Fed undertakes QE3 Scheme with $40 billion in monthly purchases of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing. It seeks to reduce the interest rate of US debt to allow more deficit spending as the financial cliff approaches. The inflation target level was increased to 3% from 2.5%. Commodities and gold spiked up. The Dow Industrials hit the levels just before the 2008 collapse but the DOW rails are still under their sell signal of August 2011. Ben Bernanke yesterday warned that bank investors would suffer much more in the future indicating they could have to be nationalized with Obama’s continuing policies. Former FED member Kevin Warsh this morning said we are approaching a tipping point of losing control and an economic collapse of financial and stock markets. He said reversing or undoing FED policies could be much worse than the benefits.

Kevin Warsh married a billionaire and he only holds 1 to $2million in his name, which is not much. Ben Bernanke’s net worth is now estimated to be only 1.2 Million and his salary is $180,000/yr. That says Ben Bernanke has done quite poorly predicting the economy for his own investments. That information is public knowledge on the web. The economic cliff could be kicked 6 months down the road before Congress adjourns. Obama uses one spending program after another and does nothing to create an incentive for people to get off the dole.


http://www.youtube.com/watch?v=3EZQvSCGaJI

Christian socialism in America and Europe is compassionate but not economically sound. The pilgrims and dozens of other experiments failed and returned to free enterprise. The Amish today survive by trading with their neighbors but at a substantially lower economic value. The Atheistic socialism of Hitler, Stalin and Mao used genocide for control, as do the most non Christian-Judeo religions of the Mid-East. Obama’s basis for re-distribution of wealth through taxation, why that economy fails, and why people starve to death in this world under religious and secular socialism is shown in the above clip.

Ben Bernanke has already put every American adult and child another $7000 in debt with his QE policies and will now increase it at about $250/month.
Here is one that Obama will not touch and could stop in a second if it were not the truth. http://www.youtube.com/watch?feature=fvwp&NR=1&v=l-HqHSkYG-Y

Manhattan’s apartment vacancy rate rose in August to its highest level in three years as tenants moved out of the market in the busiest time for leasing, according to Citi Habitats.

The dollar weakened to a seven- month low and Treasuries rose amid speculation the Federal Reserve will unveil more stimulus today.

Moodys said they are preparing to reduce the US credit rating if America does not get control of spending.

Latest economic indicators show we are again losing jobs faster.

U.S. technology companies have pushed their dividends to the highest level on record; a signal to investors that profit growth in the industry is slowing.

The Alternative minimum tax is not being adjusted for inflation. According to the IRS, if Congress doesn’t act to prevent the $92 billion tax increase from inflation, the number of households facing the alternative tax after the fiscal cliff would increase to 32.9 million from 4.4 million.

Federal Reserve easing cannot spur a faltering recovery it can only extend a recession by first distorting investment from housing and business growth to the lucrative financing government debt. Second the debt extension makes debt financing the number one government focus to avoid national in solvency. Anyone who thinks big government solves problems is an idiot. Big government debt financing becomes the focus of banking to the detriment of the economy.

Chicago teacher’s strike rallies Democrats to go after the teacher unions in defense of American children.

In what is usually a strong month for funds buying gold, the price of gold and silver rallied again yesterday. Speculation about more money printing by central banks helped to spur interest in precious metals, which are regarded by many investors as a buffer against inflation. But is demand for the underlying metal as high as the demand for the stocks? The impoverished in India are some of the biggest buyers.

The U.S. Treasury Department said it will sell most of its stake ($18 Billion) in insurer AIG, making the government a minority investor for the first time since it rescued the company

Apple Inc, is scheduled to release the new product on Sept 13 in the United States. The problem is can Apple accelerate sales enough to maintain its growth rate. If last year you grew 100% from 100 to 200, this year you need to grow twice as much (200 growth from 200 to 400). We believe that is not possible because they only are only including re-treads of Steve Job’s creation. Apple’s reliance on this single product leaves Cook little margin for error. The Chinese cloned the iPhone 5 called the called the "Goophone i5", in advance. Jim Cramer said do not buy Apple now, buy it at $560 (56 times ten).

BP is in advanced talks to sell a group of oilfields in the Gulf of Mexico to Plains Exploration & Production Co.

　

The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows President Obama attracting support from 46% of voters nationwide, while Mitt Romney earns 47% of the vote. The Obama announced Great Depression would get a lot deeper if it turns out that way. Three percent (3%) prefer some other candidate, and three percent (3%) are undecided.

http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week

The Moscow-based Bank Rossii raised the refinancing rate to 8.25 percent after Russian inflation rose to 6.3%.

European shares fell in morning trading on Thursday ahead of the U.S. Federal Reserve’s meeting at which it could decide on a further round of quantitative easing.

Germany’s top constitutional court said euro-area rescue fund requires legislative approval for each allotment and is not a free checkbook. The ruling is that the country’s 190 billion-euro ($245 billion) contribution can’t be increased without legislative approval for each allotment. Germany’s bonds immediately dropped, sending 10-year yields to the highest in more than two months. Spain’s 10-year securities led gainers among the euro- region’s lower-rated sovereigns amid optimism the 500 billion- euro ($646 billion) European Stability Mechanism will help stem the spread of the region’s debt crisis.

The EU will use the QE Ponzi scheme that put Japan into a continuous recession and a bear stock market for the past twenty years and has Japan’s debt approaching 180% of their GDP. The US will decline to Japans level in less than 10 years. We do not see the QE2 Ponzi scheme any less addictive than cocaine. But as we said before the Japanese markets rose 250% before people realized they had borrowed 20years of their future with their Ponzi scheme. Japan’s stock market today is lower than it was in 1984. Notice that the DJI was manipulated so much in the past to make it look good that they can no longer show much of its historical data. One way they do it is by replacing stocks when they peak with new stocks that are growing fast and deceiving investors who think the market made people a lot of money. But all the people who lost money leave the market. When you include commissions the market is very close to a zero-sum game on average.

France faces an economy that hasn’t grown in three quarters and unemployment at a 13-year high. The French president is also struggling to plug a 30 billion euros budget hole next year

China’s Communist Party threatened by the economic slowdown that costs jobs. M2, the broadest measure of money supply, rose 13.5 percent in August from a year earlier a rate that would support hyperinflation if allowed to continue.

Cost-cutting by Japanese and Chinese companies is dragging on wages, resulting in weaker consumer demand and a stronger case for creating inflation.

From the $2.3 trillion pumped into the U.S. by the Fed since 2008 to record-low interest rates in the euro zone, U.K. and Japan, nothing has prevented the world’s economy from slowing this year. Foreign-exchange traders are signaling they expect little improvement any time soon, and that’s a change from the past.

The rebound in China’s inflation, excess capacity in some industries and banks’ bad debt risks from past monetary easing underscore the potential cost of ramping up stimulus efforts.

Hobbled by the economic slowdown, Europe's automobile market has shrunk, causing some firms to close their factories. The influx of imported cars in China are piling on top of already high inventories and causing price wars.

"I can’t be optimistic that investor sentiment will improve rapidly and the world’s economy will pick up," Yoshisada Ishide, who oversees $14 billion as the manager of the biggest mutual fund at Daiwa SB Investments Ltd. in Tokyo,

Emerging markets. The American markets are essential to the recovery of the world.

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

Emerging market composite indicates continued breaking down through the recent lows.


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



German stocks are faltering below the 2011 high. It gave a sell signal in 2011 and has to rise a few more percent to give a buy signal again. 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 Market is also testing moving averages. It gave a sell signal last year. It is at a new high for 2012 but below the 2011 high.

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
The market continues to test old resistance levels.

Precious metals ETF’s will likely retrace and close some of the large price gaps that occurred it the recent rapid rise.

Consumer Credit Jul plunged -$3.3B after previously increasing at a rate of $9.8B

Trade Balance Jul -$42.0B got slightly worse -$41.9B

MBA Mortgage Index 09/08 11.1% wide swings indicate manipulation -2.5%

Export Prices ex-ag. Aug 0.4% spike in price increases from -0.3% due to energy

Import Prices ex-oil Aug -0.2% stable -0.4%

Wholesale Inventories Jul 0.7% major inflation increase -0.2%

Crude Inventories 09/08 1.994M good supply increase -7.426M

Sep 13

Initial Claims 09/08 382K up from 365K

Continuing Claims 09/01 3283K down from 3322K

PPI Aug 1.7% prices up from 0.3%

Core PPI without energyAug 0.2% down slightly 0.4%

FOMC Rate Decision Sep 0.25% no change 0.25%

Treasury Budget Aug -$190.5B deficit surges from -$134.1B

Today

Sep 14 8:30 AM Retail Sales Aug

Sep 14 8:30 AM Retail Sales ex-auto Aug

Sep 14 8:30 AM CPI Aug

Sep 14 8:30 AM Core CPI Aug

Sep 14 9:15 AM Industrial Production Aug

Sep 14 9:15 AM Capacity Utilization Aug

Sep 14 9:55 AM Mich Sentiment Sep

Sep 14 10:00 AM Business Inventories Jul

Market outlook Sept 14, 2012
Bernanke gave Obama an election boost. The market is not following his words but loves his music.

The DJT is beginning to converge with the DOW. This is more positive than before but not yet a buy signal. This could be the high for the year or the beginning of a breakout or as blowout.

http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=3m;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

There still has been no stock market buy signal but if this run-up continues it could happen within a few weeks. The NYSE did have a 3mo-cycle breakout but not a major 1yr-cycle breakout yet.

People forget that the DJI is not by itself the famous stock market indicator. The DJR must confirm the DJI for there to be a buy signal or sell signal. The DJI and DJR confirmed a sell signal together in August 2011and the DJR remains confirming that sell signal today. The DJI is the last "safe" place bulls go to reduce risk before the entire stock market collapses. Therefore the DJI is biased bullish and needs the DJR for balance. The DJ Rails continues to say sell even as people seek the false security of the DJ Industrials. The Divergence is now ending but there still is no DOW Buy Signal.

http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=3m;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

12,000 Federal workers are reported getting government pensions exceeding $100,000/yr for life.

The NYSE is much more representative of the US economy than are the DOW indices. Examine the last 5 years of the NYSE. It shows that Obama may be taking America into a profoundly deeper 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 again 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;

Resumption of the bull stock market is indicated but it looks like the effects of the Ponzi QE3 scheme. In Japan it led to their 22-year recession after the market almost tripled in five years.

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 back down in La-La Land. The low VIX normally precedes a sell-off. Once that starts the VIX needs to go up above 30 until bear markets normally end. The driving force this year is the election and whether the morons win or lose.

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

The USA is still the world’s greatest importer and thus the engine of the world. The Baltic Dry Index says world trade is now at a depression low. When Obama began his campaign in 2006 he said George Bush already had the economy in a depression. Never before had anyone said such a thing because never before did America have a candidate that did not know that such talk could unsettle an economy. Look at 5 years and you see it peaked when Obama was nominated in 2008 and got worse with Obama’s socialist redistribution policies that give no incentive for most of his voting constituency to work. Socialism cannot be stopped when the people who pay no taxes and have no skin in free enterprise… when their voting block is more than 50% of the voters. Consider also that fewer than 60% of working people usually vote. In socialist dictatorships 98% vote (if you wish to live).

http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets followed the USA up last night. China up 0.6%, Hong Kong up 2.9%, India up 2.5%, Japan up 1.8%.

European markets are up half way through their day in a range of +7% to –2%.

American market futures are up about 0.5% in after-hour trading at 8 AM EST. This indicator does not statistically correlate with anything.