China is about to surpass Japan to become the second largest economy in the world.

China is about to surpass Japan to become the second largest economy in the world.

With the world now coming out of the "Obama Depression", China is about to surpass Japan. This must come with great joy after the cruel crimes that were perpetrated by the Japanese during World War II. Only the negative hedge funds are still down on China.


World Markets:
Hedge funds continue to spread miss-information about China to try to unsettle markets that they shorted and are losing big on. It is false for hedge funds to say they are entering a slow down. The hedge funds are selling commodities now and making an incredibly bad mistake. They will fail at their attempt to drive the markets down now. So take advantage of declines as a buying opportunity. When the hedge funds are forced to cover their shorts the world markets will surge. One thing is absolutely certain… shortages are on the horizon. Now is the time to prepare for the shortages that always accompany inflation.

German exports also surged in June to pre-recession levels. German second quarter growth just hit 2.3% and rising.

Economic Calendar
We are seeing manipulated obama government statistics again with wide data scatter and correction as big as the reported changes.


Last Friday:
CPI Jul rose 0.3% which makes up for the -.1% last month.
Core CPI Jul was at 0.1% which is stable and growing.
Retail Sales Jul were up 0.4% after being down -0.5% and manipulate. This shows recovery.
Retail Sales ex-auto Jul also up 0.2%.
Mich Sentiment Aug rose to 69.6% from a manipulates lower 67.8% last month.
Business Inventories Jun are up 0.3% which is expected as we get closer to the holiday sales season.

Today:
Aug 16 8:30 AM NY Fed - Empire Manufacturing Index Aug
Aug 16 9:00 AM Net long-term TIC Flows May
Aug 16 10:00 AM NAHB Housing Market Index Aug

This week
Aug 17 8:30 AM Housing Starts Jul
Aug 17 8:30 AM Building Permits Jul
Aug 17 8:30 AM PPI Jul
Aug 17 8:30 AM Core PPI Jul
Aug 17 9:15 AM Industrial Production Jul
Aug 17 9:15 AM Capacity Utilization Jul
Aug 18 10:30 AM Crude Inventories 08/14
Aug 19 8:30 AM Initial Claims 08/14
Aug 19 8:30 AM Continuing Claims 08/07
Aug 19 10:00 AM Leading Indicators Jul
Aug 19 10:00 AM Philadelphia Fed Aug

Market Outlook Aug 16, 2010

The last advance barely broke the resistance level and was not a breakout. But the pullback thus far was only about 50% of the last advance. So if the decline does not break the previous low then the next advance has a much better chance of making a breakout. If it fails that attempt then it would imply the economic recovery is faltering.

The cash infusion from corporations is beginning to let loose a bull market and a fresh cash influx for acquisitions and expansion of the economy. But that only occurs when they believe the recovery is real. Corporations have cash and are beginning to warm to acquisitions. Inflation looms in the future and will make short term interest rates rise and short term debtors insolvent. They will be the big losers. Homeowners will be the big winners as long term rates are depressed. Bondholders will be big losers in the end and there will be bursts of money leaving bonds for stocks. Commodities will be the big gainers again.

We expect a bigger rally to 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. State and federal government job cuts are needed and no new taxes.

World Markets
Asian markets were up last night. Shanghai up 2%, Hong Kong up 0.2%, India down -0.6%, and Japan down 0.6%.

European markets are down in a range of about -1% to 0% this morning about half way through their day.

US pre-market futures are slightly lower this morning at 8 Am.

We look at China and Germany and think it shows the world market trend is up after all the disparaging double dip false criticism the hedge funds laid on China these past months. German and Chinese markets reflected the slowdown months ago as we have and resumed growth. But a slowdown is not a dip it is just a more sustainable advance. And now both China and Germany indicate the Obama recession is ending.