Oct 8 The Obama administration has been telling Americans for 6 years that the American economy is chugging along at about 3.5% growth rate and carrying along the entire world. Later it always gets revised down to 2% or less and the story gets repearted. A six year recovery with nothing to show for it. Obama says all we have to do is raise the minimum wage and we would all become rich with rising incomes. Obama is consistent and is driving American international corporations out of America while Governor Cuomo is building technology centers with Obama incentives that bring in Chinese and other foreign nationals to learn American nanotechnology and 3D printing technology in upstate NY. In the mean time the IMF says the US economy will actually only sputter along at a dismal 2.2% not Obama’s 3.5+ rate. But the IMF says global growth (outside America) will be at 3.8% though they were hoping for 4%. Meanwhile Germany bites the bullet to balance their economy and remain a world powerhouse while the leftists continue to think the French policy is the cat’s meow although France wallows in Obama style economic misery.

https://screen.yahoo.com/wochit/anti-obamacare-filmmaker-latest-slapped-155732839.html

 

How the Bear Market arrives:   As soon as a bear market begins, the padding of the corporate accounts is ended.  No longer are the payments of expenses pushed off and the sales realizations accelerated.  There is nothing illegal about changing accounting principles such as LIFO (last in first out) and FIFO and other accounting practices  and get very conservative in a bear market when no one is buying.  That is called taking "the bath."  When times are good that is when accountants recommend taking more risk, accepting more credit or not foreclosing.  When you foreclose you must take the loss.  That is why banks let people stay in their foreclosed homes if they keep up the property.   That is why most of the value of Freddie and Fannie is not real and using their worthless paper to back Quantitative Easing is a clever way to keep the interest rate on American debt low.  Once QE ends we will begin to see interest on American debt begin to rise.   
During a major stock market decline the opposite type of corporate strategy is taken and the losing production lines are closed and inventory is held at cost and written off and with those reductions people lose jobs.  In bear markets the hidden debt is exposed and taken as losses.  That is why a bear market is severe.  Only inexperienced managers fail to take the bath while every smart manager takes his or hers.  The bath takes about a year to be forgotten and everyone starts with a clean slate again afterward because generally the economic turmoil and decline spares very few corporations.  Therefore the economic news tends to be cloudy until the bathwater is drained.  It makes sense to get it over quickly.

 

Meanwhile most of the sectors of the stock market have already failed new highs or have broken down.  With moronic leftist policies, the free world has a form of economic Ebola and is bleeding internally.

http://stockcharts.com/freecharts/perf.php?MIDU,TNA,DRN,ERX

 

 

Oct 6   We have run out of the experimental Ebola drug which is made using a specific tobacco plant, an indigenous plant of America that was made popular by the American Indian.   The drug has not yet been proven to be effective but almost 30-40% of Ebola victims survive so it will not end the world.  Influenza emerged at the end of WWI and killed more people than World War I in just one year.  Obama thinks he can help Africa by having no three week quarantine for travelers from Africa because he thinks putting Americans at risk will motivate Americans to cure the disease that thrives on poverty.   What he risks is infecting the poor of America, particularly African Americans who have friends and relatives in Africa.  

 

The dollar has risen faster in strength than ever before.  This will cause a sudden decline in orders of American products of high technology and also construction industry products. 

 

World Economy

Oct 7   German factory orders fell 5.7% in August similar to what American aerospace has already seen.  Unlike the Obama administration the Europeans don’t try to conceal information like that because ignorance of trends and problems just makes matters worse.  Obama had his Harvard records sealed from view and just look what a disaster Obama has been for America and the world,   He had the IRS harass and sabotage Republican Americans, especially Governors.  And he had the American Intelligence agencies spy on and apparently sabotaged European French and German leaders.  There are hardly any Republicans that could run for president who have not already been smeared by Obama.  But Obama did his very best to improve Putin’s image up until Putin killed 298 people by providing his Russian separatist fighters the missiles used for shooting down a commercial Airline flying out of Amsterdam.

 

Oct 6   Greece is getting close to having a balance budget for the first time in many years.  Hong Kong protests declined as negotiations with the Chinese Communists hint the Communists may allow the democracy to continue.   

 

However Europe is tilting in anticipation of a world wide slowdown.  And that is making the dollar stronger and will help Europe compete with America shifting part of their slowdown on to American shoulders.

 

Alibaba has been around a long time and will leverage the penetration of Chinese products into the housing, electronics, and the new high technologies.  China is increasingly sending in low paid Chinese workers to install Chinese products.  This also gives them an edge since American companies have greater restrictions on importing foreign workers.  It is a loop hole which could also be a large hole in American defense against illegal immigration.  Alibaba will cause American unemployment attacking manufacturing, capital formation, and American workers directly. 

Upstate New York is seeing a large influx of Chinese buying American homes as China invests in and copies American nano-technology and 3D printing.   They are moving in wherever America is developing technology.  There is still no evidence of an improving American economy after almost seven years of Obama blaming George W Bush for all the consequences of Obama’s incompetent actions.  Giving China our latest technology will be another horrible economic legacy of Obama’s incompetence.

 

American Economy

Oct 7

JOLTS - Job Openings Aug 4.835M up from 4.673M

Consumer Credit Aug $13.5B down 50% from $26.0B

Oct 8

MBA Mortgage Index 10/04 3.8% still subpar from -0.2%  --

 

The Markets

Oct 8  This is not a classic bear market coming up.  This is an Obama nightmare.  We expect a meltdown of bull market ETF 3X derivatives in about a year.  How do people think they went up 3X the underlying market change?  Do they really believe there were as many people losing 3X on the bearish side to fund the bulls? 

 

Oct 7  The stock market breakdown is continuing.  Our proprietary Market Cash Flow index is already at its bear market resistance level.  So if and when the NYSE reaches its bear market resistance level we will already have our proprietary MCF sell signal. 
But we also expect the market will have a “dead cat bounce” and recommend that shorts should be covered by early November before any Xmas rally. There should be another opportunity to get out or sell short before Christmas. 

Oct 6  The recent small rise in the current market does not resemble a rally.   We believe it is all part of a normal topping stock market.  We expect the market to experience at least double the recent decline plus higher volume on the decline before we expect to see a real November-December rally.  We expect the bear market will only be recognized after a November-December rally ends.  Bear stock markets are seldom recognized until the risk and uncertainty affects the Cities, States and the banking industry.

 

World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas