Government Motors was a black hole yesterday that took a vast block of cash out of the market and created an imbalance of long positions.

Government Motors was a black hole yesterday that took a vast block of cash out of the market and created an imbalance of long positions.

Leftist bankers believe shareholders owe them a living and taking the highest salaries and selflessly transfer wealth to their crooked rich George Soros type cronies with special deals that steal from shareholders and Americans. They stack their director boards with cronies who all pillage the companies while maintaining a generous outward appearance as the squander American capital resources. Obama has done nothing to claw back their theft. Even the former SEC chairmen were stealing high salaries and golden parachutes from US taxpayers. The Obama administration is the most corrupt in American history. While Obama's family and friends line their pockets with taxpayer money new incorporations of businesses have not kept pace with businesses closing their doors. Unemployment can not be brought under control when leftists with friends in government take over the management of banks. Obama is using the power of the presidency to subvert the American free enterprise system with subversive leftists who get their CEO jobs based on who they know not what they know. Obama and the leftists eventually will steal all the assets from the stockholders.

Capitalists get high salaries only when they grow their companies and employ more people. Leftist Obama socialist executives raid the corporate treasury as we have seen them do since 2007 when they endorsed Obama and as their profits went on the skids. Socialists steal from shareholders even when times are tough. Obama protection is why no socialists have gone to jail and they continue to steal even as the economy goes down.

Presidents Ronald Reagan and Bush Sr. put 1072 corrupt leftist bankers in jail during the last banking crisis. There has been much more bank corruption under corrupt leftist Charlie Rangel's Senate. Rangel himself is a leftist crook and was convicted yesterday on 11 counts of corruption in the US Senate. Racist leftist Rangel required that minorities of his and Obama's race not be asked about their ability to make their mortgage payments but many banks are now being sued for that stupid leftist racist practice. In the mean time leftist racist Obama has taken no criminal actions against leftist Rangel or the corrupt leftist bankers and corrupt racist leftist Freddie Mack administrator who lied and cheated investors in the mortgage derivatives fiasco. Racist/leftist Obama has still not arrested the thousands of corrupt leftist banking and investment managers who created the derivative market meltdown in 2008 by giving mortgages to thousands of people of Obama's race who had no visible means of even supporting themselves. Leftist equals = racist favoritism = equals corruption.

Obama's Nigerian Aunt is on USA welfare now and told the press she had a right to USA welfare because the USA prosperity was not earned but was a gift from her gods.

Obama has done nothing but make more regulations to throw more Americans out of work and make American banking less competitive. Zero Obama risk equals = zero American opportunity, which equals = zero Obama administration intelligence. Risk brings reward. Obama stupidity brings zero corruption avoidance, zero growth, and lingering unemployment. The banking crisis was not due to risk taking it was due to leftist racist affirmative action favoritism by corrupt Senators like Rangel and Obama, corrupt Freddie Mack, and corrupt leftist bankers.


World Markets:

China is making additional attempts to control inflation bubbles and just raised borrowing rats by 0.5%. Asian markets stabilized. China is seeing a bubble in food price inflation now as grain harvests are down and Russia barely has enough to feed their people. The USA will have a bumper crop of wheat and soy but China does not consume much wheat yet.

Nine Russian reporters were beaten to death so far this year. The latest had his head, hands and legs crushed with a baseball bat and has not regained consciousness. The Russian government is also continuing to prosecute another reporter who has had his skull crushed because local politicians accused him of slander. He is not even aware of his severe brain damage and the prosecution now amounts to nothing less than persecution of his entire family. This is where national gangster socialism leads. Hitler and Stalin were Nationalist Socialists too.

The Chinese consumer advocate who complained when his son was poisoned by Chinese milk supplements was sentenced to two years in prison for the crime of reporting the problem. The sentence amounts to persecution of his entire family now. This is where international socialism leads.

All socialist dictators employ much more genocide than banana republic dictators do. Western socialists are only free now because the USA rescued them from Hitler and Communism. The socialists including Obama are now working hard to make America a socialist state too.

Ireland will accept loans from the EU now to prevent a run on their banks. California and about five other states are in similar positions today.

The EURO has come under pressure now and the dollar will rebound while Portugal, Spain, Italy, and Ireland have more rioting. QE2 last week seemed to show a stronger dollar and there is little reason to suspect it will have much more than the goal of 2% to 2.5% core US product inflation. In fact last month the core PPI dropped -0.6% (very deflationary). The main effect of QE2 is to raise inflation expectations so that businesses must put their cash back to work. A core product cost inflation of 1% to 2.5% is the goal. The inflation of raw materials prices could be much higher but the efficiencies of production improvements offset raw material price increases.

Last week:
Economic Calendar
This week so far:
New York State reported manufacturing plunged as US inventory build-up accelerated to 1.2% this past month.
Retail Sales Oct up 1.2% vs. 0.6% last month. Good sign
Retail Sales ex-auto Oct up 0.4% vs. 0.5% last month. Bad sign for Christmas sales.
Empire Manufacturing Index Nov down -11.1 vs. up +15.7 last month. terrible, terrible sign
Business Inventories Sep up 0.9% after being up 0.6% last month. Very bad as inventory buildup is acceleration. This is on top of the Obama communists lied again and he shifted 0.3% from this month to last month. Otherwise inventories would have admitted to be up 1.2% this month.
Producer Price Index Oct at 0.4% same as last month
Core Producer PI Oct -0.6% vs. 0.1% last month. This is quite deflationary and is what the FED wants to raise to +0.2% per month.
Net long-term TIC Flows Sept jumped to $82Billion in Sept vs. $11Billion revised August levels showing increase in foreign investment in the USA. China is buying USA real estate. Not good
Industrial Production Oct at 0% vs. -0.2% last month. Not too good especially with inventories rising.
Capacity Utilization Oct at 74.8% up from 74.7% last month. Anemic Obama recovery
NAHB Market Housing Index Nov at 16. October was also at 16 also but Obama lied and dropped it to 15 to make it look like housing was recovering this past month. Obama has still not arrested the thousands of corrupt banking and investment managers who staged the derivatives meltdown in 2008.

MBA Mortgage Applications 11/12 dropped -14.4% vs. being up last month by +5.8%-very bad
CPI Oct up 0.2% improved slightly over being up 0.1% last month.
Core CPI Oct up 0% after being up 0% last month. No recovery in progress. The FED wants about *0.2% each month to avoid stagnation.
Housing Starts Oct were 519K down from 610K last month. -not good
Building Permits Oct were 550K up from 539K last month. OK
Crude Inventories 11/13 up 7.3M after being down 3M last month indicating oil prices are too high.

Yesterday
Initial Claims 11/13 439K up from 435K even as Obama moved 8K from this week to last week as good communists always do to give favorable peoples news. Otherwise this wee the Peoples Socialist Republic of America would have reported new claims at 447K up 12K or 3% from last week… not good.
Continuing Claims 11/06 were at 4295K down from 4301K last week as more American give up and join the welfare state and live on the dole.
Leading Indicators Oct were up 0.5% after being up 0.3% last month. This was driven by the stock market recovery after the defeat of the Socialist-Democrats the first week of November.
Philadelphia Fed Nov- The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 1.0 in October to 22.5 in November. This is the highest reading in the index since last December. Indexes for new orders and shipments also improved this month. Indexes for both delivery times and un-filled orders changed from negative to positive this month, suggesting improvement. However, grow rate slowed.

Market Outlook Nov 19, 2010

Market at a critical juncture.
We think we are in a 1970s type period of lateral market movement in a +- 10% band. Currently we think we are closer to the top than to the bottom of the band.

If you ignore market cash flows the stock market tells chartists that we are at a critical juncture. We slightly exceeded the previous high for the year and fell back to the previous high and held there this week. Therefore they are hoping for a solid advance of 3% or 4% that would indicate another bull market in stock prices to their way of thinking.

We on the other hand weight the price index with the volume index and see market's new high is still 6% lower than its last high on a cash flow basis. In fact we see that when we consider cash flows, the previous high in April 2010 topped out at the level of the high at the end of 2009. Therefore it would take a 6.4% run-up to get to the previous highs of both last December and April and for us to say a bull market even has a chance to start. So from our viewpoint buying or selling short at this juncture is pure speculation with the sellers having market cash flows on their side. Even commodity prices could falter as China reigns in inflation as it did in 2008 when the commodity markets collapsed. We also have five EU countries and six American states ready to collapse if this recession lasts much longer or a crisis occurs.

The government motors (GM) IPO sucked all the oxygen out of Wall Street yesterday. We think GM will only survive if Obama succeeds in making the USA a socialist republic.

Japanese style world deflation remains the primary concern with the USA core Producer Price Index at a deflationary -0.6% last month. That is why the FED is doing QE2 and so far it has not had much of an effect.

Congratulation GE/MSNBC/Pravda for keeping your financial recommendations as consistently moronic as your political views. Obama continues to kill American jobs in the energy (Gas, Oil, and Coal) sector to stifle any possible economic growth before it can get a foothold. Gulf oil, shale fracturing, and mining permits are virtually impossible to get now even for American companies investing in the USA. The Obama reds are restricting growth and employment. They need more crises to justify more communist inroads.

It would be a bad idea to naked short commodities even though they just peaked. We expect the FED to be successful and for core price inflation to begin 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.

World Markets
Asian markets were down slightly last night after the recent plunge. China's market was up 0.8%, Hong Kong down -0.1%, India market down -1.7%, and Japan up 0.1%.

European markets are down this morning in a range of about -0.4% to -1.2% about half way through their day.

US pre-market futures were down about -0.4% at 8:30 AM EST.