Obama has been naïve and has been mislead by Bernanke. The American corporations are not cash rich and debt free like the Chinese corporations

The FED is lowering long term rates to prolong the day of reckoning of debt liquidation. It is causing the build up of corporation cash so those corporations can liquidate their debt when interest rates increase. This is very important information we need to tell people. Obama has been naïve and has been mislead by Bernanke. The American corporations are not cash rich and debt free like the Chinese corporations. The American corporations still have high debt and are only carrying cash as insurance against default for when Bernanke lets rates rise and suddenly they can no longer afford to have high debt loads. In other words Bernanke is turning the Obama recession into an Obama depression by setting rates such that the free world hoards American dollars. With everyone hoarding American dollars Bernanke is doing the opposite of what China does. Bernanke is keeping the dollar artificially strong and all that does is make our products too expensive and our labor and corporations noncompetitive. China hoards our dollars too and in the process sells us more goods. Bernanke is setting America up for a damaging collapse of the American currency and a Great Worldwide Depression that will be blamed on Obama. Obama is ready to start a trade war with China accusing China of keeping the dollar strong but in fact Bernanke is the one encouraging dollar hoarding as insurance against default. The cash on the corporation balance sheet also fools investors. When interest rates rise corporations will need to use the cash to liquidate debts. We can’t grow out of the Obama recession/depression until we liquidate much of the debt.

Obama continues to pursue the goals of his state of confusion address. Yes government can create jobs when it helps business by supporting 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.

Oracle stock price surged on improved analytics earnings last month. SAP just reported third-quarter earnings beat analysts’ estimates as new mobile and real-time analytics boosted sales. Analytics are tools that help you search and mine data to extract useful knowledge.

Billionaire Raj Rajaratnam was sentenced to 11 years in prison and fined $10 million for his role in one of the biggest insider trading cases in decades.

World markets
Nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the European debt crisis. Of course primarily America funds the IMF, the UN and most world organizations and that needs to change.

Spain’s debt was downgraded again.

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.

Yesterday
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

Today
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 14 2011
Hedge funds, especially those that invested in gold have reported losses and heavy selling. Several are considering closing down. Yet the gold hawkers are lying louder than ever trying to get rid of what they own by selling to people who believe in a doomsday coming. But the doomsday is not German 1920’s inflation. That was a nation defeated in WWI burdened with all the debt France could load on it and that hyperinflation has never been repeated in a civilized country. You have to go to Obama’s homeland to expect that disaster. Perhaps Obama’s ignorance is the cause of the fear of hyperinflation, but Obama hasn’t power to force the FED in that direction.

Tea Party people who dislike Obama seem to be the focus of the gold fraud going on. It is highly probable that little gold is being transferred and they are selling gold they do not have so that when the price drops they can pocket most of the cash being invested. If it were Obama people buying the gold they would be investigated by the Federal Government and shut down. But Obama loves the idea that conservatives are about to loose their pants now that the legitimate gold investing hedge funds have lost their shirts.

Stocks could have to rise an additional 2.5% 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 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 then 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 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 -0.3%, Hong Kong down -1.4%, India up 1.2%, Seoul up 0.7%, and Japan down –0.9%.

European markets are up significantly today in a range 0.6% to 1.5% half way through their day.

American market futures are up about 0.75% at 8 AM EST. US market futures rarely have any predictive correlation.