Archive for March, 2013

The S&P 500 Trades Up To An All Time New High On A Rising US Dollar …. While the Major World Currencies Trade Lower Commencing Competitive Currency Devaluation … Stimulating Disinvestment From Nation Investment World wide On The Loss Of National Sovereignty In Cyprus

March 31, 2013

The S&P 500 Trades Up To An All Time New High On A Rising US Dollar …. While the Major World Currencies Trade Lower Commencing Competitive Currency Devaluation … Stimulating Disinvestment From Nation Investment World wide On The Loss Of National Sovereignty In Cyprus 

Financial Market Report for the week ending March 28, 2013

1) …  On Monday, March 25, 2013, World Stocks, VT, traded lower on the Troika’s  bank bailout of Cyprus.

World stocks VT, traded 0.6%, lower, with Nation Investment, EFA -1.3, Small Cap Nation Investment, IFSM -1.2. Today’s financial market trading establishes that European banks and eurozone nations are insolvent banks and insolvent nations.

Jordan Shilton and Chris Marsden of WSWS report European Union imposes bank bailout on Cyprus. The statement by Euro Group head Jeroen Dijsselbloem that the Cyprus bailout is a model for the rest of the euro zone led to falls on Europe’s financial markets.

Jan Strupczewski and Annika Breidthardt of Reuters report Last-minute Cyprus deal to close bank, force losses on uninsured depositors. Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.

The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.

Swiftly endorsed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.

The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said. Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.

An EU spokesman said no across-the-board levy or tax would be imposed on deposits in Cypriot banks, although the hit on large account holders in the two biggest banks is likely to be far greater than initially planned. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.

Cyprus government spokesman Christos Stylianides said: “We averted a disorderly bankruptcy which would have led to an exit of Cyprus from the euro zone with unforeseeable consequences.”

German Finance Minister Wolfgang Schaeuble said Cypriot lawmakers would not need to vote on the new scheme, since they had already enacted a law setting procedures for bank resolution.

“It can’t be done without a bail-in in both banks. This is bitter for Cyprus, but we now have the result that the (German) government always stood up for,”

Lefteris Christoforou, vice-chairman of the ruling Democratic Rally party, said it was important that Cyprus had avoided a chaotic bankruptcy.

A senior source in the Brussels talks said Anastasiades threatened to resign at one stage on Sunday if he was pushed too far. He left EU headquarters without making any comment.

Diplomats said the president had fought hard to preserve the country’s business model as an offshore financial centre drawing huge sums from wealthy Russians and Britons but had lost.

The EU and IMF required that Cyprus raise 5.8 billion euros from its banking sector towards its own financial rescue in return for 10 billion euros in international loans. The head of the EU rescue fund said Cyprus should receive the first emergency funds in May.

IMF chief Christine Lagarde said the agreement was “a comprehensive and credible plan” that addresses the core problem of the banking system. “This agreement provides the basis for restoring trust in the banking system, which is key to supporting growth,” she said in a statement.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island’s offshore business model that had failed. “To all those who say that we are strangling an entire people. Cyprus is a casino economy that was on the brink of bankruptcy,” he said. The euro gained against the dollar on the news in early Asian trading.

The abandoned plan for a levy on bank deposits had unsettled investors since it represented an unprecedented step in Europe’s handling of a debt crisis that has spread from Greece to Ireland, Portugal, Spain and Italy.

Cyprus’s banking sector, with assets eight times the size of the economy, has been crippled by exposure to Greece, where private bondholders suffered a 75 percent “haircut” last year. On Tuesday, the 56-seat parliament had rejected a levy on depositors, big and small. Finance Minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia, whose citizens and companies have billions of euros at stake in Cypriot banks. On Friday, lawmakers voted to nationalize pension funds and split failing lenders into good and bad banks – the measure to be applied to Laiki. The plan to tap pension funds was shelved due to German opposition, a Cypriot official said.

The tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros – enormous sums for an island of 1.1 million people that could never sustain such a big financial system on its own.

Rebecca Christie, James G. Neuger & Svenja O’Donnell of Bloomberg report Cyprus said to reach tentative deal to avert default Cyprus agreed to the outlines of an international bailout, paving the way for 10 billion euros ($13 billion) of emergency loans and eliminating the threat of default.

The euro rose after the provisional agreement was struck that would make Cyprus the fifth country to tap a rescue since the euro debt crisis broke out in Greece in 2009. The European currency rose 0.3 percent to $1.3025 at 3:40 a.m. Brussels time. Stocks in Asia gained, with the MSCI Asia Pacific Index climbed 0.7 percent. The Nikkei 225 added 1.3 percent.

The agreement calls for Cyprus Popular Bank Pcl (CPB) to be shut down and split. The Bank of Cyprus Plc would take over the viable assets of the failed bank along with 9 billion euros in central bank-provided emergency liquidity aid, according to three EU officials who asked not to be named because talks are ongoing.

Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.

Bloated by investments from Russia, Cypriot banks have assets equal to 750 percent of the country’s gross domestic product, more than double the euro-zone average, the European Commission says. Russian companies and individuals have an estimated $31 billion in Cyprus, according to Moody’s Investors Service. All the contradictions of the crisis management came together over Cyprus, with name-calling between northern and southern Europe, tensions between unelected central bankers and elected politicians, and the disconnect between slow-moving policy makers and lightning-fast markets.

Mike Mish Shedlock writes Merkel’s Vision: “United States of Germany. Following brutal negotiations with EU finance ministers, the IMF and various European government officials, Cyprus finally agreed to measures that her highness, Angela Merkel would accept. This time she held her ground. Previously, Merkel compromised every key position she has ever held in the sake of political expediency. For example, Merkel went to the well twice on Greece to appease her opponents. She repeatedly caved in to demands from French president Nicolas Sarkozy. She reversed her stand on nuclear energy following German polls. So why did Merkel draw the line at Cyprus? To Merkel everything is a play to win the next election and ultimately to preserve her legacy. She is willing to play hardball now for one reason only. Public opinion is decisively against further bailouts, and anything but exceptionally harsh terms on Cyprus would hurt her election chances in September. She fears the rise of the eurosceptic Alternative for Germany (AfD) Party and the best way to take some wind out of the AfD sails is to show she cares about austerity. Merkel’s vision is not a United States of Europe. Rather, Merkel’s vision is for a “United States of Germany”.

A new trust, the trust in the diktat of regional leaders such as the EU Finance Leaders and Angela Merkel is rising. Complete and total regional governance of the Eurozone is only a matter of time where nannycrats now state leaders will rule.  Under liberalism, sovereign nation states and their leaders governed citizens; but under authoritarianism, sovereign regional leaders and sovereign regional bodies, govern residents of regional zones.

 

2) … On Tuesday, March 26, 2013, World Stocks, VT, rose as the S&P 500, SPY, traded up 0.80%, as Durable Goods Orders rebounded in February, to close at 156.19, overcoming its March 14, 2013 high of 156.04, to achieve a new rally high, just shy of its all time high.

With the rise of the S&P to a new rally high, we are witnessing the end of Small Cap Energy Investing, PSCE, as seen in GPOR, OAS, RRC, as well as PDCE and XTXI, as seen in their topping out in this ongoing Yahoo Finance Chart.  

Sectors trading higher included Gaming, BJK, and Paper Products, WOOD.  Interest bearing sectors trading higher included Utilities, XLU, REITS, VNQ, Mortgage REITS, REM, and Small Cap Real Estate, ROOF. Utilities rising strongly in the last year include NEE, AEP, CMS, DTE, as well as BKH and UNS, as seen in this ongoing Yahoo Finance Chart which suggests that Utility and Dividend Investing in general is coming to an end. 

3) … On Wednesday, March 27, 2013, World Stocks, VT, traded lower as as fears of Eurozone banking and sovereign insolvency strengthened.

Briefing.com relates In Italy, Bersani was unable to form a coalition government, making another round of elections increasingly more likely. And, the eurozone business and consumer survey was reported below expectations. In addition to this morning’s worries surrounding the eurozone, investors remained uncertain regarding the playbook the European Union may be using next time a troubled sovereign needs emergency assistance.

The Telegraph reports Slovenia’s borrowing costs have rocketed over recent day. The country grapples with a festering financial crisis, becoming the first victim of contagion from Cyprus.  And The Guardian reports Slovenia could be next candidate for eurozone bailout. Former Yugoslav republic is struggling with troubled banking sector that threatens to bring down economy.

I relate that Jesus Christ has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, who has a bow but no arrows, Revelation 6:1-2, to effect global economic and political coup d etat. This Henchman, having taken over Italy’s national sovereignty and democratic government, is ruling over Italy. Italy is a failed nation state, it has insolvent banks, and its seigniorage, that is moneyness needs for fiscal spending come at the provision of the ECB’s chairman Mario Draghi, who provided credit liberality via LTRO 1, and 2, as well as Open Monetary Transactions, OMT.   

Nation Investment, EFA, and Small Cap Nation Investment, EFA, SCZ, traded lower, as the European Financials, EUFN, led World Banks, IXG, the Too Big To Fail Banks, RWW, such as BAC, C, KEY, BK, the regional banks, KRE, the Small Cap Revenue Stocks, RWJ, lower.  Countries falling lower included GREK, EFNL, EWG, EWN, EWP, EWI, EWG, EIRS, EZA, EWL.VNM, and EGPT.

Japan, EWJ, and Japan Small Caps, JSC, rose vertically higher. Bento te reports Phisix mania phase in full throttle on Fitch upgrade with the Philippines, EPHE, rising strongly.

Sectors trading lower included, Wind Energy, FAN, Global Engineering, FLM,

Interest bearing sectors trading lower included trading lower include Water Resources, PHO, Telecom, IST, IYZ, Utilities, DBU, Shipping, SEA, International Small Cap, DLS, and Dividend Appreciation, VIG. 

The Steepner ETF, STPP, flattened, as US Government Debt, GOVT, traded higher, as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, the 10 Year US Note, TLT, and Mortgage Backed Bonds, MBB, took Bonds, BND, higher. 

The US Dollar, $USD, UUP, rose and the Japanese Yen, FXY, rose, while, the Euro, FXE, the Swiss Franc, FXF, the Indian Rupe, ICN, the Australian Dollar, FXA, and the British Pound Sterling, FXB, traded lower, which caused major world currencies, DBV, to trade higher to 27.23.  The Action Forex chart of the Euro Yen carry trade, the EUR/JPY, shows a strong trade lower to close at 120.46  

Please consider that traditional carry trade investing, which is long currencies, and short the Japanese Yen, FXY, is coming to an end, as is seen in the chart of the Optimized Carry Trade ETFN, ICI, rising along an ascending wedge pattern; soon this will be falling sharply out of its consolidation pattern as the World Major Currencies, DBV and the Emerging Market Currencies, CEW,  trade strongly lower on competitive currency devaluation, and the US Dollar, $USD, UUP continues higher, as the desire for risk assets evaporates, and the Risk On ETN, ONN, falls lower in value, as investors deleverage out of toxic debt such, as leveraged buyouts, PSP, High Yield Corporate Debt, HYG, and Junk Bonds, JNK, stimulating investors to derisk out of Global Industrial Producers, FXR, such as BA, and KUB.

A tectonic geopolitical and economic shift is at hand, as the global economic paradigm of Liberalism is at a pivot point and is about to enter Authoritarianism, as the world central banks monetary policies of debt monetization and ZIRP, have crossed the rubicon of sound monetary policy, resulting in the exhaustion of monetary expansion. The Apostle Paul writes that it is Jesus Christ who is at the helm of the Economy of God, Ephesians 1:10. He has been expanding credit globally through the Fed’s QE 1 through 4, the ECB’s OMT, and the BoJ Unlimited Easing; but the world is passing through Peak Credit on Eurozone sovereign and banking insolvency, as is seen in European Stocks, VGK, and the European Financial Institutions, EUFN, trading lower, which have turned World Banks, IXG, and the Asset Managers, BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, and the Credit Service Companies, such as V, MA, DFS, AXP seen in this Finviz Screener, topping out in value..       

Inflationism is turning to destructionism as the dynamos of global growth and corporate profitability, that have underwritten crony capitalism and eurozone socialism wind down; and the dynamos of regional security, stability, and sustainability, wind up, establishing regionalism  The world is passing from being a credit and carry trade banker centric world to a diktat and regional governance centric nannycrat world.

The world stands at Peak Toxic Credit, as is seen in the chart of Fidelity Investments Mutual Fund FAGIX, topping out. This mutual fund contains the most distressed of investments, which were taken in under QE 1 and exchanged for “money good” US Treasuries, which were returned to the Fed and are now classified as Excess Reserves. The banks really do own the US Treasuries residing at the Fed, but will not, repeat not be selling them at any time. And indeed for a while as stocks, VT, trade lower, these will be increasing in value before they too fall dramatically lower in value. Shortly the banks will become integrated with the Fed, and be known as the government banks, or Govbanks, for short.  The Too Big To Fail Banks, RWW, will be seen and will exist as Big Enough To Help Govern. The same will be true in the Eurozone, the Europaean Financials, EUFN, will be unified into a One Euro Government, as leaders meet in summits to waive national sovereignty and pool sovereignty regionally, and announce regional framework agreements which establish EU regional governance. 

As investors derisk out of small cap pure value stocks, RZV, the Currency Demand Curve, RZV:RZG, will turn lower in value, confirming that competitive currency devaluation is underway, and that the fiat money system is indeed dying.

The Milton Friedman Free To Choose Floating Currency Regime, that is the Banker Regime, is giving way to the Beast Regime of regional governance, totalitarian collectivism, and debt servitude, as foretold in bible prophecy of Revelation 13:1-4. Soon in Euroland, after a European Default, the periphery countries, especially the PIIGS, will exist as hollow moons, revolving around Planet Germany, which with the Troika, will write the script for eurozone technocratic governance, this being seen in the Reuters report Luxembourg minister says Germany seeks euro zone “hegemony”.

A New Pharaoh, Revelation 13:5-10, and a Monetary Pope, Revelation 13:10-18, will oversee monetary cardinals, who preside over fascist public private partnerships, which will manage the EU economy and its factors of production. The word, will, and way of nannycrats will govern in ten regions of economic and political governance worldwide, and totalitarian collectivism will rule in all of mankind’s seven institutions. Liberalism featured bankers wildcat governance, a Doug Noland term, where bankers waved magic of credit creation and carry trade lending which produced prosperity. But Authoritarianism features wildcat governance where regional leaders yield clubs of debt servitude enforcing debt servitude.

After a soon coming global credit bust and worldwide financial system breakdown, that is Financial Apocalypse, as foretold in bible prophecy of Revelation 13:3, the diktat money system will be increasing recognized as replacing the fiat money system; where diktat serves as credit, money, and power.               

4) … On Thursday, March 28, 2013, the S& 500 rallied to a record high on a rising US Dollar. as Major World Currencies trade lower commencing competitive currency devaluation.

AP reports S&P 500 moves above its record high. The chart of the Standard & Poor’s 500, $SPX, SPY, shows a new daily high beating a previous all-time high set in pre-financial crisis on a rising US Dollar, $USD, UUP, which closed at $83.14, up 0.75% for the week, while the Major World Currencies, DBV, traded lower commencing competitive currency devaluation.  Action Forex reports that the EUR/JPY closed at 120.46; its Yahoo Finance Chart, when combined with European Shares, VGK, and US Shares, VTI, shows that investors have been rotating out of the former and into the latter since February 1, 2013 on fears of EU default. Nasdaq Large Cap Socks, QQQ, have been a safe haven investment.

World Stocks, VT, Major Country Investment, EFA, Small Cap Nation Investment, IFSM, Biotechnology, XBI, Transportation, IYT, Industrials, IYJ, and World Banks, IXG, all rose, but remained below their recent highs..

IPOs, FPX, Pharmaceuticals, PJP, Paper Producers, WOOD, Aerospace and Defense, PPA, Energy, XLE, Dynamic Media, PBS, Global Industrial Producers, FXR, Gaming, BJK, Consumer Discretionary, IYC,  and Nasdaq Biotechnology, IBB, rose to new highs; a blow off market top exists in the Biotechnology Stocks BMRN, BIIB, REGN, GILD, CELG, SGEN, as is seen in this ongoing Yahoo Finance Chart

Interest bearing sectors trading higher included, XLU, XPH, KBWY, ROOF, IYR, REM, FNIO, VNQ, SDIV, DTN, and VIG.   

Gold, GLD, and Silver, SLV, Agricultural Commodities, JJA, CORN, GRU,WEAT, SOYB, Base Metals, DBC, Copper, JJC, led Commodities, DBC, lower on the trade lower lower in the Major World Currencies, DBV. This week currency gainers included the South Korean won increased 0.7%, the South African rand 0.7%, the Singapore dollar 0.6%, the Canadian dollar, FXC, 0.7%, the Japanese yen, FXY, 0.3%, the Mexican peso 0.3%, the Taiwanese dollar 0.2% and the New Zealand dollar 0.1%. This week’s currency losers included  the Danish krone declined 1.4%, the euro, FXE, 1.3%, the Swiss franc, FXF,  1.0, the Norwegian krone 0.8%, the Brazilian real, BZF, 0.2%, the Swedish krona, FXS, 0.4%, the Australian dollar, FXB, 0.3%, the British pound, FXB, 0.3%, and the Indian Rupe, ICN, 0.3%.

Bonds, BND, traded unchanged as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, the 10 and Year US Note, TLT, traded lower.

5) … On Friday, March 29, 2013, financial markets were closed in recognition of the Easter weekend; news reports center on the insecurity. instability and unsustainability the world’s leading banks.

The NYT Blog Reports British banks told to raise $38 billion in capital.  And The Telegraph reports Doubts over Bank of England’s £25bn confidence game. I relate that the UK’s Banks, especially RBS, LYG, and BCS, were favored as carry trade darlings in Neoliberalism’s grand finale Euro Yen, EUR/JPY, toxic debt, FAGIX, rally. These banks, at the core of the City of London Financial District,  are for all practical purposes insolvent financial institutions, and thus establish the UK as an insolvent nation, which cannot serve for a nation investment purpose.

Agence France Presse reports BoJ chief slams Japan debt as ‘abnormal’ and ‘not sustainable’. Maintaining confidence in financial and bond markets extremely important, says Haruhiko Kuroda. I relate that Japan’s Banks, NMR, MTU, MFG and even SMFG, are loaded to the gills with Japanese Treasury debt, that cannot be and will not be repaid; these financial institutions, along with large cap Japanese companies, such as KUB, were recently run in value on the anticipation of BoJ unlimited easing which drove the Yen, FXY, awesomely lower in value, and which commenced competitive currency devaluation. 

Benton te writes Quote of the Day: The roots of the Too Big To Fail Doctrine. For fractional reserve banking can only exist for as long as the depositors have complete confidence that regardless of the financial woes that befall the bank entrusted with their “deposits,” they will always be able to withdraw them on demand at par in currency, the ultimate cash of any banking system. Ever since World War Two governmental deposit insurance, backed up by the money-creating powers of the central bank, was seen as the unshakable guarantee that warranted such confidence. In effect, fractional-reserve banking was perceived as 100-percent banking by depositors, who acted as if their money was always “in the bank” thanks to the ability of central banks to conjure up money out of thin air (or in cyberspace). Perversely the various crises involving fractional-reserve banking that struck time and again since the late 1980s only reinforced this belief among depositors, because troubled banks and thrift institutions were always bailed out with alacrity–especially the largest and least stable. Thus arose the “too-big-to-fail doctrine.” Under this doctrine, uninsured bank depositors and bondholders were generally made whole when large banks failed, because it was widely understood that the confidence in the entire banking system was a frail and evanescent thing that would break and completely dissipate as a result of the failure of even a single large institution. … (italics original) … This is from Austrian economics professor Joseph Salerno at the Mises blog

6) … Financial Market Summary for the week ending March 28, 2013.

The Beast Regime Of Regional Governance and Diktat … is rising …. from the bankruptcy of democratic sovereign nation states and the Milton Friedman Free To Choose Floating Currency Banking And Investment Regime  … to govern in the world’s ten regions and occupy in all of mankind’s seven institutions … as foretold in bible prophecy of Revelation 13:1-4. 

Jesus Christ is God’s economic and political plan administrator for every age, assuring that every epoch, era and time period, attains completion, Ephesians 1:10. He commenced the age of Liberalism in 1931 by bringing forth the Creature From Jekyll Island, and has since perfected, that is matured Liberalism bringing it to full completion establishing global prosperity. He is now pivoting the world into the age of Authoritarianism, which will produce world wide austerity, so that one might come to trust not in anything the world has to offer, but instead to trust in Him as one’s all inclusive life life experience, Colossians 3:11.   

God has a Son, Colossians 1:3; this concept is offensive to both Jews and Muslim. God’s Son has been appointed heir of all things. His name is Jesus Christ, and he being the very image of God, is now the firstborn of all creation, Colossians 1:15. He is the creator of all that exists and is the Sovereign King of the Universe, and is Lord of all things and of all peoples. There is no human action as perceived by Libertarians, there is only Christ working His Will, and His Way in all things, Colossians 1:16. All sovereignty coalesces in Christ, Colossians 1:17.

Jesus Christ has been working to perfect, that is mature, Liberalism, and is now pivoting that paradigm to Authoritarianism. Christ commenced Liberalism with the Federal Reserve Act of 1913, and also with World War 1 in 1914, and brought Liberalism forth strongly in 1948 with the establishment of the nation state of Israel, and more solidly with the deployment of the Milton Friedman Free to Choose Floating Currency Regime in 1971, which produced Liberalism’s Banker Regime for one to trust in.

It has been very rewarding for one to place faith in the most toxic of debt such as Fidelity Investment’s FAGIX, as well as High Yield Corporate Bonds, HYG, Junk Bonds, JNK, and Senior Bank Loans, BKLN, as well as the most speculative of equity, such as Leveraged Buyouts, PSP, and Fidelity Investment’s VICEX, which contains Casinos, LVS, Tobacco Manufacturers, PM, Booze Producers, DEO, and a whole host of Defense Contractors, PPA.

Reliance on Dividend Stocks, DLN, and Dividend Appreciation, VIG, has been the bedrock upon which investors have relied for investing in Large Cap Growth, JKE, Small Cap Growth, RZG, MidCap Growth, JKH, Russell 1000 Growth, IWF, and Russell 2000 Growth, IWO, the latter being the most credit and banking sensitive of all growth shares, as is seen in their combined Yahoo Finance five day chart.

Heather Perlberg of Bloomberg writes Gary Kain spent 20 years at Freddie Mac managing as much as $800 billion of bonds before the U.S. took over the company. Since 2009, he’s used his knowledge of the home-loan market to help turn American Capital Agency Corp, AGNC, into the fastest growing mortgage debt investor. American Capital’s assets grew to $100.5 billion at the end of last year from less than $5 billion three years earlier, making the Bethesda, Maryland-based real estate investment trust the largest after Annaly Capital Management Inc, NLY, in an industry that’s drawing attention from investors and the Federal Reserve for its double-digit yields and rapid expansion. REITs, REM, bought more than $100 billion of government-backed mortgage securities in 2012, the most since at least the credit crisis, and will purchase another $60 billion in 2013, JPMorgan estimated.”

It is the genius of Christ which has produced the insight to develop the life science investments that MarketGrader reveals has provided lucrative reward in the Russell Small Cap Growth Shares such as NRCI, MWIV, SRDX, RGEN, SNTS, VIVO, TMH, ABAX, PDLI, ACOR, CHE, STE, JAZZ, HMSY, CBST, PCYC, as well as the Biotechnology Stocks seen in this Finviz Screener.

Through the national sovereignty of democracies, and through the monetary authority of the world central banks, seigniorage, that is moneyness, has flowed through Asset Managers BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, have literally coined Liberalism’ wealth, especially the Mid Cap Stocks, as John D Hartman reveals in Why the mid caps have outpaced the large indices.

Through carry trade leverage, in a spectacular nine month risk-on toxic debt based rally, investors have experienced stellar rewards in Global Producers, FXR, such as Whirlpool, WHR, International Paper, IP, Boeing, BA, as well as in Nation Investment, EFA, such as Australia, EWA, Thailand, THD, and the Phillippines, EPHE, and most recently in the Nikkei, NKY, driving up stocks such as KUB.

The world now exists at Peak National Sovereignty, as is seen in Peak Money, that is Peak Wealth and Peak Investment being achieved as follows:

Peak Commodities, DBC, September 14, 2012,

Peak Credit, BND, and AGG, December 6, 2012,

Peak M2 Money, January 7, 2013,

Peak Emerging Market Currencies, CEW, February 1, 2013,

Peak Leverage, PSP, March 11, 2013,

Peak Nation Investment, EFA, and Peak Stock Wealth, VT, March 14, 2013,

Peak Major Currencies, DBV, March 27, 2013,

Peak Transportation and Peak Railroad Investment, XTN, UNP, KSU, March 28, 3013,

Peak Toxic Credit, FAGIX, and Peak Investment Banking, KCE, such as JPM, March 28, 2013,

Peak US Stocks, VTI, and Peak Global Industrial Producers, FXR, March 28, 2013,

Peak Sovereign Wealth, that is wealth of the Nation States as reported by Doug Noland Federal Reserve Credit jumped $20.9bn to a record $3.187 TN. Fed Credit expanded $402bn over the past 25 weeks. In the past year, Fed Credit jumped $315bn, or 11.0%. … Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $658bn y-o-y, or 6.4%, to $10.952 TN. Over two years, reserves were $1.570 TN higher, for 17% growth.

The world has been in a bear market since March 14, 2013, when World Stocks, VT, traded lower on Nation Investment, EFA, and Small Cap Nation Investment, IFSM. It’s just that US Stocks, VTI, have been trading higher. Fears of sovereign and banking insolvency in the EU, are driving European Financials, EUFN, World Banks, IXG, and the Too Big To Fail Banks, RWW, lower; of which  Bank of America, BAC, has provided the best investment return over the last year. 

Jennifer Joan Lee of Bloomberg reports:Credit-default swaps insuring against losses on European financial debt climbed for a 10th day, the longest streak since August 2011, as the bank crisis in Cyprus and political turmoil in Italy alarm investors. The Markit iTraxx Financial Index of swaps protecting the senior debt of 25 banks and insurers rose four basis points to 205, with the gauge heading for its worst month since November 2011.

Sectors trading higher this week included the following

US Infrastructure, PKB, 0.1

Casinos, BJK, 2.2

Paper Producers, WOOD, 1.5

Aerospace And Defense, PPA, 1.1

IPOs, FPX, 1.2

Global Industrial Producers, FXR, 1.2

Consumer Discretionary, IYC, 1.0

Nasdaq Biotech, IBB, 2.4

Dynamic Media, PBS, 2.0

Interest Bearing sectors trading higher included

Dividend Excluding Financials, DTN, 1.4

Dividend Growth, VIG, 0.8

Utilities, XLU, 2.4

Mortgage REITS, REM 1.5

Small Cap Real Estate, ROOF,  2.1

High Yield Premium REITS, KBWY, 2.3

REITS, VNQ, 1.4

Supe Dividend, SDIV, 0.5

Office and Industrial Reits, FNIO, 1.1

Real Estate, IYR, 1.7

North American Pipelines, EMLP, 2.1

High Yielding Bonds trading higher included

High Yield Corporate Debt, HYG, 0.1

Junk Bonds, JNK, 0.2

The paradigm of sovereign nation states has supported the Milton Friedman Free To Choose floating Currency Regime, where Major world Currencies, DBV, and Emerging Market Currencies, CEW, have floated and the US Dollar, $USD, have sunk, is now history.

The US Dollar, $USD, traded by the 200% ETF, UUP, is rising and it no longer serves as the world’s international reserve currency. That’s right, there is now no international reserve currency.

The world’s Fiat Money System, that has underwritten corporate profitability, global growth and trade since 1971, when the world went off the gold standard, is literally disintegrating.

Jesus Christ is bringing forth the new paradigm of regionalism, based upon the sovereignty of regional leaders and regional bodies, where the Diktat Money System, will underwrite regional security, stability and sustainability.

As of the week ending March 28, 2013,  the world existed at the very pivot of two eras. Jesus Christ is now transitioning the world from Liberalism into Authoritarianism.

To achieve His aim of producing the Beast Regime of Diktat to replace the Banker Regime of Investment Choice, which will rule in all of the world’s ten regions and to occupy in all of mankind’s seven institutions, Revelation 13:1-4, as well as to produce the Ten Toed Kingdom of Regional Governance, Daniel 2:25-24.

Jesus Christ has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, who has a bow but no arrows, Revelation 6:1-2, to effect global economic and political coup d etat. This rider is seen having great success in Argentina, ARGT, with Kirchnerism, in Egypt, EGPT, with Morsi’s rise to power, and in Greece, GREK, with the Troika’s technocratic rule, and with Cyprus, having been mandated with a Deposits Levy and Capital Controls. Greece and Cyprus are no longer a sovereign nations;  they are  vassal colonial states, ruled by bankers and oligarchs residing in Brussels, and Berlin. The Greeks and Cypriots  rely totally for the provision of their fiscal needs upon the regional sovereignty of the ECB.

The First Horseman of The Apocalypse, Revelation 6:1-2, has taken sovereignty that is rulership from Italy; it exists as a country having no head, that is no rule, no government. Italy is no longer a democracy, rather it is a zombie state existing governed by Christ’s First Henchman, and whose fiscal needs are provided courtesy of Mario Draghi and the monetary authority of the European Central Bank. And now, via the First Horseman, Jordan Shilton and Chris Mardsen of WSWS write Cyprus to face savage cuts and economic dictatorship.

The Netherlands Cry for Freedom reported in the Financial Times article Dutch support EU referendum, will go unheeded, as God’s Clarion Call, Revelation 1:1, is for fascist technocratic government in the Eurozone, Revelation 13:1-4, Daniel 2:25-45, and Daniel 7:23. Rest assured that God will accomplish his aim as the Rider on the White Horse, Daniel 6:1-2, has all authority and power to fully displace all existing sovereignty as well as dislocate all current seigniorage. He will be effective in wiping out all existing economic and political life.

In mankind’s final dispensation, that is humanity’s last time period, Jesus Christ is bringing forth the Church, literally meaning the Called Out Ones, to be Overcomers in Him, as Bible Org relates and asks Who are the Overcomers of Revelation 2 and 3. The saints trust in Christ, and give Him credit for all accomplishments, and take their spiritual life from Him, Colossians 3:4.

Either one will be genuine, having real life experience in Christ, Ephesians 4:21; or one will be fiat, having worldly experience in fiat mandate of religion, philosophy or political party. Christians know Christ as the All Sovereign One, and as the All Sufficient One, Colossians 3:11.  There is no human action, rather all things come via divine purpose and destiny, 2 Corinthians 5:18. Jesus Christ acted with eternal forethought and purpose to bring forth on American’ shores an offshoot of Rothschild banking family, that had established the British Empire as the first of two iron lege of global hegemony seen in bible prophecy of Daniel 2:25-45. 

Liberty Tree Money Quotes provides the Baron Nathan Mayer Rothschild (1777-1836), the London financier, and one of the founders of the international Rothschild banking dynasty quote,” I care not what puppet is placed on the throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire. And I control the money supply”

The United States was fated to have an unsound money system, one designed from eternity past to be reprehensible, deceitful and immoral, that would be manipulated for greed, and which would be deployed to establish the US, like the UK, a global kick ass empire, that would invade other countries and kill for oil, and in the case of British Petroleum, BP, be given free reign to operate without sensible environmental protections by Dick Cheney to aggressively develop oil, to become the second iron leg of global hegemony seen in Statue of Empires seen in Daniel 2:25-45. 

The wise investor recognized the dynamics of plunder and power and used these for great gain by going long in carry trade investments, and even borrowing on his home for extra leverage.   

Lee Rogers of Black Listed News writes  Crumbling global economy passes point of no return. As bad as the global economy is right now, it is unfortunately going to get far worse. Many central banks around the world are now racing to devalue their currencies through the implementation of debt monetization programs (I comment examples included the Fed’s QE1, the ECB’s LTRO1, 2, and OMT, the BoJ Unlimited Easing, and PBOC Monetary Injections), and low interest rates. 

Despite statements coming out of the G20 saying otherwise, many insiders and former insiders are fully admitting that there is an on-going global currency war and that this war is accelerating. The Bank of Japan’s recent announcement of a massive bond purchase program is the latest episode in an already sorry state of affairs. It is a historical fact that prosperity has never been obtained by devaluing a nation’s money which makes it all the more insane that the central planners are actually trying to sell the general public on these policies. In fact if monetary devaluation resulted in economic growth, Zimbabwe which recently experienced a period of rampant hyperinflation would easily be the wealthiest nation in the world instead of one of the poorest. Ancient Rome had a strong monetary unit when the nation rose to prominence but degenerated after the ruling powers decided to devalue its coinage. In more recent times both the British Empire and the United States reached great heights when they maintained a sound money system. With this said, you really don’t need to be an economics guru to figure out that the result of today’s monetary policies will eventually result in a complete disaster for the global economy.

The Federal Reserve’s bond purchasing programs have effectively fueled a rally in bonds pushing yields of various U.S. government debt instruments towards historical lows. This has fooled people into believing that U.S. government debt is a safe haven play which is astounding on so many levels. The rate of return on these debt instruments is actually negative when factoring in the real rate of inflation. The government and establishment media love to tout the Consumer Price Index or CPI as the ultimate gauge of inflation. However, the CPI doesn’t even include food and energy in its calculation thus making it a completely worthless indicator of true inflation. Maybe if people didn’t eat, didn’t use oil to heat their homes and didn’t fill their automobiles with gasoline the CPI might have some relevance.

In reality, there’s little question that that the CPI is a purposely manipulated figure designed to mislead people into believing that inflation is lower than it actually is. The CPI also provides the basis for cost of living adjustments that directly affects how much money Social Security recipients receive. This allows the government to get away with paying far less than if real inflation was used as the benchmark to calculate these adjustments. The true measure of inflation calculated using the same statistical models used by the U.S. government during the 1970s has inflation closer to 10% on an annual basis. Even if we were to assume that inflation is half of that figure, U.S. Treasury bond holders would still be getting a negative rate of return on their investment. Clearly, this is a dangerous game that is being played by the world’s central banks. Looking specifically at the Fed they announced late last year that they would be purchasing $85 billion worth of securities on a monthly basis for an indefinite period of time until unemployment is substantially reduced. This adds up to roughly $1 trillion worth of bond purchases per year which is approximately what the federal government’s annual budget deficit has been under the Obama regime. The Fed is essentially monetizing enough debt for the federal government to finance its $1 trillion annual budget deficit. In other words they are creating close to $1 trillion new dollars out of nothing and dumping it into the system. The end result is that you have a larger supply of dollars chasing the same goods and services which ultimately means there will be higher prices because each dollar will be worth less.

This policy is essentially an invisible tax on the average person because it robs them of their purchasing power. Combine this with the fact that the Obama regime actually raised taxes on poor and middle class Americans as part of the recent fiscal cliff deal and the additional burden Obama’s universal healthcare plan has placed on businesses and it is no wonder why the economy is sputtering. Not only is the currency being devalued but they are financially damaging the base from which they collect taxes. Evidence of this economic reality can be seen from a leaked internal e-mail from a Wal-Mart Vice President who stated that sales were a total disaster and that February 2013 sales were off to its slowest start in the 7 years he’s been with the company. Since average people now have less purchasing power to buy things with, it shouldn’t be any surprise that we see reports like this.

One would think sanity would prevail and the Obama regime would at least end the costly foreign wars and make a few domestic spending cuts. Since we live in a world where insanity seems to be the prevailing thought process, we are not going to see this happen. At the recent State of the Union speech Obama actually proposed more spending programs including a ridiculous multi-billion dollar universal preschool initiative. With a debt over $16 trillion, unfunded liabilities that some have argued approach $100 trillion or higher and $1 trillion annual budget deficits where do they think they’ll get the money to pay for these new programs? Either this is pure stupidity of the most epic magnitude or they are intentionally trying to destroy what’s left of the economy. Regardless of what you believe, these policies are leading us towards disaster.

As a result of these crazy policies, huge bubbles are being created in the U.S. Treasury bond market, the U.S. stock market and most importantly in the U.S. Dollar itself. Since the Fed is buying an increasing amount of bonds it has artificially propped up the market causing investors to venture into the stock market for greater returns on investment which has resulted in the Dow Jones Industrial Average hitting the 14,000 level. Contrary to what the talking head clowns on CNBC say, this is not the sign of a healthy economy but instead an indicator of gross manipulations by the Fed which has forced investors to take on more risk to achieve any real rate of return. At some point the market is going to reject these policies when fewer and fewer market participants are willing to purchase U.S. Treasury bonds at historically low yields while the U.S. Dollar is simultaneously devalued. This alone will cause the bond bubble to burst, yields to skyrocket and force the U.S. government to pay even more money to service the interest on the debt. Considering that the U.S. government is already having a difficult time making payments to service the debt with historically low yields, any reversal would be extremely problematic.

It is comical that there are still ratings agencies that rate U.S. sovereign debt with a Triple-A status considering the train wreck we are witnessing. S&P which was the one ratings agency that actually downgraded U.S. sovereign debt is now being sued by the U.S. government over inaccurate securities ratings leading up to the 2008 financial crisis. This is not an attempt to defend S&P by any means, but there are a number of questions as to why they are the only ratings agency being sued. All of the big ratings agencies were guilty of grossly exaggerating the quality of different types of securities in the years leading up to the 2008 financial crash. The only thing that differentiates S&P from the other ratings agencies is that they had the nerve to downgrade U.S. sovereign debt. This lawsuit appears to be retaliation against them for that downgrade and nothing else. If this isn’t the case, than why haven’t lawsuits been filed against all of the major ratings agencies? Clearly, each one of them was involved in some sort of chicanery leading up to the crash. With this said, there is no reason to trust what any of these major ratings firms are saying about U.S. sovereign debt. It is highly probable that their ratings of U.S. sovereign debt are being affected by the possibility that the U.S. government would threaten legal action against them if they fail to provide a favorable analysis.

It is also becoming more apparent that the central planners have been suppressing the gold and silver price as part of an effort to maintain the illusion that these debt based currencies still have value. The German Bundesbank recently announced its intention to take delivery of over half of its gold reserves by 2020 from the Fed and other central banks. The main question here is why would it take 7 years to complete this process? China has been buying huge sums of physical gold on the open market and so far have had no logistical problems receiving prompt delivery of their gold. This gives additional credence to the accusations that central banks have been leasing out physical gold as part of a scam to suppress the price. In other words, the gold that Germany is requesting delivery of is no longer available which is why the gold cannot be immediately delivered. In all likelihood, this is why an agreement was struck to deliver the gold over 7 years so the central banks could save face without having to transparently expose the gold manipulation fraud they are engaged in.

Either way, it is quite obvious that the gold and silver markets have both been manipulated for some time now. If you study the daily charts of gold and silver there are often huge price disruptions to the down side that have no fundamental explanation. If other countries follow suit and request physical delivery of their gold, this could put an end to these suppression schemes resulting in a massive upswing in the price of gold.

It is often said that gold goes where wealth is being generated. If we use that as a measuring stick it is clear that wealth is being transferred from the west over to Asia. Specifically of interest is the fact that gold is being purchased in large sums by both the Chinese and Russian governments. There is even speculation that the Chinese are preparing to officially back the Yuan with gold. We also see huge gold demand from India whose gold imports surged 23% this past January. In fact gold demand has been so strong that India just raised taxes on gold imports to try to reduce demand. Unfortunately for the west, these countries that are net buyers of gold are going to be in a very good financial position once the full effect of these debt monetization and low interest policies are felt. Gold is real money and stores value unlike the debt based garbage that these central banks are creating by typing digits into a computer.

There is very little question that the global financial system is at a point where it cannot repaired

The policies of unlimited money creation that are currently being implemented by the Fed and other central banks are unfortunately going to continue until the entire system collapses. It is now inevitable that there will be a huge crash in the U.S. stock market, the U.S. bond market and eventually the U.S. Dollar. Gold, silver and other precious metals should perform very well as this scenario unfolds so there are safe havens available for people wishing to preserve their wealth. It is unfortunate that the only question remaining now is not if this collapse is going to happen but when this collapse is going to happen.

Floy Lilley writes in Lew Rockwell, Sound Money: The Impossible Dream? Our gold standard money didn’t fail us in 1913; it was murdered. Did it deserve to die? What was its crime? It had provided us with nothing less than relative peace and prosperity over a span of 136 years. It had not only retained one hundred percent of its value, it had gained eleven percent. That’s right. The dollar we started with in 1776 bought us eleven percent more after almost seven generations. Then, J.P. Morgan’s creatures picked a quiet 23rd of December in 1913 to suffocate our sound money system. Since that manslaughter, the purchasing power of a dollar has plummeted over 95%. We now pay twenty times more than J.P. Morgan did for any item.

Morgan and his henchmen had global plans for the state. Their vision was of a state, under their direction, that would supplant the failing British Empire. This state would support and create wars, marshal powerful and intimidating forces over foreign and domestic affairs, dispense military contracts to political favorites, grow a professional bureaucracy, seize central powers while diminishing individual liberties, and fund any welfare plan designed to deliver votes. Importantly, Morgan’s bank would be the state’s bank for all of this activity. So, under the guise of stabilizing the dollar, the Federal Reserve Act destabilized it, causing booms and busts while proliferating and prolonging conflicts everywhere. The new Central Bank designed for the state the secret paper door to all the money it could dream of spending, at the bald expense of unsuspecting, trusting citizens.

Doug Noland writes Invaluable insight from Axel Weber.  Larry Summers and Axel Weber are two exceptionally intelligent, learned and highly-experienced policy experts. And in their respective responses to a question (about the purpose of economic growth and prosperity) they perhaps provided an historic exchange in contrasting economic views.

The “American” view holds that aggressive counter-cyclical monetary and fiscal stimulus spur growth, prosperity and higher standards of living for future generations. “Keynesian” policies can propel the economy back to its long-term growth path, in the process ensuring a higher overall utilization of human and other resources. More money equates to stronger demand, investment and economic expansion. More risk-taking equates to higher asset prices, greater wealth and a stronger expansion. There is little downside to expansionary policies with low utilization and minimal inflationary pressures.

And when listening to Mr. Summers, I couldn’t help but recall Time Magazine’s “Committee to Save the World” cover back in early-1999 (Summers with Alan Greenspan and Robert Rubin). “The inside story of how the Three Marketeers have prevented a global economic meltdown – so far.” I remember vividly how the post-LTCM bailout policy reflation incited a wild speculative run and a rapid doubling of Nasdaq. Then the bursting of the technology Bubble (and deflation hysteria) was followed with even more aggressive fiscal and monetary stimulus – that propelled the historic mortgage finance Bubble. These days, a protracted period of post-Bubble inflationary fiscal and monetary policies literally know no bounds. And, you know what, Mr. Summers’ justifications and rationalizations sound similar to those espoused by inflationists and monetary quacks throughout history.

Axel Weber’s analysis is more credible. At this point, no one should be able to convince us that aggressive monetary and fiscal policies don’t risk inflating problematic Bubbles. Five years into an aggressive reflationary cycle, it is clear that past policy mistakes have been responsible for deep structural impairment. And deep structural issues have provided a backdrop where the inflationists believe they’re justified in running the electronic printing presses around the clock. This issue of cyclical versus structural doesn’t get the attention it deserves. If, as I believe, our economy faces deep structural weaknesses and imbalances, throwing more money, risk-taking and asset inflation at the problem only worsens the situation. Regrettably, Washington didn’t listen to Issing – and they clearly have no interest in advice from Axel Weber.

7) … The shrewd investor should be aware of the risk of being Cyprussed and take steps to protect one’s wealth from levys and capial controls.

The investor’s Post Cyprus investment strategy should be one of having money, that is wealth, in the form of physical gold, either in bullion form or in Internet Trading Vault form, as news reports highlight that fiat wealth can be confiscated by government.  In gold we trust, not government, should be the investor’s motto.

Breakout reports Post-Cyprus playbook demands Eurozone rethink. Breakout Now that European leaders have thrown out the playbook that’s been used for the past three years in terms of the hierarchy of safety of various assets classes, the way forward will be different, writes Breakout’s Matt Nesto.

Yahoo Finance reports Banks in Europe may now seize deposits to cover their gambling losses.

Mike Mish Shedlock writes The axe is in position, only the timing of the swing is in question. Four years and two Greek bond restructurings later, Cyprus was ruined but did not realize it yet. The second Greek bond haircut did Cyprus in, but the axe was yet to fall. The ECB waited until the Cypriot election a month ago when their communist president was ousted by the pro-euro Nicos Anastasiades. The ECB then dropped a bomb on the new president.

For those of you who think Cyprus is “one off” and this will never happen again, please let me point out a few recent things.

  1. Dijsselbloem brags Cyprus to be model for future bailouts.

  2. A German Bank Economist Proposes “One Time” Cyprus-Like 15% Wealth Tax on Italians

  3. By a 526 to 86 vote, the nannycrats in Brussels passed a regulation in March that will require a country to accept a bailout if offered. It’s An Offer You Cannot Refuse.

  4. Laying it on thick, the Bundesbank claims Spaniards are 33% richer than Germans.

  5. The “men in black” seek answers in Spain. Troika to Return to Spain in May Asking “What Happened to €42 Billion in ESM Bank Recapitalization Tranches?”

Timing the Axe on Spain and Italy.

Cypriot banks may be the first to suffer a forced bail-in but they will not be the last. Recall the “success” of Mario Draghi’s LTRO program? Yes, it brought down yields on Italian and Spanish bonds, I believe temporarily. The LTRO program was also an open invite for German banks to dump Spanish and Italian bonds and for Spanish and Italian banks to snap them up.

Was LTRO really a “success”? For who? The answer is Germany, not Spain or Italy. Economists hailed Draghi a genius. Yet, LTRO further concentrated bond risk. Spanish banks are now more leveraged to Spanish bonds and Italian banks more leveraged to Italian bonds. It was concentrated risk that brought down Cyprus.

Groundwork for further forced bail-ins has been laid: A model is in place, regulations are in place, and German sentiment is in place. Spaniards are supposedly more wealthy than Germans, and the “men in black” demand an audience in May.

Solidarity, be damned. It’s every country for itself. Arguably, that is the way it should be, but that certainly wasn’t the promise. It’s too late now for Spain, Portugal, and Italy. The axe is in position. Only the timing of the swing is in question.

And Mike Mish Shedlock writes EU pushes bail-in regulations in all deposits above €100,000. h regulation is a step in the right direction actually. There should be no deposit guarantees at all, no bondholder guarantees, and people should have to pay attention to where they put their money.

For a detailed explanation, please see Fraudulent Guarantees; Fictional Reserve Lending; Comparison of US to Cyprus; What About New Zealand? Here are the key ideas from the article

  1. In a Fractional Reserve Lending scheme, the notion there are meaningful reserves is ridiculous

  2. Far more money has been lent out than really exists (the rest is a fictional accounting entry)

  3. Fractional reserve lending constitutes fraud (just as lending something you do not own is fraud)

  4. There is no way for all this money to be paid back (so it won’t be)

  5. Of all the central banks, the Reserve Bank of New Zealand has the most sensible policy for the most sensible reasons of all the central banks.

That said, note how bondholders and the ECB have been protected so far. Bondholders did not suffer losses on Irish bonds, and the ECB did not even take a hit on its Greek bonds. Cyprus bondholders were not protected, primarily because the big European banks were not involved so they had nothing to lose.

Run on banks coming up? Looking ahead, the implication is that no one should place more than €100,000 in any bank. So no one will, especially in questionable Southern European banks. Instead, expect capital flight to presumed “too big to fail” Northern European banks, and also expect people to park more money directly at the ECB, where it will be safe. Might such legislation then, spur a run on banks? Seems that way to me. My advice for European depositors is simple “Please don’t wait until 2015 to find out.”

Benton te relates Example of the Mania Phase: Awards received by the Bank of Cyprus.  Chris Rossini at the Economic Policy Journal enumerates the string of awards that Bank of Cyprus received during their heyday or the pinnacle/climax of the bubble cycle. The accolades flowed from 2011 until September of 2012, which was only a few months back. Then events unhinged or unglued pretty fast. It has been part of the mainstream’s propaganda to say that current system based on fiat money has been hunky dory and functioning well. The reality is that it hasn’t. Yet when aura of superiority, augustness and opulence have been propped up by a credit bubble, watch out. This applies to any country or region, Asia and the Philippines notwithstanding.

International Man writes The top 4 lessons of the Cyprus debacle you shouldn’t have to re-learn

Bloomberg reports Saving Cyprus means nobody safe as Europe breaks more taboos

Market Oracle writes Get ready for capital controls, right here in America.

Mike Mish Shedlock writes You have to destroy the Maastricht Treaty to save it. There are plenty of news headlines rattling Europe today. Let’s take a look at some of them. Severe Capital Controls in Cyprus. In spite of the fact the Maastricht Treaty under which the eurozone was formed mandates a free flow of capital, Cyprus unveils severe capital controls.  “Cyprus is the first eurozone country ever to apply capital controls, with limits on credit card transactions, money transfers abroad and the cashing of cheques. Depositors will be limited to credit card transactions of up to €5,000 per month and will be able take a maximum of €3,000 of bank notes out of the country per trip.” Capital controls are said to expire in seven days. So, don’t worry, its only temporary. Hopefully everyone understands the implied theory: “You have to Destroy the Maastricht Treaty to Save It.”

Mike Mish Shedlock writes Canada discusses forced depositor bail-in procedures.

The investment strategy of protecting one’s wealth from levies and capital controls involves purchasing and taking personal possession gold bullion coins and owning gold in Internet trading vaults on the Internet.  

8) … Freedom is found in Christ and in Christ alone …  Liberty is God’s gift to manifest as a child of God, living in Christ’s virtue and New Testament ethics, with the goal of keeping Christ’s word of endurance and not denying his name.    

I relate Jesus Christ is God’s economic and political plan administrator transitioning the world from the fullness of investment choice and credit that produced prosperity under Liberalism, into what will be the depth of nannycrat diktat and debt servitude that will produce austerity in Authoritarianism, as seen in Ephesians 1:10.  There is no free land, that is no country where once can be free. Yet there is a peron, who wone can trust for freedom, that being Jesus Christ. 

Tyler Durden writes This is how a country ends: not with a bang, but with a bailout. Curious how in then New normal a nation is brought to its untimely end without a single shot being fired? Dimos Dimosthenous, who has worked at the Bank of Cyprus for over 30 years, explains: “That will be the end. Our jobs, our rights, our welfare funds will be lost and Cyprus will be destroyed.” In short: not with a bang, but a bailout.

Slate relates The real doom of the eurozone is Italy. The First Horseman of The Apocalypse, Revelation 6:1-2, has taken sovereignty that is rulership from Italy; it exists as a country having no head, that is no rule, no government. Italy is no longer a democracy, rather it is a zombie state existing governed by Christ’s First Henchman, and whose fiscal needs, like Greece and Cyprus, are provided courtesy of Mario Draghi and the monetary authority of the European Central Bank

With the rise in the US Dollar, $USD, UUP, the fiat money system is dying. Said another way, the Milton Friedman Free To Choose floating currency regime, which featured the US Dollar as the International Reserve Currency is failing, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, are trading lower in value.   

The diktat money system where diktat serves as currency, money, that is wealth, and power is rising to replace the fiat money system.

Liberalism in producing Peak Credit, has produced debts that cannot be repaid.   BBC reports Surging studen loan debt is crushing the system. Student-loan defaults surged in the first three months of 2013, while efforts to collect bad loans are faltering, according to credit analysts and government audits. It is the latest twist in a college debt crisis that is hanging over recent graduates and dragging on the broader economy.  And Mike Mish Shedlock writes Unwilling to work; 25% in Hale County AL collect disability, 14 Million nationwide; a simple solution.

Benton te writes Quote of the Day: Invoking Democracy to destroy Freedom.  And Benton te also writes Income Inequality: The Austrian Perspective  Roger Koppl at the Thinkmarkets blog explains the controversial issue of income inequality from the Austrian school perspective; This indifference to income distribution is all the more mysterious because pro-market thinkers generally support a theory of politics that tells us to watch out for ways the state can be used to create unjust privileges for some at the expense of others. We should expect the distribution of income to be skewed toward the politically powerful and away from the poor and politically weak. In a representative democracy “special interests” engage in “rent seeking” to get special favors. Those special favors enrich some at the expense of others. That’s what they are meant to do!

Liberal political theory tells us to expect that sort of thing as a sort of disease to which the body politic is subject under representative democracy. Our presumption, then, should be that much of the inequality of any epoch is produced by tariffs, licensing restrictions, bailouts, and other specific acts of governments. Most of the time the game is rigged more or less. (The trick of constitutional design is to minimize this evil bathwater without tossing out freedom or democracy.) The more a society’s income distribution is determined by politics and not markets, the more it will be skewed away from whatever pattern would emerge in a less fettered market economy. And in general, that skew will be toward greater inequality. As the political component grows, we can expect power to be concentrated in fewer and fewer hands and income distribution be more and more unequal. If political power is growing, we should strongly suspect that some of the rich are using the state to squeeze money from most of the poor … Mr. Koppl identifies four ways governments create such inequality: Privatizing profits and socializing losses, Regulation, Collapse of the rule of law and Public Schools.

I comment that it has been liberalism, whereby many live in clientelism and in dependency upon transfer payments presenting not only moral hazard but also and ethical hazard as well. 

Moral hazard is defined as the financial risk arising to a third party, that comes from an exchange between two contracting individuals. Ethics is defined as right relations with others that reflects virtues, that is beneficial speech and behavior. Ethical hazard is defined as the hazard to one’s virtues arising through predatory and libertine lifestyle of others.

Wikipedia provides an excellent definition of Clientelism as well as Transfer Payments.

Risk to financial moral functioning and ethical living comes by Francois Hollande’s proposal for European Socialism economic stimulation, as Mike Mish Shedlock writes Hollande announces 20 “confidence shock” measures to support home building Francois Hollande is a career politician; the very epitome of European Socialism, yes the poster adult of European Socialism. He is one disconnected, just like those who elected him, from economic reality, specifically that government debt, whether it be national treasury debt or municipal debt, is a minotaur of destruction. He ran on the platform of economic stimulus and won the election; unfortunately economic stimulus at this point will not help, as Mike Mish Shedlock describes that the economy of France is imploding.

Living in the inner city, and being low income, I testify that risk to one’s ethics comes by Social Security Disability payments to those who could work but choose a life of dependency who usually conduct themselves negatively in the lives of others by being being predatory manifesting in sociopathic and psychopathic behavior, or by being libertine and living in abandon. Such individuals often include returning veterans, those released from prison for violent crimes, and silly young women, who have gotten themselves pregnant by men who can’t hold, or do not hold jobs, that support a family; these women often go on TANF, and from there often find they cannot take the pressure of a full time time and go on to give up their children to adoption; I continually see these loose dogs, as Urban Dictionary puts it, roaming the downtown area.

Some are motivated by preeminence, others by confrontation, others by being busy bodies, others by being gossips, and other by being dependent upon dole even though they could work. A culture of sycophantic codependency surrounding Social Security Disability Payments has risen to facilitate these financial morally injurious and ethically harmful carnal dispositions. Today’s cultural toady’s include Social Security Disability Lawyers and Public Housing Authorities. Obtaining social security disability payments becomes a pivotal point in one’s life, where many became involved in a culture of dependency, with an ensuing psychopathic predatory lifestyle, or alcohol dependent lifestyle. A second generation and even third generation of LBJ’s grandchildren develop who fail to receive moral and virtue education at home, and go on to expect social support and even riot in the streets.

Jesus Christ desires that one be motivated by Him as one’s life, Colossians 3:2-4, and by Him being one’s all inclusive live experience, Colossians 3:11, whereby one keeps Christ’s Word and does not deny His Name, Revelation 3:9.

And it is Christ’s desire that one’s conscience, that is one’s discernment of what is genuinely right or wrong, come from the price He paid for sin, that being his very life. Unfortunately, some have seared their conscience and are unable to sort out right from wrong; these manifest as poneros, which is Strong’s Word # 4190, defined as defined as bad, evil, or wicked, depending on literary or life context, and carries the meaning of diseased, calamitous, morally culpable, derelict, mischievous and malicious. The only conscience such have is that which satisfies their own carnal desires to be preeminent, confrontational, nosy, or dependent on the public at large.

Those in Christ, as Pastor Cornelius R. Stam writes, have a clear conscience, that comes from the internalizing the sacrifice that Christ gave his life for sin, and with this resource have the ability to sort out right from wrong, and live thereby. These perceive The Present Truth and live in Christ’s virtue, and New Testament ethics, 2 Peter 1:1-12, such as pursuing peace with all men.

It is Jesus Christ who provides the spiritual wisdom, that is the heartfelt capability, as well as the understanding, that is the insight, to live in virtue, that is in a beneficial way, both of which come from knowing, being established, and living in the Present Truth, 2 Peter 1:1-12.

The foundation of financial morality and the foundation of ethics comes from the comprehension of what constitutes liberty.

I am not a Libertarian, I am a Christian, and I have financial moral experience as well as virtuous living with others, to the extent that I live in, and manifest Christ.

Jesus Christ alone provides freedom; and only His Word provides liberty. He requires that believers in Him have respect for the personal property of another, and live in a non-aggressive way, and desires that his believers manifest His virtuous characteristics in their speech and behavior.

One is only free to the extent he knows and experiences genuine sovereignty. Christians belong to the All Sovereign Jesus Christ. Knowing His sovereignty, they experience the freedom He provides. Jesus said in John 8:36, “If therefore the Son shall make you free, ye shall be free indeed”. John Gill’s Exposition of the Bible relates, “Men are home born slaves; the chosen people of God are such by nature; they are born in sin, and are the servants of it; Christ the Son makes them free; and then they are no more foreigners and strangers, but fellow citizens with the saints, and of the household of God. This suggests, that true freedom is by Jesus Christ, the Son of God; see Galatians 5:1. He it is that makes the saints free from sin; not from the being of it in this life, but from the bondage and servitude of it, from its power and dominion, and from its guilt and liableness to punishment for it, by procuring the pardon of their sins through his blood, and justifying their persons by his righteousness.”

Those who have life in Christ, should be ever maturing in the only right there is, and finding genuine liberty therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.”

The objective reality is defined as Christ, Ephesians 4:21. Motivation comes largely out of values (the things that one is committed to), virtue (beneficial characteristics), and ethics (right way with others). For the Christian these are found in the Present Truth, which enables one to be the divine person, 2 Peter 2:1-12.

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The World Pivots Through Peak Peak Wealth, As Investors Passed Through Peak Dividend Investing And Peak Real Estate Investing On The Trade Lower In European Financials Trade …. A New Trust, The Trust In The Diktat Of Regional Leaders Such As The EU Finance Leaders And Angela Merkel Is Rising

March 26, 2013

Financial Market Report for Monday March 25, 2013

1) … On Monday, March 25, 2013, the world pivoted through peak wealth, as investors passed through peak dividend investing as well as peak real estate investing on the exhaustion of the world central banks’ monetary authority to stimulate global growth and trade, as well as their failure to increase corporate profitability, as well as fears of banking insolvency and nation insolvency in the EU.

Dividend investment came to an end Monday March 25, 2013, as Dividend Growth, VIG, traded -.4%, and Dividends Excluding Financials, DTN, traded -.3%. This as the high yield debt sectors Corporate Junk Bonds, HYG -.2%, Junk Bonds, JNK -.1%, and Leveraged Buyouts, PSP -.5%. Distressed Investments, FAGIX, such as those taken in by the US Federal Reserve under QE1, traded unchanged at 9.71.  Real Estate Investing came to an end as Mortgage REITS, REM, traded 3.1%, lower, Real Estate, IYR -.9%, Industrial Office Reits, FNIO, -.8%, and Global Real Estate, DRW, -.7%.

World stocks VT, traded 0.6%, lower, with Nation Investment, EFA -1.3, Small Cap Nation Investment, IFSM -1.2, the S&P 500, SPY -.4, US Shares, VTI. -.3, and the Russell 2000, IWM -.2.

World stocks, VT, are unable to leverage higher on Corporate Debt, HYG, as is seen in the ongoing Yahoo Finance chart of VT, HYG, and PICB. Corporate Credit is exhausted as a means of providing returns to investors and funding corporate buybacks. Credit Service Companies, such as Visa, V, American Express, AXP, Discover Financial Services, DFS, and Nicholas Financial, NICK, seen in this Finviz Screener, have topped out in value.

With the trade lower today in Large Cap Value, JKF, and Mid Cap Value, JKI, the S&P 500, $SPX, is a failed investment; the chart of the SPY shows it peaked on February 14, 2013

Reuters reports Wall Street slips, but off lows after Cyprus clarification.  US stocks fell on Monday but pulled off their session lows by late afternoon after the president of the Eurogroup tried to clarify his comments on the Cyprus bailout.

Reuters reports Wall Street ends lower on renewed Cyprus worries  Stocks fell on Monday on renewed concerns about the developments in Cyprus and the euro zone, which wiped away earlier gains that drove the S&P 500, SPY, to less than a point away from its record close.

Jordan Shilton and Chris Marsden of WSWS report European Union imposes bank bailout on Cyprus. The statement by Euro Group head Jeroen Dijsselbloem that the Cyprus bailout is a model for the rest of the euro zone led to falls on Europe’s financial markets.

Mike Mish Shedlock writes Merkel’s Vision: “United States of Germany. Following brutal negotiations with EU finance ministers, the IMF and various European government officials, Cyprus finally agreed to measures that her highness, Angela Merkel would accept.  This time she held her ground. Previously, Merkel compromised every key position she has ever held in the sake of political expediency. For example, Merkel went to the well twice on Greece to appease her opponents. She repeatedly caved in to demands from French president Nicolas Sarkozy. She reversed her stand on nuclear energy following German polls. So why did Merkel draw the line at Cyprus? To Merkel everything is a play to win the next election and ultimately to preserve her legacy. She is willing to play hardball now for one reason only. Public opinion is decisively against further bailouts, and anything but exceptionally harsh terms on Cyprus would hurt her election chances in September. She fears the rise of the eurosceptic Alternative for Germany (AfD) Party and the best way to take some wind out of the AfD sails is to show she cares about austerity. Merkel’s vision is not a United States of Europe. Rather, Merkel’s vision is for a “United States of Germany”.

A new trust, the trust in the diktat of  regional leaders such as the EU Finance Leaders and Angela Merkel is rising. Complete and total regional governance of the Eurozone is only a matte of time where nannycrats now state leaders will rule. Under liberallism, sovereign nation states and their leaders governed citizens; but under authoritarianism, sovereign regional leaders and sovereign regional bodies, govern residents of regional zones.

BBC reports EU President Van Rompuy and Foreign Affairs Leader Ashton to quit in 2014.

There is waiting in the wings of Europe’s Stage, a New Pharaoh, the most credible of sovereigns. Soon he will step into the limelight, and rise to power, not through schemes of Liberalism, such as carry trade investment, but rather through schemes of Authoritarianism, Daniel 8:23, such as regional framework agreements, to rule Euroland, Revelation 13:5-10.  He will be accompanied in authority and power by the EU’s Monetary Priest, who will provide the economy of diktat, where diktat serves as currency, power and wealth, Revelation 13:11-18. The Prince of the people, will one day rule the world for three and one half years, that is during the Great Tribulation, demanding emperor worship, this immediately prior to the Advent of Jesus, Daniel 9:26.  These Fierce Leaders will oversee the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, that is rising from the profligate Mediterranean nation states, to replace the Banker Regime of Democratic Nation Investment, Revelation 13:1-4.  Germans cannot be Greeks; but most assuredly they will be one, living together in a debt union and gulag of debt servitude, with the periphery profligate countries of Portugal, Italy, Ireland, Greece, and Spain, existing as hollow economic moons revolving about planet Germany.

Today’s financial market trading establishes that European banks and eurozone nations are insolvent banks and insolvent nations.

Banks traded lower included European financials, EUFN -3.3, World Banks, IXG  -1.0, and the Too Big To Fail Banks, RWW -.5.

European shares, VGK, -1.6, traded lower, as Spain, EWP -4.7, Italy, EWI -4.0, Poland, EPOL -2.4, Greece, GREK -2.1, Germany, EWG 1.8, Finland,  EFNL -1.7, Norway, NORW -1.5, and Ireland, EIRL -1.1.

Interest bearing sectors trading lower included Mortgage Reits, REM -3.1%, Global Utilities, DBU -1.7, Shipping, SEA, -1.6, World Small Cap Dividend, DLS -1.0, Real Estate, IYR -.9, Industrial and Office REITS, FNIO -.8, World Real Estate, DRW -.7, Super Dividend, SPIV -.6, Calamos Closed End Total Return, CGO, -.6, S&P Telecom, IST, -0.5, Dividend Growth, VIG, -.4, Dividend Excluding Financials, DTN -.3, Utilities, XLU -.2, Pharmaceuticals, XPH -.1.

Sectors trading lower included Solar, TAN -5.2, Wind Energy, FAN -2.6, Copper Mining, COPX -1.9, Industrial Mining, PICK -1.8, Rare Earth Mining, REMX, -1.5.

Abenomics has failed to stimulate Japanese stocks higher; Bank of Japan monetary policy has failed in its mission to stem deflation, as Japan, EWJ, and Japan Small Caps, JSC, both traded 1.0% lower. The rally in Nikkei, NKY, has ended. Look for Japanese Interest Rates to rise as bond vigilantes call interest rates higher soon; as not only Japanese Stocks, but Japanese Treasury debt trades lower in value.

A global bear market is underway, with Dow Theory support coming from Transports, IYT, trading 1.0 lower, and Industrials, IYJ, 0.8 lower; Global Industrial Producers, FXR, traded 0.5% lower.

Commodities, DBC, trading lower included Natural Gas, UNG -1.8, Lead, LD -1.8, Cotton, BAL, -.7, and Timber, CUT, -.6.

The Euro, FXE, closed -1.0, at 127.46, and the Swedish Krona, FXS, traded 0.5 lower. Action Forex, which is bullish the Euro Yen Carry Trade, EUR/JPY, shows that its chart closed lower at 121.41.

Columbia, GXG, Peru, EPU, Brazil, EWZ, South Africa, EZA, and India, INP, have been leading the Emerging Markets, EEM, lower, beginning in early January, 2013, as seen in this ongoing Yahoo Finance Chart, reflecting debt deflation, that is currency deflation, as seen in Emerging Market Bonds, EMB, and Emerging Market Currencies, CEW, trading lower. As these countries have lost monetary sovereignty, nation investment in them has decreased. These countries are increasingly becoming insolvent sovereigns. Insolvent sovereigns, and their banks are unable to provide seigniorage, that is moneyness, to stocks and treasury debt; and these are a factor in International Treasury Debt, BWX, trading lower.

Jan Strupczewski and Annika Breidthardt of Reuters report Last-minute Cyprus deal to close bank, force losses on uninsured depositors. Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.

The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.

Swiftly endorsed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.

The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said. Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.

An EU spokesman said no across-the-board levy or tax would be imposed on deposits in Cypriot banks, although the hit on large account holders in the two biggest banks is likely to be far greater than initially planned. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.

Cyprus government spokesman Christos Stylianides said: “We averted a disorderly bankruptcy which would have led to an exit of Cyprus from the euro zone with unforeseeable consequences.”

German Finance Minister Wolfgang Schaeuble said Cypriot lawmakers would not need to vote on the new scheme, since they had already enacted a law setting procedures for bank resolution.

“It can’t be done without a bail-in in both banks. This is bitter for Cyprus, but we now have the result that the (German) government always stood up for,”

Lefteris Christoforou, vice-chairman of the ruling Democratic Rally party, said it was important that Cyprus had avoided a chaotic bankruptcy.

A senior source in the Brussels talks said Anastasiades threatened to resign at one stage on Sunday if he was pushed too far. He left EU headquarters without making any comment.

Diplomats said the president had fought hard to preserve the country’s business model as an offshore financial centre drawing huge sums from wealthy Russians and Britons but had lost.

The EU and IMF required that Cyprus raise 5.8 billion euros from its banking sector towards its own financial rescue in return for 10 billion euros in international loans. The head of the EU rescue fund said Cyprus should receive the first emergency funds in May.

IMF chief Christine Lagarde said the agreement was “a comprehensive and credible plan” that addresses the core problem of the banking system. “This agreement provides the basis for restoring trust in the banking system, which is key to supporting growth,” she said in a statement.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island’s offshore business model that had failed. “To all those who say that we are strangling an entire people. Cyprus is a casino economy that was on the brink of bankruptcy,” he said. The euro gained against the dollar on the news in early Asian trading.

The abandoned plan for a levy on bank deposits had unsettled investors since it represented an unprecedented step in Europe’s handling of a debt crisis that has spread from Greece to Ireland, Portugal, Spain and Italy.

Cyprus’s banking sector, with assets eight times the size of the economy, has been crippled by exposure to Greece, where private bondholders suffered a 75 percent “haircut” last year. On Tuesday, the 56-seat parliament had rejected a levy on depositors, big and small. Finance Minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia, whose citizens and companies have billions of euros at stake in Cypriot banks. On Friday, lawmakers voted to nationalize pension funds and split failing lenders into good and bad banks – the measure to be applied to Laiki. The plan to tap pension funds was shelved due to German opposition, a Cypriot official said.

The tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros – enormous sums for an island of 1.1 million people that could never sustain such a big financial system on its own.

Rebecca Christie, James G. Neuger & Svenja O’Donnell of Bloomberg report Cyprus said to reach tentative deal to avert default Cyprus agreed to the outlines of an international bailout, paving the way for 10 billion euros ($13 billion) of emergency loans and eliminating the threat of default

The euro rose after the provisional agreement was struck that would make Cyprus the fifth country to tap a rescue since the euro debt crisis broke out in Greece in 2009. The European currency rose 0.3 percent to $1.3025 at 3:40 a.m. Brussels time. Stocks in Asia gained, with the MSCI Asia Pacific Index climbed 0.7 percent. The Nikkei 225 added 1.3 percent.

The agreement calls for Cyprus Popular Bank Pcl (CPB) to be shut down and split. The Bank of Cyprus Plc would take over the viable assets of the failed bank along with 9 billion euros in central bank-provided emergency liquidity aid, according to three EU officials who asked not to be named because talks are ongoing.

Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.

Bloated by investments from Russia, Cypriot banks have assets equal to 750 percent of the country’s gross domestic product, more than double the euro-zone average, the European Commission says. Russian companies and individuals have an estimated $31 billion in Cyprus, according to Moody’s Investors Service. All the contradictions of the crisis management came together over Cyprus, with name-calling between northern and southern Europe, tensions between unelected central bankers and elected politicians, and the disconnect between slow-moving policy makers and lightning-fast markets.

Reuters reports Fed’s easy money policy benefits world economy, Bernanke says.  Federal Reserve Chairman Ben Bernanke spoke defended the central bank’s aggressive easing of monetary policy.

Bloomberg reports Japan 10-Year Bond Yield Falls to 2003 Low on Easing Bets. Japan’s bonds rose, sending 10-year and 20-year yields to the lowest in almost a decade, amid speculation Bank of Japan (8301) Governor Haruhiko Kuroda will use parliament testimony tomorrow to outline new easing steps. The extra yield investors demand to hold 10-year bonds instead of 3-year notes narrowed to the least since June 2003 on prospects the BOJ will buy longer-dated securities. At his inaugural press conference as BOJ chief last week, Kuroda reiterated a pledge to achieve a 2 percent price target. The 30-year yield dropped to a 2 1/2-year low.

“There are expectations in the market that the BOJ will eventually buy super long bonds in additional easing,” said Satoshi Yamada, a Tokyo-based manager of debt trading at Okasan Asset Management Co., which manages the equivalent of $12 billion. “Japan’s bond yields are falling despite stock gains globally and losses in bonds overseas.”

The yield on the benchmark 10-year note touched 0.55 percent, the lowest since June 2003, before trading unchanged at 0.555 percent as of 3:30 p.m. in Tokyo, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The all-time low for the 10-year rate is 0.43 percent, also reached in June 2003.

The 20-year rate fell 4 1/2 basis points, or 0.045 percentage point, to 1.44 percent, after earlier touching 1.43 percent, the least since July 2003. Yields on 30-year bonds dropped six basis point to 1.55 percent, a level unseen since August 2010.

Kuroda will appear in parliament tomorrow to speak about monetary policy. He said on March 21 he was confident that“decisive monetary easing” would lead to 2 percent inflation, adding that the nation’s biggest task is to end deflation.

The BOJ currently buys government bonds with maturities of up to three years through its 76 trillion-yen ($802 billion) asset-purchase program

2) … A note on psychopaths. My experience from living in the inner city, is that there three types of these predators. One, the bear, who has paws, on which he stands his ground, and is loud and menacing, with which he uses to rummage through smelly and rotten stuff.  And two, the lion, who has a mane, that is preeminence, and often uses these to charm, and a mouth filled with teeth that bite, rip and tear his opponents apart, and spends his time being a busybody in his territory.  And three, the leopard, having a coat of camouflage, he operates by stealth in the shadows, and literally pounces on his prey, taking them by surprise up into the trees, where he crushes and devours his catch. The Beast Regime of Revelation 13:1-4, which is replacing the Milton Friedman Banking Regime, has characteristics of all three of these animals; God has designed it to be an invincible predator.

Abuse Sanctuary Blog relates April Wilkinson writes Psychologist explains the psyche of psychopaths. Dr. Sue Stone is a clinical psychologist at the Citizen Potawatomi Nation in Shawnee, a position she’s held since January. Although her work here is in general psychology and therapy, her specialty area is psychopathy, and she came from three years’ work at the Department of Corrections, doing criminal court evaluations, consulting on capital murder cases and more.

There are people functioning in society who exhibit various degrees of psychopathic behavior in their daily lives, she said. That makes the term psychopath a relative one, but there are definite characteristics of such people, Stone said.

Psychopaths demonstrate antisocial behavior and an aggressive narcissism, they use people through charm, intimidation or violence, she said.

“They have a parasitic lifestyle, they live off people. Their whole mindset is domination over other people,” she said. “Psychopaths are not necessarily criminal in their activities, but they are attracted to positions of power. They have no anxiety about their behavior.

“Psychopaths see themselves as wronged. They can be paranoid, feel persecuted, feel a need for revenge. They harbor a lot of persecutory beliefs.” (i.e. – They are the victim, not you, in their heads)

There also is a lot of thrill-seeking with psychopathic behavior, Stone said. Over time, there will be an escalation of their behavior because they’ve gotten sensitized to a certain act, but then have to “up the ante” to capture the thrill they seek, she said.

“Psychopaths have a need for recognition, not just a need for attention,” she said. “They have a sense of being invincible, of ‘I can outsmart you.’ They’re taken in by their own narcissism. It’s almost like a game.”

[Sociopaths] often take “souvenirs” from their victims — pictures, jewelry, lock of hair, to remind them later, Stone said. “They want to keep that image, the fantasy of that control going,” she said. (I add they often carry voice recorders to record conversations and cell phones to take pictures).

A psychopathic individual can be a chameleon and learn to act a certain way. That advances their opportunity to engage in certain behaviors because who would suspect?”

Psychopaths also differ in that their intellectual and emotional understanding of things don’t match. Stone said psychologist Robert Hare has a saying for this condition: Psychopaths know the words but don’t know the music when it comes to emotions. “They know intellectually what it is to be sad, but their empathy and regard for other people is not there,” Stone said. “They can mimic the feeling, but they really can’t put words to how they feel because they don’t have that internal experience.”

There is no known treatment for psychopaths; rather, behavior management is the course of action, Stone said. Psychopaths don’t say, “I need help” because they see others as the cause of their problems; they don’t have anxiety to prohibit their behavior, she said. And studies have shown that group therapy not only doesn’t work for psychopaths, it makes their behavior worse, Stone said. They use the therapy setting as practice for manipulating people.

I relate that there is a resolution process of dealing with psychopaths; it involves marking and turning away, as well as withdrawing, as presented in the bible in Romans 16:17, and 2 Thessalonians 3:2-6. Christians practice biblical separation daily; it is a tenet of sound christian doctrine: there are four aspects of Biblical separation: political (separation of church and state), personal (separation from sin), ecclesiastical (separation from false teaching), and practical (separation from others who walk disorderly).

3) … In the news

BBC reports Exiled Russian tycoon Boris Berezovsky, profiled on NNDB, has been found dead at his home outside London. A police investigation has been launched into the death of the 67-year-old – a wanted man in Russia, and an opponent of President Vladimir Putin. A former Kremlin power-broker whose fortunes declined under Mr Putin, Mr Berezovsky emigrated to the UK in 2000.Thames Valley Police said the death, at a property in Ascot, Berkshire, was being treated as unexplained.

World Enters Into Global Bear Stock Market On Cyprus Deposits Levy …. Liberalism In Producing Peak Prosperity Has Produced Peak Moral Hazard and Peak Ethical Hazard … The Diktat Money System Is Rising To Replace The Fiat Money System

March 24, 2013

Financial market report for the week ending March 22, 2013

1) … This week, World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Industrial Producers, FXR, traded lower, reflecting that an inflection point for risk markets was reached, and indicating that the world has entered into a global bear stock market, as last weekend saw Cyprus leaders and EU Finance Ministers agree to a “bail in” whereby bank depositors would be assessed a deposit levy to help pay for the cost of bailing out Cyprus’ troubled banking sector; the EU would contribute 10bn euros to the bailout, with Cypriot depositors on the hook for 5.8bn Euros. The haircut on deposits below the 100,000 threshold unleashed a firestorm of condemnation around the world. Confirmation of a global bear stock market comes from The Morgan Stanley Cyclicals, $CYC, trading 0.9%, lower, Transports, IYT, -1.3%, Industrials, IYJ, -0.7%,global Industrial Producers, FXR, -0.7%, Small Cap Pure Value, RZV,-0.9%, and Small Cap Pure Growth, RZG -0.9%

Major countries, EFA, -0.9%, trading lower this week included

Greece, GREK -4.9

India, INP, -4.9

Russia, RSX, -3.8

Brazil, EWZ, -3.6

Sweden, EWD -2.7

Australia, EWA, -2.1

Norway, NORW, -2.0

South Africa, EZA, -2.0

South Korea, EWY, -1.8

Taiwan, EWT, -1.6

Egypt, EGPT, -1.5

Germany, EWG, -1.3

Small cap countries, IFSM, -0.6, trading lower this week included

Thailand, THD, -6.7

India Small Caps, SCIN, -6.2

Poland, EPOL -5.2

Russia Small Caps, ERUS, -3.5

Brazil Small Cap, EWZS, -3.5

Phillippines, EPHE,  -2.6

Indonesia, EIDO, -2.1

Finland, EFNL, -1.8

The world has entered entered into Great Depression II, with the chart of the S&P 500, $SPX, SPY, trading -0.2%, and the US Small Caps that is the Russell 2000, IWM, -0.6%.

Financial sectors trading lower included the Regional Banks, KRE, -1.6%, the Stock Brokers and Dealers, IAI, -1.8%, the Too Big To Fail Banks, RWW, -1.8%, the Investment Bankers, KCE, -2.8%; the European financials, EUFN, -2.9%, and the World Banks, IXG, -1.9%. The asset managers that literally coined Liberalism’s wealth, BLK, WDR ,EV ,STT, WETF, AMG, as a group, traded lower.

Sectors trading lower included :

Energy Service, IEZ, -4.6; the age of profitable investing in energy development is over.

Industrial Miners, PICK, -4.2; the age of profitable investing in mining stocks is history.

Solar, KWT, -4.0

Energy Service, OIH, -4.1

Coal Mining, KOL, -3.7

Copper Miners, COPX, -3.4

Energy Production, XOP -2.5

Steel, SLX, -2.7

Small Cap Energy, PSCE,-2.5

Networking, IGN, -2.5

Leveraged Buyouts, PSP, -1.9

North Ameican Software, IGV, -1.8

Biotechs, XBI, -1.3; the age of profitable investing in life sciences is over.

Automobiles, CARZ, -1.4

Uranium Mining , URA, -0.9

Semiconductors, XSD, -0.7

Small Cap Industrials, PSCI, -0.5

Sectors still trading higher included, IYC, KXI, XRT, FAA, BJK,

Interest bearing sectors trading lower included

Small Cap Real Estate, ROOF, -1.8

Global Real Estate, DRW, -1.0

Real Estate, IYR, -0.1

Industrial REITS, FNIO, -0.5

Dividend Growth, VIG, -0.3

Super Dividend, SDIV, -0.2

Emerging Market Small Dividend, DSL, -0.2

REITS, VNQ, -0.2

Dividend Excluding Financial, DTN, -0.1

Interest bearing sectors still trading higher included REM, XLU, IST, IYZ, SEA, EMLP, AMJ

Junk Bonds, JNK, -0.1%, and High Yield Corporate bonds, HYG -0.1,

With gold bullion, $GOLD, up $17, that is up 1.1%, the Gold Miners, GDX, recovered 2.2%. .

Doug Noland of PrudentBear reports in Cyprus and Money, that the wealth of the sovereigns increase to an all time new high. Global central bank “international reserve assets” (excluding gold), as tallied by Bloomberg, were up $675bn y-o-y, or 6.6%, to $10.940 TN; over two years, reserves were $1.559 TN higher, for 17% growth.

The chart of U.S. dollar, $USD, UUP, was little changed at 82.37, up 0.5%, (up 3.3% y-t-d). For the week on the upside, the New Zealand dollar increased 1.0%, the Japanese yen, FXY, 0.9%, the British pound, FXB,  0.9%, the Mexican peso 0.7%, and the Australian dollar, FXA,  0.4%  For the week on the downside, the Swedish krona , FXS, declined 1.3%, the Brazilian real, BZF, 1.7%, the South African rand 1.3%, the Emerging Market Currencies, CEW, -0.8%, the Norwegian krone 0.8%, the euro FXE, 0.6%, the Taiwanese dollar 0.6%, the Danish krone 0.6%, the Canadian dollar, FXC, 0.4%, the Swiss franc, FXF, 0.1%, and the Singapore dollar 0.2%.

2) … In the news

World Stocks, VT, were given seigniorage, that is moneyness, by the world central banks monetary policies.  Monetary expansion, specifically money printing by the Fed, the ECB, the PBOC, has been a hallmark of Liberalism which inflated Money Supply metrics such as M2 Money, that is the people’s discretionary wealth, and World Central Bank reserves, that is the sovereign’s wealth, and has stimulated economic production. But the world central bank’s monetary policies have passed the rubicon of sound monetary policy and have made “money good” investments bad, with the result that Liberalism’s dynamos of corporate profit and global trade are winding down, and Authoritarianism’s dynamos of regional security, stability, and sustainability are winding up. Liberalism featured wildcat finance a Doug Noland Term, but Authoritarianism features wildcat governance, where nannycrats bite, rip and tear one another to become top dog. Mike Mish Shedlock provides the truth that the global economy is imploding relating Denial is everywhere … about increasingly important thing.

Mr Shedlock continues Economic illiteracy is nearly everywhere you look. Bruno Moschetto suggests France is not bankrupt because the state is not indebted in a foreign currency. Actually, France does have its debts in a foreign currency, euros. Note that France cannot print euros at will to pay its debts (the very essence of a foreign currency). Moschetto says citizens would be “invited” to help France meet its obligations. Invited? The same way citizens of Cyprus were “invited” to bail out Cypriot banks? The ability to tax citizens to death to bail out the state is hardly a reasonable measure of non-bankruptcy. I suggest having to confiscate the wealth and savings of citizens to bail out the state is proof of bankruptcy. Greece is a nice example. Hollande has tried 75% taxation. He has tried government takeover or threats of takeover of various auto manufacturers. Hollande also seeks financial transaction taxes. Many French citizens have had enough of Hollande and his socialist policies and have fled to Belgium, the UK, and Switzerland. Thought of the day. France is Bankrupt, and it is the policies of socialist fools that put France in that state. The thought of the day comes from reader “PTCruiser” who chimed in with “Aujourd’hui, la France. Demain, le monde entier.”… Today France, tomorrow, the world!

Credit Writedowns asks When do we call it a solvency crisis?

Benton te writes The anatomy of the Cyprus’ bubble cycle.

Pater Tenebrarum writes A deal is close.

Reuters reports JPMorgan Board ‘strongly endorses’ dual role for Dimon. The board of directors of JPMorgan Chase & Co said on Friday it “strongly endorses” keeping Jamie Dimon as both their chairman and as chief executive of the company.

CNBC reports Sprawling and struggling: Poverty hits the suburbs.

AP reports Fitch puts UK on review for downgrade.

Breakout reports Obamacare Is 3 years old: where do things stand now?

Hans Nichols of Bloomberg reports  “Federal Reserve Chairman Ben S. Bernanke said he’s ‘spoken to the president a bit’ about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy.  ‘I don’t think that I’m the only person in the world who can manage the exit,’ Bernanke said when asked if he’s discussed his plans with President Barack Obama. His term expires at the end of January.  Bernanke’s comments yesterday meshed with the views of some of Obama’s economic and political advisers who said Bernanke, 59, after spending most of his seven years on the job battling a financial crisis and its aftermath, is exhausted and wants to return to private life.”

Boris Cerni of Bloomberg reports: “Slovenia’s dollar-denominated benchmark bonds declined, pushing yields to the highest level this year as bailout risks increase.  The yield on the notes maturing in 2022 advanced 13 basis points to 5.556%,. the highest since Nov. 29. The two-day-old government of Prime Minister Alenka Bratusek may be forced to ask for international aid to prop up the banking system because of increased political risk, economists at Nomura International Plc said.”

El Pais reports Spain mulls cutting 23% of  weekly  train routes. Spain’s public works ministry may cut 779 train routes unless regions are able to finance those that aren’t profitable. 172 train stations with less than avg one passenger a day may be removed, citing a draft submitted to unions. (Hat Tip to Gary of Between The Hedges). I relate that Spain’s, EWP,  economic growth was attributable to it being a channel of carry trade investment flowing to Mexico, EWP, Brazil, EWZ, Chile, ECH, Peru, EPU, and other Latin American, LATM, destinations,  as well as a massive amount of housing development and municipal projects, which saw regional debt bubble to massive levels.

BBC reports On Friday, the Cypriot parliament passed a total of nine bills, covering three of the four elements of a financial rescue plan:

  • Restructuring of the banking sector, starting with the most troubled bank of all – Laiki (Popular) Bank, the country’s second largest

  • The creation of a solidarity fund: nationalising pension funds and other state assets

  • The approval of capital controls to prevent large fund withdrawals out of Cyprus

The bank levy issue may come before parliament later in the weekend. A levy, possibly of around 15%, on all deposits over 100,000 euros, has been suggested. MPs in Cyprus have voted to restructure the island’s banks – one of several measures to ease the crisis, which has hit confidence in the eurozone. They have also approved a “national solidarity fund” and capital controls to prevent a bank run.  The “solidarity fund” would allow the pooling of state assets for an emergency bond issue, reports the Reuters news agency. These include future gas revenues and some pension funds – an idea that German Chancellor Angela Merkel has strongly condemned. Ms Merkel had warned Cyprus not to “exhaust the patience of its eurozone partners”, reports say. Businesses in Cyprus have been insisting on payment in cash, rejecting card and cheque transactions. “We have pressure from our suppliers who want only cash,” Demos Strouthos, manager of a restaurant in central Nicosia, told AFP news agency. Our correspondent says he has never seen this much pressure being applied to a member state by the rest of the eurozone community in recent years. Eurozone finance ministers have called a meeting on Sunday to discuss the Cyprus crisis. The European Central Bank has given Cyprus until Monday to raise the bailout money, or it says it will cut off funds to the banks, meaning they would collapse, possibly pushing the country out of the eurozone. The EU has postponed next week’s summit to discuss free trade with Japan, so European leaders can concentrate on trying to solve the Cyprus crisis.

GATA relates Pension fund seizure, capital controls legislated in Cyprus

Bloomberg reports Merkel’s Cyprus gamble explained as German vote nears

The FT reports Cyprus laments end of way of life. When he was finance minister a decade ago, Takis Klerides helped steer Cyprus into the EU and the single currency, a defining achievement for a once-impoverished island nation that is far closer to Beirut than Brussels. But on Friday, with Cypriots contemplating the steep price of an EU bailout, Mr Klerides sounded like a man with regrets. “We found out the hard way that it’s not a family,” he said of the EU, arguing that the bloc’s biggest members “dictate the terms and everyone else falls in line. It’s becoming a dictatorship.” … “The European project is crashing to earth,” Athanasios Orphanides, who until recently served as central bank governor, said in a separate interview in which he dubbed Cyprus’ treatment by European leaders “the bullying of a people”. Nicos Michaelas, the general manager of an investment company, Demetra Investment, put it even more bluntly: “We expected our European friends to help and they put a gun to our heads.”

3) .. Liberalism in producing peak prosperity has produced peak moral hazard and peak ethical hazard through clientelism and transfer payments.

Moral hazard is defined as the financial risk arising to a third party, that comes from an exchange between two contracting individuals. Ethics is defined as right relations with others that reflects virtues, that is beneficial speech and behavior. Ethical hazard is defined as the hazard to one’s virtues arising through predatory and libertine lifestyle of others.

Wikipedia provides an excellent definition of Clientelism as well as Transfer Payments.

Risk to financial moral functioning and ethical living comes by Francois Hollande’s proposal for European Socialism economic stimulation, as Mike Mish Shedlock writes Hollande announces 20 “confidence shock” measures to support home building  Francois Hollande is a career politician; the very epitome of European Socialism, yes the poster adult of European Socialism. He is one disconnected, just like those who elected him, from economic reality, specifically that government debt, whether it be national treasury debt or municipal debt, is a minotaur of destruction. He ran on the platform of economic stimulus and won the election; unfortunately economic stimulus at this point will not help, as Mike Mish Shedlock describes that the economy of France is imploding.

Living in the inner city, and being low income, I testify that risk to one’s ethics comes by Social Security Disability payments to those who could work but choose a life of dependency who usually conduct themselves negatively in the lives of others by being being predatory manifesting in sociopathic and psychopathic behavior, or by being libertine and living in abandon.  Such individuals often include returning veterans, those released from prison for violent crimes, and silly young women, who have gotten themselves pregnant by men who can’t hold, or do not hold jobs, that support a family; these women often go on TANF, and from there often find they cannot take the pressure of a full time time and go on to give up their children to adoption; I continually see these loose dogs, as Urban Dictionary puts it, roaming the downtown area.

Some are motivated by preeminence, others by confrontation, others by being busy bodies, others by being gossips, and other by being dependent upon dole even though they could work. A culture of sycophantic codependency surrounding Social Security Disability Payments has risen to facilitate these financial morally injurious and ethically harmful carnal dispositions. Today’s cultural toady’s include Social Security Disability Lawyers and Public Housing Authorities. Obtaining social security disability payments becomes a pivotal point in one’s life, where many became involved in a culture of dependency, with an ensuing psychopathic predatory lifestyle, or alcohol dependent lifestyle. A second generation and even third generation of LBJ’s grandchildren develop who fail to receive moral and virtue education at home, and go on to expect social support and even riot in the streets.

Jesus Christ desires that one be motivated by Him as one’s life, Colossians 3:2-4, and by Him being one’s all inclusive live experience, Colossians 3:11, whereby one keeps Christ’s Word and does not deny His Name, Revelation 3:9.

And it is Christ’s desire that one’s conscience, that is one’s discernment of what is genuinely right or wrong, come from the price He paid for sin, that being his very life.  Unfortunately, some have seared their conscience and are unable to sort out right from wrong; these manifest as poneros, which is Strong’s Word # 4190, defined as defined as bad, evil, or wicked, depending on literary or life context, and carries the meaning of diseased, calamitous, morally culpable, derelict, mischievous and malicious. The only conscience such have is that which satisfies their own carnal desires to be preeminent, confrontational, nosy, or dependent on the public at large.

It is Jesus Christ who provides the spiritual wisdom, that is the heartfelt capability, as well as the understanding, that is the insight, to live in virtue, that is in a beneficial way, both of which come from knowing, being established, and living in the Present Truth, 2 Peter 1:1-12.

The foundation of financial morality and the foundation of ethics comes from the comprehension of what constitutes liberty.

I am not a Libertarian, I am a Christian, and I have financial moral experience as well as virtuous living with others, to the extent that I live in, and manifest Christ.

Jesus Christ alone provides freedom; and only His Word provides liberty. He requires that believers in Him have respect for the personal property of another, and live in a non-aggressive way, and desires that his believers manifest His virtuous characteristics in their speech and behavior.

One is only free to the extent he knows and experiences genuine sovereignty. Christians belong to the All Sovereign Jesus Christ.  Knowing His sovereignty, they experience the freedom He provides. Jesus said in John 8:36, “If therefore the Son shall make you free, ye shall be free indeed”. John Gill’s Exposition of the Bible relates, “Men are home born slaves; the chosen people of God are such by nature; they are born in sin, and are the servants of it; Christ the Son makes them free; and then they are no more foreigners and strangers, but fellow citizens with the saints, and of the household of God. This suggests, that true freedom is by Jesus Christ, the Son of God; see Galatians 5:1. He it is that makes the saints free from sin; not from the being of it in this life, but from the bondage and servitude of it, from its power and dominion, and from its guilt and liableness to punishment for it, by procuring the pardon of their sins through his blood, and justifying their persons by his righteousness.”

Those who have life in Christ, should be ever maturing in the only right there is, and finding genuine liberty therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.”

The objective reality is defined as Christ, Ephesians 4:21. Motivation comes largely out of values (the things that one is committed to), virtue (beneficial characteristics), and ethics (right way with others). For the Christian these are found in the Present Truth, which enables one to be the divine person, 2 Peter 2:1-12.

4) … Doug Noland relates there has been a crack in the global growth of money, that is wealth.

Doug Noland of PrudentBear reports in Cyprus and Money, (Cyprus) didn’t become part of the euro until 2008.  It’s a nice tourist spot, but mainly it’s distinguished by its bloated banking sector.  Regrettably, bank assets doubled over the past five years, ballooning to a precarious eight times GDP.  Its low corporate tax rate, loose banking regulations and euro zone membership propelled Cyprus into a major hub for tax evasion and money laundering.  As money came flooding in, much of it from Russia, too much of it found its way to high-yield Greek corporate lending and government bonds.  By week’s end, however, the Cypriots were left empty-handed by the Russians.  With tails between legs, the Cyprus Parliament was desperately passing legislation hoping to avert financial and economic collapse while remaining in the euro zone.  Tuesday’s deposit levy legislation had been supplanted with bills providing the Central Bank of Cyprus authority to wind down at least one of its major banks.  Instead of a 9.9% tax, many large depositors now face major losses and even the loss of access to their funds for an extended period.  Capital controls will be necessary, as well as strict limitations on bank accounts and fund transfers.  Cyprus may very well do enough to remain a euro member on Tuesday (banks are to reopen).  But their banking and business model has been destroyed, with unknown consequences for Cyprus and their financial relationships.  Thursday’s Russian tough talk had turned strangely quiet by Friday.

It has been part of my thesis that the Germans would over time adopt a harder line.  Market participants never seem to tire repeating the mantra that the Merkel government will talk tough and predictably cave when market turmoil puts a gun to its head.  Emboldened markets have been confident that, at the end of the day, Germany will have no option but to use their wealth to backstop the entire euro zone.  This week’s Cyprus eruption may have market players rethinking a few things.

I’ve assumed that the further along the “European” crisis evolves the more the German point of view shifts from backstopping the euro project to protecting German interests.  It is worth noting that while the Cyprus bailout structure was being lambasted (“stupid” and “incompetent”) Merkel and Schaeuble were winning plaudits at home.  German public opinion against bailouts has notably hardened over recent months.  The days of railroading big euro member bailouts through the Bundestag appear over.

From my perspective, the Cyprus crisis arrives with global markets in a somewhat vulnerable position.  In particular, the emerging equity and debt markets have begun to struggle.  India’s stocks were hit for 3.6% this week – and are down 3.6% y-t-d.  South Korea’s Kospi declined 1.9%, pushing 2013 losses to 2.4%.  Eastern European stocks and currencies have been under pressure.  This week saw equities fall in Russia (down 2.2% y-t-d), Poland (down 5.1% y-t-d) and the Czech Republic (down 5.6% y-t-d).  Latin America stocks also remained on the defensive, with Brazil’s 2.9% drop this week pushing y-t-d losses to 9.4%.   And while U.S. investment grade and junk bond CDS have been grinding to multiple-year lows, emerging market CDS have curiously diverged and moved higher.  On the more bullish side, Chinese stocks did muster a 2.2% recovery this week.

U.S. stocks ended the week having sustained only minimal damage.  Bernanke confirmed that the Fed’s printing press will be running 24/7 for the foreseeable future.  Between the Fed, Draghi’s backstop, the Bank of Japan and basically concerted global central bank printing, most market participants see no end to the bullish backdrop.  The Financial Times ran a story Friday, “Hedge Funds Storm Back into Form.”  Like most, the hedge funds have rediscovered the secret to success:  throw caution to the wind and jump aboard the raging global bull.  It’s late-night and the raucous crowd has gathered contently on one side of the party boat.

Inflated and highly speculative global risk markets remain enamored by central banker resolve – and perhaps not all that focused on fundamental developments.  And, ironically, Bubbling risk markets were this week conducive to resolve elsewhere.  Strong markets provided the Germans, Finns, Dutch and the EU more generally a favorable backdrop for demonstrating some backbone.  For one, they didn’t appreciate little Cyprus copping a big attitude.  The Germans were incensed – and they weren’t going to let Cypriot politicians get away with any nonsense.  You either want to remain in the euro zone or you don’t.  If so, we dictate the terms.  If not, we’re confident we can manage the consequences.  Cyprus follies must not set a precedent.  EU and “troika” credibility was on the line, credibility that’s been taking some hits of late.

Actually, it was probably time for a new approach in dealing with the troubled debtors.  I think the Germans and the “northern” countries come out of this experience with new resolve.  And this could set the stage for trying times in the markets when bailouts are required for Spain and Italy – Draghi, Bernanke, Kuroda and friends, notwithstanding.

I also wouldn’t be surprised if history looks back at this week’s developments and finds some significance.  There was some real money lost this week.  And I mean “money” as in perceived safe and liquid nominal stores of value – like euro-denominated bank deposits (in contrast to non-money-like Greek sovereign bonds or subordinated bank debt).  Cypriot deposits (small and large) had retained their “moneyness” based on what is now clearly a misperception that Germany and the EU would backstop their value.  And there’s literally Trillions of suspect Credit and “money” throughout Europe whose value is today inflated based upon similar (mis)perceptions.

While we’re on the subject, there are tens of Trillions of securities and “money” that retain full and inflated market values based on the perception of the wealth-creating capacity of the Fed’s printing press.  And there are as well monetary partners in crime in Japan, China, the developing economies and the rest-of-world.   For going on five years now, since the 2008 Credit crisis, the global “system” has been grossly over-issuing “money.”  I have referred to the Greek collapse and “European” crisis as the initial crack in the “global government finance Bubble.”  It is tempting to see Cyprus as the first crack in “money.”

5) … Jesus Christ, is God’s economic and plan administrator for every dispensation, that is for every age, as presented in Ephesians 1:10.  He has shifted the tectonic plates of sovereignty that produce seigniorage, that is moneyness, has broken the bedrock of prosperous financial experience, and has terminated the experience of the US Dollar, as being the international reserve currency, with the result that the diktat money system is rising to provide diktat as currency, money, wealth and power.

More specifically ,we are witnessing the fulfillment of bible prophecy in the news, as the Beast Regime of Revelation 13:1-4, which is destined to have sovereignty in all of the world’s ten regions, as regional governance ….. and have headship in all of mankind’s seven institutions, as totalitarian collectivism, and debt servitude ….. is rising not only from the Mediterranean nation of Greece, but now also from the Eastern Mediterranean Sea island of Cyprus; this monster will replace the Banker Regime that came into existence in 1931 with the Federal Reserve Act.

For the week ending March 22, 20123, World Stocks, VT, traded 0.6% lower, Nation Investment, EFA, -0.8%, Small Cap Nation Investment, IFSM, -0.6%, and Global Industrial Producers, FXR, -0.7%, reflecting that an inflection point for risk markets was reached, and indicating that the world has entered into a global bear stock market, as Cyprus leaders and EU Finance Ministers wrangled for a solution to prevent a sovereign default in Cyprus.

Confirmation of a global bear stock market comes from The Morgan Stanley Cyclicals, $CYC, trading 0.9%, lower, Transports, IYT, -1.3%, Industrials, IYJ, -0.7%,global Industrial Producers, FXR, -0.7%, Small Cap Pure Value, RZV,-0.9%, and Small Cap Pure Growth, RZG -0.9%; as well as closed end debt, PFL, to leverage higher over closed end equity, CSQ, since the beginning of March 2013 as is seen in their ongoing Yahoo Finance Chart.

The EUR/JPY traded lower this week and Action Forex, which surprisingly is long term bullish this carry trade, reports a close at 124.91. Carry trade investing has coming to an end, as reflected in the consolidation triangle seen in the chart of the Optimized Carry Traded ETN, ICI.

Monetization of debt by the world central banks has commenced debt deflation globally. With the trade lower in Major World Currencies, DBV, and Emerging Market Currencies, CEW, competitive currency devaluation is underway. Inasmuch as the US Dollar, $USD, is trading higher and currencies trading lower, the Milton Friedman Free To Choose Floating Currency System, also known as the Fiat Money System, is an epitaph on the tombstone of Liberalism. The diktat money system, where diktat serves as currency, money, and power is being established as Authoritarianism’s Banner.

Risk aversion has commenced, as is seen in the Risk On ETN, ONN, falling, and the Risk Off ETN,  OFF, rising. Volatility, ^VIX, is rising with VIXY and VIXM trading higher. Investors will be massively disinvesting out of stocks, and deleveraging out of carry trade investments. A see saw destruction of fiat wealth is underway, as bonds, BND, have traded lower and now stock, VT, are trading lower on falling currency values. The age of fiat asset deflation is underway. The Proshares 200% ETFs seen in this Finviz Screener are trading higher; and the Direxion 300% ETFs seen in this Finviz Screener are trading higher as well. As Liberalism’s Inflationism is giving way to Authoritarianism’s Destructionism, the world is pivoting from credit based prosperity to debt servitude based austerity.

The Revelation Of Jesus Christ Commences With A Bear Stock Market Terminating The Nine Month Long Toxic Debt Japanese Yen Carry Trade Rally, As The ECB Gives Cyprus A Bailout Ultimatum … Great Depression II Is On The Way

March 22, 2013

Financial Market Report for Thursday March 21, 2013

1) .. A financial bear market commenced, as World stocks, VT, traded lower, as Reuters reports Cyprus, European data rattle shares and the Euro. And the NYT reports Mood sours in Cyprus as E.C.B. gives bailout ultimatum.

Greece, GREK, Poland, EPOL, Switzerland, EWL, Thailand, THD, Indonesia, IDX, South Korea, EWY, India, INP, SCIN, Sweden, EWD, Finland, EFNL, Brazil, EWZ, EWZS, Argentina, ARGT, and Ireland, EIRL, traded lower, leading World Stocks, VT, Nation Investment, EFA, and the Emerging Markets, EEM, lower. Global Industrial Producers, FXR, such as EXP, ARG, MHK, PPG, ABB, WHR, MON, FLS, SYT, PHG, LPL, LYB, IR, TEL, BA, seen in this Finviz Screener, traded lower.  Japan Small Caps, JSC, rose strongly to a new high; while Japan, EWJ, traded unchanged.

South Korea Banks, WF, KB, Ireland’s EIRL, Spain’s SAN, Greeces, NBG, Columbia’s CTB, Switzerland’s CS, UBS, Japan’s SHG, MFG, MTU, SMFG, India’s ITU, HDB, Brazil’s BBD, BSBR, UK’s LYG, Chinese Financials, CHIX, and America’s Regional Banks, KRE, such as RF, SNBC, CATY, MBWM, METR, SUSQ, FRME, FITB, HBAN, OKSB, seen in this Finviz Screener, and the Too Big To Fail Banks, RWW, such as JPM,BAC, C, BK, KEY, WFC, PNC, STI, led World Banks, IXG, lower. Stock Brokers, IAI, sush as RJF, and Asset Managers, which worked in conjunction with the Too Big To Fail Banks, RWW, and the Investment Bankers, KCE, to actually coin Liberalism’s wealth, such as BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, traded lower.

Leveraged Buyouts, PSP, Home Construction, ITB, Solar, KWT, Wind Energy, FAN, Automobiles, CARZ, Networking, IGN, North American Software, IGV, Semiconductors, XSD, Small Cap Industrials, PSCI, Energy Production, XOP, Energy Service, OIH, Copper Mining, COPX, US Infrasturcture, PKB, Aerospace and Defense, PPA, Coal Miners, KOL, Rare Earth Miners, REMX, and Apparel Retailers, such as GPS, LTD, and BKE, traded lowe.

Global Real Estate, DRW, Emerging Market Dividend, EDIV, Dividend Growth, VIG, Dividend Payers Excluding Financials, DTN, Utilities, XLU, Telecom, IST, IYZ, and Junk Bonds, JNK, HYG, led the dividend paying stocks lower.

Both Dow Transportation Stocks, IYT, and Dow Industrial Stocks, IYJ, traded lower, giving Dow Theory insight that a global bear stock market commenced today Thursday March 21, 2013.

Gold Miners, GDX, rose strongly; and Silver Miners, SIl, rose weakly.

Large Cap Growth, JKE, was the loss leading style of the day, this included companies such as  DOW, CSCO, ORCL, TXN, TSM, ERIC, IP, and TEL. The world central banks monetary policies are no longer able to sustain global growth or corporate profitability. Small Cap Pure Value, RZV, and Small Cap Pure Growth, RZG, were the style loss leaders that saw the least deterioration.

The S&P 500, $SPX, SPY, shows a 0.85% trade lower; its weakness coincides with a notable drop in the price of crude oil, USO, which sent Energy Production, XOP, such as PXD, and CLR, lower; the age of profiting from energy production is done and over.

Major World Currencies, DBV, rose higher, but traded below its recent high, as the Japanese Yen, FXY, and the Australian Dollar, FXA, rose. The Swedish Krona, FSX, the Euro, FXE, and the Swiss Franc, FXF, and the Brazilian Real, BZF,  and the Emerging Market Currencies, CEW, traded lower. The chart of the US Dollar, $USD, UUP, shows a 0.05% traded lower to close at 82.99. The EUR/JPY traded lower today and Action Forex, which surprisingly is long term bullish this carry trade, reports it looks like fall from 126.03 is resuming soon. Carry trade investing is coming to an end, as reflected in the consolidation triangle seen in the chart of the Optimized Carry Traded ETN, ICI.

Look for competitive currency devaluation to get strongly underway soon on the failure of national sovereignty, with Cyprus being a case in point, and the exhaustion of the world central banks’ monetary authority. and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.  Zero Hedge reports Global slowdown accelerates driven by confidence and new orders plunge. And Zero Hedge reports S&P500 profit margins tumble to Q1 2010 levels.

Scott Grannis asks Why is everyone so gloomy? the chart above suggests, today’s negative yield on TIPS is consistent with a market that expects real growth in the economy to be close to zero for the next few years. Note that when the economy was posting 4-5% real growth in the late 1990s, TIPS yields were 3-4%. If the Fed were absolutely confident that the economy would grow 2-3% over the next several years, would they be comfortable keeping short-term rates at zero? No. Which means that even though they “expect” real growth to be modest, deep down inside the FOMC members are very worried that if they don’t “do something” growth might be closer to zero than to their current projections. There are other telltales of gloom as well. The PE ratio of the S&P 500 is currently just over 15. That is significantly below its average of 16.6 since 1960, especially when you consider that corporate profits as a % of GDP are very near their all-time high. The only explanation of these facts is that the market expects profits to decline significantly in coming years. 30-yr Treasury yields—which are difficult if not impossible for the Fed to influence directly—are trading at just over 3%, which is very near their lowest level on record. Who would buy a 30-yr T-bond at 3% if he or she didn’t expect nominal GDP growth to be 3% or less? With long-term inflation expectations fairly stable at 2.5%, that means long bonds are priced to the expectation of a miserable 0.5% annual real growth for as far as the eye can see.

Mre Grannis continues, companies are holding back on their hiring plans, worried about regulatory burdens and big increases in mandated costs. And many individuals have probably decided that the rewards to working harder or returning to work are outweighed by the costs (e.g., higher taxes) to doing so. (I for one have decided I’d rather work for free on this blog than pay a 65% marginal tax rate on any new income I might generate from starting a small business.) This article has a nice summary of what Obamacare means for many colleges and many small businesses: sharply increased personnel costs, reductions in hours worked, layoffs, increased disincentives to work. One can only begin to imagine the depressing effect of the prospect of significant increases in future tax burdens that have resulted from the huge increase in our federal debt burden in recent years: after all, spending is taxation, even if it is deficit-financed. And then there is the strong likelihood that much of the increased federal spending in recent years has been a waste of our economy’s scarce resources. We’ve taken over a trillion dollars a year for four years and essentially flushed them down the toilet, spent on things that do not increase the economy’s productivity and that reward leisure or inactivity instead of work or entrepreneurial risk-taking. The huge growth in the size, scope, and burden of government is thus the most likely explanation for why we are living through a disappointingly slow recovery.

I relate, ZIRP no more, as money is no longer cheap as bond vigilantes have called for a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening since December 6, 2012, when Bonds, BND, traded lower. One of the defining attributes of the shift from Liberalism to Authoritarianism, is the end of ZIRP, as the Interest Rate on the Ten Year US Note, ^TNX, has risen to 1.93% from its September 14, 2012 low. The weekly chart of International Treasury Debt, BWX, seen in this Google Finance Chart shows a 3.5% loss since its September 14, 2012, high.

Money, that is wealth, and moneyness, as it has been known, is literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN, which began in February 2013. Insolvent Sovereigns, such as Portugal, Italy, EWI, Greece, GREK, and Spain, EWP, and their insolvent banks, such as Banco Santander, SAN, are unable to provide seigniorage, that is moneyness. We are witnessing the failure of sovereign nation states to provide governance, and the failure of sovereign debt, BWX to provide seigniorage, that is moneyness.

The dynamos of Authoritarianism, specifically regional security, stability, and sustainability are winding up on the failure of money, that is wealth, and on competitive currency devaluation, which will be seen in Major World Currencies, DBV, trading dramatically lower. Emerging Market Currencies, CEW, began trading lower in mid February 2013, largely on the failure of Emerging Market Bonds, EMB in January 2013.

Spiegel Online reports End of an era: Cypriot financial sector faces collapse. Liberalism featured sovereign nation states, and their central banks provided ever increasing credit liberality, which stimulated economic growth, global trade and prosperity. It is sovereignty that provides seigniorage, that is moneyness. With the failure of national sovereignty, the seigniorage of investment choice will fail, and the seigniorage of diktat will rise, as regional sovereign leaders and bodies replace sovereign nation states, as leaders meet in summits and workgroups to renounce national sovereignty and pool sovereignty regionally, a principle that has been promoted by Herman van Rompuy for months.

The ongoing nation investment strength in Australia, EWA, (which traded lower again today) is beginning to weaken, as is seen in the Yahoo Finance Chart of  EWA, EIRL, IWM, together with the banks WBK, BAC, RF.  It is the monetary policies of the individual central banks, that is the US Fed, the ECB, and the Australian Central Bank, as well as the synergistic effect of all these central banks together that had given strong seigniorage, that is moneyness, to Australia, EWA, Ireland, EIRL, and the Russell 2000, IWM.

The era of nation state investment ended today March 21. 2013, with Nation Investment, EFA, and Small Cap Nation Investment, IFSM, trading lower, as Cyprus faces collapse a sovereign default, and economic system collapse.  Australia stocks will be trading strongly lower soon as Mike Mish Shedlock writes Record corporate insolvencies in Australia.  The housing bubble in Australia has popped but the biggest declines are still ahead. Meanwhile other problems have surfaced, as expected in this corner, namely Insolvencies hit record levels in January.  Optimism is hardly warranted. Australia’s fundamentals (a housing-bust economy, a slowdown in mining with falling Chinese demand, overpriced rents, and high labor costs) are simply horrendous.

Global Consumer Staples, KXI, which includes stocks seen in this Finviz Screener traded to a new high yesterday, Wednesday, March 20, 2013, in a “flight to safety investment”, and completion of nine month long rally.

The age of profiting from investment in business services is over, as the Business Service Stocks seen in this Finviz Screener, such as ACN, IBM, and ADP, turned lower, as Envestnet, ENV, a Chicago based company which provides integrated wealth management software and services to financial advisors and institution, rose parabolically higher.

Risk aversion has commenced, as is seen in the Risk On ETN, ONN, falling, and the Risk Off ETN, OFF, rising. Volatility, ^VIX, is rising with VIXY and VIXM trading higher. The Proshares 200% ETFs seen in this Finviz Screener are trading higher; and the Direxion 300% ETFs seen in this Finviz Screener are trading higher as well.

2) … Commentary

Austrian Economist Mike Mish Shedlock writes Illusion of Eurozone stabilization.  There is no real stabilization and there is no healing. Rather, the policies of Hollande are so disastrous that some output has shifted to Germany and elsewhere, (coupled perhaps with some inventory replenishment and a temporary stimulus-fueled increase in demand in Asia). Properly rebalancing will require a shift in production from Germany to the rest of Europe as well as a shift towards more consumption in Germany from the rest of Europe. That cannot and will not happen with the destructive polices of Hollande, and the lack of reforms in Spain and Italy. Moreover, and as I have noted on many occasions, the entire Euro construct is flawed. Until those flaws are fixed, there is only the illusion of stabilization, and that based on more unbalanced growth. The only thing that has stabilized (for now) is interest rates, and even that won’t last

I relate that Jesus Christ is at the helm of the economy of God, Ephesians 1:10. He vigorously worked the money printing presses at the US Federal Reserve, the ECB, the PBOC, and the BoJ, producing peak national sovereignty, and peak central bank seigniorage, and strongly leveraged up carry trade investment, such as the EUR/JPY, and bubbled up the most toxic of debt, such as that held by JPMorgan, JPM, and traded by the Distressed Investments in Fidelity Investments, FAGIX, mutual fund; all of which established the fullness of liberalism’s prosperity on March 15, 2013, as world stocks, VT, peaked out, and as major world currencies, DBV, traded lower.

He has no desire to stabilize the Eurozone. He is now pivoting the world out of national sovereignty into regional sovereignty, where a Ten Toed Kingdom of Regional Governance, the toes being regional zones, characterized by a miry mixture of iron diktat and clay democracy, will replace soveign nation states, as presented in bible prophecy of Daniel 2:25-45.

More specifically, He is now bringing forth the Revelation of Jesus Christ, as heralded in Revelation 1:1, by effecting a global political and economic coup d’etat, by releasing the First Horseman of the Apocalypse, Revelation 6:1-2, that is the rider on the white horse, who has a bow but no arrows, to transfer the reign of sovereignty from nation states to regional bodies and leaders.

There is waiting in the wings of Europe’s Stage, a New Pharaoh, the most credible of sovereigns. Soon he will step into the limelight, and rise to power, not through schemes of Liberalism, such as carry trade investment, but rather through schemes of Authoritarianism, Daniel 8:23, such as regional framework agreements, to rule Euroland, Revelation 13:5-10. He will be accompanied in authority and power by the EU’s Monetary Priest, who will provide the economy of diktat, where diktat serves as currency, power and wealth, Revelation 13:11-18. The Prince of the people, will one day rule the world for three and one half years, that is during the Great Tribulation, demanding emperor worship, this immediately prior to the Advent of Jesus, Daniel 9:26. These Fierce Leaders will oversee the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, that is rising from the profligate Mediterranean nation states, to replace the Banker Regime of Democratic Nation Investment, Revelation 13:1-4. Germans cannot be Greeks; but most assuredly they will be one, living together in a debt union and gulag of debt servitude, with the periphery profligate countries of Portugal, Italy, Ireland, Greece, and Spain, existing as hollow economic moons revolving about planet Germany.

Christ is bringing forth New Things: A New Age, (from the age of investment choice to the age of diktat), New Economic Action (from inflationism to destructionism), New Dynamos (from the dynamos of corporate profit and global growth to the dynamos of regional security, stability and sustainability), a New Trust (from trust in bankers, carry trade investing and credit to trust in nannycrats, totalitarian collectivism, public private partnerships and debt servitude), a New Paradigm (from liberalism to authoritarianism), a New Sovereignty (from the Banker Regime of democratic nation states to the Beast Regime of regional governance), a New Seigniorage (from the seigniorage of investment choice to the seigniorage of diktat), a New Economy (from crony capitalism and European socialism, and Greek socialism, to fascist regionalism), and a New Money System (from the fiat money system to the diktat money system), will feature authoritarianism’s austerity, as a means of trusting in Him for life, and more specifically to experience Him as an all inclusive life experience.

3) … In the news

Reuters reports Russia rebuffs Cyprus, EU awaits bailout “Plan B”.  Cyprus’s finance minister left Moscow empty-handed on Friday after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the European Union before Tuesday or face the collapse.

Bloomberg reports Cyprus set to debate bailout bill as ECB deadline looms. Cypriot lawmakers will begin debate today on legislation to unlock bailout funds and prevent a financial collapse with a European Central Bank deadline to cut off funding for its lenders in three days. Euro-area finance ministers expect a proposal from Cyprus “as rapidly as possible” to raise the 5.8 billion euros ($7.5 billion) needed to trigger the emergency loans, they said in a statement late yesterday after meeting in a teleconference. “Cyprus has it in its own hands to prevent the state’s bankruptcy but time is running out,” said Hans Michelbach, a German lawmaker and ally of Chancellor Angela Merkel.

Bloomberg reports Grillo Euro-Skeptic Party seeks mandate for Italy Government. Beppe Grillo asked Italian President Giorgio Napolitano to give his party a mandate to form a government as his deputies shunned an alliance with rivals and restated their euro-skeptic views. “The Five Star Movement asked for a full mandate to present its government agenda in parliament,” Roberta Lombardi, the party’s chief whip in the lower house of parliament, said today after she, Grillo and an ally from the Senate met with Napolitano in the presidential palace in Rome. Grillo, 64, is pushing ahead with his campaign promise to wrest political power from established parties and re-evaluate positions, like euro membership, that previously enjoyed near universal support in Parliament. His resistance to compromise hurts rival Pier Luigi Bersani, who was counting on some support from Five Star to claim the premiership, and boosts Silvio Berlusconi’s push for influence over the next government

Business Insider relates Two of Russia’s billionaire oligarchs hold their steel empire through Cyprus.

CNBC reports Finally: supply of homes for sale begins to rise.

Nature Economist, Elaine Meinel Supkis writes Earthquake/Tsunami/Volcanic danger potential in Southern Tohoku Island Japan. The precarious situation in Fukushima has made the news again: TEPCO partially restores power to cooling systems at Fukushima plant and there is no excuse for this because the Fukushima plant outage reveals lack of backup power source 2 years after crisis outbreak. Closing the nuclear power plants has caused Japan’s Feb trade deficit gets worse at $8.1B as exports lag imports. The next major quake in Japan is ‘Long-overdue’ and will be a mega-quake and tsunami that will kill thousands along Pacific Northwest coast and cost U.S. 32 billion, experts warn. The Nakai Trough intersects with the other two major subduction faults and they converge on Mt. Fuji which is due to erupt soon, too. This quake/tsunami will hammer Japan’s major industrial and population hubs. Already limping along, Japan will be virtually nonfunctional as well as bankrupt if this happens, especially if the volcano also erupts. the sparsely populated Fukushima region is just a foretaste of the mega-disaster lurking in the future for Tokyo. There is also a nuclear power complex along the shoreline where this future tsunami/earthquake will happen inevitably: Hamaoka Nuclear Power Plant. Brave citizens of Japan are fighting this monstrosity: Stop Hamaoka Nuclear Power Plant in earthquake zone in Japan | Facebook. Good luck to them!

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CNBC reports Chicago announces mass closing of elementary schools. Chicago will close 54 schools and 61 school buildings by the beginning of the next academic year in the country’s third-largest public school district, a move that union leaders called the largest mass closing in the nation. The district will shutter 53 elementary schools and one high school by August, primarily in Hispanic and African American neighborhoods. The district, which has a $1 billion annual deficit, has said it needs to close underutilized schools to save money.

American Renaissance, a blog about race and racial conflict, presents the Beth Stebner, Daily Mail (London), March 12, 2013, report, Chaos in Brooklyn as 100 teenagers riot on the streets following the vigil over the death of an armed 16-year-old by NYPD officers. After reading the article, I conclude that the sixteen year old was a psychopath.  I’m an older guy, living in an inner city white neighborhood, where I know many psychopaths by name. Wikipedia relates on psychopathy, One recent writer, Glenn D. Walters (2006) Lifestyle theory p. 42 Nova Publishers, ISBN 1-60021-033-3 presents four characteristics of psychopathy: irresponsibility, self-indulgence, interpersonal intrusiveness, and social rule-breaking.[102]  I comment, yes psychopaths are marked by these characteristics; they actually instigate trouble and never ever see themselves as the source of it; their life pleasure comes from being busy bodies in others’ affairs; they are loud, and rude, always seeking the preeminence; and purposefully break every social rule, seeking confrontation, so as to be lord of their hood. For example, one man at the senior center said to a woman, “like how many face lifts have you had?” She simply smiled and walked away, to which I say good for her.

4) … Genuine life experience is found in Christ and in Christ alone; he is one’s all inclusive life experience; this provides one the liberty to manifest morally.

All things come by destiny that is fate, Revelation 1:1, more specifically all things are of God 2 Corinthians 5:17-18. He determined the times and places in which one should live, Acts 17:26. God’s son, Jesus Christ is administering God’s economic and political plan to pivot the world from the fullness of prosperity to the depth of austerity, Ephesians 1:10, so that one might know Christ as life, Colossians 3:3-4.

Said another way, there is only the mystery of Christ, that is an unknown know of Godly Providence; where He is sovereignly ruling over all philosophies and religions. There are no sovereign individuals and there is no human action. Either one has heart felt spirituality and mindful experience in the faith of Jesus Christ, or one has fiat experience in empty philosophy or vain worldly religion, Colossians 2:2-8.

In Christ, all the fullness of Deity exists, Colossian 2:9. And Christians live established in the completeness of Him who is the Head of all rule and the Preeminent One of all sovereignty, Colossians 2:10.

Scripture encourages that no one be deceived in self appointed dominion coming from a puffed up mindset, Colossians 2:18.

Inasmuch as the believer in Christ has died to the world, the elect should not subject oneself to worldly moral and ethical viewpoints, Colossians 2:20. These have a reputation of spirituality, but amount to will worship, that is the worship of one’s own will, and have no benefit in restraining carnal indulgence, Colossian 2:23.

If one has been raised up from the dead, then one should seek the things that are sovereignly provided, Colossians 3:1.

One is to set one’s mind on heavenly things, as one has life in Christ; Christ is the very element of life; He is to be one’s life experience, Colossians 3:2-4.

One is to put on the New Man, that is Christ, Colossians 3:10; and have Christ as one’s all inclusive life experience, colossians 3:11.

Having an awareness that Christ is bringing forth New Things, Revelation 1:1, an inquring mind asks, what manner of person should one be? An even deeper question is what motivates a person and what should motivate a person?

Motives can be read like a book. One’s speech and behavior, as well as how one spends one’s time and with whom one spends one time, communicates motivation. Furthermore, one’s reputation amongst one’s peers can be used to infer motivation; I am retired living in neighborhoods presented by in Claritas Prizm as Big City Blues and Low Rise Living; the low income are my peers; unfortunately, or perhaps fortunately, I am not well regarded by many of my peers, who do not like my Christian way.

Some are motivated by preeminence, others by confrontation, others by being busy bodies, other by being dependent upon dole even though they could work, others by being gossips.

Jesus Christ desires that one be motivated by Him as one’s life, Colossians 3:2-4, and by Him being one’s all inclusive live experience, Colossians 3:11, whereby one keeps Christ’s Word and does not deny His Name, Revelation 3:9.

And it is Christ’s desire that one’s conscience, that is one’s discernment of what is genuinely right or wrong, come from the price He paid for sin, that being his very life.  Unfortunately, some have seared their conscience and are unable to sort out right from wrong; these manifest as poneros, which is defined as defined as bad, evil, or wicked, and carries the meaning of diseased, calamitous, morally culpable, derelict, mischievous and malicious. The only conscience such have is that which satisfies their own carnal desires.

It is Jesus Christ who provides the spiritual wisdom, that is the heartfelt capability, as well as the understanding, that is the insight, to live in virtue, that is in a moral way, both of which come from knowing the Present Truth, 2 Peter 1:1-12.

The foundation of morality comes from the comprehension of what constitutes liberty.

I am not a Libertarian, I am a Christian, and I have moral experience to the extent that I live in, and manifest Christ.

Jesus Christ alone provides freedom; and only His Word provides liberty; and He requires that believers in Him have respect for the personal property of another, and live in a non-aggressive way.

One is only free to the extent he knows and experiences genuine sovereignty. Christians belong to the All Sovereign Jesus Christ. Knowing His sovereignty, they experience the freedom He provides. Jesus said in John 8:36, “If therefore the Son shall make you free, ye shall be free indeed”. John Gill’s Exposition of the Bible relates, “Men are home born slaves; the chosen people of God are such by nature; they are born in sin, and are the servants of it; Christ the Son makes them free; and then they are no more foreigners and strangers, but fellow citizens with the saints, and of the household of God.

This suggests, that true freedom is by Jesus Christ, the Son of God; see Galatians 5:1. He it is that makes the saints free from sin; not from the being of it in this life, but from the bondage and servitude of it, from its power and dominion, and from its guilt and liableness to punishment for it, by procuring the pardon of their sins through his blood, and justifying their persons by his righteousness.”

Those who have life in Christ, are ever maturing in the only right there is, and finding genuine liberty  therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.”

In summary, the objective reality is defined as Christ, Ephesians 4:21. Motivation comes largely out of values, virtue and ethics; for the Christian these are found in the Present Truth, which enables one to be the divine person, 2 Peter 2:1-12.

Stocks Trade Lower Amid Uncertainty Surrounding Cyprus

March 20, 2013

Financial market report for Tuesday March 19, 2013

1) … On Tuesday March 19, 2013, stocks began falling at midday, with the S&P 500, SPY, trading 0.6% lower amid continued uncertainty surrounding Cyprus, and its attempt to secure rescue funds from the eurozone. Eurozone officials spoke in favor of a swift parliamentary vote, but that appears less likely with the country’s ruling party planning to abstain from the vote. In addition, the Cypriot finance minister has tendered his resignation, but the country’s president has yet to accept the request. Energy stocks, XLE, seen in this Finviz Screener, traded 1.8% lower on a lower price of oil, USO. As stocks traded in the red, the CBOE Volatility Index , ^VIX, rose suggesting downside protection is being sought.

World Stocks, VT -0.7%

Emerging Markets, EEM -0.7

Nation Investment, EFA -0.3

Small Cap Nation Investment, IFSM, -0.4

Interest bearing sectors trading lower included Mortgage REITS, REM -1.3%. Sectors trading lower included the following:

PICK -3.4%

KOL -2.4

SLX -2.2

COPX -2.2

IEZ -2.2

OIH -2.2

PSCE -1.8

XOP -1.6

XLE -1.1

FLM -1.1

IGV -1.1

XRT -1.0

PSP -0.9

Countries, EFA, and Small Cap Nations, IFSM trading lower included the following

GREK, -4,0%

EPHE -2.7

INP -2.7, SCIN, -3.7

EWA -1.9, KROO, -2.0

TUR -1.7

RSX -1.6, ERUS -1.6

THD -1.0

Banks, IXG, -1.0%, trading lower included the following:

EMFN -2.3%

EUFN -1.8

CHIX -1.1

The financial sensitive US Small Caps, that is the Russell 2000, IWM, was the US Index loss leader of the day for the second day in the row, -0.5%.

Commodities, DBC, -0.7%, trading lower included the following.

LD -3.2%

UGA -2.3

USO -1.7

BNO -1.7

JO -1.1

UNG, 2.2; chart shows natural gas topping out.

GLD 0.5

The chart of the US Dollar, $USD, shows a 0.7% rise; the Euro, FXE, traded 0.3% lower; and the Yen, FXY, traded 0.2% higher.

Volatility, ^VIX, rose, VIXY 2.2% ,VIXM 0.9%.

2) … News of the day features the theme of creeping tyranny.

BBC reports Cyprus warned over parliament’s bailout rejection. Germany’s finance minister has warned Cyprus that its crisis-stricken banks may never be able to reopen if it rejects the terms of a bailout. Wolfgang Schaeuble said major Cypriot banks were “insolvent if there are no emergency funds”.

Bloomberg reports Europe weighs Cyprus’s fate after lawmakers reject bailout deal.

Bloomberg reports Bloomberg confirms in a story EU said to discuss Cyprus capital controls, longer bank holiday.

CNBC Video Interview, Steve Keen relates Cyprus tax amounts to blowing Capitalism’s brains out Steve Keen, professor of economics at the University of Western Sydney, argues that if you destroy the trust depositors have in their bank accounts then you destroy the oil of capitalism.

Charles Hugh Smith Of Two Minds blog writes The deeper meanings of Cyprus.

World News Australia reports Cyprus finance minister heads to Russia amid an explosion of anger over a bank levy that could cost investors billions of euros.

The Wall Street Journal reports Cyprus Finance Minister to offer new plan in bid for Russian support. Cyprus’s finance minister is set to present a plan to his Russian counterpart in Moscow Wednesday aimed at saving the country’s financial sector, a government official said Tuesday. The official said that Michalis Sarris, who is being accompanied by a delegation of businessmen, is going to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus’s future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus’s banks. There were unconfirmed reports Tuesday that Mr. Sarris had resigned as finance minister, but officials did say he was on a plane heading for Russia. However, the deal looks like a long shot. Ahead of the visit, Kremlin spokesman Dmitry Peskov said: “It’s practically impossible to talk without knowing the details.” … “The situation is very difficult, unprecedented, and we don’t understand what’s happening,” he said. Mr. Putin hasn’t spoken to his Cypriot counterpart, he added.

Benson Te relates the John Adams Quote “Property is surely a right of mankind as really as liberty” … “The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. And states,

What has taken place in Cyprus is far less important than the larger issue which is a forfeiture of private property being demanded by the nations on the Continent and by an international organization headquartered in Washington D.C. Right up until the day it happened the President of Cyprus claimed it would never happen. Then, faced with bankruptcy, the fellow folded. I do not take a position here upon his actions, he has been in office for three weeks, but I do take a position upon the tyranny of the governmental bodies in question; they have demanded and forced the forfeiture of private property for their own betterment. I state with authority; if they can do it in Greece and then again in Cyprus they can do it anywhere and under any guise they like. They can wield the army of their pen, of their money, as an effective armament on the battlefield, to change what they like, when they like, all for the good of the State. I quote Herbert Hoover “Every collectivist revolution rides in on a Trojan horse of ‘emergency’. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And ‘emergency’ became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains.”

Mark J. Grant, author of Out of the Box, writes in Zero Hedge Lesson 1: Greece; Lesson 2: Cyprus – Pay Attention.  Deposit Insurance at a bank, any bank in Europe, is now meaningless. A bond indenture, any clause, any paragraph, any promise or assurance; now meaningless. The notion of private property, land, cash, house; now meaningless. The European Union will take what they want as they deem it necessary and the IMF will follow along. The question has been asked, during the last few days, why the bond holders of Cyprus were not tagged along with the bank deposits. I can answer the question. Virtually all of the Cyprus sovereign debt is governed under British law and so the EU did not pursue this course.

I recall the movie, Casablanca, where the Germans stood up to sing their National Anthem and the French responded with the “Marseilles.” It is too bad that the French have forgotten how to sing this song but then, apparently, all of the nations in the EU have forgotten how to sing their own songs.

Greece came first. Lesson one and “shame on you.” Cyprus comes second and now “shame on me.” What will come next? What will you tell your partners or your shareholders when they say, “You should have known.” You will have no excuse! The Europeans will take what they want and when they want it and to have money invested there now only has one excuse; masochism. Neither you nor I have any idea of what they might do next. When a government changes an indenture retroactively as a condition of funding and then demands that private property be seized as a condition of funding then this government, the European Union, will stop at nothing, find no boundary or fence, to halt its ambitions.

Acting Man writes The banks of Cyprus and their road to bankruptcy. The largest banks in Cyprus have been effectively bankrupt ever since Greece’s sovereign debt received its second ‘haircut’. Readers may recall that neither Greek haircut number one, nor haircut number two were ever suppose to happen.

3) … Exactly what risks accompany the accommodative monetary policy of the US Federal Reserve?

Economist Scott Grannis, who is not an Austrian economist, writes since the Fed’s quantitative easing efforts to date have been only sufficient to satisfy a huge increase in the demand for cash, cash equivalents, and bank reserves, what will happen when the demand for safe and liquid assets declines? When confidence in the future returns? When risk aversion declines? Will the Fed be able to reverse its quantitative easing efforts in a timely fashion, before an excess of reserves and a declining demand for cash pushes inflation higher? As I mentioned in a post last December, … the biggest risk we all face as a result of the Fed’s unprecedented experiment in quantitative easing is the return of confidence and the decline of risk aversion. If there comes a time when banks no longer want to hold trillions of dollars worth of excess bank reserves for whatever reason (e.g., the interest rate the Fed is paying is no longer attractive, or the banks feel comfortable using their reserves to ramp up lending, or the public no longer wants to keep many of trillions of dollars in bank savings deposits), that is when things will get “interesting.”

I reply, that there will never, ever be a return to confidence, as the Steepner ETF, STPP, will be steepening from 35. There will not be a decline of risk aversion, as an increase in risk aversion has already commenced, as is seen in the Risk On ETN, ONN, falling, and the Risk Off ETN, OFF, rising as well as, Volatility, ^VIX, rising with VIXY and VIXM trading higher.  The Proshares 200% ETFs seen in this Finviz Screener are trading higher; and the Direxion 300% ETFs seen in this Finviz Screener are trading higher as well.

The trade lower in the Euro Yen Carry Trade, that is the EUR/JPY, reflects that carry trade investing, ICI, is faltering. Competitive Currency Devaluation is getting underway on a rise in the US Dollar, $USD, UUP, with Major World Currencies, DBV, and Emerging Market Currencies, CEW, now both trading lower.  The currency demand curve, that is the ratio of Small Cap Pure Value Stocks, RZV, relative to Small Cap Growth Stocks, RZG, RZV:RZG, has risen to a rally high, evidencing peak currencies has been attained; look for Small Cap Value Stocks, RZV, to fall more sharply than small cap growth stocks, as the World Banks, IXG, start to trade lower.

Of note, an investment demand for gold has commenced, as can be seen in the chart of the gold ETF, GLD rising.  The Spot Price of Gold, $GOLD, is $1,610, up from $1,560.

Benson Te writes More signs of global pandemic of bubbles.  You just got to love today’s entropic financial conditions that has been edified from the “this time is different” mindset. F rom Central Bank News: (bold mine) Households worldwide have boosted their borrowing since the 1970s and in some countries, such as the United States and Australia, the total amount now exceeds that of companies, the Bank for International Settlements (BIS) said, introducing a new public database for total credit in 40 countries.  In addition to the growth of household borrowing, the data shows how credit has substantially outgrown economic growth in nearly all countries.  Why change when the good times have been rollin’? Central bank policies only provide the incentives of moral hazard to political authorities, thus the reluctance to reform. This shouldn’t be hard to understand. All these “kicking the can down the road” policies have been designed to maintain the status quo of the cartel of the political triumvirate institutions of the welfare-warfare state (notice the “time bomb”), banking system and central banking.

Benson Te adds providing this insight on nation investment, international capital flows, the du jour bogeyman of central banks, are really not the culprit of financial instability or price inflation as these latter two variables belongs to the realm of domestic monetary policies.

As Wall Street financial analyst Kel Kelly explains [15], (bold mine) The notion of capital flows and money crossing borders is misunderstood by most people. Except for physical paper bills belonging to tourists, to drug dealers, or to foreign workers sending cash earnings home to relatives, money does not cross borders. Money generally remains in the country to which it belongs — and merely changes ownership. As this section will show, “speculative” money “flowing across borders” really consists only of the domestic central bank trying to keep its currency artificially priced.

So called “capital” or “hot money” does not “flow” from one country of origin into another country. However, money created in one country can be — and is, to a limited degree — used to buy the currency of another country and direct it into the purchase of asset prices in that country (bidding asset prices higher in the process). If a disproportionate amount of local currency is channeled into asset prices in a country, less currency is being spent on goods and services in the economy, causing consumer prices to fall.

But in reality, consumer prices in countries with booming asset markets do not usually fall while asset prices rise; both usually rise in tandem. This is because the local money supply is increasing, and pushing up both classes of prices (i.e., financial assets and consumer prices), even though one is rising faster than the other. It is therefore local money, not foreign money, inflating assets.

In short, spiralling prices is a function of yield chasing mentality powered by domestic credit and money expansion. Entry of foreign funds only changes the composition of the ownership of asset prices and does not necessarily constitute or equate to rising of asset prices.

And there is no money flows in the asset markets. As I previously wrote [16], Simply said, the presence foreign buyers don’t necessarily extrapolate to higher prices. This would depend on the valuation of every participant, whether the foreigner acts for himself or in behalf of a fiduciary fund from which his/her valuations and preferences would translate into action. If the foreigner is aggressive then he/she may bid up prices. But again since people’s valuations differ, the scale of establishing parameters for each action varies individually.

A foreign participant can also be conservative, who may rather patiently accumulate, than bid up prices.

And speaking of foreign portfolio investments, the BSP reported that for February, registered foreign investments totalled $2.1 billion [17]. This has been 24.6% lower than from $2.8 billion last January. Most of these or 76.4% were directed at the PSE listed companies, particularly holding firms (US$474 million), banks (US$332 million), property companies (US$211 million), telecommunication firms (US$151 million), and utility companies (US$123 million).  One would note that the ranking of foreign buying essentially reflects on the returns of the PSE sectors which has been led by property holding financial industries of which have been the primary objects of today’s credit bubble

As Liberalism falls to Authoritarianism, Liberalism’s investment darlings, such as the Small Cap Value Shares, RZV, and the Leveraged Buyouts, PSP, seen in this Finviz Screener will fall quickly in value, just as COPX, PICK, KWT, LD, JJT, already have.

A see saw destruction of wealth will be getting underway, as Stocks, VT, trade lower, and Bonds, BND, and Aggregate Credit, AGG, which traded lower beginning December 6, 2012, will trade higher for a while, before they fall lower again.

Beginning with QE 1, The Fed stepped in and helped all the “too big to fail” bank, this included JPM,  C,  WFC, BAC, BK, PNC, RF, STI, FITB and others. The Fed is still willing to help any “too big to fail” bank. As seen in news events fulfilling bible prophecy of Revelation 13:1-4, The Beast Regime is rising from  Club Med Sovereign and Banking Insolvency to replace the Banker Regime; where the the Too Big To Fail Banks, RWW, will be integrated into the government as statism develops. Regionalism will be mankind’s economic way of life replacing Crony Capitalism, European Socialism and Greek Socialism, as the dynamos of corporate profit and global trade are winding down, and the dynamos of regional security, stability and security are winding up.

The world stands at Peak Crony Capitalism, Peak European Socialism and Peak Greek Socialism, as Peak Monetary Expansion has been achieved. Destructionism will very soon replace Inflationism. Benson Te writes on France as an example of European Socialism relating How the welfare state bankrupts: French edition.

The Eurozone will serve as a model for regional governance, totalitarian collectivism, and debt servitude, where a monetary pope, the ECB Chairman, and monetary cardinals, the EU Finance ministers, work in conjunction leaders in Berlin, such as Olli Rehn, to establish public private partnerships, where leaders in business, government and labor meet in task groups to oversee the economy and the factors of production. An example is the Ulrich Rippert WSWS report European trade unions oversee auto industry restructuring  Across Europe, trade unions are playing a key role in imposing mass layoffs, wage cuts and the closure of auto plants. Existing public private partnerships such as Macquarie Infrastructure Company, MIC, will be expanded. The EU will be a One Euro Government integrated with a One Euro Economy led by new sovereigns, that is nannycrats, who replace sovereign nation states.

The Age of Diktat Commences As EU Finance Ministers Place A Levy On Cyprus Bank Deposits …The Club Med Catastrophe Gets Worse, Much Worse

March 19, 2013

1)  … On Saturday March 16, 2013, Jesus Christ pivoted the world into the age of diktat as the  EU Finance Ministers placed a levy on Cyprus bank deposits.

Colossians 1:17 presents that God’s Son, Jesus Christ, is apart from any part of creation. The Son is before all things, that is He is eternal, while creation stands in time.  Furthermore, He being the only begotten of the Father, raises Him to a unique position above all that is due to His creative act.  He is the agent and tool of creation, as well as preserver thereof. It is His power that holds creation together.

And Ephesians 1:10, presents that Jesus Christ is God’s economic and political plan administrator; on Friday, February 15, 2013, He brought forth the fullness of Liberalism’s prosperity by producing peak sovereignty, and peak seigniorage, establishing peak prosperity, with World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rallying to new highs, as Major Currencies, DBV, topped out and turned lower.

And on Saturday March 16, 2013,  Jesus Christ pivoted the world into the age of diktat, as the Euro Area Finance Ministers placed a levy on Cyprus bank deposits.  It is Jesus Christ who is at the helm of the economy of God, Ephesians 1:10.  He is now bringing forth New Dynamos (from the dynamos of corporate profit and global growth to the dynamos of regional security, stability and sustainability), a New Age, (from the age of investment choice to the age of diktat), New Economic Action (from inflationism to destructionism), a New Trust (from trust in bankers, carry trade investing and credit to trust in nannyrats, totalitarian collectivism, public private partnerships and debt servitude), a New Paradigm, (from liberalism to authoritarianism), a New Sovereignty, (from the Banker Regime of democratic nation states to the Beast Regime of regional governance), a New Seigniorage, (from the seigniorage of investment choice to the seigniorage of diktat), and a New Money System, (from the fiat money system to the diktat money system,)  as heralded in Revelation 1:1, as the Revelation of Jesus Christ, which will feature authoritarianism’s austerity.

While the Troika’s Greek Bailouts, I, II, and III, destroyed the national sovereignty of Greece, they had the effect of fracking the stratum of investments, for further investment gain.  In contrast, the EU Finance Ministers’ actions with the Cyprus banking deposits levy, to fund a unique bailin as well as a bailout of Cyprus to prevent its sovereign default and keep its banks open,  breaks apart the very bedrock of traditional governance, and shifts the global investment tectonic plates, stimulating currency deflation and stock investment derisking, making for a megashift, that is a total makeover of Planet Earth.

The EU Finance Ministers levy on Cyprus’ bank deposits introduces the diktat money system, where diktat, not choice, serves as currency, money, that is wealth, and power; the fiat money system has been relegated to the dustbin of history.

The Milton Friedman Free To Choose Floating Currency Regime, also known as the Banker Regime, is dissolving away, as the Beast Regime of Regionalism, Totalitarian Collectivism, and Debt Servitude, presented in Revelation 13:1-4. is clearly rising to rule the world.

The paradigm of liberalism commenced the age of investment choice in 1931, with nation investment coming of age, as the US rose in power when the Banker Regime inaugurated the fiat money system, a creature from Jekyll Island, with the provision of the Federal Reserve Act. The US started its rise to preeminence forming the second of two iron legs of global hegemonic power, the other being he existent British Empire.

The EU Finance Ministers levy on Cyprus bank deposits pivots the world from liberalism to authoritarianism and the world entered into the age of diktat.

Sovereignty provides seigniorage, that is moneyness. The sovereignty of the US as the world’s leading power has been eroded by the EU Finance Minister’s levy on bank accounts. And the sovereignty of the Beast Regime, consisting of regional governance in the world’s ten regions, and totalitarian collectivism and debt servitude in all of mankind’s seven institutions, is coalescing.

Said another way, the EU Finance Ministers diktat over Cyprus Banking established Eurozone regional governance as new sovereignty replacing the sovereignty of nations states, as well as dislocating the seigniorage, that is the moneyness, of Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Industrial Production, FXR.

The seigniorage of diktat, that is the moneyness of diktat, is replacing the seigniorage of investment choice; depositors in Cyprus banks lost money on Saturday March 16, 2013, to the Beast Regime.

And in other news, Eurozone regional governance was greatly strengthened, and national sovereignty washed away in Spain as Mike Mish Shedlock reports EU Court strikes down Spain’s eviction law.

With the failure of national sovereignty, clearly the Beast Regime of Regional Governance. Totalitarian Collectivism and Debt Servitude, is replacing the Banker Regime of Floating Currencies and Nation Investment.

The world no longer operates on the Banker’s fiat money system, rather it operates on the Beast’s diktat money system, where diktat serves as currency, money, that is wealth, and power. The Milton Friedman Free To Choose Floating currency system is history, as the US Dollar is now rising, and is no longer serving as the International Reserve Currency.

2) … A timeline presentation of news reports provides the details of the world entering into the age of diktat, where a German, ECB, and EU Finance Minister led Eurozone Empire, is rising to be sovereign in Europe, as Cyprus is revealed as neither a sovereign nation state nor a solvent country: new sovereigns are rising in power in the EU defining a New Europe.

Bloomberg reports Cyprus bank deposits to be taxed in $13 billion bailout. Euro-area finance ministers agreed to an unprecedented tax on Cypriot bank deposits, as officials unveiled a 10 billion-euro ($13 billion) rescue plan for the country, the fifth since Europe’s debt crisis broke out in 2009. Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros,  the ceiling for European Union account insurance, and 9.9 percent above that. The measures will raise 5.8 billion euros, in addition to the emergency loans, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters early today after 10 hours of talks in Brussels. The International Monetary Fund may contribute to the package and junior bondholders may also be tapped in a so-called bail-in, the ministers’ statement said.  Officials have struggled to find an agreement that would rescue Cyprus, which accounts for just half of a percent of the euro region’s economy, without unsettling investors in larger countries and sparking a new round of market contagion. Finance Minister Michael Sarris said the plan was the “least onerous” of the options Cyprus faced to stay afloat.

Benson Te writes Tax on savers: Cyprus’ $13 billion bailout to be funded by taxing depositors in Cyprus, abetted by the IMF, increasingly desperate politicians will now tax depositors in order to bailout banksters. This is financial repression at its finest. This is monumental. Governments today have become more brazen. They are not content with imposing implicit taxation channeled through inflation, but now take on the recourse of outright confiscation of private property. With inflation, lost purchasing power means lesser quantity of goods or services to acquire. With taxation, people simply lose money and the attendant services derived from it. True, Cyprus maybe small, but this serves a trial balloon on what governments will resort to, as today’s crisis deepens or remains unresolved. Yet politicians forget that when you tax something you get less of it. Incipient signs of consternation may translate to potential bank runs, not limited to Cyprus but to crisis stricken Euro nations. Depositors from the PIIGs could express fear of the same policies that could be implemented on them.

Ansuya Harjani of CNBC asks Will Cyprus turn the tide for gold? Tom Price, global commodity analyst at UBS, however, believes the case for gold is rising with the new element of uncertainty the Cyprus bailout has cast in Europe. Euro zone finance ministers want Cypriots with deposits of over 100,000 euros ($128,950) to fork out 9.9 percent of their savings while those with less than a hundred thousand euros will be hit with a 6.75 percent levy in order to raise 5.8 billion euros, so that the country is eligible for an international bailout. Investors are concerned that taxing depositors will set a dangerous precedent for the euro zone and ultimately risk runs on regional banks. “One of the reasons gold has been coming off is that there has been a view that the risk in Europe was limited and most of their financial market issues were resolved – this Cypriot package highlights a new risk relating to the terms of the deal,” Price said. “This uncertainty could provide a brand new support for gold for days or even weeks,” he added. Price expects the precious metal to trade in a range of $1,600-$1,700 in the coming weeks.

Deepanshu Bagchee of CNBC reports Cyprus bailout disaster risks new euro crisis. Even as Cyprus’s President Nicos Anastasiades addressed the nation on Sunday night, saying savers would be compensated by shares in banks guaranteed by future natural gas revenues, he was said to be working to renegotiate terms of the highly criticized bailout deal. Over the weekend, analysts warned the decision by the euro zone to force bank depositors in Cyprus to contribute towards a bailout a first in the euro zone debt crisis could hurt other peripheral nations, the euro and the global stock market rally.

That warning appeared to be coming true as the Euro, FXE, tumbled on Monday, falling below $1.29 in Asia trade to its lowest level this year. Asian equity markets were also deeply in the red as jitters over the Cyprus bailout dealt risk appetite a blow. Read more in Cyprus bailout crisis slam brakes on risk on. In his televised address, Anastasiades said he had to accept a tax on bank deposits in return for international aid, or else the island would have faced bankruptcy. About 25 lawmakers from the communist-rooted AKEL party, the socialist EDEK and the Greens said they won’t vote for the tax in the 56-seat Cypriot parliament amid deep resentment over a move some called disastrous. If Parliament rejects the tax, that would put the entire aid package in jeopardy. The vote was initially set for Sunday but was postponed until Monday a national holiday in Cyprus. The announcement of the vote postponement set off an immediate scramble among top European financial officials. One lawmaker told The Associated Press that European Central Bank was pressuring Cypriot authorities to hold the vote without delay.

Bailout is a Disaster.  Still, the structure of the bailout shocked many, including Sharon Bowles, chair of the European parliament’s economic and monetary affairs committee, who called it a “disaster” for European Union rules and the single market. Euro zone finance ministers forced Cyprus’ savers to pay as much as 10 percent of their deposits towards a bailout of the country’s troubled banking sector, a move which is expected to raise 5.8 billion euros. In return, the country will get 10 billion euros ($13 billion) in assistance. The arrangement, structured as a bail-in, would give depositors shares in the banks in return for the levy. According to the Financial Times, Cypriot authorities were trying to shift more of the burden to deposits larger than 100,000 euros, and adding an additional bank holiday on Tuesday to prevent a run on the nation’s banks. Sebastien Galy, senior currency strategist at Societe Generale warned the levy could unleash a sell-off in the Euro, FXE, and the stock  and bond markets of peripheral nations on Monday. In Asia, equity markets took a beating, with stocks in Japan and Australian falling 2 percent.”This will probably go down as an ill thought-out rescue plan with consequences for peripheral Europe,” Galy wrote in a research note. “It breaks a cardinal rule, namely public trust on which money reliess. Some peripherals will suffer at the opening in Europe and [it will] hit the Euro, FXE.”  Doug Kass of Seabreeze Partners on Twitter predicted European stock markets, VGK,  could fall 3 to 4 percent on Monday, while the S&P 500, SPY, could fall 1.5 to 2 percent and Spanish and Italian 10-year yields could jump 15 basis points. “The news is a wake-up call to investors that the European sovereign debt issue is far from being resolved,” Kass said in a note. “When the dust has settled on this deal, which I hope it never does, we will see that the single market has been sold down the river for a shoddy price,” said the EU parliament’s Bowles.

Mike Mish Shedlock writes Cyprus rapes citizens with 6.75% to 9.9% tax on deposits.  The hot news out of Cyprus today is the direct confiscation of depositor’s money via an alleged tax on deposits of 6.75 percent on amounts less than 100,000 euros and 9.9 percent above that. The measures will raise 5.8 billion euros, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters early today after 10 hours of talks in Brussels. The euro region’s bailout kitty and, possibly, the International Monetary Fund will look to make up the shortfall. A partial “bail-in” of junior bondholders is also possible.  Funds to pay the levy were frozen in accounts immediately, ECB Executive Board Member Joerg Asmussen said.  Officials have struggled to find an agreement that would rescue Cyprus, which accounts for just half of a percent of the euro region’s economy, without unsettling investors in larger countries and sparking a new round of market contagion. Read that last paragraph carefully. Officials raped Cyprus citizens to avoid “unsettling investors in larger countries”. Here’s the deal. Large investors should have risk. The nannycrats and thugs in Europe still don’t see it this way and this is the most blatant example of theft yet, all in the name of preventing contagion.

Mike Mish Shedlock reports Cyprus details. UK to compensate troops and government workers. Chancellor George Osborne says the UK will compensate any British troops in Cyprus hit by plans to introduce a bank levy as part of a £9bn EU bailout. Greece exempt from haircuts. Ekathimerini reports The account haircut does not affect bank accounts in Cypriot bank branches based in Greece, per sources in the Greek Finance Ministry. German Finance Minister wanted 40% haircuts. Also from Ekathimerini,  Cyprus state broadcaster CyBC reported on Saturday that German Finance Minister actually entered the Eurogroup meeting on Friday proposing a 40 percent haircut on Cypriot bank accounts. Sarris stated on Saturday that this had also been the proposal of the IMF.

Mike Mish Shedlock writes Put a German Flag in Cyprus; Poker or Chicken? Cyprus Archbishop says Leave the Eurozone and readopt the Cyprus Pound. EU officials are now swarming over Cyprus threatening to cut off funds to Laiki , Cyprus’ second largest bank if the deal does not go through. Nonetheless, Cyprian politicians are balking because they know what will happen to those who go along with EU blackmail threats. Making matters difficult for President Nicos Anastasiades, the Cyprian government controls only 28 of 56 seats in the chamber and needs support and backing from two deputies of a small pro-European party. Today’s vote was postponed for one obvious reason. The votes are not there.

Cyprus President Nicos Anastasiades now states “depositors would be offered bank shares covering the full amount of their losses, while those who left their savings in banks for another two years would be rewarded with bonds backed by future income from exploiting Cyprus’s natural gas deposits.”  The Mish response is “Please be serious”. Bank shares are worthless, and if they are not, they should be and soon will be. As for leaving money in the bank for two more years, subject to still more confiscation at the whims of the EU, I also say “please be serious”.

Poker or Chicken? Some have likened events in Cyprus to the world’s largest game of poker. A game of “chicken” where one side has an unfair advantage is more like it. The Financial Times reports “The message, delivered by the ECB’s chief negotiator, Jörg Asmussen, meant that if no deal was reached, Laiki would collapse, probably bringing the island’s largest bank down with it, and saddling Nicosia with a €30bn bill to reimburse accounts covered by the country’s deposit guarantee scheme. It was money Nicosia did not have. All of the island’s account holders would be wiped out.” Apparently this is another one of those “offers you cannot refuse”. The ECB is willing to inflict €30 billion in damages on Cyprus to collect €5.8 billion from Cyprian citizens.

Put a German Flag in Cyprus. Here is an interesting quote courtesy of Google Translate: Put a German Flag in Cyprus. Russian President Vladimir Putin placed an angry call to Cyprus president Nikos Anastasiadis Sunday morning. The Putin reportedly said verbatim “Better to put the German flag at the Presidential Palace. Don’t you understand this decision will destroy your country?” Who will trust banks on Tuesday? Not sure if that story is validated but the quote seems reasonable enough.

Contagion-Begging Actions. What is someone in Greece, Spain, or Italy supposed to think? Consider Spain. By a 526 to 86 vote, the nannycrats in Brussels just passed a regulation that will require a country to accept a bailout if offered. (Please see An offer you cannot refuse; EU passes law forcing ountries to take bailout; Is Spain the first target?) And Reader Scott had this pertinent comment, “This has simply got to be ruinous for legitimate business in Cyprus; right off the bat every business in Cyprus is having part of its capital confiscated; governments may not understand this but a lot of people and businesses are on a razors edge; that $1000 rent payment may not withstand a $67.50 haircut; a monthly payroll of $100,000 might not be made if 10% of the businesses cash is seized.”

My friend Bernd who lives in Germany had these comment, “Judging by the German forums on Focus, Der Spiegel, SZ, FAZ and Die Zeit, there is hardly any support for this action. The name calling and swearing is rather blunt. These guys did not study their Machiavelli. He said roughly if you hurt people, you must never hurt all of them at once.” The closest Machiavelli quote I can find is “If you need to injure someone, do it in such a way that you do not have to fear their vengeance.”

“F” the EU. It will not stop here. There will be more demands and more haircuts. Staying in the eurozone cannot be worth the price. It is high time something be crammed straight down the throats of the EU and for that matter, straight down the throats of anyone in Cyprus parliament who votes for the imposed terms. I encourage 100% of Cyprus citizens to take every penny out of their banks the second the “bank holiday” ends. Justifiable vengeance is coming, in spades.

And Mike Mish Shedlock writes Merkel says “Cyprus is a special case” Is Spain the next “sepcial case”? Portugal? Merkel guarantees German deposits.  The pertinent question for today is “How many lies will people believe?” I ask that because a German government spokesman says The compulsory levy to pay the depositors in Cyprus, was a special case as Merkel guarantees German deposits for the first time since 2008. The compulsory levy to pay the depositors in Cyprus, is a “special case”, says the Chancellor. The real driver for this blatant theft is the re-election of Merkel. Heaven forbid Germany provide any more bailout funds lest German voters get upset and flock to “Alternative für Deutschland“ (AfD – Alternative for Germany), a political party founded by a group of anti-bailout, eurosceptic German professors, businessmen, economists and journalists. Merkel is willing to cram this “special case” down the throats of Cypriot citizens or her re-election bid in September may be in jeopardy.

Daily Silver New reports Why Russia’s Putin is pissed over IMF and Cyprus deal.

Charles Wyplosz of Social Europe writes The next blunder.  The Cyprus bailout package contains a tax on bank deposits. This column argues that the tax is a deeply dangerous policy that creates a new situation, more perilous than ever. It is a radical change that potentially undermines a perfectly reasonable deposit guarantee and the euro itself. Historians will one day explore the dark political motives behind this move. Meanwhile, we can only hope that the bad equilibrium that has just been created will not be chosen by anguished depositors in Spain and Italy.

The decision to tax all Cypriot bank deposits has attracted massive attention (Spiegel 2013) – and rightly so. It is a huge blunder:

  • In the unlikely event that all goes well, the government will receive a bit of cash – but not enough to cover the loan generously offered by its European partners – and the Cypriot banking system will be history.

  • The alternative is a massive bank crisis in many Eurozone countries – a huge blow to the euro, maybe even a fatal one.

Not an emergency measure. Policymakers have been debating the Cyprus bailout for nearly a year; this cannot be classified an ‘emergency action’. They engaged in a lively debate whether Cyprus is ‘systemic’ or not, the answer to which can only be ‘it depends’. It depends not on the size of Cypriot banks but on the way the Eurozone acts. They also debated the Russian deposits that apparently represent a sizeable proportion of bank liabilities. The debate turned around the issues of how dirty this money is and how to do the laundry. They also debated on the size of a possible loan to the Cypriot government. The government itself requested something to the tune of 100% of its GDP, why not? After all this amounts to 0.2% of Eurozone GDP.

Eurozone’s help: Suffocating solidarity. From what is known:

  • Cyprus will receive a loan of about half the requested size under the usual austerity conditions.

  • The gross public debt of Cyprus will rise from its current level of some 90% of GDP to about 140%, a level that is unsustainable and will eventually require some deep restructuring.

This debt trajectory is a forecast, of course, but well in line with experience.

The effects of this Eurozone austerity programme are now well known. Cyprus joins a distinguished list of countries that benefit from suffocating Eurozone solidarity (Wyplosz, 2011).

  • The programme will impose tough austerity;

  • Its public-debt-to-GDP ratio will grow because deficits will not go away and because GDP will decline.

  • There will the need for more loans as economic predictions will be found to be ‘disappointing’ over and over again.

  • Unemployment will skyrocket, spreading intense economic and social suffering.

Who knows, populist parties could well be on the rise, adding political drama to economic pain. This technology is now well oiled.

The bank deposit ‘confiscation’. What is new is that bank deposits will be ‘taxed’. The proper term is ‘confiscated’. Like everywhere in the EU, bank deposits in Cyprus are guaranteed up to €100,000. Depositors have arranged their wealth accordingly, only to be told that the guarantee has been changed ex post.

Taxing stocks is optimally time-inconsistent (Kydland and Prescott, 1977). It is a great way of raising money but it has deep incentive effects as it destroys property rights. What is at stake is the credibility of the bank deposit guarantee system throughout Europe.

The system was shaken in 2008 but in the opposite direction. Followed by all other countries, Ireland offered a full guarantee in a successful effort to stem an impending bank run. The cost to the government was such that it triggered a run on the public debt that led to the second bailout after the Greek ‘unique and exceptional’ one.

That move has now been recognised as a mistake, which may explain how Cyprus is now being treated.

The Eurozone’s ‘corralito’. Because it is time-inconsistent, the decision to tax deposits has been preceded by a freezing of bank deposits. This is remindful of the Argentinean corralito of 2001, which led to economic dislocation, immense suffering and such anger that two governments fell (Cavallo 2011). Hopefully, the Cypriot corralito will not last too long. The question is: how bank depositors will react in Cyprus and elsewhere? The short answer is that we don’t know but we can build scenarios:

  • The benign scenario is that depositors in Cypriot banks will accept the tax and keep their remaining money where it is. Depositors in other troubled countries will accept that Cyprus is special and remain unmoved.

  • A less benign scenario is that depositors in Cypriot banks come to fear another round of optimal, time-inconsistent levies. This is what theory predicts. After all, if policymakers found it optimal once, why not twice, or more?

Under the less benign scenario:

  • We will have a full-fledged bank run as soon as the corralito is lifted. Since bank assets amount to some 900% of GDP, there is no hope of any bailout by the Cypriot government.

  • Any new European loan would immediately translate into a run on the public debt.

Enter ECB, stage right. At this point in the scenario script, the ECB enters the play. Being the only lender of last resort, the ECB will have to decide what to do.

  • In principle, it could stabilise the situation at little cost as total Cypriot bank assets represent less than 0.2% of Eurozone GDP or 0.5% of the central bank’s own balance sheet.

  • But this would involve the risk that it could suffer losses – especially if the banks are badly resolved, i.e. the bankruptcies are badly handled.

This is not unlikely since the ECB does not control Cypriot bank resolution. Remember that the current version of the banking union explicitly leaves resolution authority in national hands. In Cyprus, as almost everywhere else, national authorities are deeply conflicted when it comes to their banking systems. Powerful special-interest groups become engaged when banks go bust and governments decide who pays the price. Thus, it is a good bet that Cyprus’s bank resolution will be deeply flawed. The risk to the ECB is real. Proper resolution under European control could have been part of the conditions for the loan just agreed. But this does not seem be the case. The omission most likely reflects a belief by policymakers that the Cyprus crisis has been solved successfully. The problem is that this belief is false: Cyprus’s predicament remains even under the benign scenario.

All the conditions for a total disaster are in place. The really worrisome scenario is that the Cypriot bailout becomes euro-systemic, in which case the collapse of the Cypriot economy will be a sideshow. This will happen when and if depositors in troubled countries, say Italy or Spain, take notice of how fellow depositors were treated in Cyprus.

All the ingredients of a self-fulfilling crisis are now in place:

  • It will be individually rational to withdraw deposits from local banks to avoid the remote probability of a confiscatory tax.

  • As depositors learn what others do and proceed to withdraw funds, a bank run will occur.

  • The banking system will collapse, requiring a Cyprus-style programme that will tax whatever is left in deposits, thus justifying the withdrawals.

This would probably be the end of the euro.

Conclusions. The likelihoods of these three scenarios – benign, less benign, and total disaster – are difficult to assess.

  • What is clear is that the Cyprus bailout has created a new situation, more perilous than before.

  • Once more a deeply dangerous policy action is decided apparently without any awareness of its unintended consequences.

It is also another violation of sound existing arrangements. We have a no-bailout clause in the Maastricht Treaty – a clause that was essential to the Eurozone’s stability. Putting it aside in the case of Greece was the heart of the today’s problem – the reason the crisis spread (Wyplosz 2010). This no-bailout clause has once again been put aside summarily. We are now witnessing another radical change as a perfectly reasonable deposit guarantee is being undermined. Historians will one day explore the dark political motives behind this move. Meanwhile, we can only hope that the bad equilibrium that has just been created will not be chosen by anguished depositors.

References Cavallo, Domingo (2011). “Looking at Greece in the Argentinean mirror”, VoxEU, 15 July.

Kydland, F E and E C Prescott (1977), “Rules Rather than Discretion: The Inconsistency of Optimal Plans”, Journal of Political Economy 85(3): 473-491.

Spiegel, Peter (2013). “Cyprus depositors’ fate sealed in Berlin”, FT.com, March 17 6:23 pm.

Wyplosz, Charles (2010). “And now? A dark scenario”, VoxEU.org, 3 May.

Wyplosz, Charles (2011). “The R word”, VoxEU.org, 29 April.

Yanis Varoufakis writes Cyprus’ Stability Levy: Another sad euphemism They called it a ‘stability levy’, when they meant a tax on Cypriot depositors (including the savings of poor widows and small children) so that they spare holders of Cypriot government bonds (including hedge funds who are now having a party in Mayfair and New York) as well as minimise potential long-term losses by the European taxpayers. In effect, faced with the prospect of lending to Cyprus a sum equal to its GDP, so as to bail out its banks Ireland-style, the Eurozone balked. They realised, post-Greece and post-Ireland, that something has to give (beyond the minimum working conditions and social welfare provisions of common folk) in order to minimise the size of the aggregate loan. And they chose to hit depositors directly (at a rate of 9.9% if their deposits exceed 100 thousand euros and 6.75% for smaller deposits) before the oncoming austerity-driven plague eats into them instead (as it did in Greece, Ireland and Portugal were savings were used up by stressed household in the daily struggle to survive after jobs and benefits disappeared).

The LastGreek writes in comment, Until this weekend I had never heard of the term “bail in.” I am familiar with the term “sleep in.”  Yani, as silly as “stability levy” sounds, why do you call it a “tax” when it is nothing more than a confiscation (for those accounts < 100K euro)  a theft? Moreover, is there not some sort of quid pro quo where the penalized account holders in exchange for the “stability levy” get some (illiquid/bs) bank shares? Europeans when they deposit their money in banks do so with the knowledge that each account is insured up to 100k euro. Now, I am not just thinking of a bank run on Cypriot banks when their bank holidays are over. No, I am thinking about bank runs across the eurozone (especially in the PIIGS). Why? Because the lesson I take from this (aside from the obvious that governments lie all the time, as did the Cypriot government going back on its wordon this) is that money in the hand is worth more than money in the bank. So much for the expression “as good as money in the bank,” eh?  I have a soft spot for Cyprus. Then again, I have a soft spot for all countries (and lands) under illegal, military occupation, you know, like Palestine. Cyprus is like a mini Switzerland, they export mainly financial services. What else can they do? 40% of the island of Aphrodite, the most beautiful and richest part, is under Turkish occupation.

Photoroobit writes in comment The so called “Russian money” came to Cyprus solely because it was promised, guaranteed in fact, that Cyprus will remain a money heaven. If that were not the case, the money would have gone elsewhere – to Belize and Singapore, there are quite many places this money could have been parked. Common people in Russia do not want to bail out Cyprus and are rejoicing at the news of upcoming confiscation because as they see this is money stolen by politicians and Soviet management classes that usurped power in the country and is stealing its natural wealth. Also the ruling junta in Moscow is only motivated by personal enrichment of its members, not by strategic considerations, otherwise bailing out or perhaps buying Cyprus makes a great deal of sense. If the tax is imposed, the owners of large offshore accounts would probably move to other jurisdictions, which in turn means that Cyprus would lose probably its entire banking system (would lose 50 billion to get 10). One cannot have a united and equitable Europe based on notions of a centralized empire, unelected and unaccountable governance, taxation of the poor and arbitrary confiscation.

Alfredo writes in comment The UE was a mistake. Getting in, was easy. Now how do you get out? People want out, but are afraid to lose money going back to lira. Germany is hitting the tempo, the others dance. This is a german lander union, not european union.

Felix Salmon of Reuters reports The Cyprus Precedent.  I stuck my neck out in January, saying that Cyprus was “certain” to default. After all, the Europeans weren’t willing to come up with the €17 billion needed to bail the country out, and EU economics commissioner Olli Rehn told the WSJ’s Stephen Fidler that Cyprus would have to restructure its debt. But now the bailout has arrived, and — in something of a shocker — there’s no default. Instead, €5.8 billion of the bailout is going to come directly from depositors in Cyprus’s banks, in the form of what the EU is calling an “upfront one-off stability levy”.

Don’t for a minute believe that this decision is part of some deeply-considered long-term strategy which was worked out in constructive consultations between the EU, the IMF, and the new Cypriot government. Instead, it’s a last-resort desperation move, born of an unholy combination of procrastination, blackmail, and sleep-deprived gamesmanship.

The details aren’t entirely clear yet: we’re told that deposits of more than €100,000 are going to have to pay a tax of 9.9%, for instance, but it’s not obvious whether that applies to all of the large deposit or just to the amount over €100,000. And there’s still a real chance that the Cypriot parliament could scupper the whole deal. But for the time being, everybody’s going on the assumption that the deal will go through, that Cyprus will get its €10 billion bailout from the EU, and that everybody with a Cypriot bank account in Cyprus (a group which includes members of the UK military) will see their accounts taxed by at least 6.75%.

In January, I said this wouldn’t happen:

The last thing that Cyprus or any other country needs is a bank run, which will leave the national balance sheet in the classic pinch where “on the left, nothing’s right, and on the right, nothing’s left”. What’s more, in many ways the precedent of forcing depositors to take a haircut would be even more damaging than the precedent of imposing a haircut on Greek bondholders: at that point there would be really no reason at all to have deposits in any Mediterranean country.

It might seem a little bit like shutting the stable door after the horse has bolted, but the lines in front of broken ATMs certainly suggest that there will indeed be a substantial bank run out of Cypriot banks when they reopen on Tuesday morning. (Cyprus’s loss, here, is likely to be Latvia’s gain.) Cyprus has been relying up until now on its status as an offshore financial center, especially for Russians. That has bloated its banks with deposits, and if the deposit bubble bursts, the government has no money at all to bail out the banks. Cyprus’s president, Nicos Anastasiades, said today that he was forced to choose this path because the only alternative was the collapse of Cyprus’s two major banks, with “catastrophic” consequences. What he didn’t say is that those banks aren’t remotely safe yet — not with the prospect of a massive bank run hanging over their heads.

And of course it’s not only Cyprus where a bank run is a very real fear. If bank deposits can be seized in Cyprus, they can be seized in other EU countries as well. Ed Conway has a fantastic post explaining exactly why this is a horrible idea:

Given that this policy was not merely rubber-stamped but engineered by Eurozone finance ministers and the IMF (indeed, the IMF wanted an even deeper cut of deposits), it sends a disquieting message to anyone with deposits in a euro area bank. Although the ministers were quick to insist that this is a one-off and is “exceptional”, anyone even vaguely acquainted with the initial Greek bail-outs will remember precisely how long such exceptions last.

“The best the rest of the world can hope for,” says Neil Irwin, “is that Cyprus’s case is sufficiently unique that it won’t spark panic in Athens and Madrid (or in Lisbon, Dublin and Rome).” But his post is headlined “Why today’s Cyprus bailout could be the start of the next financial crisis”, which gives a reasonably good idea of how optimistic he is that any bank run in Cyprus will be contained.

And Europe won’t be home dry even if depositors in Portugal do decide to keep their money in their home country on Monday morning. That might make this bailout look like a brilliant wheeze. But the consequences of this choice are permanent: countries like Ireland and Portugal might not be at risk of a deposit tax right now, but they’re still getting bailed out on a continuous basis, and the more fraught the bailout negotiations become, the more likely it is that the EU will insist on bailing in depositors. It’s an option on the table, now, and as a result a deposit run is surely more likely to happen whenever a Eurozone country finds itself in need of a bailout. Which, of course, is always the worst possible time for a bank run.

From a drily technocratic perspective, this move can be seen as simply being part of a standard Euro-austerity program: the EU wants tax hikes and spending cuts, and this is a kind of tax: “a one-off wealth tax”, as Matt Yglesias puts it. Other taxes would raise less money, or if they didn’t they would be more harmful to the Cypriot population, since much of this one is going to be paid by Russians. Cypriots are sadly going to have to pay somehow, and although this is an unpleasant way of forcing them to do that, it’s also extremely effective and almost impossible to replicate by any other means.

But there’s something sacred about bank deposits, and especially about insured bank deposits. The one part of this scheme that no one is defending is the 6.75% tax on deposits less than €100,000 — the level to which Cyprus guarantees all deposits. As Nick Malkoutzis puts it,

Anastasiades also has to explain to Cypriots why small-time depositors have to pay a similar levy to the one some eurozone countries supposedly demanded so alleged Russian oligarchs would be forced to pay for bailing out the island’s banking system. Furthermore, he has to inform them why the Cypriot government’s pledge to guarantee deposits up to 100,000 euros – supposedly even in the most extreme circumstances – is not even worth the paper it was written on.

What we’re seeing here is the Cypriot government being forced to break one of its most important promises — the promise that if you put your money in the bank, and your deposits total less than €100,000, then they will be safe. What’s more, there’s no good reason for insured deposits to be hit in this manner: the same amount of money could be raised just by taxing the uninsured deposits at a slightly higher rate. The insured depositors are being hit, it seems, just so that the uninsured depositors can be taxed at single-digit rather than at a double-digit rate.

Meanwhile, people who deserve to lose money here, won’t. If you lent money to Cyprus’s banks by buying their debt rather than by depositing money, you will suffer no losses at all. And if you lent money to the insolvent Cypriot government, then you too will be paid off at 100 cents on the euro.

This is more by accident than by design. As Joseph Cotterill explains, Europe dragged its feet on Cyprus for so long that it effectively missed the deadline for doing a bond restructuring. It takes time to put that kind of a deal together, and there simply isn’t enough time between now and Cyprus’s next big coupon payment to do that. As a result, the EU found itself with a massively reduced menu of options: either fund the bailout itself, in full — an option which the Germans were adamant would never happen — or force a haircut on Cyprus’s depositors. Given the balance of power in the Eurozone, it comes as no surprise that in this battle, Germany won and Cyprus lost.

They won dirty, too: by forcing a tough all-night negotiating session in which Anastasiades was given what you might call an offer he couldn’t refuse. Either confiscate deposits wholesale, or see those deposits rendered even more worthless when the ECB cuts off its funding to Cypriot banks, a decision which would — through devaluation and insolvency — lead to depositors losing as much as 60% of their money.

The big winner here is the ECB, which has extended a lot of credit to dubiously-solvent Cypriot banks and which is taking no losses at all. And although they might wake up bruised, the big Russian depositors are probably winners too, given that they risked losing everything and will end up losing just 10%. Finally, of course, there are all the hedge funds who have been betting that the Cypriot government won’t default: they’re all popping Champagne right now.

The big loser are working-class Cypriots, whose elected government has proved powerless in the face of decisions driven by Germany, and who are now edging towards fury. The Eurozone has always had a democratic deficit: monetary union was imposed by the elite on unthankful and unwilling citizens. Now the citizens are revolting: just look at Beppe Grillo. Across the continent, they’ve lost their democratic right to determine their own fate at the ballot box, and instead they’re being instructed what to do by Germans. Now, in Cyprus, they’re simply and directly losing their money.

Someone with €8,000 of life savings in the bank can ill afford to lose an arbitrary €540, but that’s exactly what is going to happen. The Cypriot parliament is probably not going to revolt this weekend, but any politician who votes for this bill is going to have a very, very hard time getting re-elected. This decision is important not only because of the precedent it sets with regard to bank depositors, but also because of the way in which it points up just how powerless all the Mediterranean countries (plus Ireland) have become. More than ever before, it’s Germany’s Europe. That’s bad for Cyprus, and it’s not even particularly good for Germany.

3) … Volatility rose and world stocks sold off slightly, led lower by the National Bank of Greece, as well as Greece.

On Monday, March 18, 2013, Volatility, ^VIX, rose as World Stocks, VT, traded 0.3% lower. Nation Investment, EFA, -0.8% and Small Cap Nation Investment, IFSM, -0.5%. Emerging Markets, EEM, -1.1, as China continued lower, YAO -1.2, ECNS, 0-.9, CHII, -4.1, CHIX, -1.4, and CHIM, -2.5. Other country fallers included the following

RSX -2.4, ERUS -2.6

EWH -1.3

EWD, -1.2 with ERIC -3.6

EWA -1.2

EPHE -1.9

EPOL -1.7

EFNL -1.6

EWN -1.4

GREK -3.1

EWP -2.0

EWG -1.6

EWI -1.4

Banks traded lower as follows; the world has passed through Peak Banking, as the European Financial, EUFN, and the Too Big To Fail Banks, RWW such as JPM, and C, are now trading lower.

IXG -1.2

EMFN -1.8

EUFN -1.6,, NBG, SAN, DB

CHIX -1.4

RWW -1.2

KRE -1.0

UK Banks, BCS, RBS,

Swiss Banks, CS, UBS

Major ETFs, seen in this Finviz Screener traded lower.

TAN -2.4 and FAN -0.9

IEZ -2.2 and OIH -2.2

COPX -1.5

PSP -1.1

IYC -1.0

Of note, the Russell 2000, IWM, was the Index loss leader of the day, trading 0.56% lower; this as a result of the Regional Banks, KRE, trading lower; with FITB being a high volume loss leader.  Last week Maxwell Fisher wrote Cincinnati based Fifth Third Bancorp has a well earned reputation as a conservative, well run institution. Despite having much of its asset base in two of the states (Michigan and Florida) most devastated in last decade’s recession, Fifth Third has only been unprofitable one year in the last twenty, in 2008. In contrast, 2012 proved that the roughly $120 billion asset bank is back to its pre-recession levels.

Commodities traded 0.5% lower, with base metals, DBB, Agricultural Commodities, JJA, CANE, JO, trading lower, and Gold, GLD, and Silver, SLV, trading higher.

The Euro, FXE, traded 0.8% lower and Emerging Market Currencies, CEW, traded 0.4% lower, as the US Dollar, $USD, traded 0.7% higher to 82.68.

Reuters reports a massive boondoggle at the end of the age of credit California officials OK $8.6 bln in debt for high-speed rail. California officials approved on Monday the sale of up to $8.6 billion in state bonds to help build a planned high-speed rail system projected to cost $68 billion.

4) …. Summary

The news reports highlight a widening Nordic Latin European Divide, and suggest that a German, ECB, and EU Finance Minister led Eurozone Empire, is rising to power in Europe, as Cyprus is revealed as neither a sovereign nation state nor a solvent country. This is a fulfillment of bible prophecy of the rise of regional governance, totalitarian collectivism, and debt servitude, to replace the  democratic nation states in the Mediterranean Sea, Revelation 13:1-4.  Such news witnesses the economic and political coup d’etat accomplished by the First Horseman of the Apocalypse, the Rider on the white horse, who has a bow but no arrows, effecting the transfer of sovereignty from sovereign nations to sovereign regional bodies, such as the EU finance ministers, and the ECB, Revelation 6:1-2.

It has been God’s plan from eternity past to produce a series of empires, these being presented in Nebuchadnezzar’s Statue of Empires, Daniel 2:25-45. Today we are seeing the dissolution of the global hegemony of the US, which is economic, political and banking in nature, and the rise of a Ten Toed Kingdom of Regional Governance, where the toes are a miry mixture of iron diktat and clay democracy.

Germans cannot be Greeks; but most assuredly they will be one, living together in a debt union and gulag of debt servitude, with the periphery profligate countries of Portugal, Italy, Ireland, Greece, and Spain, existing as hollow economic moons revolving about planet Germany, which will rise to be a type of fierce revived Roman Empire, out of which will come the Little Horn, that is the one seeming little authority, who will rise in power through Authoritarianism’s schemes, such as regional framework agreements, Daniel 7:7.  He will be the Sovereign world leader, Revelation 13:5-10, and will be accompanied by the Seignior, that is the top dog banker who takes a cut, Revelation 13:11-18. This Eurozone King, the Prince of the People, will set up his global rule in Jerusalem, and govern the world for three and one half years, that is during the time period known as The Great Tribulation, Daniel 9:25

It is Jesus Christ who is at the helm of the economy of God, Ephesians 1:10.

He vigorously worked the money printing presses at the US Federal Reserve, the ECB, the PBOC, and the BoJ, producing peak sovereignty and peak seigniorage, and strongly leveraged up carry trade investing such as the EUR/JPY, and bubbled up the most toxic of debt, such as that held by JPMorgan, JPM, and traded by the Distressed Investments in Fidelity Investments, FAGIX, mutual fund; all of which established the fullness of liberalism’s prosperity on March 15, 2013, as world stocks, VT, peaked out, and as major world currencies, DBV, traded lower.

He is now bringing forth a New Age, (from the age of investment choice to the age of diktat), New Economic Action (from inflationism to destructionism), New Dynamos (from the dynamos of corporate profit and global growth to the dynamos of regional security, stability and sustainability), a New Trust (from trust in bankers, carry trade investing and credit to trust in nannyrats, totalitarian collectivism, public private partnerships and debt servitude), a New Paradigm, (from liberalism to authoritarianism), a New Sovereignty, (from the Banker Regime of democratic nation states to the Beast Regime of regional governance), a New Seigniorage, (from the seigniorage of investment choice to the seigniorage of diktat),  a New Economy (from crony capitalism and European socialism, and Greek socialism, to fascist regionalism), and a New Money System, (from the fiat money system to the diktat money system),  as heralded in Revelation 1:1, which is best described in total as The Revelation of Jesus Christ, which will feature authoritarianism’s austerity.

Peak Prosperity Achieved As Major World Currencies Top Out And Turn Lower

March 19, 2013

Financial Market Report For Friday, March 15, 2013

1) … On Monday March 11, 2013, World Stocks, VT, rose strongly as the Japanese Yen, FXY, traded lower to 101.80 in front of BoJ meeting..

Action Forex reports that the EUR/JPY closed at 125.45. Finviz reports the Euro, FXE, at 129.28, and the Optimized Carry Trade ETN, ICI, at 47.96. Yahoo Finance reports Distressed Investments, FAGIX, at 9.69; it has been trust in the most toxic of debt, such as the distressed investments traded in this mutual fund, and like those held by JPMorgan, JPM, that have given seigniorage to money, that is wealth, since the beginning of QE1. And it has been risk taken on by investors, that has also served to drive up fiat asset investments. Daily Ticker reports that author Steve Keen has his eye on margin debt who relates that the stock market is a debt fueled bubble. This is the money people borrow from their stockbrokers to expand their holdings of shares. Keen says the ratio is now 70%, meaning with $300,000 you can borrow $1 million worth of shares.  Here’s where it gets interesting. Steve has found a relationship between the change in margin debt and the level of asset prices. Even more importantly, he points to a correlation between the acceleration in margin debt and the rise in asset prices. If his theory holds true, this means we’re relying on the acceleration of margin debt to drive rising share prices.

Sectors trading higher included the following:

The Too Big To Fail Banks, RWW, 0.9%, (GNW, 6.7%, C, 2.0%, WFC, 1.7%, PFG, 1.2%, BAC, 0.7%, BK, 0.4%)

Semiconductors, XSD, 0.6%

Automobiles, CARZ, 0.4%

World Banks, IXG, 0.4%

Regional Banks, KRE, 0.4%

Aerospace and Defense, PPA, 0.3%

Casinos, BJK, 0.3%

Paper and Timber Producers, WOOD, 0.3%

North American Software, IGV, 0.2%

US Infrastructure, PKB, 0.1%, Small Cap Industrials, PSCI, 0.1%, Consumer Discretionary, IYC 0.1%

Interest bearing sectors rising included the following:

Leveraged Buyouts PSP, 0.7%

Mortgage REITS, REM, 0.7%

North American Energy Partnerships, EMLP, 0.6%

Pharmaceuticals, XPH, 0.5%

Dividends Excluding Financials, DTN, 0.4%

Dividend Growth, VIG, 0.3%

Call Write Bonds, CWB, 0.2%

Of note, Hedge Fund stocks rising included FIG, KKR, BEN, NTRS, AMP, IVZ, CG, SEIC, LAZ, LM, FIG; and Transportation stocks rising included R, FDX, UPS, ATSG.

Sectors trading lower included the Emerging Market Infrastructure, EMIF, -0.9%, which contains, UGP, CMHHF,  CSPKF, CHOLF, ASR, CIG, SBS, EOC.

The S&P 500, $SPX, SPY, 0.4%, was led higher by SPHB, 0.6%, Too Big To Fail Banks, RWW, 0.9%, (GNW, 6.7%, C, 2.0%, WFC, 1.7%, PFG, 1.2%, BAC, 0.7%, BK, 0.4%,), XSD, 0.6%, XPH, 0.5%, CARZ, 0.4%, and World Banks, IXG, 0.4%.

Japan’s Banks, SMFG, rose 5.6%, MTU, 5.6%, NMR, 4.2%, and MFG, 4.8%, taking Japan, EWJ, 0.6%, and Japan Small Caps, JSC, 1.0%, higher.

Asia, EPP, rose 0.4%, being led higher by Australia, EWA, 0.6%, Australia Small Caps, KROO, 1.0%, Thailand, THD, 0.5%, and the Philippines, EPHE, 1.7%.  China traded lower being led so by Shanghai Shares, CAF -.2.0%, China Minerals, CHIM -2.4%, China Industrials, CHII, -2.2%, China Small Caps, ECNS, -1.8%, China Financials, CHIX, -1.7%, China, YAO, -1.1%.  South Korea, EWY, -0.7%, being led lower by SHG, -1.4%, and WF, -0.8%.

Ireland’s Bank, IRE, rose 3.3%, taking Ireland, EIRL, 0.5% higher; while the National Bank of Greece, NBG, traded 6.0% lower, taking Greece, GREK, 3.1%, lower.

CNBC reports Why Italy could be the next ‘Bad Boy of Europe’. Italy could see its borrowing costs rise above those of troubled Spain this week, analysts told CNBC on Monday, with a credit rating downgrade on Friday and continued political deadlock posing an ever larger threat. “Italy is really going to blow it up this week,” Joe Rundle, head of trading at ETX Capitol, told CNBC. “There is the downgrade that happened on Friday but now there is the Italian yield and the spread narrowing to the Spanish yield and there is the possibility that Italy gets more expensive than Spain. The last time we saw that we were in the middle of a euro zone crisis,” Rundle told CNBC Europe’s “Squawk Box”.

The New York Times reports On the brink in Italy. Businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year; especially hard hit among Italy’s estimated six million companies are the small and midsize companies that represent the backbone of Italy’s $2 trillion economy. Economists worry that the pace of business closings may accelerate as long as the country lacks a functioning government.

Bloomberg reports Italy’s Grillo Threatens to quit politics if members support PD. Beppe Grillo, the comedian-turned politician whose Five-Star Movement won 25 percent of the vote in last month’s Italian elections, said he would quit politics if his party members support a government led by Pier Luigi Bersani’s Democratic Party. “If there were a confidence vote by the parliamentary group of the Five-Star Movement in favor of the ones that have destroyed Italy, I would retire from politics,” Grillo said late yesterday in a post on Twitter.

Ambrose Evans Pritchard writes Italy’s companies face slow ‘death’ as credit crunch deepens. Italy’s industry chiefs have warned that the country faces a “full credit emergency” as thousands of companies run out of critical funding, threatening a slide into deeper depression.

Bloomberg reports Italian billionaire says bankers must follow lawmakers out the door. Italian billionaire Diego Della Valle, head of shoemaker Tod’s SpA (TOD), welcomed the wave of public disgust that swept established politicians from parliament last month and said it’s time to dislodge some top bankers as well. “It’s clear that people said, ‘That’s enough, it’s time to change, show us a decent country,’” Della Valle said March 6 in a Bloomberg Television interview. “That also has to happen in the world that we represent, finance and business and the civil society that guides the country.” Della Valle, 59, is picking fights with finance executives as banks curb lending and Italy slides deeper into recession.

Fox News reports Lawmaker looks to rein in program after free cell phones sent to dead people. That’s the message Rep. Tim Griffin of Arkansas wants to send Congress, after he says a controversial government-backed program that helps provide phones to low-income Americans ended up sending mobiles to the dead relatives of his constituents. Griffin has introduced a bill that targets the phone hand-out program, which has ballooned into a fiscal headache for the government.

Under Liberalism, debt become wealth, as carry traded investment has leveraged up corporations with high long term debt to equity ratios, these include DENN, CPSS, HEES, ADS, CAR, LBTYA, FUN, ETE, SBAC, MAS, DNKN, AIV, KBH, NEE, TAL, CLX, FSM, PKOH, OI, SPG, RJET, NMR, SFI, TSLA, PT, CYH, HMA, S, SPB, NXPI, MTW, AEPI, TEF, ANGI, RCI, BYI, EAT, GMT, CIT, CAP, HSH, BKW, GE, BLX, NEWS, LAMR, R, GPK, IGTE, KOP, CMS, SCTY, MBT, PCL, TGH, RM, AFCE, CNP, CACC, AXP, DFS, CIT, IX, RU, AGM, CPSS, NNI,  SLM, CSV, CSU, AL, JAH, VIP, HOG, CZZ, ROC, IP, SLH, JPM, BA, NCR, DLX, TRN, HSY, GWR, WM, MIC.

The Telegraph reports Sputtering global economy belies stock market boom. Asia’s economic recovery is losing momentum and Europe’s slump is proving deeper than expected, raising concerns that soaring stock markets globally have jumped ahead of economic reality.

Automobile Retailers, LAD, PAG, SAH, CPRT, AN, have soared in the last two years, as is seen in their combined ongoing Yahoo Finance chart. Subprime Automobile lender Nicholas Financial, NICK, traded 2.9% lower on Monday, March 11, 2013.  Globe and Mail Sales of subprime car-loan securities soar. Sales of risky pools of securities backed by car loans have jumped this year as investors’ search for yield takes them to corners of the market that boomed in the build-up to the financial crisis. Sales of subprime auto asset-backed securities have increased year-to-date to nearly $4-billion (U.S.), almost double the volume during the same period of 2012, according to Deutsche Bank data. Subprime auto sales now account for 34 per cent of all auto ABS issuance, surpassing levels last seen in 2007.

AP reports Updated official data Monday showed Greece’s economy shrank at a slightly slower pace than initially forecast in the last quarter of 2012, but still contracted by 6.4 percent during the year.

The statistical authority, Elstat, said Greece’s economy shrank 5.7 percent in October-December 2012, compared to a year earlier — slightly better than earlier estimates of 6 percent. Greece’s economy has contracted by more than a fifth since 2008, and is set to have shrunk by 25 percent before the country is expected to start recovering during the latter part of this year.

Benton Te reports Former Asian Development Bank President Haruhiko Kuroda, has been officially been nominated as the next Bank of Japan chief.  He has echoed ECB’s Mario Draghi’s stance of pledging to do “whatever it takes to save the euro [6]” or from Mr. Kuroda’s version: “whatever is needed to end 15 years of deflation [7]”. Mr. Kuroda is seen as technocratic ally in support of Japan’s Prime Minister Shinzo Abe’s aggressive inflationism or “Abenomics”.

On a year to date basis and from nominal currency terms, the Nikkei’s 18.17% return is just a head length away from the Phisix. But again nominal can be misleading, considering 9.6% decline relative to the US dollar as of Friday, a foreign investor would net less than half of the nominal returns.

Japan recently posted a paltry statistical economic growth of .2% [8] as her current account continues to deteriorate significantly, despite yen’s dramatic devaluation.

While devaluation typically provides short term steroids, Japan’s aggressive easing policies appear to be worsening her economic conditions even in the short term [9].

Whatever supposed gains aimed at the political façade of attaining economic “competitiveness” appears as being neutralized by factors such as higher import costs and reduced consumption.

Worst, a sustained deterioration of current accounts means that Japan will increasingly rely on foreign capital and or draw down from the her pool of savings which has been estimated at $19 trillion and which could also extrapolate to a reduction of assets held overseas or $4 trillion net foreign investment position [10].

And given the deliberate debasement of the yen, I am not inclined to see a reduction of foreign assets by Japanese households. Instead, Japan’s private sector will likely increase their exposure overseas couched under euphemism of Foreign Direct Investment (FDI) or portfolio flows when in reality they account for as “capital flight” [11].

So “Abenomics” will mean that Japan will transition from a net savings-net creditor nation to eventually a net debtor country overtime or a sordid tale of from riches to rags, if such policies continue. And adding to the devaluation-offsetting factor, the stock market bullrun prompted for by Japan’s devaluation-inflationism will hardly translate to any material benefits from the “wealth effect”.

The equity share of total financial assets held by Japanese households, accounts for only 5.8% as of September 2012, compared to 32.9% in the US (as of September 2012) and 14.3% in the Euro area (as of June 2012), according to the Bank of Japan [12].

This implies that the major beneficiaries of the collective easing policies by political authorities of Japan, the EU and the US, as seen through the current stock market boom, have hardly been about interests of the consumer via households, but of those politically privileged sectors covering non-private financials and the financials. The worst ramification from the current set of policies has been one of increasing the geopolitical strains that has emerged out of financial protectionism coursed through inflationism or devaluation policies.

Recently China’s sovereign-wealth fund president Gao Xiqing warned of Japan’s domestic policy as inflammatory to the already current fractious state of bilateral relations stating that, according to the International Business Times  [13].  Treating the neighbors as your garbage bin and starting a currency war would not only be dangerous for others but eventually be bad for yourself . In short, devaluation which represents one step towards the slippery slope of protectionism serves as tinderbox to wars. Only the mentally challenged will see war as morally, politically and economically justified. Such are populist elixirs with nasty consequences.

Benton Te also writes China SoEs have been key instruments used by China’s government to implement her non-transparent policies. The Chinese government has not made any explicit significant stimulus announcements, but we see signs of credit booms occurring through SoEs.

For instance, the recent bounce in China’s Shanghai index came amidst the latest credit expansion from trust companies (whom are exposed to property developers and to the local government) as well as from local government financing vehicles [21]. So in trying to preserve the status quo which benefits those in power or those connected with the powers that be, the recent policy direction has been to re-politicize China’s economy, hence reinvigorating the role of SoEs.

Current trends should also give us a clue on how policymakers are likely to react. Chinese politicians are likely to chatter about tightening, but like the Fed’s poker bluff, they are likely to do the opposite as any “tightening” would likely undermine their financial and political interests.

Regulations are likely to be “symbolical” meant to exhibit “do something politics” for media consumption or for propaganda mileage. Such will likely be shrouded by lax enforcement from venal bureaucrats which is why Mr. Lo cavils about failed regulations.

The buying spree of wealthy political class or the politically connected Chinese of international properties, some in the US, have purportedly been in anticipation of the “stamping out” of corruption from new Chinese leaders [22]. I would doubt such a premise, considering the re-politicization (reversal of economic freedom) of the Chinese economy which means more corruption.

Rather my thoughts lean to the view where China’s political class and cronies may have perhaps realized that their policies have been unsustainable and thus have taken to hedge their wealth on international properties [23].

A bubble bust in China is likely to have wretched political consequences that could risk a disorderly change in her political structure. So I expect Chinese policymakers like their counterparts to throw the kitchen sink to preserve the status quo.

Thus far, the impact from China’s perceived policy tightening has been counterbalanced by expectations of continued easing elsewhere.

The point is that China’s current volatility could serve as paradigm for the world, including the Philippines.

And Benton Te also writes Phisix’s mania This Bloomberg article [28] which says that Philippine equities currently trades at “21.6 times reported earnings” has been seen by an analyst from a major domestic institution as not having been overvalued.

Such represents as “denigration of history” by which author Nassim Nicolas Taleb in Fooled by Randomness [29] defines as the concept were “gamblers, investors and decision-makers feel that the sorts of things that happen to others would not necessarily happen to them”

Here is “denigration of history” Thailand’s central bank version. In a recent speech, Deputy Governor of the Bank of Thailand, Mr Pongpen Ruengvirayudh enumerated [30] the three challenges to Thailand, namely credit bubble, global uncertainty and capital flows.

The first key challenge is on the domestic side. Private sector credits, particularly those in the household sector, have been growing at a high pace, spurred by domestic demand momentum, fiscal stimulus as well as easy financial conditions. International evidence suggests that a prolonged period of rapid credit growth could lead to a build-up of financial imbalances, strain households’ debt servicing ability and loan quality, as well as sow a seed for asset price bubbles. While the more adverse scenarios currently remain a remote possibility in Thailand, the MPC is not complacent and has been monitoring risks to financial stability closely

The Thai deputy governor clearly understands the essence of asset bubbles when he said “rapid credit growth could lead to a build-up of financial imbalances”. However he opaquely admits that Thailand has been undergoing, “Private sector credits, particularly those in the household sector, have been growing at a high pace”. Then he makes a 180 degree turn through a categorical denial of the risks of a bubble with “remain a remote possibility in Thailand”.

In fit of cognitive dissonance, where two ideas seemingly contradict each other, the Thai governor displays “sorts of things that would happen to others would not necessarily happen to them” as he implies that they are ready to act on them when required.

The problem is when to draw the line on the sand. This has been the same predicament which Former Federal Reserve Chairman Paul Volcker has expressed to challenge the incumbent leaders of the US Federal Reserve noting that the latter may find difficulty in withdrawing historic stimulus because “there is a lot of liquor out there now.”

The Bloomberg quotes Mr. Volker in a forum [31] At some point when the worm turns and the party is getting under way, to use that old analogy, at what point do you begin retreating…You can make a mistake and go too quick, but the much more frequent mistake in my judgment is you go too slow, because it’s never popular to take the so-called punch bowl away or to weaken the liquor.

The Thai deputy governor’s speech reminded me of this hallmark remark [32] made by former Citibank President Charles Prince that accentuates the height of the US housing bubble: When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing/ When the music did stop, Citibank [33] eventually ousted Mr. Prince and the company, despite all of their highly paid experts, became a US government ward.

Well to give a snippet on Thailand’s periphery to the core transition of the bubble cycle which ultimately paved way for the Asian Crisis, this from the Columbia University [34]

Unfortunately, the golden years did not last long. Starting from the year 1995, Thailand’s economic growth became much slow down due to a number of factors such as the contraction in the real estate sector, the emergence of China as an intimidating competitor in international trade, the fall of world demand of semiconductor which was one of the Thai major exports in 1996, and an appreciation of the dollars after Spring 1995. As previously discussed, real estates were non-tradable; thus, there was a constraint in market demand of them. Too many houses and business buildings were built; by 1997, the commercial vacancy rate had gone up to 15%. The real estate business had become unprofitable., and the business owners, thus, had no capacity to pay back their debts to financial institutions when the maturity came. The percentage of non-performing loans had risen up to 13% in 1996. This soar of the non-performing loans began the era of banking crisis as banks’ balance sheet had been deteriorated.

Increasing incidences of oversupply led to cascading debt defaults that snowballed into a regional crisis.

Déjà vu, Asian crisis?

2) …On Tuesday March 12, 2013, the Emerging Markets, EEM, traded lower, being led so India Banks, HDB, and IBN, turning India Earnings, EPI, lower, and also Brazil Banks ITUB and BSBR, turning Brazil Financials, BRAF, lower, introducing a soon coming global bear stock market, with confirmation coming from the ratio of Closed End Equity, CSQ, relative to Closed End Debt, PFL, that is CSQ:PFL, unable to trade higher for the seventh day,  indicating that stocks are unable to leverage higher on debt.

It is the dividend yielding Emerging Market Infrastructure Stocks, EMIF, as well as the Emerging market Small Cap Dividend Stocks, DGS, that are the canaries, in the global stock market coal mine, trading lower that are warning investors to get out, and get out now.

Nation Investment, EFA, and Small Cap Nation Investment, SCZ, traded lower today indicating that Nation Investment is no longer profitable.  South Korea, EWY, Italy, EWI, Japan, EWJ, Japan SmallCaps, JSC, Russia, RSX, Russia Small Caps, ERUS, India, INP, India Small Caps, SCIN, Shanghai, CAF, Hong Kong, EWH, Hong Kong Small Caps, EWHS, China YAO, China Industrials, CHII, China Small Caps, ECNS, and China Financials, CHIX, traded lower.

Automobile Producers, CARZ, and Homebuilders, ITB, were the sectors trading lower today. Notable global producers trading lower include Illinois Tool Works, ITW, Rockwell Automation, ROK, International Paper, Budweiser, BUD, Companhia de Bebidas Das Americas, ABV, Apple, AAPL, Oracle, ORCL, Time Warner, TWX, Liberty Global, LBTYA, Comcast, CMCSA, and Disney, DIS.  Of note, Samsung Electronics, a South Korea based global manufacturing leader, is trading four percent lower from its February 25, 2013, rally high.

Of note, World Banks, IXG, traded lower, with South Korea’s WF, and KB, notable fallers. And the Too Big To Fail Banks, RWW, manifested a massive dark cloud covering candlestick, suggesting a soon trade lower.

World Stock, VT, traded 0.5% lower; and Bonds, BND, traded 0.2 higher today. The S&P 500, $SPX, traded by SPY, traded 0.2%, lower.

Bullion Vault reports Gold jumps after Bundesbank chief says “euro crisis not over”.  The Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, seen in this Finviz Screener, traded higher, this as Seeking Alpha reports Gold COTS: new all-time high for gold shorts  And the WSJ reports Big sugar is set for a sweet bailout. The U.S. Department of Agriculture is considering buying 400,000 tons of sugar, enough for 142 billion Hershey’s Kisses, to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The ongoing Yahoo Finance chart of the Commodity Sugar, CANE, shows that for the last year, it and Coffee, JO, have been Agricultural Commodity, RJA, loss leaders.

Major World Currencies, DBV, traded unchanged at its recent rally high; and Emerging Market Currencies, CEW, traded up 0.1 higher at the edge of a ledge of support.

In today’s news, Robert Wenzel reports Senate Budget Chair wants $1.2 Trillion tax hike. Senate Budget Committee chairwoman Sen. Patty Murray (D-WA) has circulated a memo to her Democratic colleagues indicating she desires a massive tax increase in her upcoming budget, reports Matt Boyle.  It was Alicia Mundy who reported in Seattle Times article Power swings to Sen. Patty Murray dated November 28, 2006, “The shock of the elections putting Democrats back in control of Congress finally sunk in. For most of her 14 years in the Senate, Murray has been waiting for a chance to exercise power. Now she has a lot of it. Murray has been a player in the earmark process and was dubbed “the Queen of Pork” last year by Taxpayers for Common Sense, a group sharply critical of congressional spending.”  I live here in Bellingham, WA, which is called the City of Subdued Excitement; and it is experiencing an all time high in prosperity with expanding economic activity. Taxpayers are generous; they voted for an expansion of the local transit system. And we have lots of pork coming through, for example, we have a new fleet of busses which came by Patty’s Earmarks.

3) … On Wednesday, March 13, 2013, Emerging Market Financial and Emerging Market Mining, joined Emerging Market Infrastructure in driving the Emerging Markets lower, as competitive currency devaluation, continued debt deflation, that is currency deflation in Bonds, BND.  Yes Aggregate Credit, AGG, traded lower, as individual currencies, which included the Swedish Krona, FSX, -1.0%, the Euro, FXE, -0.6%, the Swiss Franc, FXR, -0.6%, the Indian Rupe, ICN, -0.5%, the Brazilian Real, BZF, -0.6%, the Canadian Dollar, FXC, -0.1%, and the Australian Dollar, FXA,-0.1%. Major World Currencies, DBV, continued higher, on the rising US Dollar; this ETF, will be trading lower very soon.

The trade lower in the individual currencies, caused investors to derisk not only of bonds, BND, but out of stocks, VT, and Commodities, DBC as well, commencing a trend lower from yesterday’s eventful turn lower turn lower in equities, with a definite trend lower in Global Real Estate, DRW, as well as Global Utilities, DBU.

Emerging Market Financials, EMFN, and Emerging Market Mining, EMMT, joined Emerging Market Infrastructure, EMIF, in driving the Emerging Markets, EEM, lower.

Nation Investment, EFA, trading lower included China, YAO, Sweden, EWD, South Africa, EZA, Italy, EWI, Brazil, EWZ, Canada, EWC, Mexico, EWW, India, INP, Australia, EWA, Russia, RSX, and Singapore, EWS. World Banks, IXG, trading lower included, China Financials, CHIX, India’s, IBN, Australia’s, WBK, UK’s, RBS, Greece’s, NBG, Canada’s RY, BMO, BNS, Korea’s, WY, KB.

Small Cap Nation Investment, IFSM, trading lower included China Small Caps, ECNS, Vietnam, VNM, Turkey, TUR, Argentina, ARGT, India Small Caps, SCIN, Poland, EPOL, Brazil Small Caps, EWZS, and Peru, EPU.

A rising US Dollar, $USD, UUP, took, Global Producers, 1.2% higher and US Shares, VTI, 0.2% higher, as well, with Transports, XTN, 2.5, Airlines, FAA, 1.5, Retail, XRT, 1.3, Aerospace, PPA, 1.0, rallying to new highs.  Other US Shares rising strongly included US Infrastructure, PKB, 0.8%, Home Building, PKB, 0.7%, Semiconductors, XSD, 0.6%, Regional Banks, KRE, 0.5%, Utilities, XLU, 0.4%, and Mortgage REITS, REM, 0.3%.

Sectors trading lower included, Solar Energy, KWT, -6.0%, Steel, SLX, -3.0%, Copper Mining COPX, -1.3%, and Wind Energy, FAN, -1.1%.

Commodities, DBC, -0.5%, traded lower as follows:  Gold, GLD, -0.4%, Agriculture, JJA, -0.8%, Copper, JJC, -0.6%, Base Metals, DBB, -0.8%, North Sea Oil, BNO, -1.0%, and Silver, SIL, -2.2%.

Nancy Hanover of WSWS writes Wall Street turns profit in student loan debt writes. But no matter how difficult debt may be, in 21st Century capitalism it is someone’s investment opportunity. And the riskier the debt, the greater the possible return. There is money to be made, a lot of it, when there is $1 trillion worth of debt. Last week’s news on the other side of the financial divide was therefore far more sanguine. Former government entity turned student loan originator, collection agent and debt seller Sallie Mae, SLM, announced that it had sold $1.1 billion worth of new student loan debt securities. The publicly traded firm also noted there was a whopping 15 times more demand for the highest-risk, highest-return batch than there was supply.

The Wall Street Journal commented that “boom times may be back for the student loan market” as “investors’ hunger for risky loans shows the lengths they are willing to go to generate returns in a period when interest rates are hovering near record lows.” Since the announcement of the Obama administration’s quantitative easing (QE3) last September, there has been a decided uptick in the purchase of student loan securities. In 2012, SLM sold $13.8 billion worth of these bonds, making $514 million in the fourth quarter, a 12.5 percent increase over the previous year.

This current market frenzy for student loans is a product of the policies of the Obama administration. On the one hand, he has overseen the continuing record demand for student loans by implementing budget cuts to education and financial aid. On the other hand, the administration is pumping $85 billion a month into Wall Street, driving up the prices of financial assets as capital searches for investments.

The market in securitized loans known as SLABS (Student Loans Asset-Backed Securities) was first created in 1992 by the Sallie Mae Marketing Association. SLABS rocketed in popularity with the asset-backed security scam, growing from $75.6 million in 1990 to $2.67 trillion at their height. While overall securitization levels have diminished, private student loans (with generally higher interest rates than government direct loans) from such lenders as Sallie Mae and Discover are still packaged into bonds and sold to institutional investors.

About $11 billion worth of SLABS were created in each of the last three years. This year through February, dealers sold $5.6 billion of student-loan-backed securities, more than triple the figure for the same period in 2012, according to Asset-Backed Alert.

Of the $1 trillion in student loan debt, between a quarter and a third is now securitized into SLABS. As with the subprime racket, SLABS are often bundled with other kinds of loans for trading purposes.

Mike Mish Shedlock asks Who benefits from inflation. From 1980 until 2000 the top 5% got the lion’s share of income gains. Inflation is an insidious hidden tax that benefits those with first access to money (the banks and the already wealthy), and government (via sales taxes, property taxes, and income taxes). Government bureaucrats take your money and redistribute it primarily for wasteful pet projects in their districts or to those who contribute to the politicians’ campaigns. In spite of the often-heard mantra that “inflation wipes away debt”, I suggest otherwise. Income typically does not keep up with expenses, and most have too few assets to inflate. The poor (last on the credit totem pole) overpay for their assets with cheap credit given to them at precisely the wrong times (as happened right before the housing bust). Inflation clobbers those on fixed income.  In case you missed it, please consider Hello Ben Bernanke, Meet “Stephanie”, my response to a reader on fixed income attempting to live on Social Security plus interest on a $16,000 CD. If routine price inflation did not benefit the banks and the wealthy at the expense of everyone else, we probably would not have it.

I believe that the bulk of the inflation wealth, that is the wealth that came from inflationism, went to the  top 15 counties in terms of median household income as reported by Wikipedia, which are counties in which government, finance, and broadcast workers live.

1) Loudoun County,VA

2) Fairfax County, VA

3) Arlington County, VA

4) Hunterdon County, NJ

5) Howard County, MA

6) Somerset County, NJ

7) Prince William County, VA

8) Fauquier County, VA

9) Douglas County, CO

10) Montgomery County, MD

11) Charles County, MD

12) Nassau County, NY

13) Stafford County, VA

14) Morris County, NJ

15) Putnam County, NY

Zero Hedge reports Latest Greek aid tranche to be delayed after Troika talks break down. And

Business Insider reports Italy’s worst case scenario has become the most likely scenario.

4) …  On Thursday March 14, 2013, World Stock, VT, Nation Investment, EFA, and Global Producers, FXR, the S&P 500, SPY, (but neither Small Cap Nation Investment, IFSM, nor Emerging Markets, EEM), rallied to new highs, on investment in Transports, XLI, and Industrials, XTN, and World Banks, IXG, which rose to new highs, this as Reuters reports Dow at Record, Ends up for 10th Straight Day The Dow Jones industrial average extended its recent winning streak to 10 days, its longest such streak since 1996, and once again closed at a record high.

Investments traded as follows:

Nation Investment, EFA, 0.9%; Thailand, THD, rose to a new rally high.

Global Producers, FXR, 0.6%

World Stocks, VT, 0.6%

US Stocks, VTI, 0.4%

S&P 500, SPY, 0.4%

Russell 2000, IWM, 0.8%

Europe, VGK, 1.3%

Asia, Excluding Japan, EPP, -0.1

Emerging Markets, EEM, 0.4

Japan, EWJ, 0.6%, and Japan Small Caps,  JSC, 0.6%

Sectors rising to new highs included the following

Small Cap Energy, PSCE 1.5%

Homebuilding, ITB, 1.4%

US Infrastructure, PKB, 1.2%

Airlines, FAA, 0.9%

Small Cap Industrials, PSCI, 0.7%

North American Software, IGV, 0.6%

Aerospace And Defense, PPA, 0.6%

Retail, XRT, 0.6%

Consumer Discretionary, IYC, 0.1%

Debt investments rising included

Leveraged Buyouts, PSP, 0.9%

Senior Bank Loans, BKLN, 0.1%

Distressed Investments, FAGIX, 0.1%

Yield investments rising included

Premium REITS, KWY, 0.9%

Industrial REITS, FNIO, 0.6%

Mortgage REITS, REM, 0.5%

Real Estate, IYR, 0.3%

Small Cap Real Estate, ROOF,  0.3%

Dividend Appreciation, VIG, 0.4%

Dividend Excluding Financials, DTN, 0.4%

Financial investments rising included

European Financials, EUFN, 1.8%; the European Financials rose back up to its February 14, 2013 high.

World Banks, IXG, 0.8%

To Big To Fail Banks, RWW, 0.6%

Regional Banks, KRE, 0.7%

Small Cap Revenue, RWJ, 0.8%

It has been the Too Big To Fail Banks, RWW, pulling, not individual currencies, pulling the Small Cap Pure Value Stocks, RZV, higher as is seen below

RWW vs RZV vs RZG for the day, 0.6% vs 0.9% vs 0.5%

RWW vs RZV vs RZG for the week, 2.8% vs 1.6% vs 1.5%

RWW vs RZV vs RZG for the month,  4.3%, vs 2.2% vs 1.9%

Peak Banking is seen in the charts of Panama’s BLX and Peru’s BAP, as well as Japan’s SMFG, MTU, MFG, and NMR.

Natural Gas, UNG, Timber, CUT, and Cotton, BAL, are participating with stocks in a rally.

Peak Major World Currencies, DBV, are being achieved as they traded lower, 0.5% lower from yesterday’s March 13, 2013 high, on a lower US Dollar, $USD, UUP. Peak Emerging Market Currencies, CEW, was achieved February 15, 2013.

5) …  On Friday March 14, 2013, Peak Prosperity was achieved As Major World Currencies topped out and turned lower.

Peak Major Currencies, DBV,  was achieved this week ending March 15, 2013l.  Peak Emerging Market Currencies, CEW, was achieved February 15, 2013.

Peak Stock Prosperity, VT, was achieved this week, the week ending Friday March 15, 2013. Over the last two years, it has been the investors interests in Dividend Paying Stocks, Excluding Financials, DTN, that has supported stock investment. This suggests that Peak Sovereignty and Peak Seigniorage has been achieved.

Peak Credit, AGG, that is Peak Bonds, BND, was achieved December 6, 2012.

Peak Commodities, DBC, was achieved September 14, 2012.

Peak Consumer Wealth, M2 Money, was achieved December 7, 2013 at 10570.3

Volatility, ^VIX, plummeted for the week, as March futures and options expired, as World stocks, VT, traded up only 0.1% this week. Trading activity and charts suggests that a market top is being achieved as investors rushed to purchase industrial as well as small cap value stocks driven by the rise in the Too Big To Fail Banks, RWW, (JPM, GNW, C, WFC, PFG BAC, BK),  and Distressed Investment, like those held by the US Fed and traded in the Fidelity Mutual Funds FAGIX, as well as by Junk Bonds, JNK with Patrick McGee of Dow Jones reporting yields on junk bonds fell to a new record low, hitting 5.56%.Peak Sovereignty, Peak Seigniorage, Peak Money, that is Peak Wealth was achieved the week ending March 15, 2013, as is seen in the charts of the following investments, all rising for weekly gains.

1) International Small Dividend, DLS, 0.7, Peak Small Cap Dividend Wealth

2) Small Cap Pure Value, RZV, 1.5, Peak Currency Investment

3) Small Cap Nation Investment, IFSM, 0.4, Peak Small Cap Nation Investment

4) Nation Investment, EFA, 0.8, Peak Nation Investment

5) Dividend Investment Excluding Financial, DTN, 1.2 Peak Dividend Wealth

6) Industrial Producers, FXR, 1.8, led by Aerospace and Defense, PPA, 2.3, Peak Industrial Investment

7) Airlines, FAA, 1.9%, and Transports, XTN, 2.7% Peak Transportation Investment

This week, emerging markets, EEM -3.1, continued lower as follows EMIF -3.4, EMMT -3.3, EMFN -0.6 … Countries trading lower included Norway, NORW, -0.7, India, INP, -1.0, SCIN, -2.3, Peru, -1.4, Russia, RSX, -2.0, ERUS, -1.4, Taiwan, EWT, -2.5, Mexico, EWW, -2.4,  Chile, ECH, -3.0, Philippines, EPHE, -2.1, South Africa, EZA, -3.1, Brazil, EWZ, -3.3, EWZS, -3.3, South Korea, EWY, -3.8, China, YAO, -4.6, ECNS, -5.0, Hong Kong, EWH, -3.5, EWHS, -.3.1, Vietnam, VNM, -1.4, Singapore, EWS, -0.5 EWSS, -0.4 … Countries trading higher included Sweden, EWD, 0.2, The US,, VTI, 0.7, IWM, 1.1, Netherlands, EWN, 0.7, Ireland, EIRL, 0.8, Canada, EWC, 1.0, Australia, EWA, 1.0, UK, EWW, 1.2, EWUS, 2.1, Japan, EWJ, 1.6, JSC, 2.5, Thailand, THD. 2.1, and Switzerland, EWL, 2.7 …  The countries which have the greatest fall potential include EPHE, EWD, EWW, THD, EIRL, EWJ, and IWM as is seen in this ongoing Yahoo Finance Chart.

Sectors trading higher on the day included

PSCE 0.9

IEZ 0.7

OIH 0.7

PPA 0.6

Yield bearing sectors trading higher on the day included

REM 0.6

EMLP 0.3

JNK 0.1

HYG 0.1

Banks trading higher on the day included

RWW 0.5

KRE 0.2

RWJ 0.2

EUFN -0.6

IXG 0.1

Sectors trading lower on the day included, Solar, KWT, -1.5 Semiconductors, XSD, -1.5%, Internet, FDN, -1.1%.

Action Forex reports that the EUR/JPY lost upside momentum after hitting 126.03 and turned sideways and closed at 125.55.  Finviz reports the Euro, FXE, is now trading below 130.00 at 129.54; the Optimized Carry Trade ETN, ICI, closed lower at 47.65.  Yahoo Finance reports Distressed Investments, FAGIX, higher at 9.71. Peak Major Currencies, DBV, was achieved this week ending March 15, 2013.

The WSJ reports Goldman Sachs, JPMorgan hit in Fed report. The Federal Reserve cited weaknesses in the stress test capital planning of JPMorgan, JPM, and Goldman Sachs, GS, that could hamper share buybacks.  In related news JPMorgan slashes stock buyback plan and also JPMorgan ignored risks, fought regulators, Senate briefing alleges.  Breakout reports JPMorgan testified that it’s not too big to exist. And in related news An investor cheat sheet on JPMorgan Whale Flap.

Ernst Wolff and Johannes Stern, of WSWS report Mass layoffs at energy firm Vattenfall  Workers protested in Berlin after the Swedish energy firm Vattenfall announced plans to cut 2,500 jobs by the end of 2014.

Thomas Frank, Harper’s Magazine, Appetite for destruction.  In my survey of apocalyptic literature, I was surprised to keep coming across something called Timewave Zero. This homegrown theory is based on the pop-culture-cliche that change is accelerating and will accelerate even more in the future until we come to a kind of vertiginous endpoint: novelty out of control.

A known unknown, is that Jesus Christ is at the helm of the economy of God, Ephesians 1:10, where He is effecting The Great Paradigm Shift from Liberalism to Authoritarianism, Revelation 1:1, where political governance will change from the rule of sovereign nation states to sovereign regional leaders and regional bodies in regional governance; and economic experience from investment choice and prosperity to debt servitude and austerity; eventually leaders will meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Peak Financial Prosperity, VT, was very likely achieved this week, the week ending Friday March 15, 2013. The nine month risk-on, toxic debt based, yen carry trade, global stock rally, VT, has likely come to an end, as the world central banks’ monetary policies have debased both the US Dollar, $USD, UUP, and the Japanese Yen, FXY.  Look for competitive currency devaluation to commence with the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW, to trade consistently lower, causing investors to derisk out of stocks, VT.  A see-saw destruction of fiat wealth will commence, with Bonds, BND, trading higher for a while, before they also fall lower into the Pit of Financial Abandon.

The dynamos of Liberalism, corporate profitability and global growth, are winding down on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.

ZIRP no more, as money is no longer cheap as bond vigilantes have called for a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening since December 6, 2012, when Bonds, BND, traded lower. One of the defining attributes of the shift from Liberalism to Authoritarianism, is the end of ZIRP, as the Interest Rate on the Ten Year US Note, ^TNX, has risen to 2.02% from its September 14, 2012 low. The weekly chart of International Treasury Debt, BWX, seen in this Google Finance Chart shows a 6.5% loss since its September 14, 2012, high.

Money, that is wealth, and moneyness, as it has been known, is literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN, which began in February 2013.  Insolvent Sovereigns, such as Portugal, Italy, EWI, Greece, GREK, and Spain, EWP, and their insolvent banks, such as Banco Santander, SAN, are unable to provide seigniorage, that is moneyness. We are witnessing the failure of sovereign nation states to provide governance, and the failure of sovereign debt, BWX to provide seigniorage, that is moneyness. Mike Mish Shedlock writes Spain’s deficit soars, tax revenues plunge.

The dynamos of Authoritarianism, specifically regional security, stability, and sustainability are winding up on the failure of money, that is wealth, and on competitive currency devaluation which will be seen in Major World Currencies, DBV, trading dramatically lower.  Emerging Market Currencies, CEW, began trading lower in mid February 2013, largely on the failure of Emerging Market Bonds, EMB in January 2013.

Liberalism featured sovereign nation states, and their central banks provided ever increasing credit liberality which stimulated economic growth, global trade and prosperity. It is sovereignty that provides seigniorage, that is moneyness. With the failure of national sovereignty, at the galloping ride of the First Horseman of the Apocalypse, that is the rider on the white horse who has a bow but no arrows, Revelation 6:1-2, the seigniorage of investment choice will fail.

After a soon coming Financial Apocalypse, that is a credit bust and global financial system breakdown, foretold in bible prophecy of Revelation 13:3, leaders from labor, industry, banking and government will meet in summits and workgroups serving as nannycrats in public private partnerships to oversee the factors of production and economic activity.

Authoritarianism features regionalism. Regional sovereignty in the Eurozone will be the model for governance throughout the entire world. Europe will be the leading example of regional fascism where leaders from industry, banking and state rule via public private partnerships in all of the world’s ten regions and totalitarian collectivism that enforces austerity and occupies in every one of mankind’s seven institutions, as communicated by the Apostle John in Revelation 13:1-4; this is also the Ten Toed Kingdom presented in Daniel 2:25-45.

Under Liberalism, the seigniorage of investment choice drove economic production. But under Authoritarianism, the seigniorage of diktat will direct the factors of production. Liberalism’s fiat money system will be replaced with Authoritarianism’s diktat money system, where diktat serves as money, currency, power and prosperity for nannycrats whose rule replace that of bankers.

Mike Mish Shedlock writes About a week ago I started exchanging emails with reader Bernd who lives in Germany. He claims that the anti-euro movement in Germany is far bigger than mainstream media lets on. The question is who to believe, and I cast my lot with Bernd. And you write, Wolfgang Münchau is now thinking clearly about the setup in Germany and Italy (in terms of what is likely), even though he objects to the idea. The best hope now is to get everyone on board for a peaceful dismantling of this doomed from the beginning experiment, or it is going to splinter in a dozen pieces in the worst possible way at the worst possible time.

I reply, while the anti-euro movement is quite strong in Germany, I care not because I do not believe in human action; rather I believe that all things are of God, 2 Corinthians 5:17-18, and because I believe in Bible Doctrine of Dispensationalism presented in Ephesians 1:10, and in a Ten Toed Kingdom of Regional Governance presented Bible Prophecy in Daniel 2:25-45 and a Beast Regime of Regional Governance, Totalitarian Collectivism and Debt Servitude in Bible Prophecy of Revelation 13:1-4. Frankly, it’s unlikely that many will get onboard for a peaceful dismantling of the Euro, as God is sovereign and is bringing forth Europe, as a type of Revived Roman Empire, where the periphery PiGS will exist as a hollow moons revolving around Planet Germany, as foretold in Daniel 7:7.

Bloomberg reports Euro Crisis redux seen as greatest threat to German Powerhouse. A resurgence of the debt crisis that scarred the euro-area over the past 3 1/2 years is the biggest threat facing Germany in an election year, policy makers and leading economists said. With sovereign bond yields declining in countries such as Italy and Ireland, governments across Europe cannot be lulled into thinking they can let up on their budget-cutting efforts, economists including Deutsche Bank AG senior adviser Thomas Mayer and Holger Schmieding of Berenberg Bank said during Bloomberg’s first Germany Day conference in Berlin yesterday. “No nonsense,” Schmieding said during a panel discussion at the event, urging governments not to “backtrack in any way on the achievements” made so far. “If any country tried now to undo austerity, it would likely shatter confidence, it would probably spark another row in Europe, another wave of the euro crisis, and that wave of crisis would leave us all with less business investment, less jobs across the euro area.”  I comment, soon it will be German Day, all year long, year after year.

6) … Summary

Economic Policy Journal provides the audio clip Murray Rothbard vs. Milton Friedman’s idea of giving total monetary control to the State. I relate that monetary control by the state has been part of the economy of God as presented by the Apostle Paul in Ephesians 1:10.

From a dispensationalist viewpoint, and from a biblical prophecy viewpoint, the creation of the Euro, FXE, has been part of maturing the banking and finance sector, as well as part of developing European sovereign debt, as well as part of ripening Crony Capitalism as well as European Socialism and Greek Socialism, as grooming and growing the fruit of prosperity on the tree of Monetary Inflationism, via US Dollar Hegemony, based upon the Milton Friedman Free to Choose Floating Currency Regime, where the Dollar served as the global Reserve Currency, and which enabled individual currencies to float in relation to both nation investment opportunities and debt risk liabilities, and which ever growing international indebtedness, such as US Federal Reserve Credit standing at 3.110 TN.

The deployment of the Euro, supplemented with the repeal of the Glass Steagall Act, the widespread selling of credit default swaps, the creation of the most risky forms of debt, such as LBOs, PSP, Junk Bonds, JNK, Collateralized Debt Obligations, CLOs, and the genius of the US Fed’s QE1, whereby money good US Treasuries were traded out for distressed investments residing at banks, especially at JP Morgan, JPM, and which are traded by the Fidelity Mutual Fund FAGIX, have been the genesis factors for creating a US Empire far greater in power than its antecedent, the British Empire.  America is the second of two global kick-ass empires foretold in bible prophecy of Daniel 2:25-45, that has underwritten global economic growth and trade, which has been supplemented by monetary policies of the ECB, monetary injections of the PBOC, and Abenomics.

Can there be any doubt that the US is the second iron leg of global hegemony that has existed since the late 1700s, seen in Nebuchadnezzar’s Statue of Empires?  Additional proof comes from the interventionism of the US Federal Reserve, now on QE 4 with purchases of 85 billion a month of debt, and the growth of its balance sheet, for the purpose of monetary expansion.

This has enabled the coinage of money, that is wealth, by the Asset Managers, such as BLK, WDR, EV, WETF, AMG, and the Too Big To Fail Banks, JPM, C, BAC, BK, WFC, PNC, which are trading at all time highs, and the Interest Rate on the US Ten Year Note, ^TNX, is at a near all time low of 2.0%.  The crack up boom is over. Soon out of the failure of its financial and political hegemony, held forth in Revelation 13:3, the prophesied Ten Toed of Regional Governance of Daniel 2:25-45, will emerge, where leaders meet in summits to renounce national sovereignty, and pool sovereignty regionally for regional security, stability and sustainability; eventually there will be ten toes, that is ten regional economic zones, existing in a miry mixture of iron diktat and clay democracy.

Of note, the ECB’s LTRO 1, and 2, as well as its OMT, were never designed to “spark economic growth and employment through low interest rates and buying state government bonds,” as Katy Barnato of CNBC suggests in Central banks alone can’t fix Europe Weidmann says.  Rather these were issued to subordinate all EU debt to the monetary authority of the ECB, and to prevent a meltdown of European Financial Institutions and to reduce EU state treasury borrowing costs, But now, the European Financials, EUFN, despite a rise back up to its February 14, 2013, high are under selling pressure, suggesting that Peak Seigniorage, that is peak moneyness, has been achieved.

Peak Sovereign Wealth is being achieved as Doug Noland reports Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $676bn y-o-y, or 6.6%, to $10.943 TN. Over two years, reserves were $1.564 TN higher, for 17% growth.

With a new Roman Catholic Pope, Pope Francis, a Jesuit Peoples’ Papa from Argentina promising reform, Peak Liberalism has been achieved; and is prime for pivoting into Authoritarianism.

Liberalism had a religion; past tense had is important, because Democracy was the practice of sovereign nation states. Benson Te writes The Religion of Democracy. Modern social theory clings to two ultimate presuppositions. First, men are motivated by economic self-interest. Second, democratic institutions can be used to limit the success of such special-interest groups. The ultimate special interest group, which is not a special-interest group at all, but the general interest, namely, the democratic masses, will be victorious in history. This is the god of the modern world, and this god is defended by a priesthood. The priesthood is mostly academic, and what is not academic is embedded in the media. The professor and the anchorman are the high priests of this well-organized religion.

The professors and the anchorman resent any suggestion that there is a hidden group behind them that shapes their thinking. They resent the fact that some people say that they have been bought off. I think it is a mistake to imagine that buying off someone with money constitutes the whole story. They have not merely been bought off. They have bought in. They have bought into the outlook that democracy will triumph over the economic interests of special-interest capitalism.

The people who say that the priests of academia and the media have been bought off have not followed the money far enough. These priests have indeed been bought off, but they have been bought off in a very special way. They have been screened in terms of their confession of faith. Their confession of faith must be in favor of the religion of democracy. Anyone who deviates from this faith has not yet been promoted into the highest visible seats of priestly service.

These carefully screened spokesmen for the Establishment deeply resent any suggestion that behind the religion of democracy has always been a calculating group whose senior members believe that you can fool all of the people most of the time, and that you can fool most of the professors all of the time. They resent the fact that anybody would suggest that the way they attained their positions is based on crass payoffs. I agree. The payoffs are not at all crass. They are subtle. One of C.S. Lewis’s greatest essays is “The Inner Ring.” It describes the nature of the payoffs. This is Austrian economist Gary North discussing conspiracy theories vs. the religion of democracy. Applied to the Philippines, this reminds me of mainstream media networks whose slogan consists of claims of “walang pinapanigan” or “walang kinakampihan”, no biases.

Authoritarianism will have a religion.The yenguy wrote Apple paves the way for the 666 credit system of Revelation 13:18, that Joseph Menn of FT.com reports that Apple is expected to install ‘Wave and Pay’ Technology for iPhone 5, boosting mobile commerce and potentially giving the company a big piece of the multi billion dollar transaction industry. Such a portable personalized cashless payment system lays the commerce foundation for the 666 Credit System, that is the Charagma Money System, held forth in Revelation 13:16-18, that the Seignior of Revelation 13:11-18 and the Sovereign of Revelation 13:5-10 will mandate as part of a global currency system, where the charagma, or mark, that will be required by all in order to conduct commerce. Now with Apple’s Siri voice mail feature set one will have the capability for ongoing and immediate contact to worship the Sovereign at his beckoning. Those who reject accept the 666 money system and worship the Soveign are vile in the eyes of God, and will be at the receiving end of His eternal wrath as seen in Revelation 14:9-13 and in Revelation 16:2.  Does all of this seem too fantastic for one to believe?  I suggest that one read the Economist article Get ready for the Phoenix dated 01/9/88, Vol. 306, pp 9-10, as provided by EndTimeObserver: “Thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.”

Jesus Christ is God’s economic and political plan administrator, Ephesians 1:10.  He produced peak sovereignty and peak seigniorage establishing the fullness of liberalism’s prosperity on March 15, 2013, with world stocks, VT, peaking out, as major world currencies, DBV, trading lower.  He will be bringing forth New Dynamos (from the dynamos of corporate profit and global growth to the dynamos of regional security, stability and sustainability), a New Age, (from the age of investment choice to the age of diktat), New Economic Action (from inflationism to destructionism), a New Trust (from trust in bankers, carry trade investing and credit to trust in nannycrats, totalitarian collectivism, public private partnerships and debt servitude), a New Paradigm, (from liberalism to authoritarianism), a New Sovereignty, (from the Banker Regime of democratic nation states to the Beast Regime of regional governance), a New Seigniorage, (from the seigniorage of investment choice to the seigniorage of diktat), and a New Money System, (from the fiat money system to the diktat noney system,)  as heralded in Revelation 1:1, to be accomplished by the Four Horsemen of the Apocalypse, Revelation 6:1-8, which will feature authoritarianism’s austerity.

Bible prophecy of Revelation Chapter 13 foretells that three Beasts are rising from the European Sovereign Debt Crisis to rule mankind: A Beast Regime of fascist regional governance, totalitarian collectivism, and debt servitude, Revelation 13:1-4, a Beast Ruler, that is the Sovereign, Revelation 13:5-10, and a Beast Banker, that is the Seignior, Revelation 13:11-18. Their word, will an way will supercede all constitutional, national and historic law, as well as common law and even natural law.

Under Liberalism, the seigniorage of investment choice, coming from the sovereignty of nation states, drove economic production. But under Authoritarianism, the seigniorage of diktat, coming from the sovereignty of regional sovereign leaders and bodies, will direct the factors of production. Liberalism’s fiat money system will be replaced with Authoritarianism’s diktat money system, where diktat serves as money, currency, power and prosperity for nannycrats whose rule replace that of bankers.

Reuters reports Fed to hold course on stimulus despite debate over risks. The US Federal Reserve has no exit plan. Paul Volker in March 15, 2013, interview with CNBC’s Andrew Ross-Sorkin said “At some point when the worm turns and the party is getting under way, to use that old analogy,  at what point do you begin retreating and you retreat decisively enough? You can make a mistake and go too quick. But the much more frequent mistake, in my judgment, it’s been that you go too slow. Because it’s never popular to take the so-called ‘punch bowl’ away, or to weaken the liquor. And there’s a lot of liquor out there now. Mechanically, sure it can be done. They can put it in; they can pull it out.”

When, one can go neither left, nor right, nor up, nor down, nor backwards, the only thing one can do is go further in: banks will be integrated into government. Under Authoritarianism, announced by the Apostle Paul in Revelation 1:1, the Beast Regime of Revelation 13:1-4, will integrate all of mankind’s seven institutions, that is 1) body politic, 2) military, 3) healthcare, science, and technology, 4) education, 5) media, 6) religion, and 7) banking, investment and trade, into a cohesive whole, providing a panopticon of statist experience where the debts of Liberalism will be applied to every man, woman and child on planet earth.

7) … Various news items of the week.

Wanfeng Zhou of Reuters reports US Stocks gain on rising US Dollar. The dollar has outperformed eight out of nine major G-10 currencies so far this year. Political uncertainty in Italy has re-ignited fear about the eurozone’s ongoing debt crisis. Weak economic growth and the prospects of aggressive monetary easing in Japan and Britain have driven the yen and sterling to multi-year lows. To be sure, there are those who caution that spending cuts from Washington could put a damper on economic growth and the Federal Reserve has pledged to keep interest rates low for the foreseeable future.

Still, capital flows and futures positioning bears out the attitude to U.S. assets.

Cross-border inflows into U.S. stocks are tracking at about $100 billion to $150 billion for 2013, compared with a net neutral level in recent years, according to Nomura Securities. Futures activity shows increased bets on the dollar from speculators.

Strong appetite for U.S. assets from overseas investors has driven the rally in the dollar and stocks in 2013. Foreigners have poured money into U.S. equities in recent months while U.S. demand for foreign assets has waned, in part due to the improved outlook for the U.S. economy.

The 25-day correlation between the U.S. dollar index and the S&P 500 stood at 0.53 on Thursday, so the two indicators are moving in tandem more frequently. In late 2012, the correlation was -0.9, almost a perfect inverse relationship.

Net inflows into U.S. equities surged in the second half of 2013. The four-month moving average of net equity inflows rose to $17 billion at the end of 2012, highest since January 2008, according to Nomura Securities.

This week, Major World Currencies, DBV, having a major component of the US Dollar, $USD, UUP, traded 0.2% lower, as the US Dollar, $USD, gave back 0.8%; it has been up 3.0% y-t-d.  For the week on the upside, the Australian dollar FXA, increased 1.7%, the Mexican peso 1.6%, the Swiss franc, FXF, 1.3%, the British pound, FXB, 1.2%, the Canadian dollar, FXA, 1.7%, the Japanese yen 0.7%, the New Zealand dollar 0.6%, the euro, FXE, 0.5%, the Danish krone 0.5%. the Indian Rupe, ICN, 0.2%,  and the Swedish krona, FXS, 0.1%.  For the week on the downside, the Brazilian real, BZF, declined 2.0%, the South Korean won 1.8%, the South African rand, 1.0%, the Norwegian krone 0.6%, and the Taiwanese dollar 0.2%. Emerging Market Currencies, CEW, rose 0.3%.

The Census Bureau reports Clarksville, TN, 37010, 37040, 37041, 37042, 37043, 37044, 37191 is the second fastest growing area in the US; it’s economy is based upon the Fort Campbell military base and manufacturing.  And the Census Bureau reports Jacksonville, NC, 28540, 28541, 28542, 28543, 28544 28545, 28546, is the sixth fastest growing area in the US; its economy is based upon the Marine Corps Base Camp Lejeune.

Reuters reports Michigan takes over Detroit in “Olympics of restructuring”.  Shannon Jones of WSWS reports Kevyn Orr appointed financial dictator of Detroit.

Camila Russo of Bloomberg reports Moody’s downgraded Argentina’s foreign bonds to seven levels below investment grade, as a U.S. court case with holdout creditors increases the chances the country will default. The outlook on both ratings is negative. The Caa1 rating is in line with Cuba, Ecuador and Pakistan.

Katia Porzecanski and Camila Russo of Bloomberg report Argentina’s decision to scrap constraints on the central bank’s printing press has inundated the nation with pesos, destroying the value of the currency and threatening the reserves it uses to pay overseas debt. The amount of money in Argentina has surged 40% in the past year to 300 billion pesos. That implied exchange rate is 45% weaker than the official rate of 5.0863 pesos per dollar as net reserves fell by $621 million.”

Michael Patterson, Julia Leite and Rajhkumar K Shaw of Bloomberg report The biggest emerging markets (are seeing) disappointing profits and growing state intervention (causing) stocks to trail global shares for a fourth year. Trading by Brazilian individuals has dropped to the lowest level since 1999. Russian mutual funds posted 16 straight months of outflows, the most since at least 1996, and withdrawals in India are the biggest in more than two years. Chinese investors emptied more than 2 million stock accounts in the past 12 months.

Maria Petrakis and Marcus Bensasson of Bloomberg report Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6bn) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement.

Andrew Davis of Bloomberg reports Italian legislators, meeting for the first time since inconclusive elections last month, failed to select parliamentary leaders as the country’s political gridlock deepened. Both the Senate and Chamber of Deputies held two votes that failed to produce a speaker in either house… Lawmakers from the Democratic Party, which led the winning coalition in the February election, abstained to keep their options open for an agreement with other parties.

An inquiring mind asks, why do empires and nations fall? They fall because they are unable to provide a sound money system, and because people prove to be both libertine and psychopathic. An inquiring mind asks, was Jon Corzine, a psychopath while at the helm of MF Global? Perhaps the answer can be found by reading Jon Corzine’s Riskiest Business, in the February 2013 Issue of Vanity Fair Magazine.

Most of today’s sovereigns are power hungry individuals, involved in will worship, seeking vainglory,  money, or sex; and those under them seek libertine and even psychopathic experience; these have no knowledge of truly beneficial morals, that is values, nor any socially just ethics, that is right relations with others; the best they can hope for is living a good neighbor policy.

Liberalism featured wildcat finance, a Doug Noland term. Authoritarianism features wildcat governance, where leaders bite, rip and tear one another, as they seek to be top dog.

Under Liberalism, the Euro, FXE, was brought forth to provide a sovereign debt based carry trade commodity currency to create European Banking, EUFN, wealth, from nation investment in Portugal, Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP.

Today, the PIIGS, are insolvent sovereigns, possessing insolvent financial institutions. These insolvent sovereigns and their banks cannot provide eiher governance or seigniorage, that is moneyness, as The Rider on The White Horse, who has a bow but no arrows, that is the bow of sovereignty, Revelation 6:1-2, is effecting a bloodless coup d’etat, terminating their national sovereignty and passing their sovereignty to regional sovereign leaders in Brussels and Berlin, and to regional sovereign bodies such as the Troika, that is the IMF and the ECB. After a soon coming Financial Apocalypse, that is a global credit bust and financial system breakdown, leaders will meet in summits and workgroups to waive national sovereignty and pool sovereignty regionally, to provide regional security, stability, and sustainability.

Nick Paumgarten writes The New Yorker, February 25, 2013 article Letter From Madrid, The Hangover. I summarize that Greece went broke because of excessive public spending; but Spain’s problem was the private sector pursuing manic real estate investment, in housing, commercial, municipal and airport development with funding from the Cajas, that is the regional savings banks.    Spain’s most prominent bank, Bankia, went bust; and autonomous regions jostled in what was suppose to be a democratic nation state, within a region using a common currency, but with ever growing levels of public and private debt. The architects of the Euro did not expected a sovereign bankruptcy, so they never provided a mechanism of sovereign default. I contend that this was the fateful working of Jesus Christ, who is actively working to bring forth a One Euro Government out of sovereign collapse in the Mediterranean profligate nation states as foretold in bible prophecy of Revelation 13:1-4..

Libertarians are Austrian economist dreamers who have life desire coming from books such as Henry Hazlitt’s Economics in One Lesson, a 1946 free-market treatise about the long term economic impact of government policy; and from economic thought coming from FA Hayek and Murray Rothbard who have written and spoken extensively calling for a free market money system. Today’s leading Libertarian economist Mike Mish Shedlock proposes the elimination of the Fed, the elimination of fractional reserve lending, and a return to sound money policies.  But with Jesus Christ at the helm of the economy of God, Ephesians 1:10, there will never, ever be a sound money system, such as a commodity money system, or any reliable private currency system. Needless to say there will be many Angry Byrds in the Eurozone and throughout the world.

The purpose of this blog is to minister the Apocalyptic Vision of Daniel, Ezekiel, and the Apostle John of the Revelation of Jesus Christ, to reveal the sovereignty of Jesus Christ, to provide end-times news, that is events which fulfill bible prophecy, to present the rise of the diktat money system replacing the fiat money system, and to encourage, that one live peacefully and godly in these the last days.

There is a God; He is known as the Father; He has a Son, Colossians 1:3, and has appointed Him heir of all things. God provides the word of the truth, in the Gospel, that is the Good News, Colossians, 1:5; which is the resource of God in all reliability, Colossians, 1:6.

Jesus Christ is the very image of God and exists as the firstborn of all creation, Colossians 1:15. In Him, all things were created; He is the Lord of all things and all people; Christ has been appointing and will continue to appoint sovereigns of every age, Colossians 1:16.

There is no human action; there are no “sovereign individuals” and their are no “sovereign citizens”, rather all things are of God, 2 Corinthians 5:17-28; specifically there is only Christ working His Will in all things, Colossians 1:16. All sovereignty coalesces in Christ, Colossians 1:17.  He has been given all authority in heaven and on earth, and thus He exists as the All Sovereign One. Jesus Christ is the source of all sovereignty, Colossians 2:10.

Jesus Christ in the New Man, Colossians 3:10. Christ is all, and in all; He is the all inclusive life experience. Colossians 3:11.  When one comes into the faith of Jesus Christ, one experiences the New Man. One becomes one with Him. In the New Man there is only room for Christ.

Jesus Christ is the objective truth and thus is one’s unifying reality, Ephesians 4:21. His body, Colossians 12:12, is the centrality and universality of life experience. He is the make-up of the One Body, that is the collection of believers, who make up the church.

Christ is the author and perfecter of one’s faith.

He is one’s everlasting home, the all sufficient land, fortress, tower, hiding place and eternal stand.

He is one’s desire, trust, credit, virtue and resplendit ethic, who meets every need.

He is one’s wisdom, insight, capability, resource, and righteousness.

He is one’s life, light, way, peace, rest, joy, hope, glory and one of peerless worth.

He is the fountain free, from whom living waters flow, quenching all thirst.

He is the Tree of Life, with fruit nourishing and sweet; He is the one who satisfies life’s hunger.

He is the anointed savior, peace offering and deliverer; one’s mediator, and guarantor and guarantee.

The Financial Post relates Only Jesus can save the Eurozone, Deutsche Bank communicates. I can assure you that Jesus Christ has no intention of saving the Eurozone. There is waiting in the wings of Europe’s Stage, a New Pharaoh, the most credible of sovereigns. Soon he will step into the limelight, and rise to power, not through schemes of Liberalism, such as carry trade investment, but rather through schemes of Authoritarianism, Daniel 8:23, such as regional framework agreements, to rule Euroland, Revelation 13:5-10.  He will be accompanied in authority and power by the EU’s Monetary Priest, who will provide the economy of diktat, where diktat serves as currency, power and wealth, Revelation 13:11-18. The Prince of the people, will one day rule the world for three and one half years, that is during the Great Tribulation, demanding emperor worship, this immediately prior to the Advent of Jesus, Daniel 9:26. These Fierce Leaders will oversee the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, that is rising from the profligate Mediterranean nation states, to replace the Banker Regime of Democratic Nation Investment, Revelation 13:1-4.