Bloomberg says we are now on top of the biggest equity rally in more than five decades while the US double dip continues.

Bloomberg says we are now on top of the biggest equity rally in more than five decades while the US double dip continues.

Optimism continues without bounds atop the biggest equity rally in more than five decades has lifted the S&P 500 above its level when Lehman Brothers Holdings Inc. collapsed in September 2008. USA leading Indicators Dec were up only 1%, which is lower than the 1.1% before Christmas, and much lower than the 2.5% rate earlier in 2010. The current stock market bubble is the only thing keeping the US Leading indicators up.

The dollar strengthens and gold falls in price as the world discovers the best inflation adjusted returns are found in the USA. The Net long-term TIC Flows for November show a sharp trend reversal as the world buys US dollars and treasuries for a safe higher rate of return like the USA banks have enjoyed at 0.25% cost for the last two years.
With a 0.25% cost and a guaranteed 1.88% return banks make money. While investors are forcing European governments from Greece to Ireland to cut spending as governments prepare to sell $1.1 trillion of bonds this year, demand at Treasury auctions has been the highest on record.

The precious metals trend line is now down

Islamists kill again at Moscow's busiest airport.


World Markets:
The Islamic terrorist group Hezbollah likely to become the next Lebanese government.

Britain’s economy unexpectedly shrank the most in more than a year in the fourth quarter as gross domestic product fell 0.5 percent after increasing 0.7 percent in the previous quarter, the Office for National Statistics said in London today. The median forecast in a Bloomberg News survey of 33 economists was for an increase of 0.5 percent. USA leading Indicators Dec were up only 1%, which is lower than the 1.1% before Christmas, and much lower than the 2.5% rate earlier in 2010. The current stock market bubble is the only thing keeping the US Leading indicators up.

World liquidity is shrinking because the USA is seen now as such a safe investment compared with massive illegalities and sucker sales like Hutchison Whampoa Ltd.’s sale. The Asian criminals are essentially selling their Brooklyn Bridge.

Red China engages in practices that are illegal in the Free World where trade must be fair. China is creating monopolies and cornering the market in Rare Earth's the way criminal organizations did a century ago. China thus is causing shortages and driving up prices all around the world and they are causing unemployment in manufacturing nations in the Asian ring. Remember they illegally imprisoned two Americans for doing diligent economic research for fear the Americans would expose Red China's economic corruption. Their Nobel Peace Prizewinner was thrown in jail because he accepted the peace prize. China should free the two Americans and let their Nobel Prize winner leave China.

Business trends

Friday
Crude Inventories 01/15 Jumped over 2M after declining by similar amounts in past weeks. Red China is behind the higher commodity prices around the world, not because they are doing well but because they bought up much of the world's natural resources in every continent and are raising prices to squeeze the free world.

This week:
Jan 25 9:00 AM Case-Shiller 20-city Index Nov
Jan 25 10:00 AM Consumer Confidence Jan
Jan 25 10:00 AM FHFA Housing Price Index Nov

Jan 26 7:00 AM MBA Mortgage Purchase Index 01/21
Jan 26 10:00 AM New Home Sales Dec
Jan 26 10:30 AM Crude Inventories 01/22
Jan 26 2:15 PM FOMC Rate Decision Jan
Jan 27 8:30 AM Initial Claims 01/22
Jan 27 8:30 AM Continuing Claims 01/22
Jan 27 8:30 AM Durable Orders Dec
Jan 27 8:30 AM Durable Orders ex Transportation Dec
Jan 27 10:00 AM Pending Home Sales Nov
Jan 28 8:30 AM GDP-Adv. Q4
Jan 28 8:30 AM Chain Deflator-Adv. Q4
Jan 28 8:30 AM Employment Cost Index Q4
Jan 28 9:55 AM Michigan Sentiment - Final Jan


Market Outlook Jan 25, 2011

GE socialists/ MSNBC/Pravda CEO is now Obama's chief economic advisor.

The stock market volume plummeted 21% yesterday as stocks advance close to recent highs. Will it crash tomorrow after Obama's speech like it did when he was elected and when he gave his first speech?

Currently American investors remain at historic levels of optimism while the economy continues to slow from the 2.5% rate Obama reported last year and then continued to revise downward. Most are already fully invested. Short Selling Against S&P 500 Companies is at a one-year low, lower than before the May Flash Crash. American technology stocks are overpriced because General Electric socialists/ MSNBC/Pravda are selling out other American companies by giving away American technology to curry favor with the communists of China.

Rep. Paul Ryan and House Republicans embark today on an effort to significantly slash federal spending, including one prominent congressman promising to engineer 'the largest series of spending cuts in the history of Congress.'
By mid year we expect state and federal worker layoffs because the socialists have not put their government houses in order and the Tea Party wants smaller government. Raising taxes would allow states go even deeper in the hole with union contracts and tip into default. Many predict a major sell off at mid year when several individual states also are in budget crisis. But typically the stock market is six months ahead of economy. QE2 ends mid year but that is likely to be extended.

World Markets
Asian markets were down last night. China's market was down, -0.7%, Hong Kong down -0.1%, India up 0%, and Japan up 1.1%,

European markets are down this morning in a range of about -0.1% to -0.5% half way through their day.

US pre-market futures are flat about 0.5 % at 8:00 AM EST.