Obamacare uncertainty still weighing down the economic recovery.

Obamacare uncertainty still weighing down the economic recovery. There have been 750 big corporation Obamacare wavers including one for McDonalds. The court has said Obamacare is unconstitutional because it fines people who don't want it to pay for it even though they have another plan. Obama claims that is necessary because otherwise people will not join Obamacare until they are sick. But that problem is also due to Obamacare because if before obamacare no insurance had to accept pre-existing conditions of those who refused to have care (obamcare or otherwise)… you went broke paying for it yourself because you chose not to pay for the insurance. But once you were broke the individual states picked up the costs. That is how all the welfare and illegal immigrants got free healthcare in the past and were paid under the table for their work so they paid no taxes and contributed nothing but crime and tax cheating to the economy. That is how it is in Greece, Italy, Spain and other Socialist states. The underground economy in socialist states is almost as big as the reported economy because all those welfare people get free care and take odd jobs to stay under the tax radar screen. They only investigate you if your register with the wrong political party. The socialist party becomes the majority party and it gets worse and worse when Obama wants emergency powers and no term limits like his childhood hero Castro and his best friend Ortega.

Look at the leftists in Italy: they harass even their president continuously because he does hot belong to the leftist/communist party. Here in America they bused ACORN criminals to harass working Americans and to demonstrate for Obamacare.

Once refiners are up and running demand for crude will fall to normal levels and a temporary glut of refined fuels like gasoline will hit the market. Note that much of the crude price increase is due to refiners opening up facilities and accumulating new supply inventories over the short run. That may be starting soon.

Small investors got back in at the top these past three weeks. Flow into mutual funds from individual investors was negative for twenty weeks following the flash crash last May 2010. For the past three weeks of January small investors got in right back in at the highs of the current rally. We would be prepared to buy stocks on the next significant dip.

Judge Roger Vinson, in Pensacola, Fla., ruled that as a result of the unconstitutionality of the "individual mandate" that requires people to buy insurance, the entire law must be declared void. "I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the act with the individual mandate."

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 steeply

World Markets:
 National Institute for Economic and Social Research said the Bank of England will raise interest rates three times this year to curb inflation. U.K. government bonds fell for a second day and the pound surged against gold.
 As politicians, executives and financiers networked at parties and panels last week in Davos, Switzerland, Barrie Wilkinson was in a nearby hotel, warning that a 2015 financial catastrophe may be looming.
 The number of Britons who expect house prices to rise this year decreased in the last three months as concerns about the economy mounted,
 Irish Central Bank Cuts 2011 Growth Forecast on Fiscal Squeeze
 Egypt's Military Leaders Tighten Six-Decade Government Grip Amid Protests

Business trends
Yesterday
Jan 31 8:30 AM Personal Income Dec was up 0.4% as last month. Good
Jan 31 8:30 AM Personal Spending Dec was up 0.7% compared with 0.4% last month. Good for economy
Jan 31 8:30 AM PCE Prices - Core Dec core producer prices unchanged after being up 0.1% last month. Still deflationary Japanese style.
Jan 31 9:45 AM Chicago PMI Jan at 68.8 vs 68.6 last month. Manufacturing is stable and good.
Construction seasonal adjusted Spending Dec plunged -2.5% after being up 0.4% November.
Feb 1 10:00 AM ISM Index Jan rose to 60.8 from 57.0 in Dec
Auto Sales U.S. up 17% on big pickup, new model demand from Dec 2010
Truck Sales up over 20% from Dec 2010
MBA Mortgage Purchase Index 01/28 improved 11.3% almost canceling the decline last month of -12.9%
Challenger Job Cuts Jan show job cuts -46.1% even worst than December's -29.0%, Obama policy still not creating jobs.
ADP Employment Change Jan job creation 187K slowed considerably from last months 297K. This statistic ignores overall workers receiving unemployment checks or off the lists after 2 years unemployed.
Crude Inventories 01/29 2.59M still high but down from last week's 4.84M. Note that much of the crude price increase is due to refiners opening up facilities and accumulating new inventories over the short run. Once they are up and running demand for crude will fall to normal levels and a temporary glut of refined fuels like gasoline will hit the market. That may be starting soon.

Yesterday
Productivity-Preliminary Q4 2.6% up relative to 2.3% last quarter. This is entirely socialist fiction of course.
Unit Labor Costs Q4 -0.6% dropping incomes under Obama socialism and his depression. Paychecks declined less last quarter. -0.1%
Initial Claims 01/29 415K this week but not as bad as last week 454K. We need about -200K for a normal American free economy.
Continuing Claims 01/22 are at 3925K as more people go on welfare and then vote for democrat socialists. That is why things get worse under socialism. They blame all the people who work for a living and deliberately swell the ranks of the free loaders who vote for socialism. It was at 3991K last week.
Factory Orders Dec fell 0.2% from a gain of 0.7% in November.
ISM Services Jan 59.4 showing some growth in the service sector 57.1

Today
Feb 3 8:30 AM Productivity-Prel Q4
Feb 3 8:30 AM Unit Labor Costs Q4
Feb 3 8:30 AM Initial Claims 01/29
Feb 3 8:30 AM Continuing Claims 01/29
Feb 3 10:00 AM Factory Orders Dec
Feb 3 10:00 AM ISM Services Jan
This week
Feb 4 8:30 AM Nonfarm Payrolls Jan
Feb 4 8:30 AM Nonfarm Private Payrolls Jan
Feb 4 8:30 AM Unemployment Rate Jan
Feb 4 8:30 AM Average Workweek Jan
Feb 4 8:30 AM Hourly Earnings Jan


Market Outlook Feb 4, 2011
We would be prepared to buy stocks on the next significant dip.

It is clear that the small investor has almost no affect on today's market. The small investor volume is down about 70% from 2006. The stock market is now a big game and game theory is what is driving the market higher. Essentially it is now like it was in 1880 when the big manipulators controlled prices and freight in America. That was when the term "corner the market" came into being. The idea was and still is to buy up resources when they are cheap and then shut them down to create a scarcity like we see in "rare earths" and distilled petroleum products. It could take years for competitors to bring new "rare earths" mining on line but that is fiction as well. The people who have cornered that market are now selling stocks in the mines they say they will bring on line. They have long-term excuses already and they will never bring the new mines on line because the world already has enough mines. The problem is that the self same people who cornered the "rare earths" market have been shutting down mines to make a shortage so they can double prices and increase profits tenfold. Then they reopen the mines in two years and all those fictitious new mining investments go broke taking their big bonuses and leaving the small stockholders broke. That is what they did to oil distilling and natural gas three years ago to get oil prices to increase from $40/ barrel to $102/ barrel yesterday. The little investor is once again the sucker.

Precious metals, oil, and "rare earths" are just the beginning. Obama and his socialists are in the ozone and are clueless to what is going on. Obama fell for the "big oil ploy" and has shut down all offshore oil and all natural gas production. Obama socialists are so stupid they actually believes his socialist theoreticians who are telling him that these high prices will get American to buy electric cars. They are destroying the world economy by causing shortages that drive up prices. Jimmy Carter did the same stupid thing and Ronald Reagan turned the economy around on a dime when he introduced supply side stimulation. Instead Obama is giving us supply side strangulation.


Flow into mutual funds from individual investors was down for twenty weeks following the flash crash last May 2010. For the past three weeks of January small investors got in right back in at the highs of the current rally. This means the end of each month probably will see an increase fund flow as 401 plans put money back into the market.

There is $1 Trillion of corporate cash sitting ready to buy up corporations if American corporations sense the socialists in office will all be thrown out in 2012. If Obamacare and the other socialist BS is declared unconstitutional the extreme Leftists will abandon Obama and the Democrat-socialist party and it may become a democratic organization again. Obama socialism in America will be declared an unconstitutional autocratic power grab. Next Obama would be demanding absolute power and no term limits like the banana republic socialists Fidel, Ortega, and the socialist mass murderers Stalin, and Hitler did.

Economic news is relatively good this week with the exception that prices are increasing well below the FED desired rate of 2.5% inflation. The FED is afraid we could have 20 years of deflation and stagnation as Japan has had unless we can get prices moving upward at 2.5% per year.

World Markets
Many agencies are reporting the last index changes whish were last week. That is misleading because many exchanges are closed for Chinese New Year holidays. Asian markets were up last night. China's holiday, Hong Kong India closed, Jakarta up 0.4% and Japan up 1.1%,

European markets are up this morning in a range of about 0.2% to 0.4% half way through their day.

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