Barney Frank corruption disgusts Americans.

Representative Charlie Rangle's corruption disgusts Americans. He said it was just an honest accidental $600,000 omission of income in one investment alone while he was a Congressman. Senator Dodd agreed not to run for office the moment his corruption investigation began. When will Obama go on trial? It cost Americans $2Million to get his legal clerk wife a salary of $375000 per year. Legal clerks usually get about $37500 per year but they gave her a big title.

We should take away Representative Charlie Rangle's American citizenship for being so disgusting in elected office.


Markets continue testing for possible breakout. Some consolidation is likely first,

Rotation going on from technology to more stable consumer staples seems to have stopped. Germany's unemployment rate fell for the first time in this recession. They are probably 6 months ahead of the USA.
China's markets recovered 11% thus far from June lows.


World Markets:
China markets stock recovered 11% thus far from June lows.

Corporations have cash but are also bulking up by selling corporate bonds to replace older more expensive debt at record low rates… allowing them to reduce the cost of their debt load. This will cause their income to rise substantially.


Corporate spending of their massive accumulated cash reserves is beginning to surge. That will come in two forms. Corporations that think they are undervalued will buy some corporate stock back. Secondly, corporations will upgrade their data processing to improve employee productivity. That will improve hiring and inject a lot of cash into the economy. Corporations had been sinks for cash all last year but will soon be a source of cash for economic expansion. That will more than make up for flat consumer spending and will in fact trickle down into consumer spending.

Good quarterly earnings reports came out and better reports will come. But fear of Obama National Socialism has people buying treasuries and not stocks. Socialist Obama and his socialist in Congress are feared to be attempting to make the Federal Government bigger than the private sector. It already employs more people than the top 500 corporations combined.

Economic Calendar
Last week
The world markets all rose handily last week.

Building Permits Jun rose to 586K from 574K. This is great! "GeneralElectric/MSNBC/Pravda lied again and said housing was disappointing! Nonsense, it was a 4% increase. Housing permits rose 4% in one month so future housing starts will be rising too at a similar rate!
Crude Inventories 07/17 dropped from 5M to 0.4M this week. Failed leftist Obama/Chavez energy policies are driving up energy costs to make loony left energy solutions look doable. All socialist spending on those Obama projects are pure corruption, as they will fail and no one will check latter to see how many of Obama's supporters and relatives took the money.
Leading Indicators in June declined because the socialists are killing the free markets with their indifference and incompetence. Does the new SEC chairman know what a PE ratio is. Obama didn't. Once the markets go up the index will go up because the stock market is part of the index.

This week:
New Home Sales Jun rose to 330K from 267K, up about 20% but still rising as summer gets under way. We don't need more new homes though even though it makes the economy look better.
Case-Shiller 20-city Index May improved 4.1% from 3.8%
Consumer Confidence Jul flat at 50.2 from 52.9
Durable Orders Jun declined 1% on top of 0.8% last month due to airplane sales decline
Durable Orders ex Transportation Jun declined 0.6%
Crude Inventories 07/24 jumped back to 7M…looks like manipulation of data going on
was not optimistic therefore rates stay low… i.e. good for economy

Yesterday
Initial Claims 07/24 dropped from 468K to 457K, still high.
Continuing Claims 07/17 Continuing claims rose to 4565K, they need to stop extending unemployment. It is now up to about 115 weeks.

Today
Jul 30 8:30 AM Chain Deflator-Adv. Q2
Jul 30 8:30 AM GDP-Adv. Q2
Jul 30 8:30 AM Chain Deflator-Adv. Q2
Jul 30 8:30 AM Employment Cost Index Q2
Jul 30 9:45 AM Chicago PMI Jul
Jul 30 9:55 AM U Michigan Sentiment - Final Jul


Market Outlook July 29, 2010

Testing on up side continues. A retraction of a few percent followed by a breakout next week is now more probable than a breakout this week.

The stock markets are approaching the 100-day moving average line where it needs to decide if it starts the next stage up or consolidates again. Recently each advance has shown improvement and each retraction has been weaker so upward momentum is building.

Fed Chairman Bernanke is pretty down when it comes to the economy. But we calibrated him and there is about an 85% chance that things get better when he is down on the economy.

Market volume has been uniformly very low since around the time Obama was elected. It could be that most investors are still disappointed and stunned by the speed at which Americans are losing freedoms with laws that are planned to go into effect after the socialists are thrown out so that the disaster will happen on the next watch when the taxes and redistribution of wealth go into effect. Then they will once again blame others for the problems they create. But the new Congress needs to show the socialists that their deceit will not work by first replacing the heads of the new social welfare offices and eliminating their support staff.

The cash infusion from corporations will soon let loose a bull market and a fresh expansion of the economy.
We expect a bigger rally to also follow if the corrupt socialists are voted out of office in November. Then Obama socialism can be stopped in its tracks. The imperatives are no new taxes, no new federal programs like Obamacare, and cut state and federal do-nothing jobs.

World Markets
Asian markets were down last night. Shanghai down -0.4%, Hong Kong down -0.3%, India down -0.7%, and Japan down -1.6%.

European markets are down in a range of about -0.4% to -0.6% this morning about half way through their day.

US pre-market futures are up at about 0.4% this morning.