Obama continues to pursue the goals of his state of confusion address. . The problem is that Obama does not understand what R&D means.

Obama continues to pursue the goals of his state of confusion address. Yes government can create jobs when it helps business by supporting R&D. The problem is that Obama does not understand why 30-yr. old solar cell technology is not research and development.

The FED minutes show they agreed that it was important to acknowledge, in the statement to be released following the meeting, that economic growth remained slow and that indicators pointed to continuing weakness in overall labor market conditions. It also agreed to note that inflation appeared to have moderated since earlier in the year as prices of energy and some commodities had declined from their recent peaks, and that longer-term inflation expectations remained stable. Members generally continued to expect some pickup in the pace of the economic recovery over coming quarters but anticipated that the unemployment rate would decline only gradually and agreed that there were significant downside risks to the economic outlook, including strains in global financial markets.

It has been reported that 43 companies receiving a total of $333 million from the Texas Enterprise Fund contributed $7 million to various Perry campaigns and support groups. Perry is a former Democrat who tries to look like Reagan, jumps about like a southern evangelist, and says you can force people from Oklahoma to pay full Texas college tuition but you don’t have a heart if you make the illegal Mexican interloper’s children pay full tuition. Herman Cain just took 22% of Perry’s support away in the latest poll. Romney’s support held constant.

Reuters reported that Akamai, whose service improves the performance of websites, is nearing a deal with search giant Google, according to the late Wednesday report by technology blog Business Insider citing "multiple ad tech sources" that were not identified.

World markets

Italy sold 3.5 billion euros of bonds due in 2016 to yield 5.32 percent, compared with a yield of 5.6 percent at the last auction of similar securities on Sept. 13. Demand far exceeded supply.

Hellenic Telecommunications Organization has dropped 84 percent since Deutsche Telekom (DTE) began buying shares in the Greek operator in 2008. The German owner will now try to turnaround the company to recoup some of the 4 billion euros ($5.5 billion) in investments.

Asian stocks rose again posting its greatest six-day advance since early 2009, amid China’s support for the equity market after the valuations dropped to record-low levels. China began buying shares of the nation’s four biggest banks lifting their market. Their housing market in China also appears to be stabilizing.

World optimism that the world economy will not double dip but is in fact growing faster than it has in the previous year means Europe can expect to grow its way out of their crisis this time. The US real estate market and the World bulk market of trade all have been recovering since August when the stock markets fell.

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


American Economy
Last week summary
ISM Index Sep manufacturing rose 2% to 51.6 from 50.6 in August …good
Construction Spending Aug rose 1.4% after retreating -1.3% in August …good
Auto/truck Sales Sep Chrysler sales climbed 27 percent, GM deliveries rose 20 percent, and Ford sales increased 9 percent the companies said in separate statements. …good
Nonfarm private and government Payrolls Sep 103K up from 0K …good
Nonfarm Private Payrolls Sep 137K up from 17K …good
Unemployment Rate Sep 9.1% unchanged …good
Hourly Earnings Sep up 0.2% after declining -0.1% last month…good
Average Workweek Sep 34.3 up from 34.2- …good
Wholesale Inventories Aug 0.4% down from 0.8% …good

FOMC Minutes Sep. 21 inflation appeared to have moderated since earlier in the year as prices of energy and some commodities had declined from their recent peaks
MBA Mortgage Index 10/08 rose 1.3% much better than the-4.3% last month. Now the housing industry is beginning to finally rise.

Today
Oct 13 8:30 AM Initial Claims 10/08
Oct 13 8:30 AM Continuing Claims 10/01
Oct 13 8:30 AM Trade Balance Aug
Oct 13 11:00 AM Crude Inventories 10/08
Oct 13 2:00 PM Treasury Budget Sep

This week
Oct 14 8:30 AM Retail Sales Sep
Oct 14 8:30 AM Retail Sales ex-auto Sep
Oct 14 8:30 AM Export Prices ex-ag. Sep
Oct 14 8:30 AM Import Prices ex-oil Sep
Oct 14 9:55 AM Mich Sentiment Oct
Oct 14 10:00 AM Business Inventories Aug

Market Outlook October 13 2011
Short selling, climbed to 11.6 percent of stock last month from 9.5 percent in July, the biggest increase since at least 2006. Yesterday the volume was above normal indication some short covering has begun in a few stocks though a short squeeze has not started yet!

Stocks could have to rise an additional 3% from here to trigger a short squeeze, but if they do the market could be up more than 15% 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. Soon they will all jump back into the market to get a piece of these bargain prices. However, we do not believe a new high will be hit this year… but most 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. But then it will be time to lighten up on equities again. It is moving though a resistance area now. 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 at:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stocks were up again last night. China up 0.8%, Hong Kong up 2.3%, India down –0.4%, Seoul up 0.8%, and Japan up 1%.

European markets are down significantly today in a range 0% to -1.4% half way through their day.

American market futures are down about –0.2% at 8 AM EST. US market futures rarely have any predictive correlation.