kong down -1.2%, India up 0.3%, and Japan down -2.1%.

European markets are up slightly with the average in a range from 0.1% to 0.3% this morning about half way through their day.

US pre-market futures are up again about 0.7% today at 9:00 AM EST.

American morning futures and European markets are not reliable predictors when market volume is so low. But they do tell which way speculators are leaning.