QE2 is something Obama, Karl Marx, and most other socialists could never understand.

QE2 is something Obama, Karl Marx, and most other socialists could never understand. (We wrote about this yesterday and suddenly it is on the talk shows.) They thought free enterprise capitalism was flawed because if profits were removed from the economy via capitalists, then the workers would not have enough to buy back all their products. So eventually they thought inventories would grow and everyone would get laid off (a great depression). The communists never understood economics. First of all the capitalists are not the ancient kings and queens that acquired and held family fortunes. Most of the old aristocracy went broke long ago just as the estates of capitalists also go broke today. JP Morgan is an example of how a capitalist's profits end up in a foundation that helps everyone. Bill Gates will give all his $billions away because he knows that unearned money destroys children and lasts only a generation. Likewise Warren Buffet is another example of free enterprise profits being plowed back into American innovation. It all goes back to the working productive people around the world who create job growth with their profits.

Consumer Confidence Nov rose to 54.1% from 50.2% showing hope has increased since Obama lost dictatorial control of Congress.

Banks and funds are being sued everywhere for the Senate Banking Commission follies. Fannie and Freddie are bags of festering socialist affirmative action merd where people cashed out of mortgages and never paid a cent. It is socialist corruption at its worst and they get away with it. If Obama had made rational decisions over the past two years to clean up banks, restructure debt, and liquidate irresponsible lenders, there is no doubt that we would now be on the course to a sustained recovery.

Trial lawyers make five times as much fraud money by getting insurance companies to settle out of court. The average fraud perpetrator has three false claims that don't show up in any court records because they settle out of court. When someone does take them to court the previous frauds are all inadmissible evidence. It is just like how thousands of drunk drivers get caught but never convicted because the jurors think it is a first time mistake each time because the previous arrests are inadmissible because there was no conviction. Accident records would help identify accident fraud. The Attorneys keep records of suits against doctors and just one suit now drives a doctor out of business because that doctor with a record now is a lightening rod for false insurance claims. So his insurance rate goes up so fast he is instantly out of business. We need public records of lawyers who encourage client fraud with a record of the individuals and their lawyers that report more than one accident with injuries within a five-year period. Many of you know (as we do) someone or even several persons who have filed several serious injury claims and has no other visible means of support yet skies or sometimes does heavy lifting and shows no pain except when they file a new claim. Once in a while one has an operation and then they claim the surgeon injured them. I am sure many of you know this problem is rampant in the USA and is a major problem for the medical profession that Obamacare will only aggravate.

World Markets:
Quantitative Easing is something the USA discovered during the economic depression that followed the Revolutionary War. About 3% inflation was then set for sustainable growth. The "cross of gold" was repudiated in many elections before President Nixon took America off the gold standard. Perhaps that is the misunderstanding socialists and communists have. The real value of gold goes down as more gold is mined. It only appears to increase when money is devalued. But corporations increase more in real value due to the relative decrease in the value of currencies. Gold and diamond are primarily a way to hold value when an Adolf Hitler or a Stalin rises, or a Kim Jong-il decides to destroy Beijing with an ICBM.

Since the German banks and not private sources fund the EU debt, Germany is the chief beneficiary of the EU bailout because Germany then has all profits guaranteed plus a cheaper EURO to further improve their balance of trade. Essentially Germany has always followed British and American devaluation with their own devaluation to maintain a trade advantage as Japan always did and now China does. In effect Quantitative Expansion (QE2) in the USA propagates around the world as every country tries to improve their competitive advantage. If the new bonds do not protect German interests we expect Germany to ask for a much higher rate of return.

Economic Calendar
Yesterday
Case-Shiller 20-city Index Sep rose only 0.5% year over year after being up 1.7% year over year last month showing weakness in housing prices.
Chicago PMI Nov rose to 62.5 from 60.6 showing increased confidence of Chicago purchasing managers.
Consumer Confidence Nov rose to 54.1% from 50.2% showing hope has increased as Obama loses control of Congress.

Today
Dec 1 7:00 AM MBA Mortgage Applications 11/26
Dec 1 7:30 AM Challenger Job Cuts (y/y) Nov
Dec 1 8:15 AM ADP Employment Report Nov
Dec 1 8:30 AM Productivity-Rev. Q3
Dec 1 8:30 AM Unit Labor Costs Q3
Dec 1 10:00 AM ISM Index Nov
Dec 1 10:00 AM Construction Spending Oct
Dec 1 10:30 AM Crude Inventories 11/27 -
Dec 1 2:00 PM Auto Sales Nov
Dec 1 2:00 PM Truck Sales Nov
Dec 1 2:00 PM Fed's Beige Book Dec

This Week
Dec 2 8:30 AM Continuing Claims 11/20
Dec 2 8:30 AM Initial Claims 11/27
Dec 2 10:00 AM Pending Home Sales Oct

Dec 3 8:30 AM Nonfarm Payrolls Nov
Dec 3 8:30 AM Nonfarm Private Payrolls Nov
Dec 3 8:30 AM Unemployment Rate Nov
Dec 3 8:30 AM Hourly Earnings Nov
Dec 3 8:30 AM Average Workweek Nov
Dec 3 10:00 AM Factory Orders Oct
Dec 3 10:00 AM ISM Services Nov


Market Outlook Dec 1, 2010
This past year seems like a cross between 2003 and 1975. 2003 ended the year with the funds buying feverishly to make their 4th quarter bottom line look good and then the market plunged and went horizontal for six months. In 1975 the USA had a president who had played football too long before buying a helmet. He was almost as dumb as Obama. The market was erratic and Americans left investing in the stock market in droves. By the time President Reagan (the gipper) was elected in 1982 two thirds of former American investors had given up on the American stock market.

Based on the cash flow out of the market it looks like at least one or more additional consolidation periods may be needed for the bull market to resume. Without real economic growth there is a limit to how much further corporate profits can rise. Obama socialism makes Americans know that things can only get worse in the long run. Obama socialists and the democrats still have not gotten the message. Americans do not like the socialist pickpockets much less airport gropers or sexual deviates allowed in the military. Impeach the judges who want an American army of sexual deviates.

Historically the socialists first encourage and then they discretely kill all the sexual deviates the moment they can quietly get away with it. That has been the way it went in Nationalist Socialist Germany, the USSR, and in early Red China. Hitler purged his Nationalist Socialist in one night, the night of the "long knives". The lesser-known deviates disappeared into socialist work camps. Socialist totalitarianism and sexual deviation do not mix. Once creeping socialism begins its cradle to grave control, a lot of people end up in the graves. Hitler killed 20 million civilians; half were Germans. Russia just this past weekend admitted Stalin killed the 20,000 Polish leaders in 1941 and then blamed it on Hitler. Obama always blames everyone else too. They claim Stalin killed about 80million of his own people in the USSR and the Mao killed over 200 million Chinese to control his peoples. The socialist in Cambodia killed everyone with an education in their country because they wanted to have no one familiar with western democracy.

World Markets
Asian markets were up last night. China's market was up 0.1%, Hong Kong up 1.1%, India up 1.7%, and Japan up 0.5%.

European markets are up this morning in a range of about 0.3% to 1.9% half way through their day.

US pre-market futures were up about 1% at 7:30 AM EST.