World trade has now begun to completely collapse on its own without tariffs that were the blame for the collapse during FDR’s socialist experimentation with 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.

We need only look at the collapse for the USSR, Eastern Europe and then their growth when socialist countries re-introduced free-enterprise American type systems after their economic collapse. Tariffs were blamed under FDR but the Obama Collapse can only be blamed on socialist corruption of the intelligent economic principles of free-enterprise such as "allowing people to keep the fruits of their labor" vs. the socialist looter’s principle of "robbing the hard working people to redistribute their wealth to the indigents and slackers who refuse to work". Obama has created a fiscal cliff we will hit in January if he is still around. The stock market is generally a 6-month leading indicator for the economy. Unfortunately a sharp stock market decline apparently is needed so that Americans smarten up and throw Obama’s socialist bums and Holder’s drug cartel gun runners out of office.

Stocks are declining on poor quarterly earnings reports and the Federal Reserve failure to signal action to avoid a collapse in January if Obama is re-elected. Fitch Ratings said the US outlook remains negative as a result of the Obama’s inability to show leadership on how to cut the budget deficit. Consumer confidence has fallen seven points just since last Friday's disappointing jobs report. At 80.6, the Rasmussen Consumer Index shows confidence is now just two points above the 2012 low. It typically takes up to a week before the impact of a jobs report on confidence is fully captured.

Uncertainty is an economic and jobs killer. Risk is something businesses and economies can hedge and deal with. But Obama’s corruption of using stimulation funds for crony capitalism and racist redistribution, his Obamascare, and his coming January financial cliff are major uncertainties. Crony capitalism stimulation and liar-loan corruption are Obama’s key economic policies and they lead to a fiscal cliff in January. America cannot afford socialism.

Obamascare is also a scary uncertainty because it puts 40 million indigents who squandered all they have in the doctor’s office demanding their entitlement to squander health care on their chosen lifestyle diseases and addictions. It places no limits whatsoever on how much healthcare they can also squander.

Independent voters who are growing in numbers at the expense of Democrats in swing battleground states will most likely to determine this year’s presidential election. Democrats just saw a net decline of about 480,000 in those six states but Republicans only added roughly 38,000 voters.

The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney attracting 46% of the vote, while President Obama earns support from 45%.
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll


World market this week
Emerging-market stocks fell for a seventh day. The European Central Bank said that overnight deposits from financial institutions dropped by 60% to the lowest level in almost seven months after policy makers stopped paying interest for the funds.

When Eike Batista’s oil venture reduced production targets less than six months after pumping its first barrel of crude it lost $21 billion in market value in just three months and cast doubt on any vision of Brazil as a new powerhouse on the world stage. . Brazil’s wave of optimism about prospects that culminated in a 7.5 percent surge in gross domestic product in 2010 has stalled for a second year, and is instead forecast at 2 percent in 2012, the slowest among the BRIC nations of Brazil, Russia, India and China. Of course China is much worse but then they do Communist reporting designed to shape opinion not correctly manage growth.

The EU decided to lengthen the time period over which Spain will face cuts. Spain has only 4000 miners but pumps billions of EUROs into that socialist make-work business. Spanish miners are violently protesting against austerity and Spain’s 10-year bond yield is now above 7 percent and unsustainable.

Chinese Prime Minister Wen Jiabao said the nation’s economy faces “relatively large” downward pressure and promoting investment growth is the key now to stabilizing China’s economy to counter slowdown that extended into a sixth quarter. Imports fell as the economy contracted offsetting falling exports. While the Shanghai Composite Index had been up as much as 12 percent this year, it is now negative and falling.

Portugal is considering giving foreign investors a haircut like Greece did. With Portugal’s 10-year bond yield above 10 percent, returning to the markets next year may be untenable, requiring more international aid despite the premier’s insistence he won’t seek further concessions.

Japan’s machinery orders, an indication of capital spending, fell 14.8 percent in May from the previous month, the biggest drop since 2001. Japan’s current-account surplus was the smallest since 1985 as factory orders dropped.

Emerging markets falter.
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
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 becoming undecided.
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
Earlier this week
Consumer Credit more than doubled in May to $17.1B from $6.5B with little indication of economic improvement.

The trade deficit in the US narrowed in May as falling crude oil prices and weakening demand for consumer goods trimmed the import bill.

Yesterday

MBA Mortgage Index 07/07 declined another -2.1% as “Obama Liar loans” continues to destroy the housing industry.

Trade Balance May was down -$48.7B with imports slowing a little faster than exports slumped. World trade is contracting.

Wholesale Inventories in May rose 0.3% and rising wholesale inventories are always a sign of further weakening.

Crude Inventories 07/07fell another -4.696M indicating gasoline and heating fuel price increases will soon kick in.

This Week

Jul 12 8:30 AM Initial Claims 07/07

Jul 12 8:30 AM Continuing Claims 06/30

Jul 12 8:30 AM Export Prices ex-ag. Jun

Jul 12 8:30 AM Import Prices ex-oil Jun

Jul 12 2:00 PM Treasury Budget Jun

Jul 13 8:30 AM PPI Jun

Jul 13 8:30 AM Core PPI Jun

Jul 13 9:55 AM Mich Sentiment Jul


Market outlook July 12, 2012
We now expect the stock market will slump for at least two months or more. The market would likely continue to slump further if Obama is re-elected. Right now it is too close to call. Bernanke is keeping interest rates low to make it easier for Obama to pay for increased American debt. To get out of the Obama socialist economic death spiral it is necessary to begin to raise interest rates and give businesses an incentive to find ways to increase profits. With the coming worst profit quarter in a few years the US markets are soon likely to fall like a knife for at least one month of the slump. If Obama is re-elected we predict a full-blown economic depression and chaos in the world. There very likely will be another major war and we can expect if Obama is still in office... Israel will likely be the victim.

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. It 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 is beginning to move again and says the market is still complacent but is getting ready to panic and extremely dangerous.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=2y&l=on&z=m&q=l&c=

The Baltic Dry Index is already anemic and now is turning worse again. World trade has now begun to completely collapse on its own 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
and
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were mixed last night. China not reported, Hong Kong down –2%, S. Korea down –2.2%, Taiwan down –1.8%, Japan down –1.5%.

European markets were down sharply half way through their day in a range of –0.4% to +0.6%

American market futures are down about -0.8% in after-hour trading at 8 AM EST.