The business world has been showing strength now for more than six months.

The business world has been showing strength now for more than six months.

Business travel has begun to pick up but job growth is lagging. The number of people on social services is now staggering as most of Obama's fictional stimulus package went to stimulating the growth of the population of American indigents who chose a Haitian life style where they are low stressed, don't worry, and are happy. Obama thought that group would get the economy going quicker because they can't hold on to a nickel too long (as Pelosi said the experts told her). You see that gets the money into circulation faster than small businesses can according to Pelosi and Obama's advisors. Unfortunately they were correct except they did not stimulate job creation. They only stimulated the drug cartels as gangsters fought to control American drug flow. The Obama administration has stopped the FBI from closing down the marihuana business in California because that would cost socialist democrats even more of their votes come November.

World Markets:
China has resumed growth and stabilized their housing prices and market. China raised key rates. That is the way America would do it if we had an American president not one who claims to be American but acts like a communist. The Chinese have been acting more like Americans lately than the American Marxist democrats.

By raising interest rates very slightly the Chinese show they understand more about free markets than the Marxist Obama administration knows. The Chinese understand that when the economy is contracting… declining interest rates only encourage corporations to wait for even lower rates before borrowing and expanding and hiring. That is the reason for the saying that banks cannot push on a string. Banks can lower rates but corporations and people just will not borrow until they see interest rates or commodity prices begin to rise. People want to get a home when the mortgage rates are lowest and home prices are starting to rise. Corporations what to expand when they see deflation has ended and the opportunity costs will only rise in the future. Goldman Sucks is going to pay off Warren Buffet's investment soon because the FED still has such low rates.

But the leftist Obama administration is too incompetent and stupid to understand capitalism and consequently they do not understand that rising interest rates signify the bottom of the economic cycle and that it is time to begin business expansion in anticipation of recovery and higher inflation. Yes, China is now sending the signal that they are once again growing their economy… but the Obama administration just doesn't get it.

Economic Calendar
Remember the Obama Marxists like to manipulate this kind of economic data. It may have little relationship to reality and is only what the Obama administration wants Americans to think.

So far this week
Net long-term TIC (Treasury International Capital Flows) Aug showed that investment in the USA declined from $63Billion to $39 billion
Industrial Production Sep declined -0.2% after slowing to 0.2% growth the previous month.
Capacity Utilization Sep remained at 78.4%
NAHB Housing Market Index Oct improved from 13 to 16,
Housing Starts Sept were relatively flat at 610,000 last month
Building Permits Sep were down sharply by 30,000 to 539K… not good.
China raised rates signaling the recession is behind them.
MBA Mortgage Applications 10/15 down -10.5% this past month after improving 14.6% the previous month. Very bad but perhaps a side effect of Obama intervention into foreclosures and Fannie and Freddie go bankrupt covering defaults.
Crude Inventories 10/16 are very low at 0.7M and prices break $3/gal at many gas stations.
FED's Beige Book Oct says the economy is no longer decelerating but the pace of growth has remained flat in recent weeks, according to the latest Federal Reserve survey.

Today
Oct 21 8:30 AM Initial Claims 10/16
Oct 21 8:30 AM Continuing Claims 10/09
Oct 21 10:00 AM Leading Indicators Sep
Oct 21 10:00 AM Philadelphia Fed Oct


Market Outlook Oct 21 2010
We hope you got out near the top. Once again GE/MSNBC/Pravda/Cramer got his listeners back into the stock market near the peak. Volume on the decline was almost 30% higher than the recent past and close to what had once been normal exchange volume. The volume on yesterday's partial recovery declined but still was relatively high.

The question is whether the market is high now on rumor but about to drop on Election Day when the socialists are thrown out? What if the socialists don't lose the Senate? That would not help the market go up either. So doesn't that mean the market has already priced in a free market victory and when it happens or if it doesn't happen the market will drop after the election?

Debt will fall under unrelenting pressure the moment interest rates start to rise because there is so much debt. If the jackasses in Congress are thrown out of office in two weeks, QE2 may be so small and commodity prices could return to normal (the gold and commodity bubbles would collapse). That means the economy could shift from a 1970s mode to a 1990s mode and the price of gold could collapse possibly under $600/oz after adjusting for inflation. When President Reagan was in office the shift occurred, the price of gold collapsed from Jimmy highs and eventually was under $300/oz. Gold and silver are cyclic and we still have DUHHHH Obama for two more years so there will be better opportunities to get back into precious metals and commodities later.


World Markets
Asian markets were flat last night. China's market was down -0.7%, Hong Kong up 0.4%, India up 2%, and Japan down -0.1%.

European markets are higher this morning in a range of about 0.7% to +1.1% about half way through their day.

US pre-market futures were up in a range 0.6% to 0.8% at 8:00 AM EST.