Sept 6, 2013 Very soon the stock markets will make critical tests of whether they confirm the developing head and shoulders in market price average. The market cash flow already gave that warning on July 8. But when the stock prices give confirmation sell orders can be expected to cascade and a 20% decline could take only a day. Section C of the WSJ today shows the S&P at its critical resistance level and the DJI is in a much worse condition.

Americans seem to reject Obama’s new found war interest by a factor of two to one.  It is not good for American presidents to use the IRS and the American intelligence agencies and other government regulators to harass people.  There are even claims that some in this government use friends in campaign contributing insurance companies and other service industries to harass targeted people by raising rates, and withholding services.   And they even smeared Donald Trump and drove him out of his attempt to create a new enterprise to educate future business entrepreneurs.  Many self made millionaires have established Universities in America but Donald Trump was harassed and not allowed to educate future entrepreneurs.   And the corruption extends into university classrooms where the administration socialist mentality is being forced on students by public university professors who unprofessionally rant racist, anti-Christian, anti-white old men nonsense.  Incompetent leftists still stay in the education business but Trump has been harassed out because he is an old white man and worse yet a Republican who speaks out against government incompetence and corruption.

http://www.usatoday.com/story/news/nation/2013/09/05/professor-censured-gop-rant/2771991/

https://www.youtube.com/watch?v=20jLo200wiw

https://www.youtube.com/watch?v=im7aeBEQ5w8

 

 

Sept 5, 2013   It was common knowledge that Iraq’s Saddam Hussein had poison gas and used it to kill the Kurds.   And Obama must have also known that Saddam Hussein used poison gas in his war against Iran.  There was no doubt that Saddam Hussein used poison gas.   But Obama and Kerry both opposed the overthrow of Saddam Hussein and until recently they seemed to oppose overthrow of Bashar al-Assad.  In 2009 VP Kerry said "Syria is an essential player in bringing peace and stability to the region.”  That was what Obama told him to say anyway.  VP Kerry even met with Assad at least six times, and on one occasion, was photographed, dining together with their wives at the Naranj restaurant in central Damascus.  One has to wonder if Obama or Kerry have any conscience or scruples and just are bringing us to the brink of WWIII because President Obama drew a red line in the sand and the world ignored him and said it was silly because the world (including Obama) knew that Bashar al-Assad had already used gas while killing some of his first 100,000 citizens and now suddenly he crossed a red line?  There is a peaceful option that could get UN support and that is to ask Bashar al-Assad to destroy the remaining chemical agents and give him a chance to back down before they make Bashar al-Assad into an al Qaeda hero or leader.

http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10283045/John-Kerry-and-Bashar-al-Assad-dined-in-Damascus.html

 

The WSJ explicitly said this week that wage stagnation is Obama’s fault not the fault of American businesses as the Occupy Wall Street leftists liked to shout. It’s actually a product of  Quantitative Easing (massive FED spending to distort interest rates), businesses’ uncertainty about Obama’s new taxes, thousands of pages of new regulations, Obama health care rationing, higher business health care costs for full time employees, and higher employee-benefit costs all of which the Obama administration has caused.  That is why the Wall Street Journal says Obama's economy hits his own voters hardest, that the real median household income "has fallen by 4.4 percent since Obama’s 'economic recovery' began in June 2009." Mr. Obama was re-elected with only 51% of the vote.  The WSJ reported he won the poorest and least educated voters with 60% of the youth vote, 93% of blacks, 71% of Hispanics, and 64% of those without a high-school diploma.  Those under age 25 experienced an income decline of 9.6%. Black households saw their income tumble by 10.9%, while Hispanic households' income fell 4.5%. The incomes of workers with a high-school diploma or less fell by 8%.
 

Obama’s recovery caused the median black household income to fall by just over $4,000, and Hispanic households lost $2,000. The highest jobless rates by far are for the key components of the Obama voter bloc: blacks (12.6%), Hispanics (9.4%), those with less than a high-school diploma (11%) and teens (23.7%).  But that makes sense only if Obama voters are not motivated by being productive and working for a living; they are motivated by a quick buck, entitlements like welfare, free cell phones, food stamps, rent subsidies, plus $2000 per month per fatherless child etc.  And to think Mitt Romney got into so much trouble when he warned that very soon the voters seeking governmental entitlements would soon exceed the number of voters who studied hard, work for a living and pay the taxes.  Romney was right.  Obama got 51% of the vote and America got a socialist style declining economy where the end result is ultimately equality of poverty.  But when the rich got poor in the USSR and Eastern Europe the poor starved. 

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery." - Winston Churchill 

http://online.wsj.com/article/SB10001424127887323324904579042830303535934.html

 

Research by University of California shows that since the Obama recovery started in June 2009, the average income of the top 1% grew 11.2% in real terms through 2011 and the bottom 99% saw their incomes shrink by 0.4%.  As a result, 121% of the gains in real income during Obama's recovery have gone to the top 1%. By comparison, the top 1% captured only half the income gains during the Bush expansion, and 45% of the gains under Clinton's expansion.  So it is a big Obama fantasy that socialism helps the poor.  Winston Churchill was right when he said socialism leads to equality of misery except for the ruling class of communists who get their palaces, free dining and entertainment for communist party members.  Putin lives lavishly like a Czar in Russia.

http://news.investors.com/ibd-editorials/073013-665705-income-gap-grew-sharply-under-obama.htm

 

Sept 4, 2013   S&P has now accused Attorney General Holden and President Obama of maliciously filing the $5 Billion suit against them in retaliation for its 2001 downgrade of U.S. debt.  Everyone knew that was the situation at the time but it seemed too obvious to be newsworthy.  S&P has to fight to the death now because if the Obama Administration wins the retaliation lawsuit SandP will be bankrupted and freedom of the press and freedom of honest American companies will be lost and corruption of the Eric Holden justice department will become entrenched.  http://online.wsj.com/article/SB10001424127887324202304579053142604688438.html

 

http://www.winnipegfreepress.com/business/sp-says-that-us-government-filed-lawsuit-as-retaliation-for-downgrade-222228051.html

 

http://in.reuters.com/article/2013/09/03/mcgrawhill-sandp-lawsuit-idINL2N0GZ1H620130903

 

 

What will happen in a real war if Syria launches a multiple attack on Israeli cities and launches new longer range Russian missiles at the US destroyers each time they detect a Tomahawk missile launch?  Does the “iron dome” get confused or does the Tomahawk get confused?  Do the Israelis scramble jets and bomb Syria bringing Iran into the war?  Killing more innocent Syrians should be avoided.   It would not be good if the incompetent socialists in Norway gave the Peace Prize to the incompetent American socialist who starts WWIII.

 

Sept 3, 2013   It appears that President Obama is being taunted and possibly being blindly led into a naval catastrophe that could be worse than Pearl Harbor.  Obama has created a NSA security system to spy on Americans which the Snowden experience shows is dangerously flawed and both Russia and China may have now been able to turn our satellite iron dome system into their system.  For over a year Russia has been selling what they claim are satellite and ground based missile systems to mid east countries and claiming Russia understands how our systems work and they claim even our stealth fighters can be shot down at their pleasure.   If they have learned to break into the NSA system as Snowden did then they may have new confidence that they can defeat our defense systems.  That would explain why Syria and Russia almost appear to be taunting Obama to attack Syria.  Unless the USA has a way to suppress the new Russian system and keep our system functional we and Israel may now be vulnerable.  Syria might now have the capability to sink our Mediterranean and Red Sea destroyers and kill thousands of Israelis on the ground.   This situation only adds to economic instability and we do not want a WWIII to get us out of the Obama depression.

 

Snowden is a socialist poster child for America’s newly exposed incompetence. Snowden feels at home in Russia and China.  The NSA that Obama has spying on Americans sounds like the dream system for China, North Korea, Syria, and Russia to tap into and perhaps even take control of at our most vulnerable moment.  What is most frightening is the appearance now that Syria and Russia are actually taunting Obama to put up or shut up.  They seem to know something we don’t know and the free world allies are slowly backing away from supporting Obama.

http://thediplomat.com/flashpoints-blog/2012/11/22/sorry-folks-israels-iron-dome-wont-work-in-asia/

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/international/31-Aug-2013/russia-to-deploy-star-wars-missile-system-in-2017

 

 

World Economies

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

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

 

Canadian employment rose three times faster than economists forecast on gains primarily in part-time work and service industries.
 

German factory orders in July, adjusted for seasonal swings and inflation, dropped 2.7% from June, the Ministry in Berlin said Thursday. Economists had forecast a July drop of only 1 %.

 

German bonds dropped, sending German 10-year yields to the highest in 17 months as QE is phased out.

 

Asian stocks rose for a sixth day, the longest streak of gains in nine months, as shipping lines surged and the Federal Reserve said it saw a moderate recovery in the world’s biggest economy.  The Baltic Dry Index rose 4% but is it real?

 

The US trade gap surprisingly widened last month. Phasing out QE will dry up some of the money in the USA that was previously spent on imports.  That plus shale oil and gas will reduce the income of emerging countries and reduce the USA trade gap.

 

Dubai’s benchmark index tumbled Tuesday to the lowest point in seven weeks, erasing an earlier gain, after the report of a missile launch in the Mediterranean.

 

The Secretariat for Economic Affairs in Bern said the Swiss gross domestic product rose 0.5 percent in the second quarter down slightly from the March report when it expanded by 0.6 percent.

 

China’s Premier Li Keqiang’s took steps to cut the state’s role in the economy forcing investors to reconsider bailout bets as another $1.3 billion of bonds in businesses including electric car batteries, hydropower and biofuels mature by the end of the year and $7.1 billion in 2014. His predecessor Wen Jiabao turned China into the world’s biggest maker of solar panels through spending including $47.5 billion of credit lines that crippled the industry with overcapacity.  China’s LDK Solar just defaulted while Suntech Power Holdings Co.’s attempts to renegotiate obligations prompting investors to gird for losses as $8.4 billion in renewable energy bonds that come due in 2014.   Suntech was once the world’s biggest solar panel maker.   The 2014 securities of LDK slid down 74.4% in face value. That compares with the 70% loss of Bonn-based Solarworld.   . 

 

According to Nomura Holdings Inc., Asian emerging markets suffered a crisis last month when investors pulled out billions of dollars on concern the U.S. Federal Reserve will start cutting back USA QE Treasury bond purchases.   The crisis is not over until the phase out of QE is over.

 

Japan’s stock market appears to have topped and begun a new decline.  It has declined since 1990 when it began Quantitative Easing.  Obama is the first American to use QE to suppress the interest rates on national debt to allow America to take on debt until the economy collapses when as Greenspan predicted the market will force up interest rates in spite of QE.

http://finance.yahoo.com/q/bc?s=%5EN225&t=1y&l=on&z=l&q=l&c=

 

 The German market has begun to form the second shoulder of the Head and Shoulder sell signal after failing to reach its last high.  It also failed its upper resistance level reached previously in 2000 and 2007.

http://in.finance.yahoo.com/q/bc?s=%5EGDAXI

 

 The French market has continued to decline since year 2000.  At it most recent highs it is still is still down 50% from 2008 and down 60% from 2000.

http://in.finance.yahoo.com/echarts?s=%5EFCHI#symbol=^fchi;range=my;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/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=

 

  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/q/bc?s=%5ENYA&t=my&l=on&z=l&q=l&c=

 

 

American Economy

Economists are expecting to see the 10-year Treasury yield go over 3 percent before September is over. That in turn would push mortgage rates higher.  Interest rates have been rising at a rate of 1% every three months.

 

Sep 3

 ISM Index Aug 55.7 up slightly from 55.4 – This was falsely reported by MSNBC as a sharp unexpected increase.

Construction Spending Jul 0.6% up from 0.0% Currently MSNBC employees seem negative on housing after the big funds sold and took profits and are now waiting for a lower entry point.

 

Sep 4

MBA Mortgage Index 08/31 +1.3% improved from -2.5% +++

Trade Balance Jul -39.1 got worse from -$34.2B --

 

Sep 05

Challenger Job Cuts Aug 56.5% up from 2.3% --

ADP Employment Change Aug 176K down sharply from 200K----

Initial Claims 08/31 323K down from 331K+++

Continuing Claims 08/24 2951K down from 2989K+

Productivity-Rev. Q2 2.3% up from 0.9%  manipulated, not statistically believable

Unit Labor Costs Q2 0.0% down from 1.4% manipulated, not statistically believable

Factory Orders Jul -2.4% down sharply 1.5% ----

ISM Services Aug 58.6 improved from 56.0 ++++

Natural Gas Inventories 08/31 58 bcf down from 67 bcf –

Crude Inventories 08/31 -1.836M down sharply from 2.986M –

 

Sep 06

Nonfarm Payrolls Aug 169K is a strong indication of gross manipulation from162K by shifting the numbers from last month to this month. The other way of looking at it is that they lied and reported a full 100,000 more people got jobs in July than was true. This would all be government jobs anyway even if true because the Nonfarm Private Payrolls declined. But it makes no sense that there was government hiring of that magnitude in August. Clearly the Obama administration is fabricating economic data again. Obama’s administration is ignorant corrupt and no longer credible enough to lead even from behind.

Nonfarm Private Payrolls Aug 152K declined 161K ---

Unemployment Rate Aug 7.3% declined from 7.4%  The true rate is about double this number.  It is the most falsified (intentionally understated).

Hourly Earnings Aug 0.2% wages rising -0.1% +

Average Workweek Aug 34.5 up from 34.4++

 

The Markets Sept 6, 2013

The American banking system is being dismantled by Obama.  At one time Japan had five of the 10 largest world banks and then America recovered.   Now the Obama administration is  fragmenting the American banking system that will make America less competitive again.  America is not likely to recover while Obama stays in office.  He and Eric Holder should resign or be impeached for the good of the country.  They are divisive and are making America the object of world hatred and ridicule.

 

Syria, the phase out of QE, and the debt ceiling are three possible destabilizing influences in the traditional stock market breakdown month of September.  We think the world economy has stagnated and the stock markets will be range limited until Obama is replaced just as it was until Jimmy Carter was replaced by Ronald Regan.  Carter believed the world would run out of hydrocarbon fuels by 2020 so he said it was futile to increase supplies.  Regan believed in supply side economics and oil prices dropped from $80/barrel to $34 within a year.  Under Obama it went from $54 back up to $110/barrel.  Obama believes we will never run out of oil but that burning hydrocarbons will cause global warming.  Regan said the glacial cycle of cooling and then warming is normal and has almost nothing to do with humans.  Edward Teller and intelligent scientists and engineers at the time agreed with Regan.   The Teller petition still can be found on the web.

 

We got our market cash flow sell signal July 8. About half the time it happens near the start of the stock market’s highest peak as it did this time so it was possible to get out before the plunge.

 

 World trade has been dead for four years (flat lined). Look at the last 5 years! It still looks close to zero growth.  But it is up a little this week.  Is it real?

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

 

The VIX indicates extreme complacency with the worst 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