High dead cat bounce as socialists throw more money in the raging fire

High dead cat bounce as socialists throw more money in the raging fire

Socialists give up on the idea of stimulating growth with a tax cut 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 they run out of businesses to consume then they start throwing the creative and productive entrepreneurs in the Gulags.


World Markets:

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

It is very likely that Chinese capitalism will fail this year as Russian capitalism failed in the last decade. However, they may become less extreme 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.

As we have been saying:
We had a high one-day dead-cat-bounce. Now we await a partial confirmation of recent market lows. Then we expect the market to advance to close to previous highs. That is because the raw indices have not given a head-and-shoulders sell signal. Only our volume-adjusted index gave the warning we have been talking about since the divergence between the two started last October. Beware now especially of emerging countries and their stocks and bonds. Chinese corporations are beginning to default en-masse on foreigners. The communists can be expected to sting American investors in a professional manner that will cause investment losses two to three times more than their indices indicate.

Economic Calendar
Late last week

Housing stocks have been hyped to record highs. Pending sales of previously owned homes hit a hyped five-month high in March only because buyers rushed to sign contracts before a tax credit expired. Now people are beginning to walk away and default on all those banks that refused to negotiate. This double dip in housing could be limited primarily to overdeveloped areas in the South where seniors once liked to retire. Now many seniors are broke or cannot retire so those high end houses in Florida, Arizona, and Nevada are down as much as 50% now and people (especially younger) people are walking away and renting for five years until their credit is clear again. That five-month hyped high is actually a double dip. View two years of the following:

http://www.martincapital.com/chart-pgs/Pg_existinghms.htm

The Unemployment rate rose to 9.9% from 9.7%. GE/MSNBC/Pravda and other national socialist propaganda machines did not like reporting that so perhaps 90% of Americans are not even aware of this news yet.


Consumer Credit showed Americans went $2 Billion more in debt last month reversing the good trend towards credit solvency. Now Americans are becoming more like the Greeks.
Economic Calendar this week

Yesterday
Jim Cramer lied again about China leading an economic recovery… claiming once again that trade is up. Here is the Baltic Dry Index blip from which he seea his 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. Socialism makes unemployment, beautiful trail hiking, and balmy beach combing an attractive life style for a growing younger underclass of socialists who have no work ethic.

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.

Tuesday, May 11:
Wholesale Inventories

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 11, 2010
Volume dropped 38% relative to Thursday last week as the markets bounced upward yesterday. The average investors (who cannot use volume) think the bull market held and the next high can be higher than the last. We had a higher than expected dead cat bounce and now anticipate a buying opportunity as the lows are tested. 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) but fail to have a new high. That advance will happen probably by early summer. Then we expect a second downward market plunge. Our volume adjusted NYSE price information will not likely even come close to its previous high.
World Markets

Asian markets were down last night; Shanghai down -1.9%, Hong Kong down -1.4%, India down -1.1%, and Japan down -1.1%.

European markets are wildly volatile today in the range from -2% to +4%this morning about half way through their day. But they now have a sell signal and America has one that only our readers know about.

US pre-market futures are down 1% today but 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."