John Mugarian's Dynamic Growth

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Here they come! It was only a matter of time. The Wall Street Gang, with help from their media conduits, did everything in their power to get rid of someone who wasn't one of their own.

Right before your very eyes, Wall Street is working to replace BAC's non-ivy league southerner, Ken Lewis, with one of their hand picked cronies.

Never discount the power of these derivative shaping, stock manipulating, false research reporting, conflict of interest group of Wall Streeter's. They can hold down the price of your stock, get the media to discredit your character, to eventually force you to resign. In Ken Lewis' case, they just got him to retire.

You don't have to take my word for it, even Richard Bove, an analyst at Rochdale Securities, said "Bank of America's Lewis Victim of Witch Hunt".

Wall Street's media spin machine couldn't wait to put out news suggesting how "Bank of America's next CEO must rebuild firm's image." they are trying (and will succeed) to get you to believe that the "Gang's" pick for CEO will repair the damage that they helped destroy. My bet is the "Gang" will hand pick the successor, and over the next 5 years, drive the stock much, much higher. It will be a classic "I told you so" story.

The list of candidates mentioned for the vacated CEO's position is nothing more than a who's who of candidates that worked for Wall Street firm's involved in the mortgage derivative crisis, the bogus research reports scandal during the dot-com era, and a long list of other questionable character practices.

If BAC chooses a successor internally, I would be a little less critical. Here are a few names mentioned as possible replacements, and their past associations;

Current BAC Employees:

Thomas Montag- formerly global co-head of securities at Goldman Sachs.

Sallie Krawcheck- former CEO of Citigroup's, Smith Barney division. On August 12, 2009, Ms. Krawcheck bought 63,000 shares of BAC stock @ $15.97 in the open market. Humm...

Outside Candidates:

Charlie Scharf: head of Retail Financial Services at J.P. Morgan Chase.
Jim Hance: of the the Carlyle Group.

The OMG list:

Robert Steele: formerly a vice chairman at Goldman Sachs who screwed Wachovia bank right into the ground.

John Thain: A Wall Street favorite, and was at the helm of Merrill Lynch during the bonus scandal.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

So much for full disclosure. J.P. Morgan has devised a way, through a loophole in SEC rules, where corporate insiders can sell their company stock, and not have it reported publicly.

They call the method "PRISM", and here how they are soliciting corporate insiders;

Here is the link- Article

If this is true, "PRISM" should be replaced with PRISON.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

You've heard the term, "Barefoot and Pregnant" haven't you?

Well, believe it or not, Wall Street, and their friends in Washington have you right where they want you. Here in the south, keeping someone confused and preoccupied is called keeping someone "barefoot and pregnant".

Do you find yourself confused with what is going on in the financial markets, our government, and your daily finances? I believe this is exactly where the puppet masters want you to be.

For better clarity, stop listening to the noise coming from left or right, conservatives and liberals, issues on race, arguments about the war on terror, and definitely stop listening to the phlegm being spewed by the Wall Street financial firms in New York.

Is it not obvious to you that the recovery we are seeing on Wall Street is not happening on Main Street? A real recovery happens when people have jobs. With a 10% unemployment rate, and by some calculations a 17%, a real recovery is still a long ways off.

This morning on CNBC, financial commentators were interviewing members of the senate finance committee. Rep. Paul Kanjorski (D - PA) said the number one issue was jobs. He said, "If we don't have the economy and jobs solved, the next year, or two years, we can't really get to cure health-care".

To his credit, Kanjorski opposed NAFTA, which was directly responsible for the loss of millions of American jobs.

One of the biggest con-jobs ( Wall Street wins the prize for the biggest with the Dot-com bubble in 2000, and real estate derivatives) on the American people are the shameless wars in Iraq and Afghanistan.

When I look at who we are suppose to be fighting, I find myself asking a simple and fundamental question. Who are we fighting? Who is Al Qaeda? Who are the Taliban? If they are truly a force to be reckoned with, where are their central bases? Where is their command and control located? Who are their leaders, and where is there base of operations?

You can't tell me that Al Qaeda and the Taliban have a central command, and are issuing terror orders to their cells around the globe. You can't tell me with all our technology, spying capabilities, and high tech armaments that we can't find their central command and control locations.

It's all bullshit!

Now, we are hearing the same crap about Iran that we did with Iraq.

Last night, I was watching ABC's Nightline. They showed US Soldiers on the front lines in "The Valley of Death"- Video.

Now, I'm not the smartest person in the world, but what dumb-ass would put a make-shift camp in a valley, surrounded by mountains? Our US soldiers, any soldiers, would be sitting ducks in this situation. Didn't these fearless leaders ever watch the old cowboy and Indian movies where the cowboys in the valley were getting picked off by the Indians shooting from mountains?

I am so tired of seeing bumper-stickers on cars that say, "Stand up for America, be an American". This suggests if you oppose the U.S. getting in the middle of a religious war between Jews and Arabs that you are not an American. Only an idiot would get involved in a war that has been going on since the beginning of time.

So, here we are. You and I are trying to make the right financial moves for our families, and we have to deal with foreign policy disasters, a 10% unemployment rate (17% according to John Williams, of Shadow Government Statistics), a U.S. auto industry in depression, and a herd of investor who believe in the hype that the economy is recovering.

I don't get it!

I'll tell who is about to get it though. Investors rushing in to buying this market (unless they trade it) will be very disappointed in 2010. Market momentum will eventually come to a halt, as weaker than expected economic trends begin to show around Christmas.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The stock market rose again today on news that the weekly initial claims came in at 521,000 for the week of 10/3, down from a revised 554,000 claims the prior week. The unemployment rate is still beating on the door of 10% (the governments math).

To gain some perspective, in August 2008, the unemployment stood at 5.7%. On August 4, 2008 I reported that in July 2008 the U.S. economy lost 51,000 jobs, and that the economy had lost 463,000 jobs since January 2008. Today's report (that one responsible for today's rally) said that the U.S. economy lost 521,000 last week!

And this is good news?

In addition, Wholesale Inventories show a -1.3% decrease for the month of August, an improvement from the revised -1.6% decrease the month before.

And this is good news?

Alcoa reported that 3rd-quarter income came at $0.07/diluted share, down from $0.37/share in the same quarter last year. Excuse me for asking, but doesn't the word diluted mean watered down?

And this is good news?

Do you see what I am getting at here. The news is not getting better, it is only getting spun better.

Alcoa, and many other companies reporting so far have no idea when top-line growth will return. In AA case, the company has $1 billion in cash, and $10.5 billion in debt. They reduced their workforce by 20,000 employees which helped the bottom-line, but once again, what about the top-line?

Pepsi (PEP) reported 3rd-quarter earnings of $1.09/share, up from $0.99/share in the prior year period, but these results were aided by a lower U.S. dollar.

Eventually, investors will wake up one day and say hey, the recent growth in earnings is due to corporate cost-cutting, and not top-line growth from the consumer. Those 20,000 employees from laid-off at Alcoa, and the millions of others out of work, will not be able to buy the things that drive top-line growth.

Until we get the consumer back (70% of GDP), all we are witnessing is "A Drunken Stock Market" that will eventually have a bad hangover.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Former North Fork Bank CEO, John Kanas, was on CNBC this morning. I really enjoyed John's commentary because it was honest and straightforward.

In August, Kanas said, "The US banking system will lose some 1,000 institutions over the next two years." This morning he punched the spinsters right in the face when he said, "People are saying that unemployment is a lagging indicator. I'm beginning to think it's a leading indicator."

He went on to say that he believes the 1000 bank failures he predicted in August will happen, and the economy is not recovering as much as some our leading investors to believe.

USA Today reported today that 34 banks did not make their quarterly dividend payments for the TARP loans they received from the U.S. Treasury. The number of missed payments almost doubled from last quarter when 19 banks didn't make their payments.

So, the short answer here is a simple one. We are currently in a bear market rally that will eventually end. The U.S. economy will take much longer to rebound than what you are being told, and raising cash in this rally is probably a good idea.

The Rest of the Story:

Steve Wynn, is the man and the face known for the development of Bellagio, The Mirage, Treasure Island at The Mirage and the Golden Nugget in Las Vegas, Nevada as well as the Atlantic City Golden Nugget in New Jersey and Beau Rivage in Biloxi, Mississippi. His birth-name is Steven Alan Weinberg.

Max Keiser: The U.S. Dollar Is Finished

Feds Warn on Commercial Real Estate Debt

H1N1 Vaccine Questionable

Demand for US Debt is Weak

Top researcher who worked on cervical cancer vaccine warns about its dangers

Budget deficit hit record $1.4T in 2009

Israeli's bid to buy Al-Jazeera from Qatar

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Many of the things taking place today just don't make sense. I've often heard if something doesn't make sense, all you have to do is follow the money. After doing so, I think you'll find the answers you are seeking will come quickly.

I don't have time to follow the money trail on all these issues or concerns, but here are a few topics to research;

- Why did total household debt grow to almost 100% of GDP by 2008? Who were the people behind this move to loan money to anyone with a pulse? Why did they do it when they knew people didn't have the income to service the debt?

Follow the Money...

- In 2005, personal personal bankruptcy filings in the United States soared to 2,039,214 after President Bush signed a bill that made it far more difficult and expensive for individuals to declare bankruptcy. After a brief dip, bankruptcy filings have soared from 2006-2009.

Here is a simple question, in 2005, when the bankruptcy bill became law, did corporations know what was coming in the future? Did they want lawmakers to remove protections for consumers after getting them deeply in debt?

Follow the Money...

-Oddly, more than 60 percent of U.S. personal bankruptcies involve medical bills, and more than 75 percent of these bankrupt families had health insurance. With 54.5 million uninsured people in the U.S., is there any surprise to the increase in bankruptcies.

You can be confident that our politicians will do everything in their power to protect the huge money machine pick-pocketing your wallet, while at the same time padding their own.

In 2005, there were 2,084 health care lobbyists padding the pockets of 535 members of Congress. When Hillary Clinton ran for President in 2008, she received hundreds of thousands of dollars in campaign contributions from doctors, hospitals, drug manufacturers and insurers. In the 1990's, she headed her husbands campaign for universal health-care, which was defeated.

According in an article written by Rob Christensen, "Who killed health care reform? Answer: Everyone," News & Observer, June 19, 1996, a powerful coalition which included the insurance industry, the pharmaceutical industry, the National Federation of Independent Businesses, and many others spent $100 million and $ 300 million to defeat Hillary's universal health-care plan.

Follow the Money...

- Tell me again why we are sending troops to fight in Iraq (Oil) and Afghanistan (Oil pipelines)? And tell me why we are thinking about military action in Iran (Oil)?

Follow the Money...

-Tell me why we bailed out some (Goldman Sachs, Morgan Stanley), but not all (Lehman, Bear Stearns) investment banks in New York? And why did we bailout AIG?

Former Goldman Sachs employees include Robert Rubin (Treasury Secretary/ Director-CitiGroup), Henry Paulsen ( Treasury Secretary). After given $10 billion in TARP funds, Goldman Sachs paid their employees $6.8 billion bonuses.

Morgan Stanley dished out $6.4 billion in bonuses.

According to the Center for Responsive Politics, Goldman employees and their families and the Goldman Political Action Committee contributed almost $1 million to the Obama presidential campaign.

Follow the Money...

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The September retail sales numbers released this morning tells the tale of the the story we have been reporting for quite some time. The Commerce Department reported that retail sales dropped 1.5% percent last month, less than the 2.1% economists had expected. while overall retail sales rose 0.5%, auto fell 10.4%.

A 0.5% rise in overall retail sales is actually a poor number when you take into account that the fall is one of the biggest retail periods for bank to school shoppers. Along these lines, insiders at many retail chains have been unloading their company stock.

J. Crew Group, Inc. (JCG)
Polo Ralph Lauren Corp. (RL)
Gap Inc. (GPS)

The good news seems to be in the financials as y/o/y earnings comparisons are easy to beat. In addition, the financials are enjoying a period of borrowing money at near zero, and lending that money out at 5-6% for real estate, and 20% for credit cards. Naturally, the earnings numbers are going to soar!

When a bank can make 500% to 2000% on lending money, is there any surprise that JPMorgan posted earnings of 82 cents for the quarter versus 9 cents a year ago?

The real issue going forward is the employment picture. People are desperate for jobs. As a small example, 10,000 people in the Louisville, KY applied for a job with General Electric that had 90 positions available. All for the whopping salary of $27000/ year with benefits.

As a side-note, General Electric employees in France get benefits that GE employees don't get in the United States. Why?

Corporations ship millions of U.S. jobs overseas, and then expect the U.S. consumer to pony up and buy things on credit. This is why so many consumers are hamstrung by debt, and can't afford to buy major items like cars and homes. The damage has been done, and the repair process will take years. Keep in mind, the millions of people who have filed for bankruptcy since 2005 will not have their credit repaired for 7 years. This pushes hopes for another potentially growing economy out to beyond 2012-2016.

Intel's numbers this morning was another interesting piece of information. The company ramped up production to put new products on the shelf for a new generation of computers. Heavy discounts helped back to school shoppers scoop up computer bargains, but once again Intel achieved its latest results by "keeping a lid on spending and making better utilization of its manufacturing facilities as demand improved."

In other-words, COST-CUTS.

For now, sit back, take profits, and enjoy the ride.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Today, Bank of America CEO, Ken Lewis, was stripped of his 2009 salary and bonus by the U.S. Treasury Department's pay czar. Lewis, who was not a "brother" of the Wall Street Gang gets burned at the stake, while the the other "brothers from another mother" continued to collect millions in bonuses.

By no means is Lewis suffering financially, but the former Chairman of Bank of America is just a country boy from Walnut Grove, Mississippi, who tried to take on the immoral gang on Wall Street, and got trampled.

It all started when Lewis fired Wall Street's favorite "boy toy", John Thain. Publicly embarrassing one of the "gangs" favorite members turned out to be the death-nail in Lewis' coffin. To show you how powerful and arrogant the gang really is, they got the media to report that Thain was actually in contention for the BAC CEO position after Lewis announced he was stepping down.

To further piss off BAC shareholders, the gang also got the media to report that another potential replacement for Lewis might be the former interim failure at Wachovia, Robert Steel.

If Lewis is to give up his bonus, everyone on Wall Street (Yes, Goldman too), and the banking industry should do the same.

Today's Market:

The DJIA battled back all day as a rally in energy stocks helped the major market index close up 47.08 points on the day. Goldman Sachs and Citigroup reported earnings that were better than forecast, but Goldman Sachs closed down 1.9% at 188.63, and Citigroup fell 5% to 4.75.

The S&P 500 closed up up 4.54 points to 1,096.56, and the Nasdaq Composite inched up up 1.06 to 2,173.29.

After the bell, Google blew away their third-quarter estimates on higher advertising sales. I still don't understand how Google makes so much money. I've tried to get my arms around the model, and it still doesn't make any sense.

I've read the AdSense partner site programs, and everyone has a hand in the Google til. I sure would like to see a comprehensive breakdown of their accounting. This would include, total dollars in, total dollars out. I want to see if employee compensation for grants and stock options are expensed on the balance sheet. Revenue of $5.94 billion seems to be too good to be true when you look at the current economic environment, and a business that basically produces nothing.

There have been a lot of strange things happening in the markets lately. Every overnight decline in the Dow and S&P futures are met by a reversal by morning. Clearly the markets are being goosed by outside forces. More than likely the (PPT) Plunge Protection Team is in there forcing shorts to cover which in turn gets profession money managers off the sidelines as well.

The other thing I find a little strange is Google's (GOOG) earnings. As I had mentioned last Thursday, Google's revenues of $5.94 billion seems to be too good to be true when you take into account the current economic environment.

When you compare Google's revenue of $5.94 billion to the revenues of Goldman Sachs, you have got to ask for an explanation. If the numbers are true, and clean, more power to them. But a company like Goldman Sachs is a money machine.

I don't understand how Google makes so much money. I've tried to get my arms around the model, and it still doesn't make any sense. I would like to see a comprehensive breakdown of their accounting. This would include, total dollars in, total dollars out. I would also like to see their employee stock and options grants are expensed on the balance sheet. In short, I have a hard time believing that Google, as a company, is in the same ballpark as Goldman Sachs, or even Coca-Cola. In fact, the hype surrounding Google sounds like the same stuff we heard with Yahoo and AOL ten years ago.

As far as the markets are concerned, the current bear market rally has been impressive, and by the looks of things still has legs. My channel checks with everyday people on the ground are singing a different turn than the one being sung by the financial markets. Sure, the stock market rally makes consumers feel good, but in 2008, and 2009, those many consumers who owned stocks, mutual funds, and 401k's bailed out of the market, and some never got back in.

The other group, those that relied on real estate for their path to new found riches, are basically broke, or have had their finances severely impaired.

The S&P may reach 1200, and the DJIA may hit 10,500-11,000, but what happens after a season easily beatable earnings comparisons end? My guess is flat to down earnings for several quarters in 2010, and 2011?.

Caution is warranted. Be careful what you hear, what they say, and what they want you to believe.

Is real estate really at the bottom?
Is the economy really recovering?
Is unemployment declining?
Is the U.S. auto industry back to normal?
Are the 9.7% who are unemployed, or consumers who have filed for bankruptcy, adding or subtracting from consumer spending?

Here are our Top 10 ETF's for the week of October 19th:

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) SDS: UltraShort S&P500 ProShares
8) CASH
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for October 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Yesterday, Dow Industrials advanced 96.28 points on better than expected y/o/y quarterly earnings reports. Eaton Corporation beat expectations and raised its full-year forecast .

Among the sectors were;

U.S. Basic Materials Average + 1.72%
Dow Jones Utility Average + 1.48%
Securities Broker/Dealer Index + 1.10%
S&P Retail Index rose + 1.12%
NYSE Arca Oil Index + 1.08%
Philadelphia Oil Service Index + 1.57%
Philadelphia Semiconductor Index +1%

Today, Caterpillar rallied on better-than-expected earnings, but cold water was poured on the rally after housing starts for September came in weak, and building permits declined. The National Association of Home-builders survey showed that the housing index declined to 18 in October from 19 in September. Economists had estimated a reading of 20 for October.

The Rest of the Story

Clearly, many U.S. states are in deep financial trouble. Some is due to poor money management, and some is due to corruption. Like Warren Buffett said many years ago, "when the tide goes out, you'll find out who's been swimming naked." Well apparently, many state officials who were trusted by the public were not very honest. Take this case in Birmingham, Alabama- Article.

In the south, the good ole boy system is very prevalent, in other areas of the country, it's just corruption. Here is a funny scene from the movie "My Cousin Vinny" on how northerners perceive southern corruption- Video.

Several states such as California, Nevada, and Arizona are also facing severe budget issues.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Don't you find it a coincidental that right after NAFTA was passed during the Clinton years, the manufacturing base in the U.S. began to close up shop?

I happen to believe that Barrack Obama, and George W. Bush (Clinton and Bush 1 as well) are owned by the same people. In the G.W. Bushes second term, he responded to the growing job losses by telling people to go back to school. Recently, Obama said the same thing.

Big business could care less about the U.S. manufacturing base. As a matter of fact, when the the cash-for-clunkers program was introduced, the U.S. Chamber of Commerce lobbied to have the "Buy American" slogan excluded from the stimulus program.

Let me see if I've got this right. Use our taxpayer dollars, don't encourage buying U.S. products, and make sure that Americans ignore the slogan while America is suffering. Instead, we are sending our money to places like Japan and Korea while our auto factory workers stand in unemployment lines.

I was born and raised in Detroit, and I can tell you that Motown was once a great place. The bigwigs who took a wrecking ball to that once great city, and the manufacturing base in the U.S., should be lined up and executed by a firing squad.

If you look at what is happening to the U.S. dollar, you can't tell me that its destruction isn't by design. The same bigwigs that destroyed the U.S. manufacturing base now want European Union-style currency in North America. Any politician like the Treasury Secretary, Deputy Treasury Secretary, or Federal Reserve Chairman that tells you any different is obviously lying.

These front men for the masters of the universe are using the same approach my mother used to use. Her saying was, "do as I say, not as I do." What a crock!

The front men for the masters of the universe are telling us that the dollar will remain the worlds reserve currency, and to basically ignore its weakness. I say bullshit!

In the 1990's I found a single European Union currency to be a very strange move. Now, after watching what has happened with our currency and debt, is it not obvious that "the masters" have paved the way for an “American Union,” modeled after the EU, followed by a common currency which is to be called "the amero.”

All the evidence is there if you just pay attention. Many foreign leaders have supported such an idea. Yukio Hatoyama of Japan called for an Asian economic bloc with a regional currency, similar to the EU. On September 7th, the UN Conference on Trade and Development (UNCTAD) called for a global currency.

In March, 2005, President Bush, Mexico’s Vicente Fox, and Canadian Prime Minister Paul Martin met in Waco, Tex. to announce their plans for a Security and Prosperity Partnership (SSP)—step one in the creation of a North American Union.

The stage is set. Over the past few years Wall Street robbed investors out of $23 trillion dollars, Detroit’s auto industry collapsed, socialist bailouts took hold, and the dollar’s value has plummeted.

Need I say more?

I'm off to Detroit!

I spent most of the day traveling to and from the Detroit area to the middle of the state. I met with some very close friends, who I consider, my second family.

For you baseball fans out there, I was with Jay and Joan Hook. Jay played six years in the major leagues, and is in the record books for pitching and winning the first win in New York Met history. Jay went on to get an engineering degree from Northwestern University, and during the off-season, he went back to school to get his masters in thermodynamics. So much for the theory that all athletes are dumb!

For the most part, the people of Michigan are hard workers, and take their quest for an education very seriously. These good people certainly do not deserve what the globalists have done to this state.

While in Clare, Michigan today, I saw a doughnut shop called, "Cops and Doughnuts". My curiosity got the best of me, so I decided to go in. I saw the biggest and most eye appealing pastries I have ever seen. Thinking, "what the heck", I bought a large box full of pastries (which I gave to Jay and Joan), ordered coffee, and went to pay. The clerk said "that will be $7 dollars". I paused and said "excuse me?". She repeated the price again. I said, you have got to be kidding me". "Where I lived in Florida, this would cost 20 or 25 bucks".

The point here is a simple one. This doughnut shop is owned by some cops (really!) in Michigan. All of the pastries were made in the shop that day. Every employee worked hard, and had great attitudes. Yes they did. And I bought a box full of homemade pastries for the unbelievable price of $7 dollars.

What I received today was an outstanding product, great service, for an incredible price. In contrast, back home Pensacola, Florida, they give you a half ass product, half ass service, and charge premium prices.

Sound money management demands that you receive what you pay for. If you pay a premium price for a product, you should demand that that product, and the service you receive be premium as well.

Wall Street firms have not only screwed investors since 1997, but they have given you half ass service, and half ass advice. If I were you, and at one time I was, I would go find a good discount broker, and get my ass away from these people.

As far the the markets are concerned, the sucker job continued again today. They are trying to get you to believe that the economy is on the mend (half ass advice), but I can tell you first hand, the recovery is not happening in Michigan.

Here's what I think. Let Wall Street play their little game, and we'll play ours. Wherever Wall Street feels pressure, and sees that the blame for the financial crisis is pointed at them, they rally the markets. They know that investors have short memories, especially when their account statements begin show they are making money again. But, make no mistake, Wall Streeters own and operate the markets. We are just visitors in their backyard. Just like sharks in the ocean, you may not get bitten today or tomorrow, but if you stay in the water long enough, you'll get bitten.

They way you get back and Wall Street, and the friends in corporate America, is to sellbig rallies, and buy big declines. Always remember the famous quote by Jim Rogers; "Sell Euphoria, Buy Hysteria".

I am finishing up my visit to the Detroit area. Amazingly, some abandon manufacturing facilities have been bought by Hollywood studios, and the new space is being used to make movies. The recent Clint Eastwood movie, "Gran Torino", was made here in Detroit, and now, the new "Red Dawn" movie is being filmed here.

Clearly the recent demise of the "Big Three-minus Ford" was a move to break the backs of the unions. There is good and bad to breaking up the UAW. The bad of course is workers get less pay and have less say. The good is any mob involvement in the unions goes away.

Longer term, the Detroit area and the state of Michigan will find away (with or without the big three) to win. Now the Detroit inter-city is a different story. The inter-city is infested by crime, drugs, murder, and extreme corruption. Things were really bad when I left Detroit in 1977, but today it is unrecognizable.

Money has been thrown at inter-cities all across America, and basically the money has been wasted since these areas, and the people who live there, have become less productive, and not more productive, over the years.

As far as the stock market is concerned, nothing as changed. Economically things have not gotten better. The improved economic numbers, and better earnings comparisons have come with a price. Telling us things are getting better economically is an insult to our intelligence.

When better than expected economic numbers show slight improvements, they are doing so because forecasts were at near depression levels.

When Y/O/Y earnings comparisons surprise to the upside, they are doing so because of cost cuts. Cost cuts mean job cuts, and less corporate spending. Job cuts mean less consumer spending, and less consumer spending means flat to down earnings until the job situation improves.

While we have enjoyed the rally, and glad that it occurred, I believe this rally should be looked as an opportunity to book some profits and raise cash.

Here are our Top 10 ETF's for the week of October 26th:

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) SDS: UltraShort S&P500 ProShares
8) CASH
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for October 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

This morning the economic con-men are telling you that today's release of a +3.5% GDP number has officially marked the end of the recession. All I can say is *%!!&*^!.. Well, I really couldn't say what I want to say.

Don't be fooled, the economy is much worse that what we are being told. My visit to Detroit, and Michigan in general paints a totally different picture. The jobless rate in Michigan is over 20%, and nationwide, according to "John Williams' Shadow Government Statistics" the national picture shows an unemployment rate of about 17%.

This morning, the economic con-men tried to put a positive spin the jobless numbers as well. These people are trying to get you to believe that while the economy is losing 500,000 jobs a week, it is good news because it was not as many as they had expected. All I can say is *%!!&*^!..

Today, our reckless Federal Reserve will end its $300 billion Treasury purchase program. This is where the Fed prints money, and takes that money and buys our nations debt. They are doing this because the Chinese, Russians, and many of the petrol-nations have stopped doing so. In the real world, if you and I did this, it would be known as check kiting.

The impact of no or low demand for our longer term debt is high long term interest rates. This is what should happen, but of course we will have to wait for the evidence first.

Yesterday, the economic con-men were stunned when consumers confidence fell "unexpectedly" in October. I had to laugh when I heard them try and spin this one. How can confidence be restored when people don't have jobs?

In the weeks and months ahead, I think you'll hear that the Christmas selling season will be a bust, and the GDP numbers will be flat to down.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Here comes another con. This morning Jared Bernstein was all over the financial airwaves saying that the $787 billion government giveaway program "created or saved at least 650,000 jobs". Bernstein made his rounds on CNBC, Bloomberg, and will probably be on Spongebob before it is over with.

While the economy lost another 500,000 jobs last week, the Obama administration is scrambling to some spin to the bad jobs numbers. Saved at least 650,000 jobs? What's that, a little over a weeks worth of jobs temporarily saved?

You can't put a band-aid on a gash that has cut to the bone, and is bleeding. It's obvious that the politicians are becoming more delusional.

Here why the consumer will not be able to prop up the US economy;

-The consumer, who is 70% of the US economy, has been destroyed. Banks, who for years provided 100% financing for home-loans (stupid), has gone back to traditional 80% financing. Borrowers who financed 100% of their home purchase, at escalated values, now cannot refinance at the new 80% rule with bringing 20% to the table. In addition, home prices have fallen, which makes refinancing an impossible.

-Retail sales were driven by consumer spending prior to 2008. The retail sales boom was fueled by consumers extracting equity from their homes by way of lines of credit, second mortgages, and credit cards. Now, with little or no equity in their homes, and credit cards maxed out, consumers can no longer extract cash to fuel their spending.

-When you add no growth in consumer incomes, and a rising unemployment rate to the equation, we are starring at an economy that hasn't come close to bottoming.

On September 5th, 2009, a NY Times article said that homeless schoolchildren has risen dramatically, and that more than one million students are without stable housing.

With the unemployment and foreclosure rates soaring, I can't believe someone like Ben Bernanke has the audacity to declare that the recession is "likely over".

Over? Over for who? Oh, yes, over for a few investment bankers like Goldman Sachs, and their Washington friends.

Don't believe the con. As George W. Bush so eloquently proclaimed, Fool me once...

Yesterday's Market

The DJIA spiked 199.89 points off a ST oversold levels. Volume was less than impressive on the rally, but has been climbing during sell-offs.

The temporary blip in GDP had some on financial TV proclaiming that the recession ended several months ago. Clearly, the Cash for Clunkers program boosted results temporarily, but the economy is not going to be able to sustain a recovery on a temporary boost in car sales.

The key to growth going forward will be jobs, rising incomes, and a rebound in real estate. These are the key ingredients to a growing economy. Until you see this happening, everything else is a giant Con-Job...