Muslims filed suit in Oklahoma to block a measure that bars courts from considering Islamic religious law

Muslims filed suit in Oklahoma to block a measure that bars courts from considering Islamic religious law on the basis that the Constitution does not impose separation of state and church as Obama and other American Marxists claim.

Dumb: It would be dumb for the USA to buy back long-term debt that was sold in the past two years. We want to sell more long-term debt at low rates so that when inflation hits we have more time to pay down debt. When short-term rates rise sharply it will be too late to buy more long-term debt because the rate curve would be turning deflationary (too flat).

Smart: There is a time to create long term debt (now) and a time to pay it off (as late as possible). That is because we are at the end of the recession. But in 2008 and 2009 it was a different time. It was then the time to sell debt at the lowest possible rates which happened to be the short-term rates. But now we can suspect long and short-term rates to rise so we want to sell long-term rates so they come due after we have a cushion on normal inflation. But before inflation hits 5% we want to be in the position of a balanced budget and rapidly paying down the remaining short-term debt. So now we are not buying back issued long term debt we are instead buying unsold long term debt so that there is buying competition and long term rates fall or at least rise slower than they would otherwise.

Stimulus: The cash itself is not the stimulus because we already are awash in cash. The low level of 2.5% inflation is what is needed so that the interest rate curve is healthy, so that normal inflation based de-leveraging takes place, and so that we raise the value of existing capital and de-leverage that way by getting the prices of houses and investments going up. If people see houses and capital equipment prices rising then they can produce products. We have run out of productivity increases by cutting costs now we need higher sales and revenue to kick in via higher sales prices.

Dumber: The long term bond market will collapse when the FED begins raising interest rates because investors will lose their equity if they are unable to hold them for the full life of the bonds. If a rate of $1000 Treasury bond is 0.25% and interest rates rise to 2.5% you can buy that bond for $100. Once the FED finishes this stimulation package and if they are successful, then they will raise rates. China and Japan will be unable to get their money back when that starts without enormous losses. The FED should position itself to buy back US debt at more than 90% discount at that time. But they probably will not. There will be opportunities for investors to pick up treasuries perhaps at up to 5% effective interest (a 95% discount). And there could be wide swings.

But again, the current rise of ETF's is currently irrational for another five to ten years because we are looking at low stable inflation of less than 2.5% per year.

World Markets:
Silver is not reserve currency and the jewelry market is down. Gold prices have peaked but there is apparently manipulation of the silver pro-shares because they rose significantly yesterday for no sustainable reason.

Is this fact or fiction? They say China's factories ramped up their production last month and were buoyed by an influx of new business, highlighting the strength of the world's second-largest economy. The official purchasing managers' index (PMI) rose to 54.7 in the month from 53.8 in September, blowing past expectations. The HSBC PMI, a private survey, climbed to 54.8 from 52.9. Is this totally from internal growth because the international growth is not evident?

The Baltic Dry Index (Jimmy Cramer's gauge of the world economy) has continued to bump downward. Look at the last five years (5Y) and move down the screen and you can see it is on its second declining bump down. This throws into question whether the Asian market recovery is fact or fiction. How can Asia grow at their advertised rate when international trade is down 75% and still declining?
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Muslims filed suit to block a measure that bars courts from considering Islamic religious law on the basis that the Constitution does not impose separation of state and church as Obama and other American Marxists claim.

Economic Calendar
So far this week.
Nov 1 8:30 AM Personal Income Sep fell -0.1% after increasing 0.5% last month-Very bad.
Nov 1 8:30 AM Personal Spending Sep increased 0.2% after increasing 0.4% last month. Personal debt increased.
Nov 1 8:30 AM PCE Prices - Core Sep did not increase after increasing only 0.1% last month.
Nov 1 10:00 AM ISM Index Oct improved to 56.9 from 54.4 last month which is more optimistic than China's PMI reported up above.
Nov 1 10:00 AM Construction Spending Sept up 0.5% because last month was changed to -0.2% after first being reported as 0.4%. This is Marxist Obama's manipulation again. After reporting last month they then took away 0.6% and tacked it on to this month to give 0.5% for the big lie this month. The truth is it was up 0.4% last month and was down -0.1% this month but Obama lied because today is an election and he wants the Marxist morons to do well. But they will be thrown out on their duffs.
MBA Mortgage Applications 10/29 were down 5% after being up 3% last month- deflationary bad
Challenger Job Cuts (y/y) Oct 32% down from 44%. An improvement
ADP Employment Change Oct 43K vs. a bad -39K last month
ISM Services Oct rose to 54% vs. 53% which is an improvement
Factory Orders Sep up 2.1% after losing -0.5% last month. Great news
Crude Inventories 10/30 dropped in half. Prices could rise again
FOMC Rate Decision fixed at 0.25%
Auto Sales Oct - up 5.2% year to year imports up only 3.3%
Truck Sales Oct - up 20.5% but imported trucks up 28.1%
Nov 4 8:30 AM Initial Claims 10/30 - increased to 457K from 444K last month i.e. very bad
Nov 4 8:30 AM Continuing Claims 10/23 - 4340K down from 4346 as large numbers of people reach the 99 week limit on unemployment insurance.
Nov 4 8:30 AM Productivity-Prel Q3 -improved 1.9% erasing the decline of -1.8% last month.
Nov 4 8:30 AM Unit Labor Costs Q3 - dropped -0.1% after increasing 1.1% last month.

Today
Nov 5 8:30 AM Nonfarm Payrolls Oct -
Nov 5 8:30 AM Nonfarm Payrolls - Private Oct
Nov 5 8:30 AM Unemployment Rate Oct
Nov 5 8:30 AM Hourly Earnings Oct -
Nov 5 8:30 AM Average Workweek Oct -
Nov 5 10:00 AM Pending Home Sales Sep
Nov 5 3:00 PM Consumer Credit Sep

Market Outlook Nov 5, 2010
The market shot up yesterday to the level just before Lehman's collapse. We would take remaining profits at this time and stay out or begin net shorting the market. World dry goods trade remains at about 25% of its high.

Silver is at a new high of $26/oz. This makes no sense other than if the silver market is being manipulated higher. Silver is not a reserve currency and there is currently no significantly rising industrial demand for silver. This appears to be something weird George Soros would do. George Soros is funding the potheads that are trying to legalize Marijuana in America. George Soros is a sick, sick man.

The Baltic Dry Index (Jimmy Cramer's gauge of the world economy) has continued to bump downward. Look at the last five years (5Y) and move down the screen and you can see it is on its second declining bump down. This throws into question whether the Asian market recover is fact or fiction. How can Asia grow at their advertised rate when international trade is down 75% and still declining?
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stocks have climbed and the dollar weakened well in advance of any Fed action. Since Bernanke said Aug. 27 the Fed “will do all that it can” to keep the recovery going, the Standard & Poor’s 500 Index gained about 14 percent through yesterday, and the dollar declined more than 7 percent against a basket of six currencies. To a large degree, QE2 is already priced in. Gold futures traded in New York reached a record $1,388.10 an ounce on Oct. 14 and are up 23 percent this year but show signs now of topping. We see the Obama administration as Moronic and much worse than the Carter administration. We think socialists in a primary will challenge Obama if he thinks of running again the way the socialists challenged Lyndon Johnson in his time. We anticipate manipulated shortages occurring as they did under Jimmy Carter due to manipulation. The price of sugar will soar until the survivalists have a five-year supply and then prices will plummet. During Jimmy's time we had rolling shortages of coffee, cocoa, toilet paper, lettuce, gasoline, and other commodities. Only at the very end of the decade did inflation hit 10% and the price of gold peaked and then collapsed 80% from the peak for a period of twenty years. Investors who bid up the price of gold risk losing 75%.

The defense contractor General Electric/MSNBC/Pravda is appalling and a national disgrace.

World Markets
Asian markets were up last night. China's market was up 1.4%, Hong Kong up 1.4%, India closed, and Japan up 2.9%.

European markets are down this morning in a range of about 0% to -0.9% about half way through their day.

US pre-market futures were down about 0.25% at 8:00 AM EST.