December 20, 2013 The Obama administration made its annual false claim again that the U.S. economy grew at its fastest pace in almost two years in the third quarter while business spending was stronger than previously estimated. But half the growth was inflation. Correcting for inflation the 4.1% reported Obama growth is really 1.1%. But that is much better that Obama’s normal zero growth when you remove inflation. In fact Americans have lost 7% in real income since Obama took office. Every bubble America has had emerged when the market bubble had built up so much potential energy for damage with the slightest perturbation.

It would seem we have reached that moment with QE3 gently being slowed down with several trillions of dollars of liquidity having already inflated the world and having allowed all the economies of the world to devalue the potential of their currencies without showing devaluation because their devaluations are hidden by the QE devaluation of the base currency, the dollar. That hidden world devaluation is the potential energy of the coming collapse of all currencies at once. You see the American QE3 is just the tip of the iceberg. America has kept the interest rates of all world economies low so that all the debt we and the world have taken on is potentially in default the moment the true risk is exposed and the first rapid interest rate rise creates a world panic. Suddenly all those companies that have distributed their cash as dividends or that bought back their stock will wish they hadn’t and the stock market which Icahn and others have inflated by getting companies to liquidate their reserves will collapse and with it profit margins then income and then sales as the consumer staggers with unemployment.
   Hedge funds have been fraudulently manufacturing huge profits for many years simply by buying the shares of corporations they already own. Think about it, They all get together and buy up the majority of a stock so they can manipulate the prices with the extremely low volume of public trading. If you have such a Ponzi type "something for nothing" hedge fund, you get great ratings for your stock run-up and can retire as rich as Obama will with all his side deals. But for the average stockholder... your retirement income is taken by those corrupt funds and they leave you with nothing for your retirement when their thinly traded funds go bust.

Those are some of the components of our current bubble. It is the corrupted government institutions controlling huge quantities of money and liquidity in the world and essentially no public trade volume controlling equity prices. It has created an unstable situation because it has not been reflected in the pricing structures, and the risk assessments. It has distorted the markets. It sits there ready to explode because in is potential destructive inflation and over expansion risk waiting to explode.

The following site uses cartoons to show the abject stupidity of the ideas of socialism. Socialism was the first type of government employed by the barbarians the likes of Ghengus Kahn and some of its thoughts underlie all big governments and welfare systems. It is also not very well know that all of the Arab oil rich countries are socialist governments completely dependent on foreigners to run everything. Saudi Arabian workers are primarily Indian for the low-level jobs and Western European for the high level jobs. The reason for the terrorism is the ignorance of their people who are forced to memorize certain religious books and have no skills or use in life other than for suicide attacks.  It is a sad socialist system where women and children are abused.
http://www.pinterest.com/dixondiaz/libtards/

December 19 Indian diplomat Devyani Khobragade apparently thought Obama gave her immunity allowing her to go on welfare to steal from the American poor.

Erskine Bowles and Judd Gregg said Thursday morning that the standard of living in the USA would continue to decline as long as Obama’s deficit continues. That we are redistributing wealth is certainly true but it is redistributed to the graveyard of the American economy. Obama administration ridiculous manipulation of economic data this time caused housing starts to spike up the month after the home building season ended. The Obama administration economic index manipulators remain clueless.
The FED reduced QE from $1 Trillion to $880 Billion a year. Inflation is caused by interest payments on debt. QE increases debt but manipulates the interest rates lower so that inflation does not occur until QE declines and interest rates on debt increase. The ten year rate already jumped 0.3% up to 2.9% the moment the tiny taper was announced. Japan has had Obama type economic stagnation since Japan started QE in 1990.
December 17 Obama’s annual deficit is now running at $1.2 Trillion per year. A federal judge ruled that Obama’s National Security Agency’s program of collecting private citizen and news reporter telephone-call data is probably illegal. The lawsuit claiming it violates the U.S. Constitution will now go forward. Obama spying on Tea Party members and bugging Mitt Romney fundraisers could have been used to harass and sabotage political opponents. Obama agents bugged Candidate Mitt Romney’s political fund raisers to get the clip where Mitt Romney is shown telling the truth that almost half of Americans now are collecting more from the government than giving to those in need. Of course Obama lied and said Romney wanted to cut the Social Security of the workers who funded their own Social Security. Obama also lied and said his opponents had a war on women when all they said is that paying contraception for a wealthy Catholic college girl is not a smart use of tax revenues. Obama has been consistently trying to divide and destroy the Christian rights to religious freedom using that young Catholic woman against the Catholic University.
http://www.patheos.com/blogs/deaconsbench/2012/02/some-students-at-catholic-colleges-protest-lack-of-access-to-birth-control/
"We have a bigger number of applicants than people who have paid," Aetna Chief Financial Officer Shawn Guertin said in an interview today in New York. "That’s a situation that I am a little bit worried about, that people will think they have completed the process but haven’t paid the premium yet." The sloppy disjointed process of having customers shop through the government-run marketplace first and then pay insurers separately later creates a risk the likely hood people who have chosen a plan will be covered Jan. 1but insurers may end up stuck with a disproportionate number of sicker and costlier customers with bad credit who don’t pay.
Boeing raised the dividend by 50% and authorized a new $10 billion stock buyback program late Monday.
Already-insured Americans not looking for government subsidies are blaming the Affordable Care Act for rising premiums and higher deductibles on their plans. A new poll from the Associated Press shows nearly half of respondents say their policies are changing for the worse in 2014 with 69% reporting their premiums are going up and 59% their annual deductibles and copayments are increasing. Seventy-seven percent of those surveyed say they blame Lame Duck Democrats for passing the law with the Dec. 2000 Lame Duck Congress that had been voted out of office but was serving their last month after being booted out.
The poll also finds 75% of people say the rollout of the insurance marketplaces has gone poorly and that health care will remain a hot-button issue heading into the next election cycle.

World Economies
December 20, 2013
 
The People’s Bank of China is facing a liquidity crisis. The seven-day repurchase rate, a gauge of liquidity in the banking system, jumped 1.4% to 6.60 percent (a 22% increase in cost of capital), according to a daily fixing by the National Interbank Funding Center. That is the biggest increase since a 2.7% jump on June 20 that drove the rate to an all-time high of 10.77 percent and prompted the central bank to conduct short-term liquidity crisis operations.
Indian diplomat Devyani Khobragade was arrested last week for stealing from Americans living on welfare. Russian diplomats have also been caught collecting American welfare but have yet to be strip searched. The next time the U.S. prosecutor should send them home naked because Obama apparently gives them immunity to steal from the poor.
http://www.bloomberg.com/news/2013-12-18/indian-diplomat-s-strip-search-brings-a-call-from-kerry.html
December 17
Chancellor Angela Merkel started her third term in Germany will again press her agenda for sound fiscal policy in Europe.
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=
The German market is the best of the foreign markets and is about 10% above the 2007 high which was about 7% above the 2000 high. It failed to break out from its upper resistance level defined by 2000 and 2007 or the short term trend. It is now right at the limits and that usually ends a trend of this length.
http://in.finance.yahoo.com/q/bc?s=%5EGDAXI&t=my&l=on&z=l&q=l&c=

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/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=

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
The U.S. economy grew at its fastest pace in almost two years in the third quarter while business spending was stronger than previously estimated, pointing to some underlying strength that should be sustained. Half the growth was inflation. Correcting for inflation the4.1% Obama growth is really 1.1%. But that is much better that Obama’s normal zero growth when you remove inflation. In fact Americans have lost 7% in real income since Obama took office.
Dec 16
Empire Manufacturing Dec 1.0 going nowhere -2.2 -
Productivity-Rev. Q3 3.0% still good 1.9% ++
Unit Labor Costs Q3 -1.4% Obama depression -0.6% -
Net Long-Term TIC Flows Oct $35.4B good investment $25.5B++
Industrial Production Nov 1.1% unreliable primarily utility energy cost -0.1%
Capacity Utilization Nov 79.0% no change 78.1%
NAHB Housing Market Index Dec 58 up from 54 +++
Dec 17
CPI Nov 0.0% flat -0.1% -
Core CPI Nov 0.2% 0.up from 0.1% implies 2.4% inflation
Current Account Balance Q3 -$94.8B running a deficit -$98.9B Annual deficit running at $1.2 Trillion per year.
Dec 18
MBA Mortgage Index 12/14 -5.5% plummets from 1.0% ----
Housing Starts Sep 873K plummet from 891K ---
Housing Starts Oct 889K flat 873K -
Housing Starts Nov 1091K up tremendously 889K --- indicating ridiculous Obama manipulation causing starts to spike just after the building season ends.
Building Permits Nov 1007K down from 1034K -
Crude Inventories 12/14 -2.941M low -10.585M -
FOMC Rate Decision Dec 0.25% constant % 0.25%
Dec 19
Initial Claims 12/14 379K up from 368K --
Continuing Claims 12/07 2884K up from 2791K –
Existing Home Sales Nov 4.90M down from 5.12M – down 3 mo in a row---
Philadelphia Fed Dec 7.0 up from 6.5 +
Leading Indicators Nov 0.8% up too much to be real from 0.2%
Natural Gas Inventories 12/14 -285 bcf declined from -81 bcf
Dec 20 8:30 AM GDP - Third Estimate Q3 4.1% 3.7% 3.6% 3.6% -
Dec 20 8:30 AM GDP Deflator - Third Estimate Q3 2.0% 2.0% 2.0% 2.0% -
　
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The Markets
December 20, 2013
New Jersey's unemployment rate fell to 7.8 percent in November as the state added nearly 17,000 jobs and 31,000 people stopped looking for work.
December 19
The stock market jumped yesterday close to its recent high which is the upside resistance level. As QE tapers interest rates will rise and the cost of debt will increase. Then the FED will have to choose either higher interest rates slowing the economy or continue QE giving America the Japanese depression disease Japan has had since 1990.
Dec 17
World trade is down about 75% from when Obama was elected but it looks like recovery has started. Look at the last 1+ years! Use the graph or snapshot option.
http://www.bloomberg.com/quote/BDIY:IND

The VIX indicates continuing complacency with a slight adverse a 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