Corporate purchases could wipe out short sellers. Uncovered short sellers could face 500% losses to unlimited losses.

Corporate purchases could wipe out short sellers. Uncovered short sellers could face 500% losses to unlimited losses. Warren Buffett said he would/will buy $5Billion in Bank of America yesterday and the stock rose 10% on thenews. What happens when he actually does buy the BAC stock? The multiplier effect could be 20.
http://www.ibtimes.com/articles/204321/20110826/warren-buffett-berkshire-hathaway-bank-of-america-goldman-sachs-preferred-stock-bac-morgan-stanley.htm


Many companies are likely to buy back their shares at a time when price-to-earnings ratios are low, providing a trigger for a rally of 10% or half the recent 20% decline. We plan to sell when we get a sell signal. It is entirely possible that the rally could reach the recent highs depending on how fast U.S. companies buy back shares since they have high cash ratios and buy backs enormously increase the rise in earnings per share. Warren Buffet said he would invest $5Billion in Bank of America yesterday. We are just seeing the corporate money ready to flow into the market and wipe out all the short sellers thus starting another rally. As prices fall it becomes more possible for corporations to take their firms private. Then short sellers could go –500% in the hole.

While the U.S. rate of expansion has slowed slightly, the Chicago Fed’s index of 85 economic indicators improved in July for a third month on gains in production.

Obama is barking at the banks hard now for them to act on all the “liar loan” mortgages he made them accept from his “chosen people.” He forced Bank of America to buy Merrill Lynch and Country Wide and then destroyed Ken Lewis for living to talk about it. Obama knows that Fannie and Freddie were bankrupted by his “liar loans” but instead of admitting his (and Barney Franks) biggest ever shakedown of American taxpayers Obama instead prolongs their dissolution causing bank stagnation and an inability to fund a recovery. As Obama’s “chosen people” continue to strip the vacant homes of their copper plumbing and wiring essentially gutting the houses so they become condemned and worthless. Obama is not letting the housing crisis get resolved because the "liar loan" losses show just how stupid his socialist ideas are and have been. Barking Obama’s socialism is government of the lazy, stupid, and pot heads, by the lazy, stupid, and pot heads, for the lazy, stupid, and pot heads.

We need to stop the handouts to Obama’s chosen people because when all the stupid, and lazy people in Greece, America, and the rest of the world are forced to work for a living, we can get out of the debt crisis because the welfare state is the debt crisis.

World Markets:
Gold plunged below $1800; a dramatic reversal from a record-setting run that bred complacency about the yellow metal's risks. Gold dropped almost 6% yesterday alone. Silver currently is about 80% overpriced. Bonds, especially higher rate bonds your brokers have been pushing people into during the past year are plunging in value faster than seen since Lehman failed.
http://www.goldprice.org/gold-price.html

Socialist and economists from Pacific Investment Management to the communists at Harvard say ensuring the euro’s existence may require members to leave the 17-nation currency region. So far the rescue bill includes $524 billion in official loans to Greece, Portugal and Ireland, the creation of a 440-billion euro rescue fund and 96 billion euros in bond buying by the European Central Bank.

World markets may have set lows for now and in some cases they set double bottoms.
China
http://finance.yahoo.com/echarts?s=000001.SS+Interactive#chart2:symbol=000001.ss;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Germany
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart1:symbol=^gdaxi;range=1m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

The Swiss government and central bank talks about a possible target for the Swiss franc to halt its gains has failed and the Swiss franc is rising again. The Swiss market has not yet double bottomed and has a way to go.
http://finance.yahoo.com/echarts?s=^SSMI+Interactive#chart2:symbol=^ssmi;range=1m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Emerging markets also will fall further before they double bottom.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#symbol=%5EBVSP;range=
http://finance.yahoo.com/echarts?s=000001.SS+Interactive#chart1:symbol=000001.ss;range=1m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined


American Economy-
Last week
Leading Indicators Jul 0.5% up from 0.3%. very good
This week:
New Home Sales Jul 298K down from 312K reported in June
MBA Mortgage application Index 08/20 -2.4% after jumping +4.1% last month.
Durable Orders Jul up 4.0% after bad news -1.9% in June.
Durable Orders -ex Transportation Jul up 0.7% on top of a good up 0.4% last month
FHFA Housing Price Index Jun up 0.9% after increasing 0.4% last month…great news for housing stocks.
Crude Inventories 08/20 dropped -2.213M which means demand is high.
Initial Claims 08/20 up at 417K from 408K last week
Continuing Claims 08/13 3641K down from 3702K last week.

This Week
Aug 26 8:30 AM GDP - Second Estimate Q2
Aug 26 8:30 AM GDP Deflator - Second Estimate Q2
Aug 26 9:55 AM Michigan Sentiment - Final

Market Outlook August 26, 2011
The market rally should be somewhere between 50% and 90% of the way to the recent spring highs. There may be some consolidation today after Bernacke speaks.

We expect the VIX to continue to decline as the panic of smaller investors subsides similar to after the flash crash of May 6, 2010
http://finance.yahoo.com/q/bc?s=^VIX&t=3m&l=on&z=m&q=l&c=

We expect a normal advance now of up to at least 50% of the total decline. See:
http://finance.yahoo.com/q/ta?s=^NYA&t=6m&l=on&z=l&q=l&p=e50%2Ce100&a=&c=

Economic recovery the past two years was one of Obama’s big lies as he continued to divide Americans, destroyed the American economy with socialism and corruption, and barked at Congress and the increasing numbers of disappointed voters. But could the bulk shipments finally be getting ready to break out? See 3yr and 5yr charts at:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stocks were down last night. China down –0.1%, Hong Kong down –0.9%, S. Korea up 0.8%, India down –1.8%, and Japan up 0.3%.

European markets are down today by about –0.4% to –2% half way through their day.

American markets futures are flat at about 0.1% at 7:30 AM EST

We expect the stock market run-up could be fast now with corporations buying back their own stock at least 50% of the way, possibly to 90% of the recent highs. Corporations have over $500 billion in cash to invest and it does not look like they will invest in jobs as long as stupid barking Obama’s socialized medicine and new stupid barking Obama new taxes loom. Remember if the money multiplier effect is 20:1(the money changes hands 20 times) that $500billion becomes $10Trillion so it would only take 10% of the corporations to buy back and to put $1trillion into the stock market. If you do not know what the multiplier is it is the velocity of money when there are no reserve requirements as is the case for investors (20 to 30) and it is 1/R for banks where R is the fraction the banks must keep in reserves.
http://en.wikipedia.org/wiki/Money_multiplier

http://www.mymoneyflow.com/secure/velocity.shtml