It seems both the Jihadists and Lunatic Left do not like the Tea Party.

Central banks of Asia and South America have raised their FED rates aggressively for a number of months. India has done it 8 times in the last 12 months. Brazil has already hiked it to 11%. China has also been hiking its rates for more than a year. The People's Bank of China said raised its one-year lending rate to 6.31% from 6.06%, effective last Wednesday the fourth time in six months. In the pas, six months of rising rates would have triggered a bear stock market. In the past it was said that you cannot fight the FED and when rates go up for two quarters that is the sign that the stock market will contract. In the past the stock market reacted 6 months in advance to the economy so that profits were peaking when the market was starting to decline and the market bottomed in 2009 before the economy turned around. If the stock market remains a leading indicator then we would expect good earnings reports now if the market was peaking. They also say do not fight the tape and react too soon.

German bonds fell for a third week as the European Central Bank raised interest rates to avoid inflation. Portuguese and Greek yields rose as and bond values fell as Portugal seeks a bailout from the European Union. Portugal failed to stem a surge in borrowing costs, even as it followed Greece and Ireland in asking the EU for a financial assistance package estimated at $115 billion. Inflation is quite low at less than the desired 2.5%. Silver is up 500% in the last 10 years. But if there were the FED goal of 2.5% inflation per year it would take 65 years for inflation to catch up. So clearly the people buying silver and gold now are expecting hyperinflation that Germany had before WWII. Japan has had about 1% inflation for 30 years and that is a greater risk than inflation getting to 5% per year. That would require 33 years or about six business cycles for people who buy silver now to get their money back if silver is now peaking. 30 to 65 years wait implies it is extremely advisable to liquidate silver, gold, and other inflation hedges before the FED rate hikes start in the USA. You know that if there is any inflation over 2.5% they plan to raise rates at we are at about there now.

Germany’s 10-year yield increased to 3.48 percent the most since Aug. 2009. Yields on two-year notes rose to 1.92% percent, the highest since December 2008. That will put more pressure on Germany to stop any further bailouts of the PIIGS.

The ECB's key interest rate charged banks is now 1.25%, up from 1% previously. In contrast, at the FED’s meeting, the target range for the federal funds rate was kept at between 0 percent to 0.25 percent and the discount rate was kept at 0.75 percent. The FED is still tipping towards a continuation of the $600 billion bond buying program through the end of June and a holding pattern on interest rates although Americans are becoming worried that Obama’s infatuation with the Greek health care system and their size of government is beginning to worry even the federal reserve. We believe that when the fed announces the end to QE2 they will say it was fait acompli…. already done so the economy will not react to it. That means QE2 should be phased out before this June.

The new members of congress want Americans to bite the bullet and get the adjustments behind us and to shrink that part of government that has become a “pretend job” mill for people who do not believe in a work ethic. They recently gave over $18Billion to Obama’s be-happy supporters for bogus discrimination in not getting a fair share of government farm handouts in the past. Many Americans have never taken a handout and wonder how Obama be-happy supporters could possibly think they have not ripped off America enough, when they are the only people in America who regularly get handouts.

CNN/Pravda has too Obama supporters as spokespersons. It seems all the Obama thinkers come from the Mid-East, India, and Indonesia now. Those areas of the world have the king of government Obama likes. They work together there and have such a good standard of living and so little violence according to Obama. Here is a portion of their CNN discussion from Saturday. “
Amar C. Bakshi: Does this potential shutdown prove our government is broken? If so, what should be done to fix it? Fareed Zakaria: I think it proves that our political system is broken - the political parties are broken. You can see that most vividly on the Tea Party. The Tea Party’s constituency, or its base, clearly seems to be more interested in them not actually doing a deal than in them doing a deal. But they are one segment of the country. Unless they believe that they should have the ability to - by some kind of dictatorial fiat - impose their will on the rest of the country, then they’re going to have to give and that’s the part that seems to be lost here.” It seems both the Jihadists and Lunatic Left do not like the Tea Party.


When Obama had both houses of Congress he used his dictatorship to force unaffordable Obamacare down the throats of working Americans so that his “be-happy” don’t have to work and can have the best health care in the world while they live off the people who pay taxes. Note that most Obama appointees cheated on their taxes. So half the socialists do not believe in work and the other half cheat on their taxes so they don’t mind paying taxes. In 2006 Obama opposed raising the debt limit but now he says that is irresponsible.

World Markets:
Under Jimmy Carter, gold rose to over $800/oz. But by 1999 gold fell back below $290/oz again. Now it is about $1470/oz. We need to warn you now to liquidate gold and silver when it has run up, not after it drops quickly back to about $400 and $8 respectively.

Canadian job hiring took a pause.

Ireland's ratings were lowered again. Inflation in China and India is not yet in control. Yet Japan and the USA are able to keep

Inflation in India and China is getting out of limits. Gasoline and fuel oil prices doubled under Obama but he and Bernacke say inflation is less than 2.5%. Only morons still believe that.

US Market Highlights

Latest reports
Data is adjusted for Obama’s obvious manipulation of data but not possible outright falsification like the socialists did in the USSR
Initial new unemployment Claims 04/02 were 386K virtually unchanged from 388K last week and twice as bad as job creation. , 1-% socialist manipulation removed.
Continuing Claims 03/26 at 3741K up from last weeks 3714K 0.5% socialist manipulation removed
Consumer Credit Feb $7.1B up from $5.0B, 7% socialist manipulation removed
Wholesale increased again this month by 1% meaning that if sales do not pick up then production will be cut and jobs will be lost.

This week
Apr 12 8:30 AM Trade Balance Feb
Apr 12 8:30 AM Export Prices ex-ag. Mar
Apr 12 8:30 AM Import Prices ex-oil Mar
Apr 12 2:00 PM Treasury Budget Mar
Apr 13 7:00 AM MBA Mortgage Index
Apr 13 8:30 AM Retail Sales Mar
Apr 13 8:30 AM Retail Sales ex-auto Mar
Apr 13 10:00 AM Business Inventories Feb
Apr 13 10:30 AM Crude Inventories 04/09 -
Apr 13 2:00 PM Fed's Beige Book Apr
Apr 14 8:30 AM Initial Claims 04/09
Apr 14 8:30 AM Continuing Claims 04/02
Apr 14 8:30 AM PPI Mar
Apr 14 8:30 AM Core PPI Mar
Apr 15 8:30 AM CPI Mar
Apr 15 8:30 AM Core CPI Mar
Apr 15 8:30 AM Empire Manufacturing Apr
Apr 15 9:00 AM Net Long-Term TIC Flows Feb
Apr 15 9:15 AM Industrial Production Mar
Apr 15 9:15 AM Capacity Utilization Mar
Apr 15 9:55 AM Mich Sentiment Apr


Market Outlook April 11, 2011

The world markets are now holding their breath waiting to see if the markets plunge. If the Republicans back down on their miniscule government cuts the world thinks it is doomed to perpetual socialist self indulgent stupidity like we see in the Greek union riots.

The stock market is continuing to test its head and shoulders now. The markets all appear to be topping out. To us it looks like the 47dma is no longer a support level but instead has become the resistance level for a topping trend (head and shoulders) line.

S&P
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1y&l=on&z=m&q=l&p=m50&a=m26-12-9&c=

We think the next stock market support level will be down at Nov 4, 2010 levels.

World Markets
International trade shows that the world economy has only revived about 25% not the 60% shown by the stock and commodities markets. That means more than half of the stock market rise from the 2009 lows is unsupportable and could evaporate. See:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Asian markets were down last night. China down -0.3%, Hong Kong down -0.4%, India down –1%, and Japan down -0.5%.

European markets are down this morning in a range of about 0% to -0.5% half way through their day.

US pre-market futures are up at about 0.3 % at 7:30 AM EST.