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April 14, 2016


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HOUSING STARTS and PERMITS DOWN 8.8 % in March. Both multifamily and single family. More evidence of the real economy. SO far corporate earnings are not doing well either. Republicans are gaining a lot of leverage as we head toward the election. GDP probably running at near zero. If only we had a candidate.

THE FOOL's CON GAME: Iran learn's quickly. Jumping in with both feet, Iran comes out to enter the dialogue that the Saudi's and Russia use to drive the short term price of oil up and sell their product in a falling market. The game is played like this: You agree with your enemies to tell a story every 30 days or so that you are on the edge of a deal to fix the production of oil. Or EVEN LOWER production even though you are intending to increase it. Then before the news comes out you buy calls on oil futures. As the news comes out and as the price goes up you harvest your calls, then you sell puts at the higher price and sell your oil then you announce reluctantly that the deal has fallen apart. When the oil price falls you harvest your profits on the puts and the oil futures you sold on your future production at the false price you created. A great game. Used to be played by the oil barons, sheiks, and dictators. OPEC was great at the game. Now we have a rotation going: OPES, then Russia-Saudi, now Iran-Saudi. You need a rotation of characters lest the fools who believe figure it out. The true price of oil as a commodity is about $15-$20 a barrel with all these pile lines flowing. Add to that the fact that the world economy is tanking, Japan is in a 35 year recession, Europe cannot fund it's social system and the US is trying to become Europe. add to that that US oil storage facilities are full, offshore storage is full, Iran wants to get to 2.4 million barrels a day now that they are one of the world's good guys. And, despite a reported 28 US oil companies on the verge of loan default the US has only cut it's production 700,000 barrels a day. Brazil's 4th largest economy is tanking. Apple is building an electric car.Why O Why would anyone believe oil is worth anywhere near $40 a barrel? Who really believes demand is going up? The Russians, the Saudi's and Iran want you to believe it. I've got a bridge I'd like to sell you too!

IT'S THE ECONOMY STUPID: It's going to be Hillary as we all know. But, there is going to be an anti Hillary component in the Democratic party developed by Obama's weak economic performance, Sanders bashing of Hillary as an establishment proxy and the Democrats who actually believe that terror is a threat to their children's future. The only hope Republicans have after this mess is to keep the anti Hillary crowd at home. She will focus on the give a way plans of progressives. She will be vulnerable on terror and her career political gaffs as a poor leader. Republicans who seem to fail every time the have an opportunity to unite and conquer have a golden chance to pound Hillary on her weakness as a leader and her ties to Wall Street banks. At the same time they focus intently on the failure of the Obama Presidency to deliver on the recovery of the economy and deliver economic wellness to the middle class. Household income falling, the necessity for people to take on part time and 1099 jobs to even be employed. The blind eye toward immigration that takes middle class jobs. The failure for those high paying clean energy jobs to ever appear. The use of $4 Trillion of printed money to pay for welfare and unemployment programs rather than infrastructure and high school IT programs to produce IT trained kids for US employers. Only if the candidates at every level from local to state to Congressional to President pound away at those issues will Republicans turn the polls around driving independents to their side and keep the Democrats at home. IT's THE ECONOMY STUPID and by election day Americans could be really feeling it.

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