Obama's Marxist idea of redistributing wealth to people of his own race means that he is trying to put America on the same path as Zimbabwe.

Obama's Marxist idea of redistributing wealth to people of his own race means that he is trying to put America on the same path as Zimbabwe. Fortunately we already know that does not work and we can still throw all the bums out. Barack Hussein Obama shares Robert Mugabe's racist form of Marxism. Marxists usually distribute the wealth to their government of mentally deranged political hacks who in Zimbabwe also liked to hack to pieces white farm families as well as black opponents. General Electric runs MSNBC, which is the American Marxist propaganda network. Obama has initiated a strike among other pro-Obama networks to refuse payment to Fox for Fox programming. This now has given them a pretext to send Obama thugs to investigate FOX News claiming that FOX does not follow communist orders. That could ultimately lead to Obama shutting down FOX News the way Obama's banana republic Marxist hero, Hugo Chavez, has shut down the critics of his tyranny.

Obama has put the USA into a liquidity trap similar to what FDR did in the Great Depression. This would explain the large cash holdings of corporations and little being invested. This also explains Obama's US Bond bubble which will devastate pension funds when it pops. The federal and state employee unions will insist the productive Americans be taxed extra high to bail them out because they all voted for Obama.

John P. Hussman, Ph.D. explained the trap in his blog this week. Here is an excerpt.
"There is the possibility... that after the rate of interest has fallen to a certain level, liquidity preference is virtually absolute in the sense that almost everyone prefers cash to holding a debt at so low a rate of interest. In this event, the monetary authority would have lost effective control." John Maynard Keynes

One of the many controversies regarding Keynesian economic theory centers around the idea of a "liquidity trap." In the Hicksian interpretation of the liquidity trap, monetary policy transmits its effect on the real economy by way of interest rates. In that view, the loss of monetary control occurs because at some point, a further reduction of interest rates fails to stimulate additional demand for capital investment. Alternatively, monetary policy might transmit its effect on the real economy by directly altering the quantity of funds available to lend. In that view, a liquidity trap would be characterized by the failure of real investment and output to expand in response to increases in the monetary base (currency and reserves). In either case, the hallmark of a liquidity trap is that holdings of money become "infinitely elastic." As the monetary base is increased, banks, corporations and individuals simply choose to hold onto those additional money balances, with no effect on the real economy. . As interest rates decline toward zero (and especially if the Fed chooses to pay banks interest on cash reserves, which is presently the case), there is no effective difference between holding riskless debt securities (say, Treasury bills) and riskless cash balances, so additional cash balances are simply kept idle. See blog of John P. Hussman, Ph.D. for more details


James Madison in the Federalist Papers, Feb 5, 1788 wrote to the Massachusetts Convention, "but as a just government protects all alike, it is necessary that the sober and industrious part of the community should be defended from the rapacity and violence of the vicious and idle. A bill of rights, therefore, ought to set forth the purposes for which the compact is made, and serves to secure the minority against the usurpation and tyranny of the majority."

Thomas Jefferson to P. Dupont in 1816 wrote; "The majority oppressing an individual, is guilty of a crime, abuses its strength, and by acting on the law of the strongest breaks up the foundation of society."

In 1824 Thomas Jefferson the founder the Democratic Party also wrote (note in Tracy's Political Economy, 1816), “To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one of a free exercise of his industry, and the fruits acquired by it."

World Markets:
China continues to lead Asia and the world out of the recession. Obama continues to be a Marxist anchor and will continue weighing down the American economy with uncertainty until he is ejected or resigns from office.


Economic Calendar
Yesterday
Oct 25 10:00 AM Existing Home Sales Sep rose to 4.5M vs. 4.1Million sales last month. That indicates housing has bottomed on its own now only a little more than a year since MSNBC said it did. GE/MSNBC/Pravda is a shill for Marxists.

This Week
Oct 26 9:00 AM Case-Shiller 20-city Index Aug
Oct 26 10:00 AM Consumer Confidence Oct
Oct 26 10:00 AM FHFA Home Price Index Aug
Oct 27 7:00 AM MBA Mortgage Applications 10/22
Oct 27 8:30 AM Durable Orders Sep
Oct 27 8:30 AM Durable Orders - ex transporation Aug - 0.5% 0.1% 2.0% -
Oct 27 10:00 AM New Home Sales Sep
Oct 27 10:30 AM Crude Inventories 10/23 -
Oct 28 8:30 AM Initial Claims 10/23 -
Oct 28 8:30 AM Continuing Claims 10/16 -
Oct 29 8:30 AM GDP-Adv. Q3 -
Oct 29 8:30 AM Chain Deflator-Adv. Q3 -
Oct 29 8:30 AM Employment Cost Index Q3 -
Oct 29 9:45 AM Chicago PMI Oct -
Oct 29 9:55 AM Michigan Sentiment Final Oct

Market Outlook Oct 26 2010
Still time left to take profits when available.

One question is whether the market is high now on rumor and about to drop on Election Day when the socialists are defeated?

But what if the socialists don't lose the Senate? That would likely hurt the market even more. So doesn't that mean the market has already priced in a free market victory… and if it happens, and more so if it doesn't happen, the market will probably drop after the election?

That is why we are taking profits now. We hope you got out near the top. Volume on the declines was almost 30% higher than the recent past and close to what had once been normal exchange volume.

There is some evidence that long-term fund flows may be moving back to the stock market in anticipation that Marxists will be soundly defeated next week. Yet there is another report out now that retirement accounts are even more heavily invested in bonds in the biggest bond bubble in the history of the FED. When the bond bubble bursts the longer-term bondholders will be devastated along with retirees who need some money to live on now. Most pension funds will just try to hold the five-year (and less) bonds and collect the fixed interest over those years. Anyone who needs money quickly will take great losses.

Debtors will be subjected to unrelenting pressure the moment interest rates start to rise because there is so much debt and an interest increase from 0.5% to just 2% would be a 300% increase in interest expense when bonds turn over. That is why spendthrift socialist countries want interest rates so low. Even Japan's national debt is more than their Gross National Product now. But the Japanese work hard so they are better off than the Greeks, Spanish, and French who have a lower debt to GNP ratio but more Marxists on the dole.

World Markets
Asian markets were down last night. China's market was down -0.3%, Hong Kong down -0.1%, India down -0.4%, and Taiwan down -0.2%.

European markets are down this morning in a range of about -0.5% to -1% about half way through their day.

US pre-market futures were down about -04% at 9:00 AM EST.

The best thing now for America is if Obama resigns from office and we can get all of his Marxist crony Czars out with him. Fat chance that happens. Well someone finally threw a book at him. President Bush had a Marxist Moslem reporter throw a shoe at him. To Moslem's, the heal of their shoe in your face is one of the biggest insults they have. They have a lot of religious rules and insults in the Koran. They only eat with their right hand because they are supposed to wipe their ass with their left and then clean it in the sand. Mohammed did not have toilet paper in his days.

The Moslems only religious claim on Jerusalem is that Mohammed visited Jerusalem when he died. The Big Bird called Barack (this is the absolute truth) carried Mohammed from his deathbed to Jerusalem and then up to his seventy virgins in heaven. That is why the Israelis get so angry when the Moslems say Mohammed visited Jerusalem and is therefore their sacred city too. Mohammed neither conquered nor even saw Jerusalem during his lifetime.