Jefferson assured John Adams, “the Flames kindled on the fourth of July" had spread over too much of the globe ever to be extinguished by the forces

Geithner and Obama may help bail out Europe on the back of American taxpayers though the IMF. It is fun to watch democrat-socialists say on television how they feel it is their privilege to pay taxes and then read how Geithner, the socialist Secretary of the American Treasury had to pay up his tax fraud before Obama would appoint him. If socialists like taxes why did Obama have a record number of three tax cheats among his appointments. Two of his three tax cheating appointments had to withdraw because what they did was too embarrassing. They claim Geitner only hid about $30000 of foreign income and he paid it back just in time for his appointment.

Jefferson assured John Adams, “the Flames kindled on the fourth of July" had spread over too much of the globe ever to be extinguished by the forces of despotism and reaction.” But Jefferson, the founder of the Democratic Party, did not anticipate Obama. Obama just eclipsed Jefferson with a similar sized monument to Martin who couldn’t hold a candle to Jefferson or to Martin Luther.

By buying insurance policies for “Liar Loan” derivatives, Goldman Sucks 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 corruption that made so much profit for wall street and bankrupted so many of the middle class home owners. The economy demise of the economy would come back to roost on the empty head of a socialist president willing to take the fall for Wall Street and blame it on Republicans and American free enterprise.

Alan Greenspan had very little to do with the housing bubble. Greenspan is philosophically an Objectivist and you have to read Atlas Shrugged to understand it would be impossible for him to have been involved. And so people who blame Greenspan are very, very stupid conservatives or just normal stupid leftists. It is amazing how many conservatives believe Greenspan had any knowledge of the Liar Loan housing bubble Dodd and Barney Frank created. It was not an economic bubble it was a political corruption bubble.

Americans did not understand that the Senate Banking Committee was driving private banks out of mortgages essentially nationalized housing. Holding companies then took the Federally insured mortgage notes and bundled them into AAA rated federally insured vehicles. Then when questioned about the fact that possibly the Treasury might not stand behind some that defaulted, they created “Tranches” (slices, Fr) called financial derivatives. Those corporations that incurred defaults were segregated and bundled together and not marketed so the world would not know the “US Senate Liar Loan Mandate” was unraveling. The financial derivatives were created to hide the fact that the US Senate Banking Committee had committed the greatest fraud in the history of the world. The Lehman Bro.’s and Goldman Sucks of the world traded the worthless derivatives to each other at their full value so the world would not know they were becoming worthless. But you see they expected the recession would end quickly and home prices would rise and their worthless “Tranche” derivatives would regain their value. To further cover this “Ponzi Scheme” based on housing price increases, they invented a new insurance derivative that was a form of insurance against failure of these “S&P AAA” rated derivatives. When Goldman Sucks realized the recession would “pop” their “Ponzi scheme” Goldman Sucks not only insured what they had… they bought more inexpensive insurance swaps than they needed and it was legal under the US Senate Banking Commission opinion to insure more liabilities than existed. Suddenly, the US Senate Banking Commission had created an America where there was “BIG MONEY” to be made destroying the American economy because Goldman Sucks and other financial firms could make more money if American housing collapsed than they could holding worthless housing derivatives.

Obama continues to pursue the goals of his state of confusion address. Yes government can create jobs when it helps business by supporting real research and development (R&D). The problem is that Obama does not understand why 30-yr. old solar cell technology is not research and development. Windmills and solar energy and biogas are the technologies of the “3rd World” backward peoples like Nigeria and Indonesia where Obama comes from, not the industrialized western world, which Obama hates. The answer is still gas and nuclear energy but nothing that GE/Pravda produces. GE has made all the free world's defective nuclear plants that fail everywhere and most recently crippled Japan’s economy.

World markets
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. Thus the apparent 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.

World stocks are under-priced but gold and silver have a long way to fall.

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

Friday
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

Today
Oct 17 8:30 AM Empire Manufacturing Oct
Oct 17 9:15 AM Industrial Production Sep
Oct 17 9:15 AM Capacity Utilization Sep

This week
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
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 17 2011
Merger mania is returning with today’s bargain prices. Mergers remove stocks for sale and infuse the market with cash to buy more stock. Therefore it is a two for one boon to the stock market. The energy sector will get a $21Billion shot in the arm from Kinder Morgan.

Tea Party people who dislike Obama seem to be the focus of the gold fraud going on now. It is highly probable that very little gold is actually being transferred and the fraud is by fly by night operators selling gold they do not possess so that when the price drops they can pocket most of the cash being thrown away. If it were Obama’s people buying the gold the sellers would be investigated by the Federal Government and shut down. But Obama loves the idea that the suckers are mostly from the Tea Party.

Stocks could have to rise an additional 2.4% from here to trigger a short squeeze, but if they do the market could be up more than 15.0% from the low by Christmas. Stocks are such a bargain; China is investing excess cash in their own market and is buying international companies at bargain prices. American corporations remain sitting on record cash levels and their own companies are often their best investment at these stock prices. However, 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). But when it approaches the high it will be time to lighten up on equities again. 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=

We believe America will not have a double dip recession. Since August, international trade continues 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 up last night. China up 0.4%, Hong Kong up 2%, India down –0.3%, Seoul up 1.6%, and Japan up 1.5%.

European markets are mixed today in a range –0.4% to +0.3% half way through their day.

American market futures are mixed with NASDAQ up and the DOW down slightly at 8 AM EST. US market futures rarely have any predictive correlation.