Obama and Bernanke have managed to totally screw up the American economy.

I can’t even forecast any bottom for the world economy until Obama is removed.

This is how they did it. Imagine this. You are a banker and have $1billion in loan demands and:
Year 1 you can borrow from the FED at 4% and loan it out at 6.5% and with $25,000,000 income (not earnings).

Year 2 Greenspan drops FED interest to 2.5% and you can loan it out at 5.2% and income of $27,000,000. Earnings are a lot less. Wow, Greenspan helped you recover and the cost of debt is lower so now people borrow 6.5/5.2 * $1Billion= $1.25Billion from you so now you actually have 1.25 * $27000000 income or 32,500,000!

But now Obama and Bernanke come along.
First they say you must keep 25% in cash reserves just in case there is a run on your bank (how dumb, we had the runs in the banks back in 2007when idiot Senators Obama and Dodd opened their mouths and said that Bush gave us a great depression). The horse already got out of the barn when they said that, so stupid Obama and Bernanke decided then to lock the door with high reserve requirements so the horse cannot get back in again! How royally stupid!!! But now Bernanke drops interest rates to 1.5% and you can loan it out at 2.5% so people can now borrow .75*6.5/2.5 * $1Billion =1.95$billion. Their effective interest rate is 1.5% for which you net 1% which is $19,500,000 income (not earnings). Obama and Bernanke just cut you income by 46% with their stupid reserve requirements. And on top of that Obama and Holden are giving away $800,000,000,000 each year to buy votes of unions and their welfare recipients and government sleepers resulting in an annual government deficit or about 10% of our gross national product. The real problem is that the socialists squeezed margins as interest rates declined plus the Obama socialists continue to spend us into debt. The dig the hole deeper every year and when interest rates rise again as they are in Europe the debts will become unbearable (as they are in Europe) and the economy will stall as Japan’s has already for 21 years.

So the Obama/Bernanke policy significantly increased national debt and the deficit in ten years will be 100% of America’s GDP and the banking economy for private enterprise is being squeezed because dropping interest rates is addicting like heroin and only helps as they go down and the addicted socialists borrow more. Once they are down the squeezed income margins make the economy decline and national and private debt grows. Then if you try to start raising rates the squeeze on debt begins in earnest and debtors have to borrow just to pay the higher interest. So Obama and Bernanke have screwed up the American economy royally! I can’t even forecast any bottom for the world economy until Obama is removed.

Gold and silver just plunged to their July lows as inflation remains lower that the average for the last 50 years. In fact the FED can hardly get it up to their inflation target of 2.5% much less maintain it. But that is not good for the world economy because it could put many economies into Japan or USSR style perpetual socialist recession/depression. Perhaps all socialist societies die that way by borrowing and spending other people’s money and getting so far into debt that they become serfs. You may need to paste these wed sites in to see the price of gold is now in a downtrend.
http://futures.tradingcharts.com/chart/ZG/W?anticache=1325159522


The socialist-democrats of Montebello, California, in the eastern part of Los Angeles County, have been stealing public assets and funds for years, the state controller said Wednesday. What else did he expect from the corrupt socialist-democrats who run California? Why don’t they check how socialists Governor Brown and President Obama went from being stupid poor community activists to millionaires when the got into political office? In socialist China they would take corrupt officials under the nearest bridge and shoot them and send the families the bill for the execution.

Virginia ballot access rules are among the most onerous and are particularly problematic in a multicandidate election,” Ray Sullivan, a spokesman for Perry, said in a statement yesterday. “We believe that the Virginia provisions unconstitutionally restrict the rights of candidates and voters by severely restricting access to the ballot.” Newt Gingrich is a citizen of Virginia but the Socialist Democrats in Virginia have kept Republicans Perry and their citizen Gingrich off the Virginia ballot! So much for the Obama socialists wanting democracy in America!

World markets
Italian business confidence falls to two-year low.

The ECB balance sheet increased to a record $3.55 trillion on loans to banks. Italy will sell as much as 8.5 billion Euro ($11 billion) in bonds today, one day after borrowing costs plunged at an auction of shorter-maturity debt.

China’s stock market continues breaking down below the lows of July 2010. China’s goods remain inferior and their prices are no longer as competitive so we expect Japan and South Korea will start eating China’s lunch.

China however is on the verge of releasing free enterprise from prison. Then China will be a great contributor to the human race and will no longer have to sustain their dignity pretending “4000” years of gross murder, oppression, and barbarism was something great. The Europeans did not think the invasion of Batu Kahn and his years of gross murder, oppression, and barbarism was anything great! And yet the Chinese people still are a great people in spite of their 4000 years of brutal and corrupt governments.

Data released this week showed profit growth at China’s industrial companies slowed to the weakest pace in at least 10 months. Chinese stocks listed in the U.S. have lost over 9% this year.

S&P withdrew the rating of Cheung Kong (Holdings) that was based on publicly available information because it had no information to go on S&P said in a statement yesterday.

With such corruption and hacking, theft and espionage even among “friendly” Asian nations, investments in Asia could have a 1998 type contraction disaster as in 2012.

Asian markets (especially China) care failing to break out some on the second and third times at resistance levels.
http://finance.yahoo.com/intlindices?e=asia

Germany is showing strength: Choose 2 or 5 years
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart2:symbol=^gdaxi;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

The Swiss are showing strength. Choose 2 or 5 years http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#chart1:symbol=^ssmi;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Emerging markets show strength.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefine

American Economy
The US markets are still showing strength especially as funds try to put year-end lipstick on their performance pig. The US economy may not dip as Americans increasingly have hope that the Obama Regime will be thrown out of office so Americans can change back to an honest free enterprise system. Obama administration corruption rivals that of Greece and Italy.

This Week
Yesterday
Case-Shiller 20-city Index Oct down only -3.4% from last year but last month it was down even more at-3.6%
Consumer Confidence Dec 64.5 substantially improved from 56.0

This week
Dec 28 7:00 AM MBA Mortgage Index 12/24
Dec 29 8:30 AM Initial Claims 12/24
Dec 29 8:30 AM Continuing Claims 12/17
Dec 29 9:45 AM Chicago PMI Dec
Dec 29 10:00 AM Pending Home Sales Nov
Dec 29 11:00 AM Crude Inventories 12/24
Dec 30 9:45 AM Chicago PMI Dec

Market outlook December 28, 2011

It is reported the hedge funds are now accumulating housing stocks.

We should be ready to take profits as they recover near July highs. Remember though that January was very good last year and the market went down significantly afterwards. But American stocks could still rise close to this past year’s highs by the end of January. The NYSE MACD is definitely bullish and implies we could see the bull market last until November 2012.
http://www.martincapital.com/index.php?page=graph&view=macd

Real estate has turned the corner with the latest home sales, housing starts, and the recent NAHB survey giving more confirmations. But the market will not take off until Americans are confident that Obama and his racist-leftist supporters will be ejected in 2012. Racist liar-loans to Obama’s minority group brought down the American banks after several years of racist minority group appointments to the highest levels of Fannie and Freddie by democrat-socialist.
http://www.martincapital.com/index.php?page=graph&view=permits_and_construction

When it comes to jobs, Obama has to manipulate the government statistics just like all communists do to pretend things are better. Sales are up because consumers have been refinancing dropping their monthly expenses. http://www.martincapital.com/index.php?page=graph&view=unemployment

The VIX has is approaching 20 which would indicate complacency. That means the coming exuberant rally will be a good time to take profits and raise cash.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=6m&l=on&z=m&q=l&c=

We predict we could possibly have as much as 95% recovery. But realize that as the upside potential is approached, then the downside risk exceeds the upside potential and it is time to lighten up. Also, remember January was very good last year and the market went down significantly afterwards so January is not necessarily a good predictor for the year. View 1yr. See:
http://finance.yahoo.com/echarts?s=^NYA+Interactive#chart4:symbol=^nya;range=1y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Growth in bulk shipments in November was down and still at less than 20% of the bulk trade level that existed before Obama declared the USA was in a depression in one of his 2007 campaign speeches. http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stock markets were down last night. China up 0.2%, Hong Kong down -0.7%, India down –1.2%, S. Korea up 0.0% and Japan up 0.3%.

European markets are mixed today in a range –0.7% to +0.4% half way through their day.

American market futures are up about +0.1% in after hour trading at 7:30 AM EST. It is an unreliable predictor.