Tuesday, February 11, 2014

Feb 14 Germany, the most robust economy in the world, where the workers live comfortably and strive to save 25% of their earnings, and overall they save three times what we save. They just announced that their gross domestic product expanded an honest 0.4 percent in the final three months of 2013. That is at a 1.6% real rate of annual growth. The Obama administration must include inflation in what they consider to be legitimate Bolshevik economic growth. So Obama claimed a 3.25% annual growth rate in the last quarter, twice the rate of Germany while simultaneously Obama claimed the government shutdown in the last quarter had crippled the American economy. It is surprising Obama stops there and doesn’t claim 7% growth like the Communist Chinese. World bulk trade as fallen 80% since Obama took office yet Obama and the Communist Chinese still claim their economies are humming. Obama socialist policies have America on the slide to oblivion because the only thing socialists are good at is spinning their failures as the fault of working people who they say are greedy and need to share more.

Feb 13   The administration cannot credibly say the government shutdown last October hurt the economy in the last quarter and then show statistics that claim the year end was the best in five years, unless someone high up in that government is smoking weed.  Nor can faked USA economic statistics ever create an economic turnaround.   All that Obama’s faked statistics do is destroy the credibility of his administration. 
Procter & Gamble the world’s largest consumer-products maker cut its forecasts for profit and sales growth. Amazon.com fell after UBS AG lowered retailer’s rating.  The slowdown is gathering momentum because Obama’s Quantitative Easing created a huge bubble allowing Emerging and other socialist governments to squander $trillions of American dollars on expanded foreign welfare the way Obama’s banana socialist government is slowly redistributing poverty throughout Puerto Rico and soon all of America.   In other words Obama has been wasting America’s wealth subsidizing welfare both here and abroad. 
 
The only economic system that works all the time is our American Free Enterprise system that has had a single currency for over 200 years of the United States of American.  But the socialists in American government today seem to be trying to invent a new Kenyan or Argentinean type Banana Republic of Obama.
 
Feb 12   Is the US Attorney General too big to jail?  Vindictive lawsuits inspired against individuals and states like Wisconsin will result in an overwhelming backlash in the coming two elections.  The American Constitution first gives the people their power and then narrowly prescribes the power of the Federal Government.  All the rest of the power is constitutionally in the hands of the states.  Government prosecutorial vindictiveness and harassment is always a crime and never a legitimate power on any level of American Government.  The Attorney General must be held responsibly for choosing not to prosecute the IRS and state politically run organizations for coordinated harassment of American citizens.  For example BOA president Kenneth Lewis was harassed with a coordinated action from most blue state treasurers, politically linked pension fund managers, as well as the Attorney General and the 74th United States Secretary of the Treasury.  When that failed, they then harassed BOA directly until Kenneth D. Lewis retired to avoid the vindictive harassment leading to the destruction of BOA. 
 
A thorough investigation will also reveal that individual Americans were harassed not just by the IRS but it was politically coordinated in blue states with state agencies and even some financial institutions that those states regulated such as insurance agencies.  This activity caused a groundswell beneath the radar due to fear of further Obama administration harassment. Americans are extremely angry and seething beneath the surface because vindictive governments frighten everyone, even liberals.  Eric Holder and Obama have instilled a deep sense of fear in most Americans who sense they are being actively monitored by a new vindictive national secret police.  Americans will be relieved only by ejecting all of them within two years.  Anyone who wants to be elected will have to distance themselves from this corrupt and vindictive administration.  That distancing began over a month ago and will likely accelerate.
 
Prosecutorial vindictiveness refers to filing a lawsuit for purposes of harassing the defendant when there is no genuine basis for the suit. If the defendant in the lawsuit wins and has evidence that the suit was filed out of harassing or vengeful motives and without any legal or factual foundation, it may be the basis of a claim for damages against the person who filed the original action. If vindictive prosecution is clearly proved against the party who brought the original suit, punitive damages may be awarded along with special and general damages against the lawyers.  Many lawyers may be disbarred.  In some cases, courts have held that an attorney who knowingly assists a client in filing a baseless lawsuit out of malice may also be liable for damages. Before bringing a suit for a vindictive prosecution, the original lawsuit must be decided in favor of the victim.  How about impeachment?
 
 
Feb 11   Puerto Rico is trying to refinance debt or negotiate with creditors to avoid making a $940 million payment, almost 10 percent of its budget, after the U.S. commonwealth was cut to junk by Standard & Poor’s and Moody’s Investors Service.
S&P dropped the territory to BB+, the highest speculative grade, on Feb. 4 because of limited access to capital markets as officials struggle to revive a shrinking economy. Moody’s today lowered it to Ba2, one step below S and P’s score. The moves trigger accelerated payments on debt and calls for increased collateral on swaps. Almost half may need to be arranged within 30 days, said David Hitchcock, an S&P analyst.
 
Adobe is used for Yahoo graphics is requiring updates that do not work on older computers.  Flash is seemingly being sabotaged with Adobe on two of our machines so we know there is a real problem out there.  The Adobe updates do not fix the problem and seem to be intrusive and try to force Google Chrome on users.  By sabotaging flash they sabotage Yahoo and other service suppliers as well.  Adobe is sabotaging HTML5 too?
 
World Economies
Feb 14  Gold hit six month highs and commodity prices are now rising as inflation is heating up and currencies are falling.  The American debt is rapidly approaching 110% of the Gross American National Product.  The net National Product is less than 4% of the Gross.  So with America’s current savings rate it would take America 22 years to pay down the debt Obama has laid on the shoulders of Americans in just six years.  Obama is praying that he will retire from office before things get out of control so that he can blame someone like Hilary Clinton for the collapse of the American dollar.
 
Feb 13  The Chinese government has been faking economic statistics longer than Obama.  Bloomberg said that three people with direct knowledge of the matter said China is setting economic sights lower than last year’s slow pace.  Last year international bulk shipments were off 80% from what it was in 2007.  The China bubble is ready to burst.  It is a disaster greater than the Russian and Asian bubble of the late 1990’s.  Fools continue to say China can start to build their domestic consumer market.  But that is what they have already done for the past five years and their domestic bubble is also now ready to burst.
 
Feb 12  China is now in the situation Russia was in the mid 1990’s and many Asian countries were in 1998.  The Russian and Asian stock markets imploded then, and the hidden waste and corruption was exposed.  However the incredible secrecy of the Chinese market may have allowed even greater losses to have been hidden, meaning China is a ticking time bomb until they survive a general house cleaning.
Foreign-exchange reserves are emerging as the latest battleground between developing nations trying to stem the worst rout in their currencies since 2008.  An unprecedented currency war has broken out between the former Soviet republics of Kazakhstan and Belarus just two years after they formed a new trade pact.  
Nations with the smallest reserves are trying to fend off currency speculators.  While for the last year the American currency held against the price of gold, the price of gold is now rising again as inflation in the developing nations now already ranges from 6% to upwards of 10% per year.
 
Feb 11
According to Standard & Poor's, Chinese companies amassed an estimated $12.1 trillion of debt at the end of last year and by the end of the year is poised to exceed the US businesses debt of $12.9 trillion now the world's most indebted.
 
Bloomberg reported that Gold futures rose to the highest price since November as physical purchases from China and a weakening dollar spurred demand. Silver extended its longest winning streak in almost six months.
 
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=
 
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 Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2003. Obama has destroyed Swiss banking by destroying the Swiss confidentiality that protected people from the Hitlers. Stalins and the current socialists trying to legally confiscate everything people earn while lining the pockets of their friends with Obamcare inept management of $billions.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy
Obamacare coverage is in a state of collapse, as the administration said it would again delay another key requirement of the health law.
Feb 11
JOLTS - Job Openings Dec 3.990M down from 4.033M --
 Wholesale Inventories Dec 0.3% down slightly 0.5% +
Feb 12
MBA Mortgage Index 02/08 -2.0% down sharply from 0.4% ---
Treasury Budget Jan -$10.4B deficit increase from $2.9B---  While Obama claims this is better than last year it is a deficit over and above the new budget that was increased last October to cover last year.  This is not the relative to last years budget but to the new higher budget and therefore this miss is serious saying we are spending much more Congress agreed to last October and Congress is rushing to pass an even bigger budget right now.  This is an example of how confused and ignorant our government has become that they seem to think they now are making reductions in the spending when they are actually spending at a greater rate than ever before.
Feb 13
Initial Claims 02/08 339K up from331K ---
Continuing Claims 02/01 2953K flat from 2964K-
Retail Sales Jan -0.4% down from 0.2%---
Retail Sales ex-auto Jan 0.0% down from 0.7%---- 
Business Inventories Dec 0.5% increased from 0.4% -
Industrial Production Jan -0.3% fell from  0.3% -- -
Capacity Utilization Jan 78.5% fell from 79.2 --
Mich Sentiment Feb 81.2 unchanged
 
The Markets
Feb 14  When stocks are topping out, the only game in town is mergers and acquisitions using overvalued stocks instead of cash.   If you know your stock is worth half as much as the overheated market offers, then you know your real costs are half of what everyone else thinks.   So that is when the rich used their overvalued stocks like cash.  Mergers and Acquisitions are the last inning of a bull market and they have been going on for two years already.
 
Feb 13  How bad will the next correction be?  Only one thing is certain about the American future and that it only gets worse when a government is headed by a banana republic socialist would-be dictator who makes his own executive orders and buys votes with welfare taken from the pockets of workers.  Obama’s hero, Hugo Chavez of Venezuela conducted so much malicious harassment of national leaders that he drove the best business leaders out of Venezuela.  
 
Obama has the American economy headed down a steepening path to equality of poverty.  The Quantitative Easing economic opiate is now being withdrawn and the weakest socialist economies are already crashing.  However, there are some voices from Florida, Wisconsin, and Texas who now seem to know how Americans can have greater equality of opportunity not poverty.  And America is on a path now to boot the socialist out of office.  But unfortunately the economic pain is about to get worse with this socialist dictator running roughshod over Christians, charities, political opponents, critics,  gun owners, Republican Governors,  registered Republicans, patriots, outspoken anti-socialists, and even non profit historical societies.  The word is spreading quickly but quietly because people really fear this socialist administration’s abuse of power.   After all, 30,000 Mexicans died because this administration ran guns to Mexican cartels just to try to smear American gun owners by saying it was the work of “ugly capitalist gun dealers”.
 
Feb 12 Ten year interest rates are rising and will likely exceed 3.5% this year.  Higher rates will make mortgages more expensive but will loosen up bank cash for mortgages.  Currently cash rich banks make most of their money borrowing short term at 0.25% and investing in short term treasury debt guaranteeing their profit for doing essentially nothing.  As rates rise bank skills will be tested and highly leveraged corporations will see the cost of operations skyrocket.  Cash rich corporations will earn interest and see higher profits.
 
Feb 11 The market teeters on the brink again.  We ran two scenarios.  A one day 3% drop at closing could now trigger a sell off.  Two consecutive days of 2% drops could also trigger a selloff now.  Such a sell off  might stop there for a few weeks but it would trigger soul searching and probably a minimum of another 5% downward spike should China and the Emerging markets not trigger a full blown bear market.   China has had a run-up that is very long in tooth and high by historical runs.  And Obama’s division of America and his proposal to level the playing field income between the workers and the shirkers is unsettling America.
 
World bulk trade is again at the Obama record low since he was elected. Look at the last 1+ years! Use the graph or snapshot option. Unfortunately they do not show back to 2007 when trade was five times higher than the Obama administration’s world trade highs.
http://www.bloomberg.com/quote/BDIY:IND/chart
Look at the volatility index and you see that the market could fall much faster. This is not a good moment in time for holding equities other than depressed commodities.

World market updates:
http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/intlindices?e=asia
 
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