40 years ago mankind left his last step on the moon. $1 Trillion spent and then abandoned. Now we run a deficit each year that is as high as the entire NASA man on the moon program.
A study published last month in the Annals of Family Medicine found that medical students dread Obama Care. Only about 20 percent of students have chosen primary care since Obama dictated his brand of healthcare, down from about 50 percent said the study. If the trend continues, the U.S. could be short more than 52,000 primary care doctors in 12 years as Obamacare downshifts senior citizen care and broadens the coverage to indigents for whom Obama has never reimbursed their hospital emergency care costs. Forty million more hard core indigents who have always had "free" hospital emergency care will now get an Obama entitlement at taxpayer expense. It was always at taxpayer expense but charity was never abused and entitlements are always abused. Increasing the coverage for indigents while cutting end-of –life services for taxpayers will lengthen their life spans of those on the dole under the Obama health-care law. It entitles every American to go on the dole. In Europe a private clinic system has evolved and it picks up all the quality care while the hospitals are restricted under socialism and waiting lists for surgery at hospitals exceeds a year. That means most critical health conditions are privately paid because waiting an Obama year is often eternity.
Planned layoffs hit highest level since May, as a deep recession looms greater on the horizon. Yet once again after the layoff and the storm Sandy…Obama claims unemployment is down again. We have said it before that Obama is another incompetent president like Jimmy Carter was. Obama has set up America for an Obama malaise of chronic unemployment and increasing inflation. We expect stocks will trade in the range of previous highs and lows churning with no net positive movement until Obama is out of office. We are near the top of that range right now.
U.S. Household Net Worth Jumps $1.7T in 3Q as house prices begin to rise.
Read more: http://www.foxbusiness.com/industries/2012/12/06/best-and-worst-places-to-live/#ixzz2EKl8p8Tq
If right-to-work legislation passes, Michigan would become the second Midwest industrial state in the past year to adopt a ban on mandatory union dues, following Indiana in February.
The Senate unanimously passed a measure authorizing $631.4 billion for U.S. defense programs this fiscal year that sticks to President Barack Obama’s proposed spending total while drawing an Obama veto threat with its endorsement of the Pentagon’s request to buy 29 F-35 stealth jets made by Lockheed Martin. The Pentagon requested $9.1 billion for the F-35 program, including $6.1 billion for procurement. The 98-0 vote yesterday in the Senate advances legislation allowing about $543 billion for the basic defense budget in the fiscal year that began Oct. 1, and an additional $88 billion to fund wars in Afghanistan and elsewhere. The legislation next must be reconciled with a House- passed version that would spend $4 billion more than Obama wants for returning warriors. This means Obama will likely insist on $1Trillion total in defense cuts that are part of the cliff.
President Barack Obama says he is in favor of choosing another socialist or communist leaning business leader for his economic team in a second term if they can be convinced the democrat controlled U.S. Senate confirmation process isn’t too disheartening.
The plunge in US truck sales has General Motors sitting with more than double a typical supply of trucks and facing the prospect of cutting production or increasing discounts, threatening to squeeze 2013 profits. Clearing away that inventory is critical.
World Economies
http://www.bloomberg.com/news/
http://www.foxbusiness.com/index.html
U.S. Securities and Exchange Commission is stepping up scrutiny of Chinese companies for suspected "Enron" levels of accounting fraud. In a recent enforcement action, the commission accused affiliates of the four biggest Chinese accounting firms of refusing to produce documents needed for SEC investigations. Carson Block is shorting many stocks in China now and claims tattooed Chinese gangsters have threatened his people.
http://www.bloomberg.com/news/2012-12-10/carson-block-goes-short-unafraid-as-gangsters-in-china-chase-him.html
Greece’s economy has contracted every quarter for four years and one in four Greeks is jobless. Despair and crime rises.
http://www.bloomberg.com/news/2012-12-06/depression-deepens-greek-middle-class-despair-with-crime-rising.html
Dec 7 the WSJ had an article on the number of accounting fraud incidences found with Chinese firms that had been listed on American exchanges.
The Bank of England has given up made no new effort to ease the recession. The European Central Bank slashed its economic forecasts for 2013 and also took no new steps to spur business activity, offering little hope to the euro zone's weaker members as they struggle to emerge from the region's debt crisis.
Samsung is seen overtaking Apple in technology.
Data that shows the eurozone's services sector is continuing to contract is yet another worrisome sign for the EU currency.
Nokia the Finnish mobile-phone maker took on Apple Inc.’s iPhone using Google Inc.’s Android version of its smartphone for China’s largest wireless carrier. Finland’s economy just joined the euro area in the recession of the third quarter as the region’s debt crisis weighed on business confidence and sapped investments.
Chinese manufacturing returned to growth in November for the first time in over a year and the deep downturn in euro zone factories eased slightly, according to purchasing managers indexes. China, whose economy has misfired this year, is just showing signs of recovery going into 2013. If sustained, it could prove vital for the world economy next year since a meaningful recovery in Europe still looks a long way off. The decline among the euro zone hit an eight-month low in November and the latest PMIs showed the economy is on course for its worst quarter since 2009.
Chinese are cash rich buying real estate in the USA just as Japan was in 1988. The only difference is that Japan was buying at the peak of the housing boom and China is buying at the bottom. The supply of housing in the Los Angeles area has been unable to meet demand since April this year. Potential local buyers say they are unable to compete with Chinese buyers who turn up with cash, the US-based Chinese-language press as saying.
About 10% of China's stocks of small and medium enterprises will be worthless in five years due to local competition, say officials at the 2nd cross-strait forum for SMEs, which was held in central China this week.
A recent study reports the majority of the least livable cities are located in Africa. War-torn regions like Baghdad and Tbilisi, Georgia are also on the list, as is the earthquake-devastated and extremely impoverished Port-au-Prince, Haiti. Eight of the ten countries on the list are among the worst primarily because they are the most dangerous on earth. The U.S. Department of State has issued travel warnings for these countries due to extreme violence, robbery, and the murdering of tourists.
http://www.foxbusiness.com/industries/2012/12/06/best-and-worst-places-to-live/#ixzz2EKoD3pC5
China continues to fall.
http://in.finance.yahoo.com/q/bc?s=000001.SS&t=5y&l=on&z=l&q=l&c=
Japan may finally be bottoming from their Quantitative easing that started in 1985 and collapsed their growth in 1990.
http://in.finance.yahoo.com/q/bc?s=%5EN225&t=5y&l=on&z=l&q=l&c=
No, not even Germany has confirmed a bull market.
http://in.finance.yahoo.com/q/bc?s=%5EGDAXI&t=5y
American Economy
http://biz.yahoo.com/c/e.html
This week
Dec 3 10:00 AM ISM Index Nov 49.5 declined from 51.7 means US manufacturing is contracted last month.
http://www.martincapital.com/index.php?page=graph&view=ISM
Dec 3 10:00 AM Construction Spending Oct 1.4% up from 0.6% …definitely turned around now.
http://www.martincapital.com/index.php?page=graph&view=construction
We expect the US dollar to fall under pressure before the end of 2013 as the tax revenue falls off and the 2014 projected deficit explodes.
Dec 3
Producer CE Prices - Core Oct 0.1% very little price inflation 0.1%
Chicago PMI Nov 50.4 growth up while 49.9 last month was shrinking. 50 is no improvement in manufacturing.
Dec 5
MBA Mortgage Index 12/01 4.5% up greatly from -0.9%
ADP Employment Change Nov 118K down very bad, was 158K
Productivity-Rev. Q3 2.9% up from1.9%
Unit Labor Costs -Rev Q3 -1.9% pay dropped more from -0.1%
Factory Orders Oct 0.8% fell from 4.8% and near the point of falling off a cliff.
http://www.martincapital.com/
ISM Services Nov 54.7 slightly improved from 54.2
Crude Inventories 12/01 -2.357M down from -0.347M
Dec 6
Challenger Job Cuts Nov 34.4% up 200% from 11.6% last month.
Initial Claims 12/1 370K down from 393K but still high.
Continuing Claims 11/24 3205K down from 3287K
Dec 7
Nonfarm Payrolls Nov 146K down from 171K
Nonfarm Private Payrolls Nov 147K down from 184K
Unemployment Rate Nov 7.7% down absurdly from 7.9% with payrolls down and the perfect storm Sandy implying unemployment should be up not down.
Hourly Earnings Nov 0.2% up from 0.0%
Average Workweek Nov 34.4 constant at 34.4
Mich Consumer Sentiment Dec 74.5 plunged down from 82.7
Consumer Credit Oct $14.2B debt increased rapidly from $11.4B
Next Week
Dec 11 8:30 AM Trade Balance Oct
Dec 11 10:00 AM Wholesale Inventories Oct
Dec 12 7:00 AM MBA Mortgage Index 12/08
Dec 12 8:30 AM Export Prices ex-ag. Nov
Dec 12 8:30 AM Import Prices ex-oil Nov
Dec 12 10:30 AM Crude Inventories 12/08
Dec 12 12:30 PM FOMC Rate Decision Dec
Dec 12 2:00 PM Treasury Budget Nov
Dec 13 8:30 AM Initial Claims 12/08
Dec 13 8:30 AM Continuing Claims 12/01
Dec 13 8:30 AM Retail Sales Nov
Dec 13 8:30 AM Retail Sales ex-auto Nov
Dec 13 8:30 AM PPI Nov
Dec 13 8:30 AM Core PPI Nov
Dec 13 10:00 AM Business Inventories Oct
Dec 14 8:30 AM CPI Nov
Dec 14 8:30 AM Core CPI Nov
Dec 14 9:15 AM Industrial Production Nov
Dec 14 9:15 AM Capacity Utilization Nov
Dec 7, 2012
We would prepare for a sell-off of unprecedented magnitude that shakes the foundation of Wall Street. Raising taxes on individuals will reduce consumer spending. Raising taxes on business will reduce business investment and American jobs and thus reduce consumer spending as well. Reduced consumer spending will further reduce jobs. Consumers are already spending most of their disposable income so higher taxes translates directly into reduced consumer consumption.
http://www.martincapital.com/
But by April 15 tax revenue will be increasing because people are taking profits now before the tax increase. So the benefits of the surge in tax revenue will sharply reduce deficits because it will be exaggerated two fold in 2013 mostly because people are taking profits before 2013 ends. But that extra tax in 2013 will not be available in future years and the extreme increase in taxes next year will cause people to try to postpone taking 2013, 2014, 2015 and 2016 profits. That will make 2014 a disaster in that deficits will rise sharply in a deeper 2013-16 recession. The USA will look much like Greece if Obama does not cut spending, but if he cuts spending the recession will initially be deeper. Still it will at least come to an end sooner.
Right now there is heightened activity because investors are taking profits now because taxes will be higher next year. Not only will Fed taxes be higher but also city and state taxes will no longer be deductible for computing Federal Taxes. Cities in NY and CA will be in greater pain by 2014 than in states with lower taxes.
The bulk of the next slowdown will be felt by the Stock Market by the end of the first quarter 2013 but hope will begin to spring back as revenues top expectations. The market could take off at the moment the revenues rise sharply. So I would want to get invested before the good news is out and that could be just after the worst news is out.
So at present many are taking profits before the new taxes but it may not be advisable to re-invest right now. You can see the average daily volume is higher now showing people sell and then buy back in somewhere else so prices do not fall but volume is up. The cliff will not go away. What Obama is doing will make things progressively worse.
Obama needs to decide what to do with the new tax income next year. He will likely flush it down the sewer again by putting more people on food stamps, subsidized housing and subsidized utilities. As a communist Obama has no interest in strengthening the USA. He wants to crush the concept of private property and free competition. Under socialism when the government decides on windmills and that is all you get.
Socialism will generate no jobs and no income or growth. We will have American debt stuck on the US Government books, as interest rates grow unaffordable. Stagflation will be at least twice as bad as Jimmy Carter produced in 1978-1980. Interest rates will hurt housing but the declining dollar will help American business and foreign investors will buy US real estate like never seen since the Japanese purchasing in the late 1980’s. By 2016 Americans and especially businessmen and Wall Street will be ready to clean out our big government and union mess. Today unions have cities in the poor house and in a form of 17th century bondage. By 2016 the US Government will also have sold its soul to the unions. We will need a president like Ronald Reagan who fired the unionized Air Traffic Controllers who would have been making $180,000/yr today just like the unions in our shipping ports get today along with 11 weeks paid vacation. Obama wants to reduce inequality except if it requires unions and Federal Government workers to do a reality check.
The Flash Crash was so large that in some cases the sales were later cancelled. Rather than be greedy it would be better to offer a price after the bottom or create an uptick at a low price. That is better than under pricing and leading the ticker down. Your uptick could save a computer-orchestrated collapse.
The DJ Rails continue to contradict the DJIndustrials and there still no DOW buy signal. The DJI and DJR confirmed a sell signal together in August 2011and the DJR remains confirming that sell signal today. But evidence is that the two are now converging and it is a matter of there being another rally.
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;
As we predicted the market shows that Obama may be taking America into a profoundly deeper depression breaking 2009 lows since he was re-elected and we have little hope of a recovery with Obama in office.
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 3-month shoulder of the head and shoulder sell signal. But bulk trade is rising and October looks like a turn around beginning. http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=1m;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;
The USA VIX is flat lined. A low VIX normally precedes a sell-off. Once that starts the VIX needs to go up above 30 until bear markets normally end. Volume is so low it implies Americans are fleeing stocks again.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=
Is the Baltic Dry Index five-year trend finally showing a bottom? China probably hit bottom and has begun to bounce like a dead cat…unfortunately. And Obama stalling the American economy will compound the worldwide recession.
http://www.bloomberg.com/quote/BDIY:IND/chart
Stock market update:
http://in.finance.yahoo.com/intlindices?e=asia
http://in.finance.yahoo.com/intlindices?e=europe
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