US banks will get some mortgage relief and some homeowners will get refinancing and lower payments.

US banks will get some mortgage relief and some homeowners will get refinancing and lower payments. But for the time being the other 80%, the mortgage investors would not get relief. By letting Goldman become a chartered US Bank, Goldman now is eligible for this kind of taxpayer relief. Goldman deserves to lose its charter for its part in the Liar Loan corruption scandal. Goldman should be allowed to fail.

By buying insurance policies for “Liar Loan” derivatives, Goldman had the most to gain if the American economy collapsed. They also profited big with the collapse of competitors such as the Lehman Bro’s that took the fall to cover the Washington/Wall Street corruption with a maze of worthless derivative paper. It took big bonuses, golden parachutes and a threat of a claw-back to make sure the villains of Wall Street kept quiet. Wall street flooded Obama with campaign contributions because it was poetic justice for the socialist Liar-Loan corruption that made so much profit for wall street and bankrupted so many of the middle class home owners. The demise of the economy would come back to roost on the head of a socialist president willing to take the blame liar Loans and Wall Street and blame it on Republicans and American free enterprise instead.

World markets
. Thus Deutsche Bank imbeciles will bear the brunt of defaults unless they can get the idiot who is the American Treasury Secretary to have America foot the bill through the IMF. Geithner keeps hanging around the corner acting like he wants to be a fool for the strip tease from Berlin. Geithner is such an idiot he just can’t stay away. And every time Merkle sees Geithner’s stupid grin, the strip tease of Berlin steps back into the shadows saying come and get it… you moron. If Geithner could be handcuffed in a padded cell for a day or two Merkle would strip Greece naked and the Greek bank stripping show staring Merkle would finally be over.

Moody's said on Monday it might slap a negative outlook on France’s Aaa credit rating in the next three months if the costs for helping to bail out banks and other Euro zone members stretch its budget too much.

HSBC is abandoning the U.A.E. stock market as theocratic socialists have little interest in free enterprise and U.A.E. has little free enterprise to begin with. Trading volume in Mid Eastern theocracies and dictatorships is next to nothing anyway.

Josef Ackermann, the head of Deutsche Bank AG (DBK) and chief lobbyist for the world’s largest financial firms, showed just how naïve he is. He has pressed European leaders for months to devise a strategy to end the sovereign debt crisis without apparently realizing the banks he represents are responsible for the debt because they financed it.

American Economy
Last week summary
Initial Claims 10/08 up to 404K from 401K not good
Continuing Claims 10/01 down to 3670K from 3700K not great
Trade Balance Aug grew -$45.6B from -$44.8B worsening
Crude Inventories 10/08 rose 1.344M from the previous decline -4.679M good news
Treasury Budget Sep worsened -$64.0B from a monthly deficit rate of -$34.6B last month. Bad news
Retail Sales Sep rose 1.1% very good news
Retail Sales ex-auto Sep up 0.6% from 0.1% last month
Export Prices ex-ag. Sep stable at 0.3%
Import Prices ex-oil Sep stable at 0.2%
Mich Sentiment Oct 57.5 down again from 59.4 No confidence in Obama.
Business Inventories Aug up 0.5% worse than last month 0.4% increase
Treasury Budget Sep -$64.6B worse than last months -$34.6B

Yesterday
Empire Manufacturing Oct improved slightly to -8.48 from -8.82 better but not good
Industrial Production Sep same at 0.2% good
Capacity Utilization Sep same at 77.4% good

Today
Oct 18 8:30 AM PPI Sep
Oct 18 8:30 AM Core PPI Sep
Oct 18 9:00 AM Net long-term TIC Flows Aug
Oct 18 10:00 AM NAHB Housing Market Index Oct

This week
Oct 19 7:00 AM MBA Mortgage Index 10/15
Oct 19 8:30 AM CPI Sep
Oct 19 8:30 AM Core CPI Sep
Oct 19 8:30 AM Housing Starts Sep
Oct 19 8:30 AM Building Permits Sep
Oct 19 10:30 AM Crude Inventories 10/15 -
Oct 19 2:00 PM Fed's Beige Book Oct
Oct 20 8:30 AM Initial Claims 10/15
Oct 20 8:30 AM Continuing Claims 10/08
Oct 20 10:00 AM Existing Home Sales Sep -
Oct 20 10:00 AM Philadelphia Fed Oct
Oct 20 10:00 AM Leading Indicators


Market Outlook October 18 2011

If Geithner and Obama could just stay away from Europe for a while instead of posing Merkle would get the message that America will not bail them out through the World Bank. Then finally this crisis would get behind us.

Volume was relatively low on yesterday’s decline.  And unfortunately it was not high on the recent rally either. It appears the 50 DMA trend line is about to be broken on the upside. Short sellers are selling just small amounts of stock on each trade letting buyers quickly move the individual stocks up in price. The WSJ today said that buyers are seeing that the short sellers have started unloading but still buyers are complaining that they cannot take a position without causing the stock they want to swing sharply upward. Buyers like to buy everything in one fell swoop at their target price. They do not want to be nickled and dimed with transaction fees when no one will sell to them in large quantities. One way to look at this phenomenon is the small short sellers are now unloading but the large short sellers are holding while the big funds are now buying. This would explain the large price swings we see on low volume. It means that when the Berlin stripper finally does her act the stock market could gap up rapidly which usually means we will be down in this territory visiting again in the future.

Stocks could have to rise an additional 4% from here to trigger a short squeeze, but if it does the market could be up more than 15.0% from the low by Christmas. We do not believe a new market high will be hit this year… but many market losses could be recovered.

We still expect a normal advance of at least 50% of the total recent decline and possibly as much as 90% recovery. For that to happen the 50DayMovingAverage (green line) must move above the 100 DMA (red line). The market is moving though a resistance area now, the 50 DMA. See:
http://finance.yahoo.com/q/ta?s=^NYA&t=2y&l=on&z=l&q=l&p=e50%2Ce100&a=&c=


America has not had a double dip recession. Starting in April, the banks began net loaning of money to small corporations. Since August, international trade continued to recover. See 1yr chart. You may need to cut and paste this in:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stocks were down last night. China down –2.3%, Hong Kong down –4.2%, India down –1.6%, Seoul down -1.4%, and Japan down -1.6%. Asia’s move usually follows America’s move the previous day.

European markets are down today in a range –0.4% to -4% half way through their day. Europe’s move usually follows America’s move the previous day and the American futures.

American market futures are down in a range of –0.2% to –0.6% at 8 AM EST. US market futures rarely have any predictive correlation.