Investors 411 Blog

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Things to Life

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General Electric

World’s 17th Largest Company

All we want is a level playing field

Trillions of dollars are flowing into an oligarchy of  giant corporate  and wealthy individuals. One group that is  being decimated by this oligarchy is American small businesses.

Mom and Pop want to start a small business in America. They hang up a sign that says OPEN for business.

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Small business are American job creators. In a large part because they have not yet reached the size where it is profitable to outsource major components of their business.

Example: Apple Computer has 43,000 US employees and creates 700,000 jobs in Asia.

The problem is they can’t compete against the giant corporations and their Army of Lobbyists and Lawyers

The corporate oligarchy has one huge advantage

TAXES

Most American businesses are taxed at 35%. That is unless your special like Romney’s Bain Capital and other venture capital firms and hedge funds. Their taxed at 15%

The real problem is giant corporations own the politicians in Washington

What does GE pay in Taxes?

• GE Had $14.2 Billion in profits ($5.1 billion in the USA) in 2010

• GE got $10 billion+ in Bailout money because GE Financial was way over leveraged.

• GE is pays more money to lobbyists than any other firm.

• GE has a huge tax division that is run by & employs ex Treasury and IRS officials.

• GE was just fined $63 million for IRS violations.

Tax rate – Do they pay

35% – WRONG

15% -WRONG

5%- WRONG

0% –  WRONG

GE in 2010 had a tax benefit of $3.200,000,000

63% Tax Credit RIGHT ANSWER

of what they profited from in the USA

Not only is this an unfair competitive advantage, buy you the tax payer are missing out on billions in potential tax revenue.

In fact YOU (the government) owe GE $3,200,000,000

as write offs on future Taxes

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STOCKS

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Buying Democracy

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How money

Wins Campaigns and  Destroys Democracy

Part 2

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What if Sheldon Adelson (8th richest man in USA and pictured above) decides to give Newt Gingrich’s Super Pac more than the $10,000,000 he already has? After all $10 million is not even close to one day’s profits from his giant gambling empire.

What if Adelson gives $100,000 million?

What if a Saudi Prince through an American corporation he own/controls/influences  decides to give a $100,000 million?

What if George Soros (7th richest in the USA) decides to give Obama $100,000 million?

Just because Adelson’s chosen to be open about his contribution, doesn’t mean the others have to be open about their contribution.

Money sure helps win elections. (There are some other infuencing factors)

• Gingrich & Romney spend the same amount of  money in S. Carolina and Gingrich wins.

• Romney spends the 5 times what Gingrich does in Florida and Romney wins

Where is the Outrage in the media?

There is almost none.

Why?

Because both Democrats and Republicans are out getting all  wealthy oligarch Super Pac money they can.

Its all legal.

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Here’s a photo of one leader who has consolidated power in a supposed democracy with the help of his own wealthy oligarchy. Now, Even billionaires who opposed him are in Siberian jails.

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Russia’s Vladimire Putin with a former friend

Think this will never happen in the USA?

Did you ever think there would be a legal $10,000,000 campaign contribution to influence a presidential campaign by a Vegas casino owner in the USA and no one cares?

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STOCKS

• Fundaments- These are the drivers of stocks –  The earnings reports, the jobs number, GDP, money supply and a host of other significant factors.

• Fundaments are the drivers and the car that move along the road. One good or bad earning report can shatter any sign or light on the technical road.

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• Repeat from Friday – “The MO can be read like any chart (see  above link) – Three times in January the MO has tried to break out above the 55 to 60 range and failed. Yet is has stayed in a very tight range between 30 and 60. If this range/trend breaks  on the top side bulls win and on the bottom bears win. The fact that the trend is from + 30 to + 60 instead of minus is BULLISH

• DAX (Germany)  down 1.2%  at 9AM EST. Not good for US markets. Big European Meeting this week. But they are all big meetings. Just lie all 19 Republican debates – each is hyped and hyped

• Link to the market events of the week here and Seeing Alpha’s homepage

• Two more considerations for Option combinations. BIDU (Monday earnings) A short term trade.MCP as a possible long option term combination trade.

• Reading Tea Leaves – It seems the majority of market tea leaf readers I look at are predicting some kind of pull back this week – It would be healthy if markets had a minor consolidation. Earnings season is winding down so outside economic news will start to dominate.

• The Key to Watch for – Any signs of Central Banks manipulating stocks or bonds. Rumors of a QE #3 abound. (google – news QE 3)

Brutal, Just, Brutal

Gingrich Super Pac new 7 minute movie on

Romney and Medicare

Came out at 1:00AM EST

Click on word FRAUD above to see it

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What’s even worse for Romney is Gingrich , catches Romney in a “blatant lie” in the Tampa debate about 6 Minutes and 30 seconds into the film.

Gingrich “Did Bain have any work with the government such as Medicare and Medicaid.” Romney “We didn’t do any work with the government.”

Documentation for Film at

“MittsBloodMoney.com“

That’s Gingrich’s Super Pac title NOT mine

Be Afraid, be very afraid because Super Pac adds  by  members of a corrupt oligarchy and permitted by the 5 right wing Supreme Court Justices who gutted campaign finance reform by voting to allow this are buying our democracy.

Financial Crimes Unit

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Eric Schneiderman- Head of new Financial Crimes Unit.

Obama in the SOTU address announced the creation of a

financial crimes unit.

When Obama took office he appointed Darth Vader/Larry Summers as his chief economic advisor. Summers was under Secretary of Treasury to Robert (former CEO of GS) Ruben who went along with the 1998 the Republican proposal to gut many financial reforms and allow Investment banks to merge with Insurance companies.

1998 was the start and the process continued throughout the Bush administration. Cutting regulations and regulators led to the finacial meltdown of 2008/2009.

Fed Chair, Alan Greenspan Mr “Free Market” himself

admitting deregulating banks was wrong

Summers, who left the Obama administration almost year ago,  had coddled the big banks.

This new unit, which is three years late, will be headed by New York Attorney General Eric Schneiderman

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Another Republican Debate

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Republicans will score this a clear win for Romney.

Another typical Republican food fight that was painfully short on solutions and filled with accusations and counter accusations.

Romney’s most effective line was about family values and it absolutely crushes Gingrich – “I stayed with my wife though MS and Cancer” (Newt has had 3 wives and scored big time when jumped on the media for making the topic the first question of the debate.)

More from USA Today

But it’s not over till the fat lady sings

and Newt has a new docudrama coming out at 5:00EST

Preview

If it hits with his billionaire PAC money it could do some damage.

However, Mitt is outspending Newt 3 to 1 in FLD.

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YOUR Comments

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A follow up to yesterday’s Yankee Bob editorial - Two outstanding posts (scroll down at link) yesterday on solutions from JS and Yankee Bob on a financial transaction tax. As always PAUL R keeps you up to date with the latest breaking insight in stocks and trading concepts in the comments section.

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STOCKS

• Long term – As long as interest rates stay low, and there is liquidity without inflation – investment money seeking higher returns will be forced into stocks and bonds. This dynamic has not changed under Bernanke/Obama even though other significant sectors of the world have taken some big hits (Europe & Japan) or are slowly pulling back – China.

The POSITIONS page does not yet reflect the

2012 Outlook.

• The MO can be read like any chart (see  above link) – Three times in January the MO has tried to break out above the 55 to 60 range and failed. Yet is has stayed in a very tight range between 30 and 60. If this range/trend breaks  on the top side bulls win and on the bottom bears win. The fact that the trend is from + 30 to + 60 instead of minus is BULLISH

• Mantra – Low volume rallies are a characteristic of Central Banks and friends manipulating stocks/bonds. They have become quite good at this and these rallies have tended to last.

• DAX (Germany)  was up over 1% yesterday and this failed to move US markets higher. The disconnect between Europe and the USA is growing. Italian bonds are now below 6%. Conclusion – Its way too early to call a long term trend, but it looks like there is some light at the end of a what will continue to be a long dark tunnel for Europe.

• NFLX –  Kudos to Jim J who made a 65% Profit on his combination Option Trade of NFLX. The Strike price for both the Put and Call was $95 and the expiration this Friday. NFLX ended the day up +22.06 after earnings.

• Two more considerations for Option combinations. BIDU (Monday earnings) A short term trade. MCP as a possible long option term combination trade.

• Homebuilders, will be a recommendation this year. 3 homebuilders have been added to YSL 2012 this week. ETF’s - Paul seems to prefer the ITB homebuilders ETF. I like the XHB because it is @5x more liquid and therefore a better for options. Both work as a long term investment.

• Warren Buffett – “Why should I have a lower tax rate than my secretary”

• Steve Jobs -  Fox News is - “An incredibly distructive Force”

Remember the giant corporations and the weathy have  an army of lobbyists and lawyers in Washington. This is what they pushed for

• 1998 – Tore apart banking regulations like allowing  banks to merge with insurance companies

• 2004 – SEC allows bank over leveraging to grow from 12 to 1 to 40 to 1

• 2008/09 – Financial meltdown. Housing crisis, Bush/Paulson  bailout of too big to fail banks. -9% GDP & stocks tank

Nothing we can do becuse its all legal They privatize gains. We taxpayers subsidize the losses

• Romney (uber wealthy) paid 13.9% rate on his 2010 taxes while most working American pay far more.

• Romney’s company Bain, like hedge funds and other investment firms, pay only 15% on their profits while small business pay a much higher tax rate.

• Romney, sets up $100 millon dollar tax funds for all his sons without paying taxes. We can’t.

• Gingrich, like all politicians, can exit politics and make millions lobbying for government agencies (Fannie & Freddie)

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ITS LEGAL, ITS LEGAL, ITS LEGAL

Because they own our government.

Elizabeth Warren -

In her passionate plea to fight for the working middle class -

“Washington now works for those who can hire an army of lobbyists and an army of lawyers … 30 largest companies pay more for lobbyists than they do taxes...Who really pays for that?…And the answer is America’s middle class. They’re the ones left to pick up the pieces, to pay the taxes, to keep the country running.”

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SOTU

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George “Been Forgotten” Bush went over the top with his “your either with us or against us” proclamation.  A line he later regretted.

Remember, those of us who opposed the Iraq war were hated as un American and not Patriotic. Emotions ran high because of the terrible 911 tragedy, but now some healing  has occurred over a war that was a tragic mistake.

The heart of Obama’s speech

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We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right.

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Why are Romney’s Poll numbers Dropping?

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Romney provides the contrast to Obama SOTU and makes Bush’s “you’re either with us or against us”  milquetoast.

The following 20 second video is a perfect example of raging extremism. The kind of shouted hatred that twists the minds of so many of our fellow Americans into blind fear mongered emotionalist.  Romney -

“I’m going to Stuff it Down Obama’s Throat”

Click on photo for 20 second video

As far as timing goes Obama caught a huge break that his SOTU address came directly after Romney released just his 2012 tax returns (13.9% tax rate) that have opened a massive amount of new questions. (future editorials)

More on SOTU here and NYT here

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STOCKS

• From Last week – “We are in a low volume rally” In Paul’s Corner he points out the decrease in volume over the last five days. There have been lots of technicians who are calling for a pull back here. I tend to see 1350 1370 as the target on the S&P 500 before a significant retreat. (S&P now at 1314)

• Low volume rallies are a characteristic of Central Banks and friends manipulating stocks/bonds. They have become quite good at this and these rallies have tended to last.

• DAX (Germany) down this AM 0.67% at 7:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone. But yields rose yesterday and this AM to  +6.23%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

• NFLX reports earnings after the bell. Watch comments section for details on possible combination Option Trade.

• Our government is simply overwhelmed by corporate lobbyist and money. For more Robert Reich

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Democracy Dying

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Billionaire Sheldon Adelson

Donates Another $5,000,000

to Gingrich Super PAC

Yesterday’s blog detailed the vicious negative & effective character assassination assaults of the Super Pacs for both the Romney and Gingrich presidential campaigns.

Why the Super PAC’s?

because fear mongering negatives work

They Buy YOUR vote?

You can have an army of outside attack adds decimate your opponent and funded by anyone or any entity/corporation that wants to buy/own a candidate.  These hidden or transparent oligarchs buy votes, thanks to the US Supreme Court’s Citizens United decision.

This week the target of Gingrich’s Super Pack will be Mitt Romney and they have plenty of fresh ammo because

Romney just released his

2010 Tax Returns.

• Romney has 13.9% Tax rate for 2010.

• Romney has/had a Swiss Bank Account.

• Romney has/had other off shore banking accounts in noted tax havens Luxembourg and the Cayman Islands

• Romney unlike his father, Obama and Biden has NOT released 10+ years of tax returns – only 1 with an estimate for 2011

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Some of the negative attack adds that are being used so far below.

Here and here and here and here

and here and here and here

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How to Fight Back

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Join United For The People

“We believe that America works best when our government is of, by and for the people. Although we have differences in scope and tactics, all of us are united in the understanding that the Court’s decision in Citizens United must be remedied by amending the Constitution in order to restore the democratic promise of America.”

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STOCKS

Back tomorrow with Stock Section

Check Out Comments Section For More

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Headlines

US, French, English warship go through Gulf of Hormuz,   Europe agrees against Iran Sanctions,   Prez addresses nation tonight,   Earnings season continues,  Overbought markets due for a pull back

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Special Note

Investors411 2012 Yearly Investment Outlook

is in the Stock Section Below

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One Big Party

The news of the morning - The first Florida prediction poll is out since South Carolina and its Newt +9%. Its only one poll, but there is a change in momentum. Its way to early to call this race.

Some interesting political analysis  ”Mitt Romney’s Misery in a Word Bain “(Politico)

Clearly Republican voters in South Carolina felt Gingrich won the debates, but there was another even more significant factor.

Super Pac Money

“There are probably less than 100 [obscenely wealthy] people fueling 90% of these Pacs”

LINK

In Iowa it was Romney’s Super Pac that spent millions on negative adds against Gingrich. He was caught flat footed. He obtained one agreeable billionaire and created his own giant super Pac They smashed Romney with negative adds in South Carolina and spent just as much money as he did.

Florida Super Pacs are already in full swing with the vast amount of money not spent on building a case for constructive ideas on how to help fix out economy, but scathing negative character assassination.

Everybody says they hate these adds, but the reality is they work. Romney beats Gingrich in Iowa by going negative with his super PAC and Gingrich beats Romney in Florida by going negative with his.

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In the last election we saw a massive amount of money go to Obama from Wall Street. Almost every progressive will tell you Obama has not delivered becuse he is influenced or ownd by big money.

Sure there is a difference between Republican views and Democrats (watch the debates) But in the end to compete with the winner of the Republican Primary Obama is going  to need his own Super Pac’s to go negative.

End result –

A group of wealthy oligarchs determine the outcome of what used to be called

Democracy

We are slowly morphing into one big party

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STOCKS

• From Friday – “We are in a low volume rally. This means the manipulators (central banks, HFT’s and other giant sharks) are in control.” Sorry I haven’t got the details on how this is happening, only a recognition of its existence (see yield rates falling below) Low volume rallies can last a long time as we saw when the Fed introduced quantitative easing (QE #! & QE #2)

• DAX down this AM 0.57% at 6:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone at 6.13%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

• A record setting -599,000 have been eliminated from government. If these jobs were still in existence the monthly jobs growth figure would be higher.

• US corporations are sitting on more cash than ever before ($1.9 trillion) Most company profits are again beating expectations.

• Relative to the rest of the world – Japan (tsunami) India & China (GDP in decline) Europe (crisis) – the USA is outperforming (Thanks to EW for his heads up on this)

• While it may be just a little too soon to call the trend, there has been a three month surge in housing stocks The fall in housing prices was a dominant factor in the great recession.

The USA under Obama and his Fed Chair Bernanke is in a slow steady recovery with little sign of inflation on the horizon.

Later this week the Bad and the Ugly

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Money Bomb

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Thanks to any of you who came to (D) Elizabeth Warren’s “Money Bomb” party at our house. All across Massachusetts the grass roots came together to donate and make calls.

Raising a million+ in one day is great, but

Here’s the problem

Even though this is a phenomenal amount of $$$, her opponent has a big head start and Carl Rove is already running negative Super PAC attack adds. Click on photo or here for more.

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Unnatural Causes

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Investors411 has spent time in recent weeks going over how countries with greater income inequality has a devastating impact on everything from trust to mental illness of the people in that country.

Dictatorships and countries run by wealthy oligarchies are even a more obvious example of income inequality having a devastating impact on populations.

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Unnatural Causes

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They started as a documentary that formed a world wide

political action group on how inequality causes illness.

Thanks to AG for heads up on this

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Toaster Gets Toasted

As usual, the 17th Republican debate was not about substance and jobs, but negatives hyperbole and attacks.

Two candidates knew the question that was coming. Newt about his 2nd wife’s allegations and Romney about his taxes.

No matter what you think about either candidate or what they did.

Newt hit a home run (video)

Romney struck out (video)

Now that Perry is out of the debate, Romney the former toaster is getting toasted.  He’s flipped flopped back to “maybe” about his tax returns and perhaps for Obama in April.

What an insult to Republicans in South Carolina and Republicans everywhere. You don’t have the transparency of Mitt’s tax returns being made public for you to make an informed decision on voting.

Romney’s father released 12 years of his tax returns and started this tradition of openness and transparency..

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STOCKS

• DAX way down 0.55% this AM (8:00 EST) and the Italian 10 year bond  full retreat for almost two weeks continues. The later is in the longer term bullish.

• Options Combination Trades – I realize lots of this is very technical and many do not understand it. But there is a group of you who do trade options. For them – If you bought GOOG options (I mentioned it but passed on the trade because the options cost a lot) you are going to have a huge gain this AM because GOOG was down 9+% in post market trading.

• Longer term indicators are bullish, but it sure looks like some traders may sell today. We are in a low volume rally. This means the manipulators (central banks, HFT’s and other giant sharks) are in control. Best example of this is how the Italian bond is being pushed lower.

• Politics, potential trade wars, globalization are all major factors on the long term outlook for 2012. Will work on this over weekend. Sorry it’s so slow in coming out.

A Jobs Creator?

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Mitt Romney (R) & Deval Patrick (D)

A tale of Two governors as Jobs Creators

As you know, the jobless rate each state roughly reflects the jobless rate of the country.

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Romney served as Massachusetts governor from the start January 2, 2003, to January 4, 2007. Patrick from Jan. 4 2007 to present.

So let’s look at the jobless rate in the USA and Massachusetts when they were governors in the following interactive graph with data from Bureau of Labor Statistics

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Unemployment graph for Massachusetts and USA

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Mitt Romney (R) & Jobs

Basically, at the start and a few months into his administration the MA jobless rate is a tiny bit below the USA  and when his administration ends it’s a tiny bit above or flat.

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Romney’s public record as a jobs creator is

slightly below average

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Deval Patrick (D) and Jobs

Basically, Patrick starts out with a jobless rate that’s flat or slightly above the USA average. But as the graph shows over time to today that difference widens to a huge 1.5% better than the national average.

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Patrick’s public record as a jobs creator is

outstanding

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Einstein said everything is relative. So compare Patrick to Romney & Romney to the USA. Which governor made a difference in Massachusetts?

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Romney, the businessman’s

record as an elected official

in creating jobs is

Below Average

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STOCKS

• DAX way up 0.55% this AM (8:00 EST) and the Italian 10 year bond is in full retreat for over a week. The correlation between European & US stock markets has become weaker, but still significant. Latest data below. All this = BULLISH

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