On December 15th, I posted “S&P 500 Fractal End-of-Range Signal” where I wrote:

“The market has been range-bound for this long because half of investors are thinking: ‘the economy is improving, so I should be buying stocks’, and the other half are thinking: ‘the wheels are coming off of Europe, so I should be selling stocks.’”

I predicted that the market would break out of its range within the next few weeks. Three weeks later, that’s exactly what happened. However, I didn’t predict which way it would break; only that the range was long in the tooth.

However, the next day, Joe Weisenthal at Business Insider posted this:

“Want to see a CLEAR sign that funding stress has eased in Europe? …this has a lot to do with the ECB’s actions that will allow banks to borrow money super-cheaply for 3 years and buy sovereign debt that’s yielding a lot more. If that’s the case, it’s working. Major shift here in the last few days/weeks.”

He totally nailed it. So, I hereby christen this rally as “The Great Joe Weisenthal Rally of 2012.”

Moral of the story: Don’t fight the Fed, or the ECB!

Next week, we get another LTRO operation from the ECB. So that’s a very big deal.

I see that there is a movie about Martin Armstrong. I didn’t realize that he was out of prison. In any case, I agree with Barry: “Way too conspiratorial…”, but I will go further.

Martin Armstrong is a bullshit artist. How do I know that? Because he writes a lot about this super-intelligent computer that he invented 25 years ago.

And I have a degree in computer science.

So when he writes things like:

“Now I needed my children to help put a face on the computer. By this I mean I had to teach it how to communicate. I initially established a type interface.”

…I burst out laughing. No engineer would ever say “type interface.” The term is “command line interface”. Maybe you remember it from the old days of MS-DOS. If you look at the Wikipedia article, you will not see the term “type interface” anywhere on the page.

Right? It’s a joke. Armstrong writes gaffes like that constantly whenever he is carrying on about the magical computer that can predict the future.

If you see him, open up your Mac and start up the “Terminal” app. Ask him to type in a “copy” command. I bet he will stare at it like a deer in the headlights.

Note: Armstrong’s “type interface” quote can be found on this page. There’s a lot of text on the page, and the quote is nearer to the bottom. But I’m sure you know how to search a page for a piece of text, right? Right???

Libertarian economist Walter Williams jumped for joy when a Federal Reserve Bank study found that imports from China amount to “only” 2.5% of US GDP. Finally! Some solid evidence that our libertarian open-borders policy wasn’t destroying America!

But should libertarians and other globalists really be breaking out the champagne? I don’t think so. While 2.5% of GDP sounds pretty small, remember that our GDP is rather gigantic at $15 trillion. So, the Chinese bite amounts to $375 billion.

What does that translate into jobs-wise? Hard to say, but let’s calculate a rough estimate. In 2010, Walmart’s US sales were $258 billion. So, we can say that China has bitten off about 1.5 Walmarts. And since Walmart has 1.4 million employees in the USA, we arrive at a rough estimate of 2.1 million jobs lost to Chinese imports.

That’s not small potatoes.

Do we have 2.1 million jobs to burn? Not hardly. Would President Obama like to have those 2.1 million jobs in his pocket as he seeks re-election? He sure would.

And of course, when I rant about China, I am only using it as an example of our larger policy of free-trade with low-wage nations. So, countries like Mexico and India would have to be added in. Not only that, but the Fed’s calculation doesn’t consider collateral damage.

What happens to local businesses when you pick up the 250,000-strong US shoe industry and move it China? Do we only lose 250,000 jobs? Of course not. Just imagine all the restaurants, dog-groomers, and accountants who no longer have those 250,000 shoemakers as customers. The Fed report did not consider that, but the truth is that imports of sweatshop goods and services have cost the USA several million jobs.

Is it a coincidence that strong US economic growth is a thing of the past, and rapid Chinese growth is now the standard?.

Is it a coincidence that “jobless recoveries” began shortly after the gates were thrown open to cheap imports?

Is it a coincidence that the number of Americans on food stamps has nearly tripled since China was admitted to the World Trade Organization?

I don’t think so.

People like to blame Alan Greenspan for keeping interest rates too low, blowing up the housing bubble, and destroying the financial system. But I hold that Greenspan kept his foot on the gas peddle too long because he was unknowingly trying to fight the massive tide of offshoring. The real root cause is the libertarian, free-trade dystopia that was constructed at the end of the last century.

When you look at a product stamped with “Made in China” on a Walmart shelf, you are really looking at the tombstone of an entire American industry. See this story for how China targets small American manufacturing companies. Ironically, if an American company fights back against the mafia-style tactics of the Chinese, they are attacked by American retailers too. You see, retailers want those cheap Chinese products on their shelves, and actively try to destroy American producers.

Of course, American exporters are selling to China. Back in the day, the globalists used to argue that those new exports would create enough new jobs to offset the jobs lost. But that has been completely debunked. Not even Larry Kudlow will make that argument now!

History will prove my view correct. Wait and see. The USA topped-out when we brought China into the WTO. Short of trade-reform, it’s all downhill from here.

Note: China was admitted to the WTO in December of 2001. However, nations like Mexico and India were admitted earlier. See the list here.

Note: The Fed study linked above was conducted in response to the charge that the Fed’s QE2 policy would create inflation in the USA. The Chinese peg the yuan to the dollar, so they had to print huge amounts of currency to maintain the peg. That caused inflation in China, and the prospect of it propagating to the USA via higher-priced imports. I’m not saying that the Fed’s study is flawed. However, it is important to consider the context. The study would likely have not been done if the Fed didn’t feel the need to justify QE2. So, they did have an axe to grind.

Note: I was a supporter of QE2, and took much delight in the squealing of the Chinese, and their globalist fifth column here in the USA.

Update: The list of top investing websites now has a permanent home on this page. Please go there to see the latest Alexa rankings.

Here is an update to the list of top investing websites as compiled by my Rank-O-Matic app. I have added 19 new sites – denoted with an asterisk after their name. I found a few more, but their Alexa ranks were so low that I decided not to add them. I like having Larry Kudlow as the anchor (ha, ha) of this list. He’s great at SHOUTING ON CNBC!!!, but apparently couldn’t write his way out of a paper bag. Take that Kudlow!

Note: SPYderCrusher debuts with his new site, already above Kudlow.

Note: I outrank The “World Famous” Gartman Letter, of which I am not “subscribed of”.

Note: I have added Niall Ferguson because it pleases me to out-rank famous people. While he is an historian, he does specialize in economic and financial history, so one can make a case for his inclusion.

On the morning of October 5th, Challenger, Gray & Christmas released their monthly job-layoffs report with a headline screaming: “Layoffs Surge to Highest Total Since April 2009″.

Later that night, I was quoted in Investor’s Business Daily commenting on withholding-tax collections:

“the data show no evidence of serious job losses”

And I was vindicated on the following Friday, when the big “Employment Situation” report almost doubled analyst expectations showing 103,000 jobs added in September. Not to mention hefty upward adjustments for both July and August.

Maybe Challenger’s layoffs have yet to bite since they report layoff announcements rather than actual layoffs. But then again, maybe they won’t. See the explanation that Business Insider published here.

In any case, the hardest of hard data on jobs (federal withholding-tax collections) will continue to give my subscribers at The Daily Jobs Update the straight story. Which, as the jobs report showed last week, is that the economy is not in recession like everybody thinks.