Morning Update/ Market Thread 12/29

Good Morning,

Equity prices are higher this morning, yesterday we did not receive the large price move called for by the small move in the McClelland Oscillator, so a large price move today should be expected. Bonds are roughly flat after a large move down yesterday, the dollar is lower this morning, both oil and gold are higher.

We have hot money pushing the price of oil near $92 a barrel, this is simply not a supply/demand phenomena, it is money fresh off the printing press phenomena. We know this is true because gold and silver are also zooming. Copper is at an all-time high, again, not due to some explosion in demand, but rather due to an explosion of hot money. This only makes things more expensive for consumers. Gasoline at $3 a gallon now, and the CEO of Shell just said he thinks we’ll see $5 a gallon gasoline by 2012! This will simply make the vast majority of Americans poor… a disaster.

The hypocritical Mortgage Banker’s Association was scheduled to release Purchase Application data today, but is declining citing the holidays. They say they’ll combine weeks and give us a report next week. In other words, the data was so bad even their own trumped up reporting methods would look horrid. There’s no other scheduled data releases today, but there’ll be a slew of reports tomorrow.

Yesterday we had a very weak 5 year auction as the demand for debt wanes world wide. The state of Illinois is discussing borrowing $14 billion FROM WALL STREET in order to keep paying their bills! Talk about loan sharks and mobsters, Illinois is a fitting place for a transaction like that. Loan shark debt on top of tremendously excessive debt, now there’s a “solution” that’s sure to last.

But that’s exactly what’s happening all across Europe right now too, as just yesterday the ECB had trouble sterilizing all the debt it wanted to. Too much debt, so the solution offered inside of the debt pusher’s debt backed money box is to pile on new debt while they print up money to cover it. It’s like watching a slow motion train wreck, and you know the outcome’s not going to be pretty.

Meanwhile our largest creditor, China, is attempting to take the last bastion of true manufacturing from the United States and we’re letting them take it. In fact GE, a company who the tax payers just bailed out and who should have been allowed to fail, is now giving the Chinese the technology necessary to compete against Boeing commercial aircraft:
China Squeezes Foreigners for Share of Global Riches

General Electric Co. is finalizing plans for a 50-50 joint venture with a Chinese military-jet maker to produce avionics, the electronic brains of aircraft. The deal with Aviation Industry Corp. of China would give GE access to a Chinese government project aimed at challenging Boeing Co. and Airbus in the civilian-aircraft market.

For those who think that being in debt to China poses no real risk, you should talk to a Boeing worker about that. And you can bet that it won’t be long before they are taking this technology and using it to take the other last bastion of American manufacturing, namely producing weapons. Evidently America is hell bent on only producing worthless paper.