Britain to cut 500,000 federal workers and sees the biggest risk is worldwide deflation.

Britain to cut 500,000 federal workers and sees the biggest risk is worldwide deflation. That supports US policy to keep inflation close to 2% this coming year to prevent the Japanese malaise.

World Markets:
European market joined American markets in rising to the levels just before the mortgage derivatives lies and corruption of the US Senate Banking Commission torpedoed the US economy in late 2008.

It is likely the EURO will come under pressure now and the dollar will rebound because Spain and Ireland still have major problems. QE1 had little effect on the dollar and there is little reason to suspect Qe2 will have much more. The main effect is to raise inflation expectations so that businesses must put their cash back to work.



Goldman expects oil price surge in 2012 as world economies all grow in unison.

Economic Calendar
Yesterday
Wholesale Inventories Sep rose 1.5% after rising 0.8% last month and then shifting 0.4% from this month back on to last month. In other words they want us to believe that the federal government is so incompetent that their methodology errors are 50% of the thing they are trying to measure. Most competent organizations can keep errors to less than 10% of what they are measuring or else they go out of business. The USA should fire the department that generates the figures and bid the work to private companies.

This week:
Nov 10 7:00 AM MBA Mortgage Applications 11/05
Nov 10 8:30 AM Initial Claims 11/06 -
Nov 10 8:30 AM Trade Balance Sep -
Nov 10 8:30 AM Continuing Claims 10/30 -
Nov 10 8:30 AM Export Prices ex-ag. Oct -
Nov 10 8:30 AM Import Prices ex-oil Oct -
Nov 10 8:30 AM Trade Balance Sep
Nov 10 8:30 AM Export Prices ex-ag. Oct
Nov 10 8:30 AM Import Prices ex-oil Oct
Nov 10 10:30 AM Crude Inventories 11/06
Nov 10 2:00 PM Treasury Budget Oct
Nov 11 8:30 AM Initial Claims 11/06
Nov 11 8:30 AM Continuing Claims 10/30
Nov 12 9:55 AM Mich Sentiment Nov -

Market Outlook Nov 10, 2010
Yesterday the market manipulators had many false rumors floating to try to keep their rally going. One rumor was that consumer confidence took a jump. There are two sources of consumer confidence figures and one is always about 8% higher than the other (a 10% bias) but always consistent (a 2% variable error). The rumor is false and is based on the higher biased figure the previous week vs. the low biased one (Michigan) that will be revised this Friday.

Since Oct 28, 2009 our market cash flow index has shown cash flow out of the market and the flow out hit its peak the third week of May. Cash has recently been flowing in but has stopped again and on a cash flow adjusted basis the recent highs in the market averages did not surpass the previous high and it is still as low as during the free-fall following Lehman's collapse. Therefore it tells us this mini-bear market is still active. It would be a bad idea to short commodities even though we do expect another market decline soon. We expect the FED to be successful and for deflation to end this year. We would buy at cyclic lows and be wary of shorting the market other than to balance out alpha trades where quality is bought and weak companies in the same sector are sold short.

Yesterday the market declined for the second day but gold and silver set new highs. Today there will be many economic reports released.

World Markets
Asian markets were down last night. China's market was down -0.6%, Hong Kong down -0.9%, India down -0.3%, and Japan up 1.4%.

European markets are down this morning in a range of about 0% to -0.8% about half way through their day.

US pre-market futures were down about-0.2% at 8:30 AM EST.