Socialist gravy train infusion is coming to an end.

Treasury bonds, not the US dollar, were the biggest losers of the year. The greenback was off a modest 4% on the year while Barclays 20+ Year Treasury Bond Index lost 21.4%. But the end of the liquidity gravy train will likely be the main driver in coming weeks, with the fear of swelling supply for sale as the second. And with sentiment polls showing bullishness at levels similar to those late 2007 it is a high perch from which to fall. The change in market tone from joy to fear can easily flip-flop stocks and Treasury bonds, again.

All commodities as measured by the Reuters-CRB index of 17 commodities futures prices were up over 30% in 2009. This index is the original formulation of the CRB index and has a heavier agricultural commodity component. Having it up by as much as it was tells us that it was more that just the two big guns—gold and oil—that rallied.

The Obama leftists are not going to be happy when they find out they are propping up Wall Street. Wall Street is toasting leftist economic incompetence with new bonuses for the Obama secret windfall stock profits that Trim Tab thinks identified as likely from the government.

World Outlook
China's exports increased for the first time in over a year.

Market Week News:

Monday, Jan. 11
Treasury bill auctions

Tuesday, Jan. 12:
U.S. Trade deficit

Wednesday, Jan. 13:
FED's Beige book outlook

Thursday, Jan. 14:
Unemployment Claims
December Retail Sales

Friday, Jan. 15:
Consumer Price Index
NY Manufacturing Index
Industrial Production
Consumer Sentiment


Market forces January 11, 2010

The US market has been relatively flat for six weeks while Asian markets have declined since August. Charles Biderman, founder of Trim Tabs Research, a firm that keeps track of liquidity flows into and out of the market implies the government has been investing in American stocks and artificially caused the recent rally to create the illusion of a recovery. Biderman said, “We cannot identify the source of new money that pushed stock prices up so far so fast." He says the money didn’t come from companies, retail investors, foreign investors, hedge funds, or pension funds.

Asian markets were up over night; Hong Kong up 0.5%, India down -0.1%, South Korea down -0.1%, Taiwan up 0.5%, and Japan up 1.1%.

European markets are up with the average in a range from 0.5% to 0.6% this morning about half way through their day.

US pre-market futures up about 0.25% today at 8:30 AM EST.