Obama administration Ponzi schemes are ready to collapse now. Cash is the best place now with a market collapse now close at hand. It is most likely the next five days will see the trap close. The trap may be executed by computer to first wipe out short sellers with an upward spike that draws in more buyers. The collapse could then trap the buyers with 10% to 20% losses. Federal Reserve Chairman Ben S. Bernanke reiterated during his second day of testimony that the U.S. fiscal spending situation under Obama is “unsustainable.” It is a Ponzi scheme. Bernanke has lowered rates so that Obama’s debt is charged a lower rate and hence Obama has been able to load up with debt because Bernanke keeps the debt cost artificially low. The FED also pumps up bank earnings and bank purchases of Obama debt by offering Obama debt at an interest rate above the artificially low rate the banks pay to borrow from the FED. Then the FED allows the banks to turn around and buy the Obama debt that pays a slightly higher interest rate from the FED. This is and has been the outright obvious fraudulent and deceptive Obama/Bernanke FED Ponzi scheme run under the name “quantitative easing.” This Obama Ponzi scheme will also undermine the EU scheme as confidence in Socialist community activist deadbeats hits a new low.

Obama has the home building industry down only -66% from the high level before he took office. It was as bad as down –78% under Obama. Obama has continued the liar loans and is still suing banks that do not give liar loans. The position of this blog is that we first have to throw out Obama and then we need to let inflation rise to between 4% to 5% not the current 2.5% to put pressure on all governments to lower debts because interest rates always are higher than inflation. The5% inflation rate would then help reduce world debt and would force corporations and people to stop hoarding cash, a practice that currently hurts investment so that the returns are greater than the inflation rate.


The low interest rates allows incompetent governments and incompetent bank executives have lower debt payments and grossly inflate financial sector profits because they pay close to 0% for the money they borrow from the fed. So they have a no-brain gain by borrowing tons at 0.25% interest from the fed to buy US government debt paying 2% interest. That is the game they have been playing for three years now. We have a disaster facing us now when this debt comes due.

The year-end Obama mandated “fiscal cliff” would damage the GDP recovery by as much as –5%, Bernanke said. Obama demanded that budget cuts be put off until after the November 2012 election as punishment for the vast majority of Americans who will vote Obama out of office. Then Obama can blame his Obama Depression on Mitt Romney.

The Aerospace Industries Association, presented a study predicting the across-the-board Obama Military cuts in federal programs may cost 2.14 million private industry jobs and reduce the gross domestic product by $215 billion next year. Former Vice President Dick Cheney said at a private meeting with Senate Republicans yesterday that the projected cuts totaling $500 billion could be “devastating” to military modernization and planning. The problem arose when Defense Secretary Leon Panetta was snookered and came up with an additional $400 Billion cuts for Obama after a similar size cut was already set to go into effect in January 2013.

Goldman Sachs Group Inc's quarterly profit fell 12 percent as investment income plunged.

State Street Corp.'s second-quarter earnings fell 4.5% on lower foreign exchange trading revenue and lower fees from investment management and servicing.

Alcatel-Lucent warned on Tuesday that it expects to post a second-quarter operating loss and miss a key performance goal as demand continues to slump in Europe.

There are reports that Microsoft may be illegally corrupting and thereby shutting down decade old software which owners are legally allowed to continue to use as they upgrade their computers. The problem may involve illegal access and disruption of user work. If Microsoft is involved then they will become liable for $billions in damages. Users who trust Microsoft and use their fault reporting may be most vulnerable.

Citigroup Inc said on Monday that quarterly earnings fell 12 percent as it was stung by losses from the liar-loan credit crisis-era assets, but the bank's results were better than many analysts expected after low-balling to try to give Obama a boos in the polls.

Facebook stock fell 8.1 percent to $28.25 at 4 p.m. in New York. It is down 26 percent since May when the California company sold shares in an initial public offering.

On Friday July 13 and the trap was set for investors. The hook was bated. Each day the lure was lowered and then it went back up and many investors would miss the daily worm. Then Friday the July 13 they knew they figured it out. Investors decide to buy when it by 10:45 Am and prices are low and sell by 3:45 and they make 0.8% in just one day. They are hooked. Some days later they do the same thing but their particular stock goes down 25% and the people who sold the stock short it and it loses 80% before they get out. That is now happening with many stocks like Cummins that Jim Crammer got hooked on himself.

The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney stuck at 46% of the vote, while President Obama earns support from 44%. 52% of investors say the economy is getting worse. At the beginning of the year only 37% thought it was getting worse.
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
Poisoned dog food, human and animal feces in vegetables, hazardous gypsum board, shoddy workmanship, and manufacturing errors make American and German made products a better value than Chinese and Mexican products. Emerging-market stocks declined from a one-week high after Chinese Premier Wen Jiabao warned of a “severe” jobs outlook and amid concern corporate earnings “have gone over the cliff.”

Shoddy merchandise from the BRICS results in products that are failing across the free world and that has collapsed demand for products from the emerging world. The products are cheap but worthless. It is seen in full force this summer as heat waves traverse the Northern Hemisphere where imported air conditioning units are failing. Americans made units that had lasted 20 years have now been replaced by Mexican and Chinese products that are failing in 2 to 5 years. Shoddy imports are causing Westerners to boycott the products. $Billions of gypsum board manufactured with solidified Chinese toxic waste are eating away the wiring and plumbing in new houses and are about to be declared heath hazards. Shoddy products are the cause of the decline in trade with BRICS. The financial health of the BRICS has been grossly exaggerated.

Sales of offshore wind turbines collapsed 75% in the first half of 2012, a sign the power industry and its financiers are struggling in Germany and Britain. U.K. inflation unexpectedly fell to 2.4%, its lowest rate in 2 1/2 years

The International Monetary Fund on Monday cut its forecast for global economic growth and warned that the outlook could dim further if socialists in Europe do not act with enough force and speed to end their welfare states and go back to the free enterprise system.

London home sellers cut prices by a record 3.6 percent for the month of July from June as an increase in supply added to pressure on the property market during the traditional summer lull.

Chancellor Angela Merkel gave no ground on Germany’s demands for more central bank control over euro member states in return for joint burden-sharing as the region struggles to contain the debt crisis. The Federal Constitutional Court in Karlsruhe will issue its ruling on Sept. 12 the bids to halt Germany’s participation in the European Stability and the fiscal treaty. That’s a delay of more than two months.

Emerging markets faltered. News falsely reported Monday that they just had a six-week run-up and you can see they went down again in that time period. However, they will still do better than American stocks unless Obama is given the heave-ho.
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

Germany faltering and 7% below the recent high but 20% higher than last year’s low: Choose 2 or 5 years. The DAX can’t even keep up with the DJI!
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 Markets are now faltering too but are better than the DOW industrials. All gave a sell signal last year. Remember a Dow signal requires a Rails confirmation. Last year the Dow set a new high but the Rails did not confirm so it is still a sell signal.

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

American Economy
Three more American cities went bankrupt last week.

Squawk Box said hedge funds are rife with Ponzi schemes again that will go bankrupt soon.

J.P. Morgan 2Q Profit fell and reported earnings that were down 9% from a year ago, as it struggles to bounce back from a $6 Billion loss on a bad hedging bet.
US Retail Sales decline 0.5% in June falling for a third month in a row as small companies refuse to hire until they are certain the Obama Scare will not go into effect. The limited employment gains took a toll on consumers.

20% of the unemployed are not counted (the blue line) because they have given up on socialism and have joined John Gault in retirement.
http://www.martincapital.com/index.php?page=graph&view=unemployment

Retail Sales ex-auto Jun were down again by -0.4%

Empire Manufacturing Jul 7.improved slightly to 7.4

Business Inventories rose again in May this time by 0.3%. Inventory build-up means production must be cut.

CPI Jun 0.0% up from -0.3% ok

Core CPI Jun 0.2% was.2% ok

Net Long-Term TIC Flows May $55.0 bln up from $25.6B the world is still buying our runaway debt

Industrial Production Jun 0.4% up from -0.1% good

Capacity Utilization Jun 78.9% declined from 79.0% bad

NAHB Housing Market Index Jul 35 was 29 This is complete fabrication

Yesterday

MBA Mortgage Index 07/14 +16.9up from -2.1% Good indication of some clearing of inventory.

Housing Starts Jun 760K up from 711K Improved from –78% to only -67% since Obama liar loans went into effect. Obama has continued the liar loans and is still suing banks that do not give liar loans.

Building Permits Jun 755K down from 784K not good

Crude Inventories 07/14 -0.809M down from -4.696M, not good

Today
Jul 19 8:30 AM Initial Claims 07/14

Jul 19 8:30 AM Continuing Claims 07/07

Jul 19 10:00 AM Existing Home Sales Jun

Jul 19 10:00 AM Philadelphia Fed Jul

Jul 19 10:00 AM Leading Indicators Jun

This Week
Market outlook July 19, 2012
We anticipate a market collapse within days similar to the one we saw in August of last year

The market is hitting upper resistance levels again. The stock market rally since 2009 was based on assumed economic recovery. We produced a stock market recovery that is entirely hollow and no economic recovery. The recovery is based on artificially low FED rates that are dangerous enablers of socialism and socialist debt and also the enablers of financial institutions borrowing excessively from the FED at low rates to make artificially high profits while squandering the future livelihoods of our children.

As of the end of the 3rd quarter 2011, Wall’s Street estimated for 2nd quarter 2012 S&P 500 earnings would increase of 14.3% and that was the basis for the market rally. The estimates have now plunged to consensus expectations of a rise of only 5.8% less than half the number used to justify this current market level.

We now expect the stock market will soon slump for at least two months or more. The market will likely continue to slump further if Obama is re-elected. It is too close to call just how bad it will be. It could get worse than in September of 2008 when Obama was first elected after he announced America was in a Great Depression.

Examine the last 5 years of the NYSE. Obama could easily be taking America into a profoundly deep depression breaking 2009 lows if he is re-elected.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=5y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

The Dow Theory Industrials and Rails sell signal of August 2, 2011 still holds. The Rails failed to meet even the last shoulder of the head and shoulder sell signal.
http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=5y;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

The market sell signal is also seen in 3-month market cyclic data.
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

The VIX says the market is still complacent and extremely dangerous.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=m&q=l&c=

The Baltic Dry Index is already anemic and now is turning lower again. World trade has now almost completely collapsed with just having Obama malaise, without tariffs that were the blame for the collapse during FDR’s socialist experimentation that resulted in the last Great Depression. Clearly it is the corruption of socialism and its crony capitalism, not rigorous free enterprise, that always ends in collapse of production and then economic depression.
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were up last night. China up 0.7%, Hong Kong up 1.7%, India up 0.6%, Taiwan up 1.4%, Japan up 0.8%.

European markets were mixed half way through their day in a range of +0.3% to +1%

American market futures are up about 0.4% in after-hour trading at 7:30 AM EST.