Markets being Juiced?...........

Before the market chart appears, I've added another diatribe on what caused the Presidential election outcome to mystify the thinking person and why things are going to be profoundly different from now on. One issue that appears to be the tap root of our malaise is our educational system.

Education in the U.S.

In looking at the unemployment picture going forward, things beginning to look rather dismal for both the short and long term outlook. The economy is struggling for many reasons but one of the key elements is the structural nature of the change in the job market. Today everything is done by or touched by high tech products that do the much of the work in the production process. The requirements for high skilled workers is booming while the old school pure assembly processes are going away. Our economy is moving through another structural change on how work is done.

Today our schools are not turning out enough graduates in the math and sciences to keep up with corporate needs. We are having to move work to areas around the globe that have an abundance of skilled workers. Just to drive the point home about the jobs going begging, below you will find comments that should scare the heck out of you.

Excerpts from a report in 2008 by an educational advocacy group founded by retired general and former Bush administration Secretary of State, Colin Powell.

"Detroit, by many calculations the poorest US city, graduates less than 25 percent (24.9 percent) of its public high school students. Indianapolis Public Schools graduate 30.5 percent of their students, and the figures for the Cleveland Municipal City School District and the Baltimore City Public School System are 34.1 percent and 34.6 percent respectively."

"The city-suburb split is also immense in such metropolitan centers as New York (47.4 percent vs. 82.9 percent), Cleveland (42.2 percent vs. 78.1 percent), Philadelphia (49.2 percent vs. 82.4 percent), Chicago (55.7 percent vs. 84.1 percent), Los Angeles (57.1 percent vs. 77.9 percent), and Atlanta (46.1 percent vs. 61.8 percent)." 

 The former Secretary of State said of the study, “When more than 1 million students a year drop out of high school, it’s more than a problem, it’s a catastrophe.”

Here are a couple of succinct comments from Michael Rothschild, found in his book "Bionomics"which was released in the 1990's:

"....Recently, more than 80 percent of the applicants taking a simple test for entry-level jobs at New York Telephone flunked. While the newspapers are filled with listings for high skill jobs that go begging for qualified applicants, the flood of dropouts and functional illiterates disgorged by the public-school system swells a pool of 30 million illiterate adults already trapped in menial jobs." (remember that 47% number Romney was touting)

"Clearly, something is profoundly wrong with an organization that consumes ever more resources to produce an ever more pitiful product. Indeed the record of the public school system shows a negative "learning curve"- ever higher costs for deteriorating performance."

"Like other parasites, a bureaucracy lacks the capacity to anything but grow and reproduce itself."

And from an article found on Theburningplatform blog:

"If you live in a wealthy area of the country, you may look around and things may look really good to you. But in many other areas of the country things are worse than they have ever been in the post-World War II era. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.

 Can you imagine that? We have over a million kids that are attending our public schools that do not have a home to go back to at night.

Our economy desperately needs more jobs, but we just continue to lose more of them. On Thursday, it was announced that American Express is eliminating 5,400 more jobs. More announcements like this come out just about every day now. 65 percent of all Americans expect 2013 to be a year of “economic difficulty”, and there aren't a whole lot of reasons to be optimistic about things at this point."

http://theeconomiccollapseblog.com/archives/the-federal-government-hands-out-money-to-128-million-americans-every-month

It took 60 plus years for the nation to get to this point of near collapse. Short term fixes are not going to make a dent in the problem. The school system is turning out ever greater members for the legions of 47%'ers than any other demographic voting block. Once again we're screwed. Please take a moment to click on the links and read the original articles which yield many more details of our problems.

The Markets 

The following excerpts were taken from articles, same subject, on Zerohedge.com:

"And of all major inflection points, perhaps none is more critical than the just released data from today's H.6 statement, which showed that in the trailing 4 week period ended December 31, a record $220 billion was put into savings accounts (obviously a blatant misnomer in a time when there is no interest available on any savings). This is the biggest 4-week total amount injected into US savings accounts ever, greater than in the aftermath of Lehman, greater than during the first debt ceiling crisis, greater than any other time in US history."

"Will this comparable attempt to send stocks even higher and fool retail to be the dumb money bag-holder once again succeed? Or will this time not be different? Of course, back in 2007 we actually had a market: now it is merely a place where the Fed parks $85 billion in freshly printed money each and every month.  So maybe this time will be different after all."

http://www.zerohedge.com/news/2013-01-10/what-record-220-billion-deposit-injection-kick-start-2013-market-looks.

The basic concept at work here "in the broken market" is that the Government (The Fed) and the big Banks are working together. The Fed prints the money then gives it to the Banks interest free to invest in the market and make profits and the little guys (that's all of us) get screwed once again.

If the market (see SPX chart below) fails to break out above the red resistance zone then maybe its going to be different this time. If it makes a move higher the Ponzi game will continue for awhile longer. This is not the time to be jumping into the market and chasing the move higher, but rather one of extreme caution.

This is the chart of the SPX with Friday's closing price. The index is lacking the momentum at the moment to make the move higher. So far on Monday we have seen mostly a sideways move. The RSI is still above the 50% level which bodes positive for the market unless the index  falls through the 20 day moving average at 1450.