Obama does not understand that when taxes get too high, then raising taxes actually decreases tax revenue. Obama is not nearly as smart as Ronald Regan who lowered taxes, got more tax revenue, reduced the budget deficit and started America’s greatest growth period in the second half of the 20th century.

One reason for the Obama Great Depression is Obama is driving wealth into cash, not investment, and he is driving wealthy people out of the USA. Bloomberg reported that Saverin joins a growing number of people giving up U.S. citizenship ahead of a possible increase in tax rates for top earners. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dormitory and stand to reap billions of dollars after the world’s largest social network holds its IPO. Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin made that move “around September” of last year, according to his spokesman. As a non-US Citizen, Saverin’s estimated gain, and subsequent tax bill, would be based on an appraisal by his tax advisers when he gave up his US Citizenship. They could have valued his Facebook stake at less than it will be worth once shares trade publicly, reducing his liability. For tax purposes, Saverin could justify that the value of his stake should be discounted because of the potential difficulty of selling the shares while the company remains private.


Scott Thompson was fired by Yahoo Sunday as its chief executive and chairman following a scandal over falsifying his CEO resume to say he had an advanced degree in Computer Science. It is a matter of having no integrity and lying, two character issues symptomatic of dishonesty and corruption.

California’s Jerry Brown is running a state budget deficit as bad as Greece’s deficit.

Three top executives involved with a failed hedging strategy that cost JPMorgan Chase & Co at least a $2 billion loss and tarnished its reputation are expected to leave the bank. Simon Johnson, MIT Sloan School professor and former IMF chief economist, says Jamie Dimon should also resign for taking too much risk after taking the USA bailout. Jamie got over $50 Million in salary and bonuses and this loss proves he did not earn it. The regulations need to be written to retroactively claw back the salaries and bonuses of all the JP Morgan executives involved in the loss decisions.



World market this week

Spanish borrowing costs are at euro-era high. The reaction to Madrid’s banking sector reforms remains strained.

BRUSSELS EU reported today that output at factories in the euro zone unexpectedly fell in March, the latest in a series of disappointing numbers. Industrial production in the 17 countries sharing the euro fell 0.3 percent in March from February, the EU's statistics office Eurostat said on Monday. Stock market advisors had expected a 0.4 percent increase in the month.



Italian market watchdog Consob chairman Giuseppe Vegas said on Monday, days after JP Morgan (JPM) unveiled a $2 billion trading loss due to a failed hedging strategy that MILAN authorities must regulate and even ban financial products that can wipe out people's savings. He cited high frequency trading and exchange traded funds as potentially dangerous products and practices whose risks need to be monitored because they can have systemic repercussions.

China has declined for more than a year now and may be seeking a bottom. http://finance.yahoo.com/echarts?s=000001.SS+Interactive#symbol=000001.ss;range=my;compare=;indicator=ema(100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

Emerging markets are still lower than last year’s high and look like the head and shoulder sell signal is getting worse.

http://finance.yahoo.com/echarts?s=%5EMERV+Interactive#symbol=^merv;range=2y;compare=;indicator=ema(100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;



American Economy

Last week Sy Harding discovered what we have been saying for months now. Most of the world markets look like head and shoulder bear markets. They have been stopped where they were stopped in the past. Today an analyst on Squawk Box showed the same problem with the market plus the low volume on advances that shows the weakness. We are waiting only for the final shoe to fall when the second neckline of the like head and shoulder is broken.

This week Sy Harding is showing what we have told investors since gold hit its high mid way through last year. Silver is doing even worse. They are hedges for inflation but Obama is setting the world up for a depression where cash is king just like when J.P. Morgan became the richest man in the world by investing his cash pile when cash was king. Spain and Latin America always have inflation but they have little effect on the world economy. President Obama’s declared World Depression remains the world’s current fear. That is why America needs to throw Obama and his Congressional liberals out in November.

Last Week
Corrected and uncorrected data still being mixed allowing Obama to report anything he wants and the to change it the next week. So he can report a better number this week to make the economy look good relative to last week and then raise this weeks number next week to make next week look better. If it was just a random error it would not make the economy look good most of the time.

Initial Claims 05/05 370K up from 365K likely got worse

Continuing Claims 04/28 3243K down from 3276K likely improved less

Trade Balance Mar -$51.8B worsened from -$45.4B

Export Prices ex-erg. Apr 0.2% down from 0.5% deflation

Import Prices ex-oil Apr 0.1% down from 0.5% deflation

Treasury Budget Apr $59.1B increased from -$40.4B due to April tax collection.

Friday

PPI Apr -0.2% declined from 0.0% indicates dangerous deflation.

Core PPI Apr 0.2% down slightly from 0.3% still reasonable.

Mich. Sentiment May 77.8 up from 76.4, a good sign.

This Week

May 15 8:30 AM Retail Sales Apr

May 15 8:30 AM Retail Sales ex-auto Apr

May 15 8:30 AM CPI Apr

May 15 8:30 AM Core CPI Apr

May 15 8:30 AM Empire Manufacturing May

May 15 9:00 AM Net long-term TIC Flows Mar

May 15 10:00 AM Business Inventories Mar

May 15 10:00 AM NAHB Housing Market Index May

May 16 7:00 AM MBA Mortgage Index 05/12

May 16 8:30 AM Housing Starts Apr

May 16 8:30 AM Building Permits Apr

May 16 9:15 AM Industrial Production Apr

May 16 9:15 AM Capacity Utilization Apr

May 16 10:30 AM Crude Inventories 05/12

May 16 2:00 PM FOMC Minutes 4/25

May 17 8:30 AM Initial Claims 05/12

May 17 8:30 AM Continuing Claims 05/05

May 17 10:00 AM Philadelphia Fed May

May 17 10:00 AM Leading Indicators Apr



Market outlook May 14, 2012

More and more analysts are pointing out that the market is topping and has not been able to break out. The DJI has some grossly inflated stock prices and is no longer reflecting the stock market because people go to the DJI when they are afraid and seek safety during uncertainty. Consequently we no longer see the DJI as a safe haven.

No Dow Rails confirmation means there is no DOW buy signal since the collapse in August of 2011. It is still looking like a head and shoulder Dow sell signal forming not a buy signal. The DJI looks overpriced.

http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#chart1:symbol=^djt;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

On a quarterly cycle basis (look at 6 months), the New York Stock exchange second neckline was confirmed having broken below the first neckline and now the second neckline is being tested. Usually the market plunges when the second neckline is also broken. On an annual cycle basis (look at 2009 to today) it appears the head and shoulders is already in place and the market is about to break down for that mini cycle. On an economic business cycle basis (up to 20 + years) it shows the economy peaked in early 2000 and began to decline during the Clinton administration. For a Dumbama Great Depression to be declared the market would need to drop another 20% from this current level. That could happen if the Dumbama Regime is re-elected.

http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=2y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

We expect the VIX to soar and be above 40 in a few weeks as markets crash in some countries. A sharp computer sell-off could now trigger huge stop-losses and a plunge below the lows of 2000. The Dumbama-Holden regime will get even uglier.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=2y&l=on&z=m&q=l&c=

Baltic Dry Index has just peaked this past month at only at 10% of its 2008 high. http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:

Markets are tumbling today.

Asian markets were down last night. China down –0.6%, Hong Kong down –1.2%, India down –0.5%, S. Korea down –0.2%, Japan up 0.2%.

European markets were down sharply half way through their day in a range of –1.5% to-2.8% with Greece an outlier down -5.8%

American market futures are down about -0.8% in after hour trading at 7:30 AM EST