The United States is not just the most indebted nation in the world – it’s the most indebted nation in world history. And I believe our debts will get worse before they get better.

Why China's skyscraper obsession could spell doom for the country's economy.

Less than 24 hours after rumors of improved GDP growth in China drove U.S. financial markets up 1% on Thursday, today stocks are falling after those rumors proved untrue.

It was a big first quarter for U.S. stocks. But Venezuela, Japan and other financial markets around the world had even better quarters.

Despite the near-term bullish setups I remain skeptical about the upside from here. The bulls have carried the indices 11% higher this year. Also, pullbacks have been short and shallow.

Financial markets experienced a rare pullback on Tuesday. But here are three stocks that made big gains.

As anyone who has filled up their gas tank in the last month knows, oil prices have been on a tear of late. But today oil is experiencing a rare pullback.

A merger between two online-video companies sent this China stock up 157% on Monday.

It's great to ride a commodity bull market, but even in the throes of a huge uptrend, there are opportunities to take the road less traveled.

When investors think of growth, they think of high revenue and earnings growth, but they are looking in the wrong place; they should be looking here instead...

The momentum continued through Friday and dollar bulls look poised to keep it moving higher this week.

Analysts are beginning to call for $5 gasoline to hit pumps by this summer. Here's what you should do...

The higher-than-expected CPI number today was attributed to a Chinese holiday, but should inflation in China persist their loose economic policy may also reverse course.

As usual, Coca-Cola (NYSE: KO) beat earnings forecasts today despite a 71% year-to-year drop-off in profits.

Caterpillar's (NYSE: CAT) fourth-quarter earnings were strong. But the future could be even brighter.

In the wake of one of the most volatile years ever for stocks, safety will be a key theme among investors in 2012.  

China stocks were down more than 20% in 2011. Here are three that bucked the trend to make solid gains.

Agriculture stocks are one place that I'll be looking for profits in the year ahead.

Two of the most notable commodities investors are once again at odds. But why do I care?...

It has been a rough year for uranium stocks, but demand for the controversial metal is starting to resurface.

Apple's (Nasdaq: AAPL) iPad sales are falling, but the company's sales in another area are boosting its earnings forecast.

Risk aversion has taken hold of the market as investors became fearful that Europe will implode and that China's economy will begin to slow down.

Putting your money in a company that explores for or mines rare earth is a speculation-only venture by any definition of the word.

Bank of America (NYSE: BAC) missed earnings estimates badly, and tech behemoth IBM (NYSE: IBM) came in light on sales.

Chinese coal company Puda Coal (PUDA.PK) has fallen to 50 cents a share on suspicion that its Chairman (Ming Zhao) has sold American shareholders down the river, in so many words.

The market finished higher yesterday despite a bearish open. Volume was low for a second session in a row, which is unusual given the huge price move over the past three days.

Earnings season got underway with an underwhelming start by Alcoa (NYSE:AA). The company beat on revenues, but missed pretty badly on EPS due to rising costs and weaker prices for aluminum.

So, today I'd like to respond to one of the ONLY positive emails I received in response to an article I wrote about China stocks, 6 months ago.

Jack Ma, the chairman of the Chinese Internet conglomerate Alibaba Group, said last week that he is "very interested" in buying Yahoo! Inc. (Nasdaq: YHOO).

The market lost ground again last week. Despite early optimism from Europe and a rise in bank stocks, the bulls could not muster any meaningful rally. And the bears quickly resumed the selling pressure, defended 1175 on SPX, and dragged the market back to within 3% of this year's low.

Volume was also high in the decline, which indicates that there still is a large base of investors who are more than willing to sell at lower prices.

Stocks just ended their worst quarter since the financial crisis. The Nasdaq and S&P 500 each lost more than 12%.

The market slowly moved higher once again yesterday. The indices actually started deep in the green. But a midmorning ride down to 1220 resulted in consolidation for the rest of the day. The SPX rose nearly a percent after it surpassed 1220 resistance but it couldn't hold onto those gains. SPX quickly retraced the morning jolt and then declined by another percent near the close after 1220 could not be held by the bulls.

Between 1220 and 1250 there is not much resistance, but at 1220 there is plenty of selling pressure. Although if SPX is able to take out 1220 it could be a fast ride to 1250, maybe briefly higher to 1260 or something in that area.

Two services-related companies and a little-known Chinese coal miner were among the best-performing small-cap stocks on Tuesday. The day marked by President Barack Obama signing off on a bill resolving the federal government's debt ceiling crisis. Wall Street's response was negative, indicating disfavor about the nation's economic health.

There was little to cheer about for stocks, as the Dow Jones Industrials fell for an eighth straight day. The Standard & Poor's Small-Cap 600 has closed lower for the same number of trading sessions, while the Russell 2000 Index is on a seven-day losing skid.

The market didn't exactly fall apart yesterday, but at the same time, there wasn't exactly any conviction buying. But the bulls, despite another down day, did not lose a support zone.

Volume tracked higher again as the indices jostled up and down all day. Large cap technology rebounded, as did big banks, but consumer services and energy experienced a weak day.

While I certainly did not like being stopped out of numerous positions this week, I am content heading into this big weekend in cash. I think many traders may have that attitude as well,  which could make it difficult for the indices to gain any bullish traction until Monday.

The stock market recovered from Wednesday's sharp drop. The major indices traded higher for most of the day, before a late sell-off drove them in onto the red. The S&P 500 closed less than a half-point form support at 1,301.

But while investors seem to be feeling at least slightly better about a budget deal getting done before Tuesday, another negative catalyst has reared its head -- weak economic data.

The market weakened a little more on Tuesday, but the indices stabilized and kept the decline to a minimum. Volume levels were low as SPX consolidated at 1332 support. The industrials were hit the hardest and financials showed unusual strength. Large cap technology also continued to motor higher as stocks like HPQ, AAPL GOOG and MSFT rallied nearly 1%.

The TradeMaster portfolio was active again yesterday. On Monday a Chinese stock and RCMT were added to our long positions. Yesterday, F and another small cap stock were added, but F was a short.

Ford announced its second quarter results Monday before the market opened. Financial results were solid and EPS beat analyst expectations. And shares gapped 2% higher to begin the session. But high volume sales immediately dropped shares back to $13.15 from $13.44 intraday highs.

Congress and the Obama administration are at it again. Talks broke down over the weekend, which is a familiar development. The impasse is certainly weighing on the stock market.

Precious metals are rallying, bonds and stocks are down. Of these assets, it's the move in bonds that are most telling. Bond prices are falling, and yields are rising, because failure to pass a budget opens the door for a downgrade of U.S. debt from the ratings agencies. That, in turn, raises borrowing costs (interest rates) because repayment is suddenly less certain.

I've said it before, but the debt ceiling is a red herring. The United States will default on its debts for the simple reason that they are too high to get rid of in any other way.

Whether it's an outright default for bond holders or the more likely default of inflationary policy, we'll see the US default on its debt, and all of the terrible things the politicians on either side of the aisle threaten us with will come to pass - regardless of what bill is passed or how high the debt ceiling gets raised.

The problem is that we're talking about an abstraction. The dollar does not exist. It's an idea. There's nothing backing it except for some guns and some printing presses.

Earnings season continued at a torrid pace, with large cap stocks beating on revenues and/or earnings per share. The EU finalized a bailout plan, and reports seem encouraging that Congress will reach a budget deal soon.

We've had to suffer through a perfect storm of bad news since May. Now, we seem to be getting a perfect storm of good news. Even the most recent housing construction data was better than expected.

Unemployment, however, continues to lag. And as we've discussed at length, there's no reason to expect hiring to improve significantly, especially with spending cuts coming at the federal level.

China's got a heck of a nerve. Yesterday, CNN reported that the Chinese government's State Administration of Foreign Exchange published the following statement on its website:

"We hope the U.S. government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests and investors..."

And even went so far as to say that the debt issue is a "... reflection of the credibility of the U.S. government..."

Now, I know none of us are happy with the way Congress and the administration has approached our debt issues so far. But China's sitting in its own glass house.

Well that didn't take long. Just a day after it was reported that Greece will benefit from a debt restructuring that will require current bond-holders to take a financial hit, Ireland's finance ministry is demanding a similar restructuring for its bonds.

Of course, this is what happens when you open the door to restructuring. In a union, all rules must apply equally. You just can't give preferential treatment to one country and not expect others to demand the same treatment. The European Central Bank should have known this. And its failure to see this one coming is making the situation even more unstable.

There is a budding divergence between economic data and corporate forecasts. We’ve seen a stark deterioration of economic data across the board. Manufacturing surveys have weakened, auto sales were down in May and then, of course, we got the icing on the cake with the pitiful employment numbers last week.

 

Economists and strategists have been falling all over each other as they lower their 2011 GDP estimates. (Of course, Daily Profit readers had a heads up, as we noted the change in the Fed’s outlook after the last FOMC meeting.)

The International Energy Agency (IEA) recently released a report titled “Are We Entering a Golden Age of Gas?”

Fortunately, you can actually read this report for yourself. I’ve included the link to the report at the bottom of this email. (Warning: the report is nearly 130 pages long.)

I haven’t read the entire report myself, but I thought I’d go over two of the most interesting themes presented.

For one, the IEA projects that natural gas could rival oil usage on a Metric Tonnes of Oil Equivalence (MTOE) by 2035.

Take a look at this chart that plots world demand for different energy fuels:

Bank stocks are getting beaten down again this morning. Bank of America (NYSE:BAC), for instance, is off another 3%, and is trading below $11 a share and well below tangible book value of $11.40.

 

Valuations might look attractive. As a group, the big banks trade with a forward P/E around 10, while the S&P 500 as a whole sits at 13. But investors should always ask “what’s the upside?” And for the banks, that’s a darn good question.