When Bob Woodward recently called a senior White House aide to say he had written a piece for the weekend paper that would question President Obama's version of how sequestration came about, and the veteran journalist said the aide "yelled at me for about a half-hour." Then he got a follow-up email, he says. "It was said very clearly, 'You will regret doing this,' " Woodward told CNN. "I mean, it makes me very uncomfortable to have the White House telling reporters, you're going to regret doing something that you believe in," Woodward said. Bob Woodward is correct that President Obama's version of how sequestration came about is not true. Below you can see that under President Obama’s orders Defense Secretary Leon E. Panetta cut the Pentagon budget by more than $450 billion and President Obama is taking the $1 trillion cuts from withdrawal from Afghanistan and the Gulf and putting it into entitlements and new Solyndra type jobs programs. There will be no capacity to take on Iran if necessary. President Obama is taking President Bush’s war deficit and converting it entirely into an additional entitlements deficit. That is why President Obama wants the sequestration and free hand to do whatever he wants while retaining the ability to blame his failing economy on someone else… even the reporters of his bad news.

Here is some of the background on sequestration.  Speaking from Brussels October 05, 2011, Panetta warmed America’s allies in NATO that serious budget cuts coming to the Pentagon could cause the United States to be much less likely to pick up the bill of NATO operations if the other member nations can’t come through. “As for the United States, many might assume that the United States defense budget is so large it can absorb and cover alliance shortcomings – but make no mistake about it, we are facing dramatic cuts with real implications for alliance capability,” Panetta said earlier October 05, 2011.  In September of 2011, US President Barack Obama delivered a speech from the White House in which he told reporters, “We have to cut what we can’t afford to make way for what really matters.” Among those on the cutting block, said Obama, are the overinflated military budget. He is hoping that proposed cuts and a withdrawal in Afghanistan could leave the government with around $1 trillion to use towards his highly touted (but still un-passed) American Jobs Act.

http://rt.com/usa/panetta-nato-us-united-165/ 

Under President Obama’s orders to cut the Pentagon budget by more than $450 billion over the next decade, Defense Secretary Leon E. Panetta is considered reductions in spending categories once thought sacrosanct, especially in medical and retirement benefits, as well as further shrinking the number of troops and reducing new weapons purchases.  Apart from the prospect of the automatic cuts, some Republicans have already criticized the administration’s planned reductions as dangerously severe. Some Tea Party members and liberals, by contrast, have argued that the administration’s reductions are too modest. 

The Obama administration’s more than $450 billion in cuts would reduce the military budget by roughly 7 percent over the next 10 years, even beyond the spending reductions that would come from the withdrawals from Iraq and Afghanistan, according to government budget projections. 

http://www.nytimes.com/2011/11/07/world/panetta-weighs-military-cuts-once-thought-out-of-bounds.html?pagewanted=all 

"Make no mistake, the savings we are proposing will impact all 50 states and many districts across America," Defense Secretary Leon Panetta told a news conference at the Pentagon. "This will be a test of whether reducing the deficit is about talk or action."

http://usnews.nbcnews.com/_news/2012/01/26/10244240-panetta-military-cuts-to-hit-all-50-states?lite

Shortly after the White House denied the reports that they threatened famed Watergate journalist Bob Woodward, former Clinton aide, Lanny Davis joined Woodward to claim he was threatened by the Obama White House.  Davis said that a "senior Obama White House official" once called his editor at the Times and said that if the paper continued to run his columns, "his reporters would lose their credentials." White House Press Secretary Jay Carney said Thursday that the White House stands by what they said to Woodward.  Obama is now using Nixon's tactics to quell scrutany of the American free press.  Josef Stalin said “Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas.” 

http://www.foxnews.com/politics/2013/02/28/white-house-denies-staffer-threatened-watergate-journalist-woodward/ 

Former White House Chief of Staff Jacob J. Lew who has no education in economics or any business experience was confirmed to become President Obama’s U.S. Treasury secretary.

Barack Obama’s administration Thursday urged the U.S. Supreme Court against the California Proposition 8 referendum result.   Obama wishes to reinstate same- sex marriage in California, taking a stand in a historic case that could lead to gay marriages in every state. The justices will hear arguments on March 26 on California’s Proposition 8, the 2008 ballot initiative that halted gay marriage after the lower courts allowed it for five months. Today’s filing means Obama’s top courtroom lawyer, will probably take part in that session, making the case for gay marriage first in the nation’s most-populous state and then throughout the nation.

J.C. Penney Co. Chief Executive Officer Ron Johnson (an ex-Apple officer), is feeling the heat after his turnaround plan resulted in the department-store company’s lowest annual sales in more than two decades.  Its net loss in the latest quarter widened to $2.51 a share, from 41 cents, a year earlier.  The aura of Steve Jobs allowed many below average executives to reflect competence that was not their own.  While Apple may now be just another Microsoft or HP there are still possibilities ahead as it gradually loses to the competition.

Kohl's department store chain reported lower fourth-quarter profit and issued a full-year earnings forecast saying the Obama tax increases create a "significant headwind" for the economic recovery. 

When people ask how many Google employees telecommute, Chief Financial Officer Patrick Pichette told an Australian tech audience last week, he replies, "As few as possible."  Google wants workers to talk informally over meals or coffee. "There is something magical about spending the time together, about noodling on ideas, about asking at the computer, 'What do you think of this?' " 

Google and Facebook allow employees to work from home, relying on the judgment of employees and their managers, according to sources at both companies, which declined to comment on Yahoo's policies. But both companies have said they see a benefit in the creative sparks that come with random meetings in corridors or cafeterias.

Australia expects to spend $13.21 billion if it takes out its full order of 100 F-35s Joint Strike Fighters, according to a report last September by the government’s audit office, and has already approved a A$2.36 billion ($2.4 billion) spend on the first phases of the project.  The aircraft has one engine but three aircraft missions.  One version is a vertical takeoff configuration that is also supersonic.  Lockheed makes the aircraft and United Technologies makes the engines.  GE and Boeing versions failed the competition and have since lobbied for suspension of production. 

Recently Bloomberg has joined Jim Cramer trying to hammer down the price of gold so Soros can buy in at a lower price.   Gold prices touched a seven-month low of $1,554.49 an ounce minutes after the Federal Reserve's last meeting suggested some officials thought the bank might have to slow or stop buying bonds even before a pick-up in hiring.  But then the Bernanke said that was not the FED position.  Goldman Sacks has the reputation of taking positions opposite to which it recommends others take.  They even bet against their customers and profited from the knowledge of liar loans when all other banks lost money.  It appears Goldman may be shorting gold equities and that on top of India taxing gold last year could have slowed the rise of gold.  The best time to sell gold was mid September before the elections. 

http://futures.tradingcharts.com/chart/DG/M?anticache=1362095456 

On Monday the stock market suffered its worst loss since Election Day reinforcing expectations that the Standard & Poor's 500-stock index is topping out near the 1500 level, just as it did at bull market peaks in 2000 and 2007 and just as we are seeing in all the Western Economies.  Then the market made another run up on declining volume.  Then it failed to breakout on Thursday as volume returned.  

World Economies

http://www.bloomberg.com/news/

http://www.foxbusiness.com/index.html 

Vale SA, the world’s largest iron- ore producer, posted a record quarterly loss of $2.65 billion after writing down the value of some of its assets. 

China Life Insurance Co., the nation’s largest insurer, said profit for the first nine months of 2012 was estimated down 56 percent from the same period a year earlier. 
 

German adjusted jobless rate held at 6.9 percent this month after the January rate was revised up from an initially reported 6.8 percent amid signs that Europe’s biggest economy is returning to growth after a contraction at the end of last year.  But Germany still shows stagnation since 2007.  It has still failed to break out from the 2007 high even with the world being flooded with stimulation credit.

http://in.finance.yahoo.com/q/ta?s=%5EGDAXI&t=my&l=on&z=l&q=l&p=&a=&c= 

The German market continues to hit resistance.

http://in.finance.yahoo.com/q/ta?s=%5EGDAXI&t=6m&l=on&z=l&q=l&p=&a=&c= 

The Greek market indicates stagnation since year 2000.

http://in.finance.yahoo.com/q/bc?s=AEX.AS&t=my&l=on&z=l&q=l&c= 

The French market indicates stagnation since year 2000.

http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my 

The British market indicates peaking in 2000 and stagnation since 2007. 

 http://in.finance.yahoo.com/q/bc?s=%5EFTSE&t=my 

 The Swiss market indicates stagnation since 2007.  But once again look at the spike up in stock prices with Bernanke’s $85,000,000,000/month gift from America to the stock and bond markets of the world as more people enter poverty, go hungry and lose their jobs under Socialism’s equality of poverty.

 http://in.finance.yahoo.com/q/bc?s=%5ESSMI&t=my

  The NYSE is similar to the British and Swiss and indicates stagnation since 2007 but no spike up. http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 

 American Economy

The recently reported housing boom and increases in sales at Home Depot and Lowes can be explained by the reconstruction after the devasting huricanes.  The failure of sales in existing housing stock is consistent with that analysis because the huricane was a local effect.  A 10% or more equities price decline is now possible.  The stock market is beginning to re-engage with the economy and is unstable because the FED created a balance sheet bloated approaching a trillion dollars putting US and world stocks in the stratosphere. 

The DJI failed to break out.  If it fails to break out in the next few days it will be sign the bull market is over.

http://finance.yahoo.com/q/ta?s=%5EDJI+Basic+Tech.+Analysis&t=my

 

The DJA in 2013 is also now at a record high. Look at the spike up this year as $85,000,000,000 flows into markets each month. 

http://finance.yahoo.com/q/ta?s=%5EDJA&t=my&l=on&z=l&q=l&p=&a=&c=

 

This week

http://biz.yahoo.com/c/e.html

Feb 26

Case-Shiller 20-city Index Dec 6.8% up from 5.5%   Good

FHFA Housing Price Index Dec 0.6% Flat at 0.6%

New Home Sales Jan 437K mostly Multi family up from 369K   likely huricane Sandy.

Consumer Confidence Feb 69.0 up sharply from 58.6    Good

MBA Mortgage Index 02/23 -3.8% Mortgages down again from -1.7%  Bad

Feb 27

MBA Mortgage Index 02/23 -3.8% down sharply -1.7%     Bad

Durable Orders Jan -5.2% plummeted from 4.3%     Very Bad

Durable Goods -ex transportation Jan 1.9% up slightly 1.3%

Pending Home Sales Jan 4.5% up from -4.3%   likely huricane Sandy.

Crude Inventories 02/23 1.130M down from 4.143M  Bad

Feb 28

Initial Claims 02/23 344K down slightly from 362K

Continuing Claims 02/16 3074K up from 3148K

GDP - Second Estimate Q4 0.1% up from -0.1% but down from the election claim of +0.5%

GDP Deflator - Second Estimate Q4 0.9% up from 0.6%.  This implies negative GDP growth and 0.9% inflation  

Chicago PMI Feb 56.8 up from 55.6  

Natural Gas Inventories 02/23 -171 bcf declined from -127 bcf

The U.S. economy expanded at an annualized rate of 0.1% in the fourth quarter continuing the slowest rate in two years and well below the 0.5+% growth claimed occurring during the election campaign when it was claimed the stimulus had worked.

Existing Home Sales are flat.

http://www.martincapital.com/index.php?page=graph&view=existing 

Mar 1

Personal Income Jan -3.6% plummeted from last month 2.6% With Obama’s higher taxes on the middle class
Personal Spending Jan 0.2% was flat at 0.2%
PCE Prices – Core Production costs Jan 0.1% up slightly from 0.0%  
Michigan Sentiment - Final Feb 77.6 up slightly from 76.3  
ISM Index Feb 54.2 up slightly from 53.1  
Construction Spending Jan -2.1% down significantly from 0.9% signaling the hurricane boost is petering out.

Markets

Bernanke is pushing on a string.  The FED has run out of leverage at close to 0% short term interest rates. 

http://www.martincapital.com/index.php?page=graph&view=interest_rates_long

 The VIX was worse (lower) recently than the low where it was in 2007 before the last bubble burst.  This week it began to rise, then fell again and may now continue to rise.  Once that starts the VIX needs to go up above 30 before a bear markets normally ends and it is time to buy.  Low Vix means excessive exuberance.  A 10% equities decline is now possible and it could last about another month on average before a breather.

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

World market updates:

http://in.finance.yahoo.com/intlindices?e=asia

http://in.finance.yahoo.com/intlindices?e=europe