The Obama administration is in the Ozone and has done virtually nothing to clear out the "be happy" mortgage crisis

The Obama administration is in the Ozone and has done virtually nothing to clear out the "be happy" mortgage crisis that the Senate Banking Commission created by putting "be happy" Obama folk in the Fannie and Freddie administrations.

FED boosts bank profits from doing nothing by keeping bank short term rates low while longer term treasury rate rise in spite of the QE2 effort to keep the long term rates lower. This is great for banks that want to do nothing to stimulate the economy because they get a guaranteed profit for doing nothing.

We have said before that rates need to be raised 0.25% to let banks know the FED is going to stop giving them a free lunch and they had better start loaning it to businesses. Businesses now want to put their money to work and need loans to do it. South Americans are now buying up Miami with cash.

Banks stash the cash and will not invest their cash in new businesses if they can continue borrow from the FED at essentially zero interest and use their cash to buy treasuries at higher rates as the banks do. They have guaranteed profits and no risk with the current deal the FED gives them. US businesses will be forced to invest because pretty soon even red China will be buying up America if the Obama administration continues to give US Banks money for doing nothing just like they give lazy "be happy" or "too good to work" people cash for doing nothing.

World Markets:
China's president liked the movie Finding Private Ryan. That was a great movie. Maybe there is hope for China?

Chinese economic data is likely entirely fraudulent now. There is no way to know anymore. China imprisoned an American with an eight-year sentence because he was in China doing investor research to see if the balance sheets and income statements were truth or a fraud. Seeking truth is now apparently a criminal offense in China. That means that we can no longer trust Chinese financial information because fraud in China cannot be exposed. As long as China shows no respect for the rights of investors to seek the truth and arrests anyone seek the truth, China will become an increasing risk of total economic collapse. If they continue to hide the truth about their many corrupt businesses that continue to sell worthless stock to ignorant foreigners China will be heading to a total collapse just as Russia experienced over ten years ago. But this time foreign investors will be burned much more badly. China has to stop hiding the truth by arresting people. That is not sound policy it is plain stupid and dangerous in that it makes China unstable and unreliable as a world partner.

This week's news

This week
ProducerPriceIndex Nov rose 0.8% after rising 0.4% previous month. Could put pressure on profits.
Core PPI Nov rose 0.6% after declining -0.4% previous month. A wash.
Retail Sales Nov rose only 0.8% after rising 1.2% previous month. Fading, not a good sign.
Retail Sales ex-auto Nov up 1.2 % after rising 0.4% previous month.
Business Inventories Oct rose 0.7% after and is terrible after rising 1.3% last month after last month being adjusted up to 1.3%. That means Obama really hid a rate of 1.1% increase. Inventory buildup is always bad for future growth.
FOMC Rate Decision was to reward banks for buying into Obama's debt with essentially free Obama FED loans at the FED window.
Dec 15 7:00 AM MBA Mortgage Applications 12/10 declined -2.3% after declining 0.9% last month. The Obama administration is in the Ozone and has done virtually nothing to clear out the "be happy" mortgage crisis the Senate Banking Commission created by putting "be happy" Obama folk in the Fannie and Freddie administrations.
Dec 15 8:30 AM CPI Nov
Dec 15 8:30 AM Core CPI Nov
Dec 15 8:30 AM Empire Manufacturing Survey Dec
Dec 15 9:00 AM Net long-term TIC Flows Oct
Dec 15 9:15 AM Industrial Production Nov
Dec 15 9:15 AM Capacity Utilization Nov
Dec 15 10:00 AM NAHB Housing Market Index Dec
Dec 15 10:30 AM Crude Inventories 12/11
Dec 16 8:30 AM Initial Claims 12/11
Dec 16 8:30 AM Continuing Claims 12/05
Dec 16 8:30 AM Housing Starts Nov
Dec 16 8:30 AM Building Permits Nov
Dec 16 8:30 AM Current Account Balance Q3
Dec 16 10:00 AM Philadelphia Fed Dec
Dec 17 10:00 AM Leading Indicators Nov

Market Outlook Dec 15, 2010
Obama policy is to abandon the WASP seniors who have paid in all the Social Security funds in favor of his racist policies to help those who have the "be happy" culture that rejects the work ethic. The "be happy" culture comes up from the tropics to wherever socialists nations provide an easy life of welfare and $billions in "be happy" housing stimulus benefits for Obama's people. Somebody has to pay for all these people who have liberated themselves from the drudgery of work and who are so creative in how the play and have fun. 40% of Americans now pay no taxes and a little more than half of them (~25%) have been liberated from the WASP (White Anglo-Saxon Protestant) work ethic. Obama is the first president of color and the first to entirely eliminate WASPs from the US Supreme Court.

Obama rewards "be happy" fraud. It is reported that Obama made 80,000 of his "be happy" people millionaires by giving them reparations for years of fraudulent claims of discrimination against the Agricultural Department which, (as with most government jobs), happens to stacked mostly "be happy" people who need to pretend to work so they can retire with twice the benefits as those cold hearted regular Americans who work real jobs and pay taxes. We also heard that Agriculture Department "be happy" employee tell how she only discriminated against "Whitey" until she discovered that some "honkies" were poor. No one in the Agg Department ever said they discriminated against any "be happy" Obama folk. Still Obama got his "be happy" folk reparations under the table with no national debate.

Making "be happy" people millionaires is part of Obama's stimulation policy because he says they spend money faster than they can legally get it. The fact that they don't feel like saving for their future is why they stay poor and have no future. That is called socialism. That is why he wants to raise taxes on people who actually do real work and who create real jobs. None of the Obama kinfolk in the "be happy" Obama voting block want a real job so what good are productive people anyway then they always vote against socialism. They are now the majority and they are racists now because productive Americans are now the minority. When Obama has a 50% "be happy" voting block he can create his own USA Banana Republic like the ones his idols Castro and Ortega created. With the stoke of the pen he can then change the US Constitution and get rid of the American Democracy and allow for succession of power of the ruling family like they have now in Cuba, N. Korea, and no doubt soon in Venezuela.

No longer will "be happy" people be called lazy in Obama's banana republic. No longer will judges apply the cold-hearted justice of WASPs. From now on judges must give special consideration to the "be happy" life stile and the unfair proportions in which they get busted for drug running and homicides. Obviously "be happy" people are not happy that so many of their kin end up in prisons. The new Obama "be happy Justice system" will level the playing field of justice and make sure there are equal proportions of WASPs and Tea Party folk in prisons. The Obama Justice Department upon taking power two years ago let it be known that returning soldiers are a terrorist threat.

The stock market continually hits the wall at the recent resistance level which is virtually the high for the year. The U.S. market continues in a narrow trading range. We continue to test the upper range yet again but any breakout is likely to be a trap of serious proportions. Optimism is high but evidence is lacking that the US economy is accelerating this quarter.

Bonds are still taking a beating from the FED and that beating will go on through much of next year. Usually the first effect of a declining bond market is a rise in stock prices and then is followed with a collapse in stock prices. We expect a sharp collapse of the equities markets in January. The people who lost their shirts on stocks went into bonds after 2008. Now as they lose their pants in Bonds they will want stocks again. So later next year could be good for stocks after the bond losers get back into stocks near the highs this year and lose again by investing high in stocks.

World Markets
Asian markets were down sharply last night. China's market was down -0.6%, Hong Kong down -2%, India down -0.8%, and Japan down -0.1%.

European markets are down this morning in a range of about -0.3% to -0.8% half way through their day.

US pre-market futures are down about -0.3% at 8:00 AM EST.

The court in Virginia decided that forcing people to buy into Obamacare was unconstitutional. Obama thinks he will still be able to force Obamacare down American's throats while we wait for a Supreme Court Ruling but that is because he is an idiot and still does not understand what Americans think about Obomb-duh care for his "be happy" voting block. Giving away America's resources to the lazy Obamafolk will only attract more illegal immigrants, pot heads, and drug dealer making Obama's voting block too big to throw out of power. It may already be too late for Americans to stop the new wave of socialists like Hitler, Stalin, Mao and Mahmoud Ahmadinejad.