China is sending teams to study why socialism leads to bankruptcy even in free European democracies.

China is sending teams to study why socialism leads to bankruptcy even in free European democracies. China is experiencing wealth now by allowing free enterprise and they want to understand why redistribution of wealth starts innocently but in the end destroys the nation's work ethic. Socialism is doomed to a government that pretends to meet quotas and a government work force that pretends to work. Socialism plus freedom leads to tribal subsistence. Socialism plus tyranny leads to mass starvation, war, and disease (N. Korea, NAZI, and Imperial Japan). A free market with workers (like Warren Buffet and Steven Jobs) entitled to invest or give away their personal wealth leads to national prosperity. The leaders of China are discovering that socialist leaders rule no differently than the former Chinese dynasties which were benevolent dictatorships. Communism starts as a benevolent dictatorship but then runs out of wealth to redistribute. Then it collapses. Socialism is just a less violent form of communism.

They have a death penalty law in Iran for anyone who causes someone to leave their hate faith. So the Iranians have rounded up all new Christian converts to torture them to get evidence to execute all the Christians they associated with. In the holy hate government of Iran, the persecution of people with Christian ideas of freedoms and work ethic continues with their ruling cult of holy haters. I cult of holy haters is a growing socialist state that keeps its people poor, ignorant, and violent for terrorist fodder. The holy hater of Iraq returned yesterday from Iran to Iraq.

Notice how GE/MSNBC/Pravda stopped covering that welfare woman with two children who got taxpayer money for fertility treatments and had six more children all eight plus her now on welfare. She gets over $80,000 a year of American taxpayer money and she is a hate faith immigrant. The hate faith plans to conquer the world that way, with high birth rates and by murdering Christians and others of faiths of love and peace. Poverty is not the cause of their hatred as Obama claims. Rich educated holly haters from rich American immigrant families and other western nations love to hate and murder too. Terrorism is clearly the result of holly haters of the worlds hate faiths. And they have several sects of hate faiths in competition over who controls the world's oil resources. Obama aids them by shutting down American oil exploration and by trying to bankrupt BP and other free world oil producers.

Obamacare will give 15 million illegal immigrants and 25 million indigents better health care than American workers can afford for themselves. Oh yes, and do you remember when Obama took office and he said American wounded soldiers should pay for their own medical insurance because they volunteered and they knew the risks they were taking? Don't you just love him? The leftists think he is brilliant!

Obama wants gasoline at $4.50 per gallon by this summer according to GE/MSNBC/Pravda (Jan 3). Obama has cut US exploration and international supply with moratoriums. $140 /barrel oil is coming but will the economy crash before or after that! Leftists want high energy prices to fight global warming and to redistribute wealth to Hamas, Iran, George Soros and their other holy hater friends. High energy prices will make energy sector companies recover but it is a tax on the American economy. High energy costs will raise the costs of business and travel. Airlines will suffer badly. It will work to defeat economic and job recovery but would help sell a few electric cars. Only the terrorists benefit because the oil kingdoms fund the world terrorists and have been trying to buy nuclear bombs to attack Israel, Europe, and America.

World Markets:
China appears to be behind the sudden decline in N Korean hate speech. That is good news. Perhaps China realizes that N. Korea's criminally insane suicidal hate is not a good indication of how China influences its friends and neighbors. We define ourselves by the kinds of friends we have and by how we handle the bullies and haters. This is good but reliability is also an important quality in a friend. Can we count on China as a reliable partner in world peace? How will China deal with the holly haters?

Yes, some emerging markets were booming recently but their economies rise twice as fast as the USA but they then fall even faster. Look at how fast Mexico grew when Clinton gave them our manufacturing business! At first the American job losses, inferior Mexican products, and the American deaths from Mexican human feces left on lettuce and tomatoes took a heavy toll on the American worker. But now Mexico has become a major drug producing nation with Mexican trucking rights to go anywhere in America thanks to Obama considering trucking their free trade right. Duhh--That is Clinton's great Mexican trade deal. Mexico is falling deep into poverty as drug lords cause mayhem and murder.

This week Gold suffered its greatest single day decline in 11 months. Silver prices plummeted. Both are still about 25% overvalued. High energy prices fund the left and the of hate faiths and they buy gold not free world currencies.

Economic reports:
This week the news has been better than in recent past.
Construction Spending Nov 2010 subsided to 0.4% from 0.7% improvement the previous month but down 6% from 2009.
http://www.martincapital.com/chart-pgs/Pg_hous.htm

ISM Index Dec shows management optimism is at 57, up slightly from 56.6 last month and back to where we were in 2002. http://www.martincapital.com/chart-pgs/Pg_ism.htm

Factory Orders Nov were up 0.7% after being down 0.7% the previous month.
Auto Sales Jan US auto sales rose 13% in December, making up the entire increase for the year.
FOMC Minutes -Nothing new
Truck Sales Jan up 11% for the year.
MBA Mortgage Purchase Index 12/31 improved 2.3% after being down 18.7% when the FED first froze bankruptcy processing
Challenger Job Cuts Dec -29% after being just down -3% last month means fewer layoffs predicted
ADP Employment Change Dec added 297 jobs vs 93 last week
ISM Services Dec Institute for Supply Management’s non-factory index, which covers about 90 percent of the economy, rose to 57.1 from 55 in November. A reading greater than 50 signals growth.
Crude Inventories 01/01 -4.2M vs -1.3M last week
Initial Claims 01/01 rose to 409K vs 388K as layoffs apparently overwhelmed the first good month of new hiring.
Continuing Claims 12/25 was manipulated by shifting 22K from this week to last week. It was essentially unchanged.

Today
Jan 7 8:30 AM Nonfarm Payrolls Dec
Jan 7 8:30 AM Nonfarm Private Payrolls Dec
Jan 7 8:30 AM Unemployment Rate Dec
Jan 7 8:30 AM Hourly Earnings Dec
Jan 7 8:30 AM Average Workweek Dec
Jan 7 3:00 PM Consumer Credit Nov

Market Outlook Jan 7, 2011
Jim Cramer of GE/MSNBC/Pravda lied last night and said Bank of America would rise quickly because it has a high level of short selling and the shorts are going to be squeezed. That is a bald faced lie. It has very little short interest. See:
http://www.dailyfinance.com/company/bank-of-america-corporation/bac/nys/short-interest

Today MSNMC had extremely bullish socialist guests saying unemployment will now come down with Obama's new "seasonal" adjustments and will not hit 10%. However, they ignore the problem of declining housing prices that are down over 30% the biggest decline in national housing values since the Revolutionary War.

Funds are fully invested. Trading volume has not picked up. There is no evidence the current market level is due to frightened workers returning to the stock markets. There is very little shorting going on, in fact this entire run-up seems to have been caused by shorts covering their positions. If that is true then the public's participation in this run-up is zilch, nada, nothing. The GE/MSNBC farce has run its course. There are record low levels of cash being held by mutual fund managers now. The AAII poll of individual investors is record optimistic, and the low VIX (fear) Index is at record levels of complacent optimism.

Market volume indicates that investors have not returned to stocks. Perhaps they bought gold and silver instead because those commodities went through the roof and beginning a major correction. There was some evidence investors were returning to stocks three months ago but that faded in December. Perhaps investors are buying real estate? Real estate is a much better investment than stocks if you have a reliable source of income but prices fell again this winter. But so many Americans have seen their credit ratings fall and cannot buy a house now.

Waves of military cutbacks are expected this year. For instance 6000 navy desk jobs will be eliminated and the people will be sent out to sea. These are older military personnel with families that Obama wants to get rid of without having to compensate them fairly. So he will make their lives in the service of America as miserable as possible. The Obama strategy is to take from the people who do not support socialism and redistribute their wealth to indolent people with no education, smarts, or work ethic who will vote for a socialist government to house and feed them so they can stay home and watch reality shows and games. That is why American workers do not trust socialist Obamacare. Americans know that people of Obama's profile have a disproportionate number of government jobs and are about 70% of the welfare/title 19 workforce in the leftist run northern states. That is why the white protestant minorities with a work ethic have to get lawyers to protect their parents from being bankrupted by the government and must pay twice as much for their parent's senior care and convalescent homes, than the indigents who vote for socialism pay. That is the way it was in the USSR and East Germany and is becoming in socialist Greece where government employs close to 90% of the Greek indolent population and pays them higher salaries than the people who actually work for a living. In socialist countries, anyone who doesn't "work the system" is considered stupid. Now the socialists' immigration wave is flooding America from Haiti and Mexico because we have so much that they want to take for nothing. And when you get things for nothing you feel entitled and you don't appreciate it because it is free. That is when the idle become viscous. In America you now need to be a communist or a socialist who never had any business experience to hold a good government job under Obama.

James Madison in the Federalist Papers, Feb 5, 1788 wrote to the Massachusetts Convention, "but as a just government protects all alike, it is necessary that the sober and industrious part of the community should be defended from the rapacity and violence of the vicious and idle. A bill of rights, therefore, ought to set forth the purposes for which the compact is made, and serves to secure the minority against the usurpation and tyranny of the majority."

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. Many predict a major sell off at mid year when the 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 up 0.5%, Hong Kong down -0.4%, India down -2.4%, and Japan was up 0.1%, Jakarta down -2.8%.

European markets are up this morning in a range of about 0% to 0.3% half way through their day.

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