It is time for Americans to demand the release of Americans imprisoned by corrupt Chinese leaders and a kangaroo Chinese court system or to pull out o

It is time for Americans to demand the release of Americans imprisoned by corrupt Chinese leaders and a kangaroo Chinese court system or to pull out of China. Refusing to pay communist demands for bribes should not be an offense anywhere in the world. The Chinese communist government officials show they have all the finesse of Somali pirates stealing from foreigners. The Chinese have no rule of law and apparently can no longer afford the cost of all the bullets needed to shoot corrupt Communists

World Markets:
Chinese production decreased last month.

China with 5% of the GNP of the USA now is a bigger world polluter than the USA. China's wasted energy is driving up the prices of raw materials around the world. China needs to begin to start thinking about all the waste and pollution China is creating. China needs rule by clear laws not rule by corrupt politicians and corrupt courts.

The economic policies of Communist China are now ant-inflationary while American policies are anti-deflationary. That will cause investments to continue to move to China the same as the American Economy enjoyed for 190 years until the Clinton bubble burst. It would be wise for the USA FED to raise rates to 0.25% just to incentivize banks to start making commercial loans. Americans must stop investing in China until they have rule of law and stop N Korea's plan to threaten neighbors as they beg for food. Communism has failed everywhere in the world because communists enslave their intelligent people and steal from the most productive members of their society to create useless red flag waving guards to harass and humiliate anyone who wants to really help China.

China imprisoned Dr. Xue Feng and gave him an eight-year sentence because he was in China doing investment research to see if the balance sheets and income statements were truth or a fraud. Seeking truth is now apparently a criminal offense among corrupt leaders in China. That means that we can no longer trust Chinese financial information because fraud in China cannot be exposed. As long as China supports N. Korea (a pathological new dynasty) shows no respect for the rights of investors seeking the truth, and arrests Americans seeking the truth, China will become an increasing risk of total economic collapse and anti-western nationalization/confiscation of property.

China already holds an American with a 16 year sentence. Jude Shao is a naturalized American citizen who started China Business Ventures (CBV) in 1993. CBV focused on exporting American medical equipment (CAT scans, MRIs, X-rays) to China, and by 1997, had offices in San Francisco and Shanghai with 15 employees. It all started when in July 1997 corrupt local Tax Auditors arrived at CBV's Shanghai office and took CBV's accounting records to conduct a special tax audit to solicit bribes. Jude was twice solicited for bribes to stop the investigation, but he refused since he knew that he had done nothing wrong. In April of 1998, Jude was arrested and told by the police that they were asked to "teach him a lesson." He was held incommunicado for the next 26 months.
In June 1999, a trial was held in Shanghai No. 1 Intermediate Court, but Jude was unable to prepare a defense because he was never able to meet with his attorney, who was only hired 10 days prior to the start of the trial. Neither Jude nor his attorney was able to review the evidence against him. In March 2000, the Court issued a ruling convicting Jude of two tax crimes (obviously refusing to pay two bribes) and sentenced him to 16 years in prison.

If you were an honest businessman would you invest in china? GE/MSNBC/Pravda announced a big consortium deal this week to supply China with all the missing technology they need to put Boeing Aircraft out of business. China already has learned how to produce Neanderthal Russian aircraft.

Economic reports:
Case-Shiller 20-city Index Oct dropped 0.8% after increasing 0.6%last month. It would have been a 1% drop if they did not drop last months number by 0.2% to make this month look less disastrous. Obama and the socialists are destroying the economy by not liquidating the Mortgage crisis.
Consumer Confidence Dec dropped again to 52.5 from 54.3% last month.

Yesterday
MBA Mortgage Applications 12/24 Results for the December 24 week along with the December 31 week will be released together on Wednesday, January 5.
China has ten days worth.
Initial Claims 12/25 dropped to 388K from 420K last week possibly due to seasonal hiring.
Continuing Claims 12/18 increased to 4128K from 4064 last week.
Chicago manufact Index in Dec improved to 68.6 from 62.5 last month
Pending Home Sales Nov rose 3.5% after having increased 10.4% last month.

Market Outlook Dec 31, 2010
It has been a good year for the markets of western democracies and not such a good year for the markets of the corrupt socialist/communists. Idiot Chavez had to devalue his currency twice. The communist Monarchy of Cuba now has Castro's brother as king. The communist Monarchy of N. Korea now has the son of the "high hair" idiot for their new idiot king. The former USSR is still run by former communist criminals and has a pin-up dictator who likes to pose for pictures. The German socialists in Berlin now have chocolate pudding for brains. They have now decided that wisdom is collective knowledge and does not reside in any wise individuals. Anyone can be wise if they mind meld with their alternate wise selves who exist in alternate universes.

If there is a sell off it should come within the first weeks of January. Obama has done nothing for two years to liquidate the crippled mortgage market. This has frozen worker mobility and is destroying credit ratings so that housing will take five years just to recover to where it was before Barack Obama.

By mid year we expect state and federal worker layoffs because the socialists have not put their government houses in order. Many predict a major sell off at mid year when the individual states are in crisis. But typically the stock market is six month ahead of economy. QE2 ends mid year but we expect that to be extended.

The market is still near its high for the year just where the funds want it to be. However on a cash flow basis it is not. At this point volume is down 50% since last May. Volume of late is the lowest we have seen since the Obama recession.

Today is your last chance to reduce your taxes on your investments. For your taxes this year, Obama is requiring securities firms to report not just client purchases and sales but also profit and loss. The securities firms, in doing that, have decided to tell their clients in advance so the clients know that they can take some losses to decrease capital gains taxes to as close to zero as possible. Obama will take it otherwise. It will minimize the amount that investors pay in capital gains this year. In demanding more information to harass some investors, all the investors are getting the information needed to drive their taxes as close to zero as possible. In the past investors did not often sell fractions of their under performing investments as much as they will going forward under socialism.

World Markets
Asian markets were mixed last night. China's market was up 1.8%, Hong Kong up 0.2%, India up 0.6%, and Japan closed.

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

US pre-market futures are down about -0.2 % at 9:00 AM EST.