The Euro suffers as the Greek Communist Unions earn 1$Trillion for burning three bank employees

The Euro suffers as the Greek Communist Unions earn 1$Trillion for burning three bank employees

European socialists have now given up on the idea of stimulating growth with tax cuts and spending cuts and instead throw another $Trillion to the Greek Communists who burned three bank workers alive last week. Throwing money into the raging world communist fire will only reward those tyrants who rise to lead the growing unemployed underclass and further burn down free enterprise to temporarily keep warm. When the run out of businesses to destroy is when they start throwing the creative and productive entrepreneurs in the Gulags.

Hewey, Dewey, and Louie had a lovely time swimming in money yesterday. Throwing money at problems is however no way to contain a raging fire of incompetence or the growth of an unemployable underclass led by leftist radicals.

World Markets:
It is very likely that Chinese capitalism will fail this year as miserably as Russian capitalism failed in the last decade. However, they may become less communist and similar to the way Russia is today with a much reduced growth rate but still much better than under communism. Then it will again be time for Americans to invest in China.

Economic Calendar
This week
Lower ratings and ad revenues, and higher costs at Walt Disney ABC television network upstaged a turnaround at its film division and its shares fell 3.5 percent. Revenues in the media networks division, home to cable networks like ESPN and broadcaster ABC, rose 6 percent to $3.8 billion, but operating income was flat at $1.3 billion. Within the division, operating income at Disney's broadcasting networks fell $39 million to $123 million primarily due to decreased primetime and news ad revenues at ABC TV network and higher programming costs.

Jim Cramer lied again about China leading an economic recovery… claiming once again that trade is up. Here is the Baltic Dry Index blip he calls the world trade recovery. It is the third blip in a flat trend of worldwide socialist stagnation brought about by a free lunch for leftists and hefty income taxes on productive individuals. That makes unemployment, beautiful trail hiking, and balmy beach combing an attractive life style for a growing younger underclass of socialists. View two years of the following.

http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND

The British central bank left its benchmark interest rate at 0.5 percent, where it has been since March 2009. It also decided to leave unchanged its program of buying government bonds and other assets to revive the economy. That program currently stands at £200 billion, or $296 billion.

Yesterday
Inventories at U.S. wholesalers rose for a third month in March, and sales climbed even more, a signal companies will need to step up orders to try to meet demand. The 0.4 percent gain in the value of stockpiles followed a 0.6 percent increase the prior month, the Commerce Department said today in Washington. Sales gained 2.4 percent, the most since November. The amount of goods on hand compared to sales dropped to the lowest level on record, indicating factories will need to keep increasing production.

Wednesday, May 12:
U.S. Trade deficit

Thursday, May 13:
Unemployment initial claims

Friday, May 14:
Retail Sales
Industrial Production
Consumer Sentiment, Mich.

Market Outlook May 12, 2010
The markets were relatively flat yesterday so the volume did not count for much. The average investors (who cannot use volume) think the bull market had successive highs and held above the necklines and therefore the next market high can be higher than the last one. That is what the average investor thinks. We also had a higher than expected dead cat bounce and we and the average investors now anticipate a buying opportunity as the lows are tested.

But then since the average investor will be told by GE/MSNBC/Pravda to expect a new high we expect the market will rise close to the previous highs (when we want to sell everything). The average investor will expect a new high but we expect this time the raw price history as well as the volume corrected history will both fail to have a new high. Our volume adjusted NYSE price information will not likely even come close to its previous high. That advance should happen probably over several weeks. Then we expect a second downward market plunge that the average investor will expect to be supported and to hold at the low price close of last Thursday. We however expect that resistance will be cut like butter by a hot knife perhaps with inter-day low averages as bad as last Thursday. We do not expect the individual stocks will duplicate last Thursday but the averages could. For instance the inverse silver prices actually declined during the day last Thursday but with communism being rewarded in Greece we expect Europeans to turn to gold, diamonds, art and other solid material goods. We expect precious metal ETFs to soar, but because they have no intrinsic value we expect they will then collapse dramatically. The Chinese and Indian industrial shakeout problems should become clearly visible by then as well. Those new market lows will likely be the best buying opportunity of this year.

In Europe they have seen their markets break down in their raw price levels while in the USA we only see the breakdown in our volume adjusted price levels. So Europe may lead this next market collapse.

After that, what happens is dependant on whether the US economy will revive in spite of everything Obama is doing to destroy free enterprise and expand his systemic underclass voter base of indigents, unemployables, the ignorant, the poor, and the corrupt city political machines that bring in the vote by redistributing the wealth available from stripping down free enterprise. Communism can last 50 years just by stripping down free enterprise the same way you strip the valuables out of an abandoned house. You rip out the copper plumbing and wiring etc and the mansion becomes affordable housing for the growing underclass. That is what the Russian communists did. When Rome fell they even stripped the marble from the beautiful city to make hovels for their illegal immigrants who were rampaging Goths who went by the name "Vandals." The illegal immigrants who sacked Rome are the people who define the nouns vandal and vandalism, the verb to vandalize. Perhaps we will have new words as well such as an obama, obamaism, and a new verb… to obamaize.

World Markets

Asian markets were flat last night; Shanghai up 0.3%, Hong Kong up 0.3%, India up 0.3%, C. Korea down -0.4%, and Japan down -0.2%.

European markets flat today in the range from -0.2% to +1.1%this morning about half way through their day.

US pre-market futures are manipulated as usual.

John P. Hussman, Ph.D. this week reports:
"Greek Debt and Backward Induction
The bottom line is that 1) aid from other European nations is the only thing that may prevent the markets from provoking an immediate default through an unwillingness to roll-over existing debt; 2) the aid to Greece is likely to turn out to be a non-recourse subsidy, throwing good money after bad and inducing higher inflationary pressures several years out than are already likely; 3) Greece appears unlikely to remain among euro-zone countries over the long-term; and 4) the backward induction of investors about these concerns may provoke weakened confidence about sovereign debt in the euro-area more generally."

Street Smart this week reports
A Trillion Dollars Buys Only a One-Day Bounce?