July 26: Six out of ten American doctors say they will retire when the Unaffordable Care Act takes effect. The percentage of American students training in American university medical schools has dropped to 10%. However medical students from India, Russia, and Bangladesh do not mind it if a government bureaucrat in Washington making six figures dictates how they must treat patients and limits how much they can earn. Currently many hospitals are opting out and shutting down in large cities especially Christian hospitals. Charity is being replaced everywhere by entitlements on the low end and clinics will replace individual doctors on the high end. In Europe there is nothing left in the middle. You have entitlements in European hospitals and you pay for service in clinics. A typical American tourist in Finland will first seek a clinic or go to the hospital, say they are an American tourist and with a valid credit card and they get sent upstairs to get the help they need. If in an accident in France and they tell the police they are American the police normally automatically send Americans to the clinics. Under socialism the middle class slowly disappears. In France doctors get paid about as much as an average engineer which is half what they earn in America. There French doctors belong to a union and must disclose in the local newspapers a week before they plan to go on strike.

In the USSR in the early 1990’s we knew a head doctor in a small city who in the best of times made less than $40 per month and had cars but no gasoline to use them.  They were “privileged” and were told when a truck of raw vegetables would be dumped in a local warehouse in the middle of the night so the “privileged” could get some fresh turnips and other vegetables.  Doctors and engineers were trying to get out of the USSR and were willing to do any kind of work if they could.   Before Obama, America attracted the hardest working people from around the world and they initially waited at tables and cleaned houses and told us how bad socialism is.  Now American welfare is what attracts the most immigrants and they tell us how hard it is to find work here and refuse to work for the minimum wage when welfare or unemployment are options.  Today many have children just for the sake of the extra welfare they can get, and their children learn disrespect of teachers and authority figures.  The most notorious is “Octomom” and after already having six children on welfare, California paid for her fertility treatments so she could have eight more on welfare.  Search on Octomom to see just how irresponsible the American welfare system has become and why illegal immigrants are flocking to our shores.

http://en.wikipedia.org/wiki/Nadya_Suleman

 

The U.S. filed criminal charges Thursday against SAC Capital in the biggest blow yet to one of the biggest stock manipulation and insider trading empires. 

 

July 25:  Investors who are cashing out of bonds are not plunging into stocks now as the manipulators hoped and said they would.   The WSJ reported Thursday that former bond holders are buying money market mutual funds like they did in the late 1970’s when the stock market plummeted, gold soared, and money market rates topped 16% annual interest.  This means bond holders are not foolish enough to jump into the over extended stock market built on what amounts to investment cannibalism.  Investment cannibalism (mergers and acquisitions, M&A) occurs when the stock market (i.e. general economy) is not growing but the DJI and other easily manipulated stock indexes continue to rise because those carefully selected stocks take market share from the market as a whole through mergers and acquisitions that leave the economy and total stock market income stagnant and garner multiples that imply prosperity.  The Hindenburg Omen which we described June 11, 26, and July 17, reflects this polarization of the stock market when the select DJI and other index stocks distort the peaking market with M&A and resulting market share concentration.

http://online.wsj.com/article/SB10001424127887323971204578625900935618178.html

 

And as far as Obama/Bernanke and QE3 are concerned their methods had been implemented by Japan since 1990 and have failed miserably.  QE3 is economic addiction to debt by the deliberate government manipulation of the treasury markets to drop national interest rates to allow higher lethal doses of debt leading as it did with Greece and then to a lethal overdose of debt that ultimately leads to bankruptcy such as Cyprus and Detroit are experiencing now.  Japan’s stock market is lower today in American dollars than it was in 1990.

 

The market manipulators pick and chose stocks to manipulate, stocks like Netflix, HP, Microsoft, and Apple which have had their day and continue to be the favorites of a few and can catch fire when pumped, and then get dumped again.  The pumping and dumping eventually shows up in the market polarization that then gives the classic Hindenburg Omen.  However, that Omen is a caution that manipulation is going on it is not the market peak itself.  It occurred in the run-up in August 2010 after the stock market bottomed in 2009.  So in that case it said it was time to buy because the hedge funds were loading up on the index stocks not to intentionally manipulate the index but because the stocks in the index are selected to be the safest and most likely to advance.  And it is because they are among the best that they outperform the stock market.  And because they outperform they are quoted by the market manipulators to pretend the market can still rise even after the average stock and the economy have stagnated.  So now you see the whole cycle.   

 

The last market bottom was in March 2009.  The market blowout could be the end to this business cycle with the 4.5 year advance.  The previous advance was 5.5 years but the average advance is less than 4 years.  The average decline at the end of a business cycle is about a year and is -25% to -60%.  It is also possible that if significant real economic improvement materializes now there could be a smaller 20%-30%.   The last collapse in 2008 was not due to high FED rates but rather it was high Bush Administration War debt and monetized US real estate fraud with the creation of Liar Loan derivatives (tranches) that were marketed world-wide.  This bear market collapse may be attributed to welfare- food stamp -student loan-and other entitlement fraud, plus the collapse of in-debt cities and states due to a collapse in the municipal bond market that bond holders are now just beginning to abandon.

 

July 23: A sharp crack appeared in the edifice of stock market manipulation yesterday.  Stock market manipulators suppressed the reporting of the Dow Jones Transportation Average which plunged 0.95% while the other 30 Dow Stocks were still supported.  Transportation revenue has been going nowhere since the Obama Depression began.  The advances in the markets have been based on the few companies in the averages cannibalizing the companies that are not followed.  The Dow Jones Transportation average has begun to straddle and cross below its 50 day moving average support line.

http://finance.yahoo.com/q/ta?s=%5EDJT&t=3m&l=on&z=m&q=l&p=e50&a=m26-12-9&c=

 

Prior to 1963 the vast majority of financial aid went to reward qualified students who had worked hard and demonstrated a competence and an ability to complete college.  Scholarships and grants were then a reward to motivate students to study harder.  Today under the advance of socialist professors and unions in our educational system, education does not reward students who work hard.  The healthy two parent families that pay most of the USA taxes and raise the most competent children are penalized since their children get no recognition for their hard work.   The priorities of universities however are different from those of the Obama socialized educational system where teachers and students are rewarded on Karl Marx’s basis of need not competency.  Federal Pell grants, which must be paid back specifically, target students who are not committed and they ignore better-qualified students.  Fewer than 50% of these students typically finish college.  The money is therefore used for half these students to brag and party and the problem of dropping out due to pregnancy is increasing.  Wedlock and welfare affects a significant portion of these students.  Since those grants are government backed loans the universities are willing to loan more on the basis of need rather than likelihood of a successful completion because the taxpayer is hammered not the college. This year, 63 percent of applying families earning less than $35,000 a year received an average of $6,170 in such grants.    Only 19 percent went to middle income families who normally finish college and they each received a smaller amount.  College scholarships, though, were given based on anticipated student successful completion rate because they invest in the students who are likely to complete college and pay back more in donations from their successful careers.  Thirty-five percent of low-income families got an average of $7,237 in scholarships, while 36 percent of better prepared students got an average of $10,213 in scholarships. Sixty nine percent of the scholarships for investment in these students come from the schools themselves rather than nonprofit or public sources.  This confirms the results of a recent study by the New America Foundation that found that schools are increasingly using aid to lure more intellectually qualified students rather than targeting those most in need as pure socialism requires.  So better prepared and more committed students and parents are still getting a helping hand because they are expected to still pay back everything plus more in future donations to their alma mater.  That makes the socialists who have infiltrated the American educational system very unhappy.

 

July 23: Yesterday's sell off in Yahoo (YHOO) has smart money saying that now is the time to sell holdings. Dan Loeb decided to sell two-thirds of his holdings affirming the smart money is taking profits now while they still can. Now no one will notice when he sells the rest and the pundits pretend it is only YHOO that is maxed out in price.

 

In anticipation of weak sales, US Treasuries fell in advance of the coming sale of $35 billion of two- year notes. A growing number of economists surveyed by Bloomberg speculate the Federal Reserve will trim the Fed’s monthly bond buying to $65 billion from the current pace of $85 billion by this September.

 

July 22: The WSJ reported that the Group of 20 nations agreed to place growth before austerity amid mounting fears that the global recovery remains perilously weak, unstable, and uneven. The long-anticipated acceleration in the U.S. economy was just more disappointing economic and corporate-earnings reports that have dashed the last hopes that the U.S. was at last entering a phase of solid, self-sustaining growth. Economists are predicting no rebound yet but continued unemployment, higher prices and higher interest rates putting severe cost pressure on the corporations that became highly leveraged when loans were cheap. Many on Squawk now predict a sharp drop in stock and bond prices as high debt is shed. The consensus this morning is it will be after Labor Day but we have already gotten a sell signal July 8 and that normally gives no more than a single month or less warning.

 

There also are signs that consumers—whose spending has helped prop up the economy for much of the past year—are beginning to tighten their belts. Retail sales grew a paltry 0.4% in June, Commerce Department figures showed, and would have been even worse if higher gasoline prices hadn't forced drivers to spend more at the pump.

 

The Wall Street Journal reported Holder-Obama administration’s U.S. Marshals Service has lost track of at least 2,000 encrypted two-way radios worth millions of dollars and an extreme security risk. The problem was first reported in 2011 and has continued ever since. How many thefts and for how long they have been going on have not even been determined yet. The WSJ quoted a 2011 presentation by the agency's Office of Strategic Technology saying, "It is apparent that negligence and incompetence has resulted in a grievous mismanagement of millions of dollars of USMS property," This follows the Holder-Obama administration discovered harassing political dissidents with IRS delays and audits and taping the phones and computers of journalists and apparently every American citizen. That is because the Holder-Obama administration does not want to single out terrorists because only Christians and White Anglo Saxon Protestants are responsible for the American Constitution, American freedom from the tyranny of the socialist mobs. It is very difficult for the lazy and incompetent to tear down American rights to the fruits of American citizen’s labor and intellect. It has denied the Holder-Obama desire for equality: i.e. equality of poverty under socialism.

 

 Monday, Howard Dean said on Squawk Box that there is nothing wrong with state and city worker unions forcing Republicans and Independents to pay union dues used in union contributions to buy the votes of corrupt politicians who then give the corrupt unions the pay, vacations, and benefits that are now bankrupting our cities and states.

Howard Dean said that was OK because it is no different than corrupt crony capitalism where the corrupt government administrators give contracts and bailouts to corrupt ex-politicians administrators in private companies that then funnel political contributions back to the campaigns of the corrupt politicians. He says if socialist crony business is good so is crony socialist labor.  That is how corrupt the national head of an American political party has become.  The corrupt believe one evil counterbalances the other.

 

World Economies

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

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

 

Emerging stocks fall as commodities drop.

 

Emerging-market stocks dropped for a second day and currencies weakened as commodities declined and investors weighed prospects for an end to Federal Reserve stimulus. India’s benchmark index slid to a two-week low.

Bloomberg headline: Jobless Parisians Mean Fewer Peugeots in Slumping France

 

 The German market is close to its upper resistance level reached previously in 2000 and 2007.

http://in.finance.yahoo.com/echarts?s=%5EGDAXI#symbol=^gdaxi;range=1y;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 The French market indicates stagnation since year 2000. It still is down 50% from 2008.

http://in.finance.yahoo.com/echarts?s=%5EFCHI#symbol=^fchi;range=1y;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 The Swiss market indicates stagnation since 2007. http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#symbol=^ssmi;range=my;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 

 The NYSE is similar to the British and Swiss and indicates stagnation since 2007 given in excess of 15% inflation since then and no similar market advance. The NYSE index is too big to manipulate legally. It has 300 stocks just starting with the letter A.

http://finance.yahoo.com/echarts?s=%

 

5ENYA+Interactive#symbol=^nya;range=my;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 American Economy

 Jul 22

 Existing Home Sales June plummeted 2% to 5.08M from 5.18M----

 Jul 23

 FHFA Housing Price Index May 0.7% unch 0.7% +

Jul 24

MBA Mortgage Index 07/20 -1.2% down again after -2.6% ---

New Home Sales Jun 497K up from 476K competing with current abandoned housing ---

Crude Inventories 07/20 -2.825M down again -6.902M  -

Initial Jobless claims rose by 2% to 343,000 last week.

Continuing Claims 07/13 2997K down from 3114K

Durable Orders Jun 4.2% down from 5.2% ---

Durable Goods -ex transportation Jun 0.0% down from 1.0% --

Natural Gas Inventories 07/20 41 bcf down from 58 bcf  -

 

The Markets July 26, 2013

The markets now teeter at the highs.

 

The market highs can no longer be sustained and the smart money is quietly rotating out of the market on higher volume than is going into the market.  We see increasing outflow.  When everyone runs for the exit as we estimate will occur in the next few weeks it will not be a pretty sight.  The real question will be if any of the funds break the dollar or if interest rates abruptly rise.  Gold and silver prices are rising again.

 

 We estimate more than 2% of investor cash has flowed out of the market since May and that the highs for this year will all have been established by

 

We got our market cash flow sell signal July 8. About half the time it happens near the start of the stock market’s last-gasp rally so it is possible to get out before the plunge.  This is a blog and presents publicly reported information, observations and opinions only and no advice.

 

World trade has been dead for four years (flat lined). Look at the last 5 years! It still looks close to zero growth.

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

 Earnings have stagnated and do not support current prices.

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

 The VIX indicates the worst is about to come. The VIX would normally top out above 30 or even 70 before the bear market ends.

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

 

 World market updates:

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

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