The MSNBC is now saying Obama Socialism is not the problem it is Republicans who are trying to get spending under control. Higher corporation taxes only hurt our national competiveness and job creation. Tax neutral corporation tax loophole filling would be beneficial. But it hurts consumption if we increase taxes on individuals. We need to stop the Octomom Social programs that are squandering America’s treasure and youth. Obama taxes on medical equipment will destroy that American industry and the America jobs and they will move to China. The chief beneficiary of Obama Socialism is China. The economy and the stock market always eventually disintegrate together under socialism. The more socialism grows the more the economy shrinks. That is the historical repeatable fact with no exceptions to the rule thus far. And the value of gold always shrinks in advance of an economic depression and rises with inflation. Two repeatable facts! Jim Cramer said and other fools on MSNBC are saying the stock market can go higher because the Price Earnings ratio has not peaked at 20 to 25. They are fools because the price-earnings ratio does not peak until the market collapses. It only reached 18 before the Obama collapse. But soon after that collapse that began when Obama won the election it shot up to 26. Don’t consume the Jimmy Cramer MSNBC baloney.

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

 

Fitch Ratings, one of the nation's three big rating companies obviously is in cahoots with the Obama Administration while Standard and Poors was completely honest and targeted by Obama for harassment.  Fitch did what Obama wants, it clucked about threatening default like a hen defending her eggs.  Standard and Poors said nothing this time but just may yet sue Obama’s justice department for harassing them for being too honest and diligent in the past.

 

Obama’s budget will bankrupt the private economy and Socialized Medicine will burry the American government .  That is what we have to look forward to.   Since the election of Obama the rate of increase in federal debt has already doubled even though Obama has cut spending by ending the American war on terror, cut spending on the American defense budget, saved money by letting the American Embassy in Libya be overrun, and has tried to cut costs by befriending the enemies of Israel.  Despite the Republican cost cutting he still doubled the Bush deficit with freebees like entitlements, cell phones, fertility treatments for Octomoms, and unjustified racially motivated reparations through the Farm Administration.  Look at the government data and see for yourself.

http://goldsilverworlds.com/economy/the-debt-ceiling-and-implications-for-gold-investors/

 

What would be the situation today if Obama had succeeded in getting us back to prosperity?  For one thing the interest on public debt would return to a normal 2.5% or ten times the interest rate with QE3.  The annual interest on just US debt alone would now be $2Trillion which is close to the current Obama deficit.  And higher Obama corporate taxes will only retard economic recovery.  We are headed to a Union of Soviet Socialist Republics or a Democratic Socialist East Germany type bankruptcy of 1989.  It doesn’t matter how smart a East Germany was before Socialist retardation took over.  As Winston Churchill said, Socialisms only guarantees equality of poverty.  The economy and the stock market always eventually disintegrate under socialism.  The more socialism grows the more the economy shrinks.  That is the historical repeatable fact with no exceptions to the rule thus far.  East Germans are wealthy again now that the no longer are run by socialist government planners who think they know everything and harass anyone who disagrees with them.

 

Oct 15, 2013  Obama is experienced and knows just how to create and maintain poverty but he is clueless about creating economic growth.  Yesterday, short term treasuries actually rose in value as demand surged just the opposite of what Obama said would happen.  It turns out investors were not as afraid of an American default as they are of Obama’s resistance to fiscal responsibility.

 

Email in-basket Lesson # 1: US Fiscal Cliff...in layman's terms

* U.S. Tax revenue:                     $  2,170,000,000,000.00

* Fed budget:                               $  3,820,000,000,000.00

* Annual interest on US debt:     $     200,000,000,000.00

* Total new debt:                        $   1,450,000,000,000.00

* National debt:                           $ 16,271,000,000,000.00

* Recent budget cuts:                  $        38,500,000,000.00

 

Now let's remove 7 zeros and pretend it was Obama’s pre-Senate family budget:

 

* Annual income:                                                    $   217,000.00

* Money spent:                                                        $   380,200.00

* Annual interest on debt:                                       $     20,000.00

* New annual debt on the credit card:                    $   145,000.00

* New outstanding balance on the credit card:       $1,627,100.00

* Total Obama budget cuts so far:                          $          380.50

 

Got It ?????  Obama is spending about 40% more than America can afford.  He is going to bankrupt the country unless he is stopped!  If we stop borrowing for the deficit and fire government workers such as the 20,000 new IRS agents needed to harass Americans, and fire the thousands who have produced the Socialist Healthcare signup program that doesn’t work,  and close down Obama's massive agency he created to tap the phone calls of Americans... then the budget deficit will shrink.

 

All we have to pay to avoid default is the interest on the debt which is a little more than 9% of our tax revenue and to use the new treasury sales to pay off treasuries coming due. 

 

The real problem is that the US interest rate is currently only about 0.25% and under normal economic conditions of prosperity it would be 2.5% or ten times higher than current interest cost.  That is why Obama’s ignorance of the consequence of debt makes it impossible for Obama to get the US out of national poverty.   That is why so many people who think like Obama are impoverished.  Obama’s sole life experienced is in how to get government freebees, a quick buck, and create and maintain poverty, but he is clueless about private enterprise and creating value and economic growth.  Growth causes competition for money to invest in growth, and that causes interest rates to rise and that causes the cost of the debt burden to rise.  People who do not live within their means become impoverished and pay exorbitant interest rates because they are so irresponsible.  Obama is impoverishing America because he has the irresponsible “quick buck” mindset that always creates poverty not prosperity.

 

Lesson # 2:  A way to look at the Debt Ceiling:

Let's say, you come home from work and find there has been a sewer backup in Washington...and the White House and Congress has sewage all the way up to the ceilings.

What do you think Obama and Congress should do ......

Raise the ceilings, or cut the c**p?

 

Oct 15, 2013  Barons once again indicated the ARMS (TRIN) index is giving a market peaking signal.  But as we pointed out before that while it has always been reliable…  it is often premature by a few months.  The small cap stocks tend to peak first and the ARMS index is showing that.  The NASDAQ is just showing signs as well.  The DOW surprisingly shows a head and shoulders topping sell signal forming too but usually the DOW is the last refuge for security before the stock market retreats.  Our Cash Flow index indicates that the market is being moved up with very little upside cash flow as though the short sellers are broke.  Could it be that this extremely overvalued market exists because there has been an overall short squeeze that has crippled the hedge fund short sellers?  In that case we may be heading for the stratosphere as the market bubble did in 1929.  We are already at the bubble heights of the yr 2000 Dot Com bubble and the 2007 Dodd-Frank Liar Loan bubble.  So one has to ask is it better to be on the side lines now at the recent high or gamble on another euphoric surge in optimism.  The people who held on after sell signals in 2000 and in 2007 lost more than 50% but a bubble could run another 20% to 30%.  

On the other hand there could be another option.  The Obama experiment could be very costly.  It could be the end of American exceptionalism and the beginning of socialist poverty of spirit and material wealth.

Or the American people could say no to socialized medicine and vote out the socialists and we could see an enormous economic recovery.  The first opportunity to vote them out is in 2014.  In that case only a 20%-30% short term collapse of the market is likely.  This is possible because to date no one, absolutely no one has been able to sign up yet.  So far some people have gotten into the system but have not been able to sign up for anything.  It could take a year for the system to get up and running and by then we could have a new Congress that could over-ride an Obama veto. 

Without the hope of stopping the slide toward socialism the stock market is little better than a random game or betting on the horses.

The Federal Reserve Bank of New York’s general economic index fell to 1.5, a five-month low from 6.3 in September while economists called for a reading of 7.   It means manufacturing in the New York, northern New Jersey and southern Connecticut grew at a slower pace than projected as sales and hiring cooled.  Bloomberg had predicted it would rise not decline sharply.   Ambiguity and lack of leadership regarding Fed tapering, Syria, the EU slowdown and Obama budget deficits resulted in very slow July and August months.

Some Americans under the Obama/Holder economic malaise must resort to legally selling their hair, breast milk and eggs but the sale and purchase of a kidney in the U.S. is still against the law and that makes it more profitable.  

http://www.bloomberg.com/news/2013-10-15/bodies-double-as-cash-machines-with-u-s-income-lagging-economy.html

 

Oct 14, 2013  Bloomberg today said Obama may join 1933 Hitler in the pantheon of deadbeats by making the U.S. the first major Western government to default since Hitler’s Nationalist Socialists defaulted 80 years ago.   Bloomberg also said a dollar downgrade would make American products more competitive at home and abroad.  But that is nonsense!  A default can be avoided by cutting government until there is a sufficient net income to pay interest and use the continued sale of treasuries to pay off the treasuries coming due.  In other words slashing spending voluntarily or involuntarily would do the job.  But promising to lay-off IRS employees makes no sense because while Obama’s socialized medicine is not ready for prime time, there are still too many enemies that Obama and Holden need to harass so they want the 20,000 IRS new hires.

 

http://www.bloomberg.com/news/2013-10-13/u-s-risks-joining-1933-germany-in-pantheon-of-deadbeat-defaults.html

 

Mark Bertolini said that Obama’s socialized medicine will not be usable at least until March 2014.  There is so much wrong it could take to 2016 or 2017 to fix it.  However, the competing private systems may be up in 2014 with about 14 alternatives insurance plans. 

 

World Economies Oct 18, 2013

Alibaba Group Holding Ltd., China’s online marketplace for everything from chop suey to Boeing Dreamliners, more than doubled second-quarter earnings.

 

JPMorgan Chase & Co. downgraded Chinese equities to underweight.

 

European finance officials said Ireland and Spain will soon be weaned off aid and Greece’s mounting bills will eventually be paid.

 

With regard to an Obama related government default, International Monetary Fund Managing Director Christine Lagarde said. “If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over,” Lagarde said in an interview on NBC. “And we would be at risk of tipping, yet again, into recession.

 

China, exports fell 0.3 percent in September from a year earlier, according to a report from the General Administration of Customs on Oct. 12.  That is a net decrease which means there is not 7% growth there is a 3% contraction in the economy, a recession!

 

Emerging-market stocks tumbled as lawmakers failed to agree on raising the U.S. debt limit. India’s rupee led a drop in developing-nation currencies as inflation accelerated.

Japan’s stock market appears to have topped and begun a new decline.  It has declined since 1990 when it began Quantitative Easing. 

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

 

 The German market is about 7% 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.

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/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

Oct 11

Mich Sentiment Oct 75.2 down from 77.5  --

Oct 15

Empire Manufacturing Oct 1.5 down sharply from 6.3 ----

Oct 16

NAHB Housing Market Index Oct 55 down from 58 –

Oct 17

Initial Claims 10/12 358K down from  373K but still high

Continuing Claims 10/5 2859K down from 2902K +

Oct 17

Philadelphia Fed Oct 19.8 down from 22.3 --

 

The Markets Oct 18, 2013

As the economy continues to slow under creeping Obama socialism we can be certain Republicans and the Tea Party will be blamed. 

 

The economy and the stock market always eventually disintegrate together under socialism.  The more socialism grows the more the economy shrinks.  That is the historical repeatable fact with no exceptions to the rule thus far.

 

Since we saw the market was peaking we had three good opportunities to unload stocks.  Yet the ARMS index while confirming that we are near the secular market peaks and new highs are not probable… indicates consolidation (a 10% to 20% drop) could take a few months longer.  And we do not know if it could actually be a 50% to 60% drop and then an economic depression.

http://finance.yahoo.com/q/bc?s=%5EDJI+Basic+Chart&t=1y

 

 Markets can remain irrational longer than you can remain solvent –John Maynard Keynes

 

Jim Cramer said and now the other fools on MSNBC are now saying the stock market can go higher because the Price Earnings ratio has not peaked at 20 to 25.   They are fools because the price-earnings ratio does not peak at 20 to 25 until the market collapses.  See the truth; don’t consume the Jimmy Cramer MSNBC baloney.  It is when the stock prices plummet that the true earnings are reported and the truth is the reported earnings plunge even faster than the market and sometimes go negative.

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

 

The stock market mavens are fiddling as Obama/Holden destroy American exceptionalism and make America into a welfare state where everyone is equal; equally impoverished spiritually and economically.

 

Two days to a default?  Nonsense!  There will be no default.  The continuous payroll deductions are sufficient to pay the interest on US debt and new treasury sales only have to pay off (replace) treasuries coming due.  That would hold expenses at the debt ceiling as long as the US does not pay the government workers who are furloughed.

 

If you look at these next two plots it says this bull market is over because prices are about 50% higher than the historical average and the dividends are very low.

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

 

World trade started to grow as China began to replenish some iron ore stockpiles.

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

 

The VIX indicates some market concern now at 20. The VIX would normally top out above 30 or even 70 before the bear market ends.  Investors are now as complacent as they were in 2007 at the peak.

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