Financial Market Report for the week ending September 27, 2013
1) … Those things which must shortly come to pass will unleash a new sovereignty and a new seigniorage.
Friday, September 20, 2013, was liberalism’s day of investment instability that marked an inflection point that pivoted the world from the paradigm of liberalism into the paradigm of authoritarianism, and from a moral hazard based prosperity into a debt servitude based austerity. With the financial markets turning from risk-on to risk-off, as indicated by the Market Off ETN, OFF, trading higher, and the stock market turne from bull to bear.
Currency Carry Trades unwound worldwide with the Japanese Yen, FXY, trading higher and individual currencies such as the India Rupe, ICN, and the Euro, FXE, trading lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing investors to derisk and deleverage out of World Stocks, VT, and Global Industrial Producers, FXR, such as BA, UTX, DOW, EMR, GE, ROK, F, GM, MT, CRH, BUD, SAP, CNH, COV, CRH, MHK, HON, MMM.
Action Forex chart report shows the EUR/JPY closed at 134.54, standing at the middle of a broadening top pattern, that goes back to January 2010; it’s as Street Authority relates, when you see the broadening too, the market will eventually drop. Yahoo Finance chart report showing the EUR/JPY down from its Wednesday September 18, 2013, high of 134.726, on Wednesday September 18, 2013, evidences the zenith of carry trade investing in the business cycle.
With Jesus Christ at the helm of the Economy of God, Ephesians 1:10, World Stocks, VT, and Nation Investment, EFA, traded lower, on Friday September 20, 2013, from the climax of the No Taper Rally,with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Indonesia, IDX, Malaysia, EWM, Turkey, TUR, and Chile, ECH, traded lower, on the the exhaustion of the US Fed’s monetary policies of easing, as the provision of QEternity marked the crossing of the Rubicon of sound monetary policy, and destabilized global economics pivoting the world from liberalism’s banker regime of democratic nation states into authoritarianism’s beast regime of regional governance and totalitarian collectivism.
The 1.3% rise seen in the weekly chart of the S&P 500, $SPX, closing at 1709, reflects an Elliott Wave 5 High. The chart of $NYMO, shows there is as sudden and severe loss of breadth momentum (an important red flag) is taking place, communicating that one should flee to the exit doors, as the stock market is moving from bull to bear.
India Banks, EPI, such as IBN and HDB, led India, INP, and the Emerging Market Financials, EMFN, lower.
The National Bank of Greece, NBG, Ireland’s IRE, and Germany’s DB, led Greece, GREK, Ireland, EIRL, and the European Financials, EUFN, lower.
China’s Bank, SHG, and China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower. The Finviz chart of Catalog and Mail Order Company, DANG, shows a massive broadening top pattern, with rise to strong resistance at 9.84. It’s as Street Authority relates When you see the broadening top, the market will eventually drop.
Interest Rate Sensitive Stocks, that is Leveraged Buyouts, PSP, Home Builders, ITB, Utilities, XLU, Global Utilities, DBU, Real Estate, IYR, and Global Real Estate, DRW, traded lower.
Sectors trading lower included Aerospace, PPA, Paper Producers, WOOD, and Automobiles, CARZ. And Metal Manufacturing, XME, was led lower by Coal Miners, KOL, Industrial Miners, PICK, and Steel Producers, SLX. And Gold, GLD, and Silver, SLV, traded lower, forcing Junior Gold Mines, GDXJ, Gold Miners, GDX, Junior Silver Miners, SILJ, and Silver Miners, SIL, lower.
Aggregate Credit, AGG, traded unchanged, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close the week at 2.73%, down sharply from its recent high near 3.0%.
Financial Times Lexicon writes of Bubblecovery. A bubblecovery is a term coined by financial blogger Jesse Colombo to describe what he calls a bubble-driven economic recovery spurred by cheap credit. He says the cheap credit has a tendency to flow into temporary growth-generating speculative endeavours.
JP of The Capital Spectator writes The evidence is compelling for arguing that the latest profile of economic activity continues to suggest that business cycle risk is low.
But I contend, that both the fiat asset inflation and economic expansion part of the business cycle ended Friday September 20, 2013, with Aggregate Credit, AGG, having fallen strongly in value since May 2013, and now with the weekly jobless claims report heralding the reality that the economy is failing to produce new jobs, as Andrew Klips reports in Equities.com reports. In August, the U.S. only added 169,000 new jobs and June and July figures underwent sharp revisions, including July’s figure plunging to only 104,000 new jobs. The unemployment rate ticked down to 7.3 percent, but only because more people gave up actively seeking employment.
The 38 ETFs seen in this Finviz Screener, exemplify the financial assets that have been fueled by Bubblcovery, that is by stimulus of the US Federal Reserve’s QE monetary policy, and are poised to fall strongly lower on the exhaustion of the US Fed’s and world central bank’s monetary authority, that is as bond vigilantes, begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.73%, and currency traders once again, begin selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, lower; these are XIV, FDN, CARZ, PBS, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, FXR, BJK, PBJ, EFNL, YAO, PPA, PNQI, EZA, KROO, ARGT, EWY, GNW. The short selling opportunity of a lifetime has arrived, and these ETFs can serve as the basis of a short selling portfolio, as well as a metric to follow the entrance into Kondratieff Winter, the very last season of the business cycle. Wiley investors went long these fiat assets, lived risk free on a moral hazard based rally, to experience tremendous gains; but now it’s as Mamta Badkar of Business Insider writes, All Hell Is Going To Break Loose, Fleckenstein Says.
Asset Managers such as Blackrock, BLK, coined the final swell of Liberalism’s wealth with QEternity; since April 2009 the Keynesian and Monetarist money printing policies of the US Federal Reserve, together with carry trade financing have inflated the Sector ETFs from this Finviz Screener as follows below.
The business cycle is now showing nascent signs of completion, with the weekly jobless report indicating that the economy is failing to provide new jobs, and the PMI is in downturn, and that an investment bubble is apparent … presenting both short selling opportunities, as well as the opportunity for investing in physical possession of gold bullion.
Fiat money died Friday September 20, 2013, with World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower as Jesus Christ is operating in dispensation, presented by the Apostle Paul in Ephesians 1:10, that is in administrative oversight of all things economic and political, and has pivoted the world out of liberalism and into authoritarianism, and as such the stock market is turning from bull to bear; those ETF sectors which rallied over the last year and countries which rallied from late June 2013 to late September, 2013, seen in this Finviz Screener, will be trading lower on competitive currency devaluation and on the exhaustion of the world central banks’ monetary authority as investors come to greater realization that the US Fed’s monetary policies have crossed the Rubicon of sound monetary policy, and have made “money good” investments bad.
Please consider Corollary #8 from the Dispensation Economics Manifest. The No Taper Rally of September 18, 2013, in World Stocks, Major World Currencies, DBV, and Emerging Market Currencies, was Liberalism’s peak event, which terminated the Creature Jekyll Island and birthed the Beast Regime of Revelation 13:1-4. and which pivoted the world from a policy of investment choice … consisting of credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, dollarization, financialization of stocks and ETFs, such as corporate bonds which convert into stocks, all of which created capital for corporations to operate and revenue for governments to operate … to a policy of diktat … consisting of debt servitude schemes, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability.
The gains seen in the following ETFs over the last year, are over, through, finished, and done.
Internet Retail, FDN, 40%
Automobiles, CARZ, 56%
Media, PBS, 39%
Biotechnology, IBB, 45%
Small Cap Pure Value, RZV, 33%
Small Cap Industrial, PSCI, 35%
IPOs, FPX, 42%
Stock Brokers, IAI, 46%
Transportation, XTN, 48%
Semiconductors, SMH, 26%
Retail, XRT, 29%
Pharmaceuticals, PJP, 35%
Leveraged Buyouts, PSP, 32%
Solar, TAN, 87%; of note this ETF, rose 1.1% today, and ReneSola, SOL, traded strongly lower.
Global Consumer Discretionary, RXI, 33%
Design Build, FLM, 22%
Paper Producers, WOOD, 24%
Too Big To Fail Banks, RWW, 35%
Global Industrial Producers, FXR, 36%
Resorts and Casinos, BJK, 44%,
Food and Beverage, PBJ, 28%
Aerospace, PPA, 40%
Nasdaq Internet, PNQI, 45%
The Keystone Speculator posts VIX Volatility Daily Chart Projection is for VIX to move higher in the days and weeks ahead, and, considering the CR deadline is now only 6 days away, it is reasonable to expect fear to increase and volatility to rise. I comment look for Volatility, XVZ, as well as TVIX, VIXY, VIXM, seen in this Finviz Screener to soar.
Michael Snyder of The Economic Collapse blog, asks in ZeroHedge Are You Ready For Yellenomics? Are you ready for Janet Yellen? Wall Street wants her, the mainstream media wants her and it appears that her confirmation would be a slam dunk. She would be the first woman ever to chair the Federal Reserve, and her philosophy is that a little bit of inflation is actually good for an economy. She was reportedly the architect for many of the unprecedented monetary decisions that Ben Bernanke made during his tenure, and that has many on Wall Street and in the media very excited. Noting that we “already know that Yellen is on board with Bernanke’s easy money policies”, CNN recently even went so far as to publish a rabidly pro-Yellen article with this stunning headline: “Dear Mr. President: Name Yellen now!“
But after watching what a disaster Bernanke has been, do we really want more of the same? It doesn’t really matter whether she is a woman, a man, a giant lizard or a robot, the question is whether or not she is going to continue to take us down the path to ruin that Bernanke has taken us. As I have written about so many times, the Federal Reserve is at the very heart of our economic problems, and under Bernanke the Fed has created a mammoth financial bubble unlike anything that we have ever seen before. If Yellen keeps us going down that road, financial disaster is inevitable.
Sadly, Yellen is not a woman that believes in free markets. She had the following to say back in 1999
“Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not.” Yellen believes that without the “routine intervention” of the central planners at the Fed, our economy will not produce satisfactory results. So if you thought that Bernanke was an “interventionist”, you haven’t seen anything yet.
In fact, according to Time Magazine, Yellen was continually urging Bernanke to do even more “to help stimulate the economy”. But as the most recent financial crisis proved, a good Fed chief needs to be willing to think outside the box to achieve its goals of low, steady inflation and full employment. This is exactly what Bernanke did, using the powers of his office to launch a massive bond-buying program aimed at lowering interest rates further down the yield curve and promising to keep short-term interest rates at near zero for years. Bernanke, however, didn’t launch these programs immediately. Behind the scenes, it was reportedly Yellen who was the most forceful advocate for the Fed doing more to help stimulate the economy. It is truly frightening to think that Yellen might turn out to be “Bernanke on steroids”. Let’s hope that she is not the choice.
The costs of healthcare are too big to pay for. So, the doctor can’t see you now, that’s right, rationing of doctors and services has commenced. Under President Obama’s Affordable Care Act, with a swell of people coming into the system with the dual mandate to cover preexisting conditions and the mandate to hold down premiums, health care providers and major insurers are sharply limiting the number of doctors and hospitals available to patients in the various states’ new health insurance markets opening Oct. 1, 2013.
Fox News reports Ohio Clinic Touted By Obama Slashes Budget Due To ObamaCare. An Ohio clinic that was touted by Obama while he was speaking on health care reform is now blaming ObamaCare after it was forced to cut $330 million from its budget. Fox 8 reports the Cleveland Clinic, which is the largest employer in Northeast Ohio with about 39,000 workers in the region, announced the cuts to its 2014 budget at a meeting Wednesday. A spokeswoman for the clinic tells Fox News the clinic is being forced to cut back to prepare for increased costs and decreased revenue under the health care reform law. These changes will include offering early retirement to approximately 3,000 employees, reducing operational costs, and then layoffs as needed.
Steve Midkiff writes of A Sovereign Encounter heralding “those things which must shortly come to pass” as presented in Revelation 1:1.
It is through Christ’s Sovereignty, and out of banking insolvency and sovereign insolvency of the Mediterranean Nation Sea States of Portugal, Italy, Greece and Spain, that is out of a Financial Apocalypse, a credit bust and financial system breakdown, that nannycrats will unleash Authoritarianism’s sovereignty of regional governance and totalitarian collectivism, as well as its seigniorage of diktat, as foretold in Revelation 13:1-4.
Liberalism was defined by what Doug Noland terms wildcat finance, where bankers of all types fiercely outdo one another to generate the greatest investment gains, and where Ben Bernanke fathered credit easing.
Authoritarianism, on the other hand, is defined by wildcat governance, where leaders bite, rip and tear one another apart in their struggle to become top dog leader, and where Angela Merkel fathered debt servitude with Greek Bailouts I, and II, and she in calling for More Europe, laid the groundwork for a soon coming One Euro Government.
Of note, Katerina Selin and Christoph Dreir of WSWS writes Greek workers demonstrate against mass sackings, fascist violence. Protests were held in all major Greek cities Wednesday, September 18, 2013, against the austerity measures of the Greek government and the European Union.
The Globe and Mail of Toronto writes For Victorious Merkel, Little Incentive To Change Course On Austerity and Reuters reports Merkel Romps To Victory But Faces Tough Coalition Choices and an
article in Greek Ta Nea carries the headline, Europe becomes Merkeland after the triumph of the Queen of austerity. WSWS writes Why Merkel Won The German Elections.
Charles Hugh-Smith of the OfTwoMinds blog, posts in Zero Hedge The Big-Picture Economy, Part 3: Scarcity, Risk And Debt. Manipulating rates to near-zero and opening the credit floodgates has incentivized everything sound economic policy avoids: moral hazard, speculation, leverage and reliance on marginal credit expansion for profits and “growth.” “Growth” that depends on manipulated interest rates and easy credit is a sand castle awaiting the rising tide; its destruction is assured.
Money as it has been known no longer exists. Fiat money died Friday September 18, 2013, with the trade lower in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Economies, CEW. Diktat money is rising it its place, as the sovereignty of nation states gives way, and nannycrats meet in summits and work group to renounce national sovereignty, and establish ever increasing regional sovereignty. Liberalism featured credit, and trust in the world central bankers. Another word for credit is trust. Now in authoritarianism, specifically out of waves of economic and political turmoil in the Mediterranean Sea nation states of Portugal, Italy, Greece, and Spain, people will come to trust in the word, will, and way of sovereign regional leaders, that is statist nannycrats, for regional security, stability, and sustainability, as communicated in bible prophecy of Revelation 13:3-4.
On Friday September 20, 2013, the National Bank of Greece, NBG, led both Greece, GREK, and the European Financials, EUFN, lower, as Roger Cohen of NY Times The perfect political storm for violent extremism has descended on Greece. As Kyriakos Mitsotakis, the minister responsible for the cuts, explained to me inside the besieged ministry, the message from the “troika” (the International Monetary Fund, the European Commission and the European Central Bank) is clear: “If you don’t do it, no more money!” Europe’s requirement is: Reform or else.
Greece, with an estimated $3.3 billion shortfall in its social security fund this year and a larger financing gap looming over the next two years, still needs money, if much less than before. More urgently, it needs international understanding. The combination of the demands of the troika (widely seen by Greeks as a Trojan horse for Germany) and the frustration evident outside the ministry, Soultos’s private sector has lost close to 1.5 million jobs as unemployment has reached 28 percent, is combustible.
Troika officials will visit Athens next week. If they make further demands for cuts in wages and pensions they could push Greece over the edge. Germany has not yet learned to play the benign superpower. It is time; and after the German election this Sunday there may be a little more wiggle room. Toughness toward Greece has played well in Germany but, as Mitsotakis put it: “The country has been stretched to its limits. This needs to be very, very clear.”
LuggageTag posts Greece Is Characterized By The 3Cs: Cronyism, Clientelism And Corruption. The pervasiveness of corruption at all levels of society, including the widespread and “honorable” practice of “fakelaki”, cash inside an envelope for the attainment of public services and personal favors; hence also the routine violation of civility norms and a culture of complacency that pervades public life.
Indeed, for decades, the dominant image that prevailed about Greeks among many northern Europeans and Americans was a nation of lazy, uncultured and irresponsible citizens, mustachioed men who spent all their time either inside or outside coffee houses, usually with a cigarette in one hand and a string of beads in the other, while the women worked in the fields. The contributions to world culture of the likes of Giorgos Seferis and Odysseus Elytis two Nobel Prize winners in Literature, Nikos Kazantzakis and Yannis Ritsos both nominated scores of times for the Nobel Prize in Literature, but rejected because of their communist beliefs, Angelos Sikelianos one of the most inspiring poets in modern Greek history, Maria Callas the greatest opera diva of last century, Dimitri Mitropoulos and Mikis Theodorakis two world class conductors and composers, respectively were reserved for conversations in polite society. According to the dominant impression, average Greeks lacked discipline and the capacity for self-reflection and were instinctively drawn to populist, charismatic political leaders who promised them bread, butter and honey in their everyday lives, a position not a job! in the public sector, and retirement after a couple of decades of working.
In recent times, this caricaturish image of the Greek national character has insidiously resurfaced in various non-Greek newspapers and magazines, with regard to the profile of the typical Greek public employee: fat, lazy, and unshaved, sitting behind a desk with stacks of papers in front of him and with a cigarette hanging out of his mouth. Which brings us back to the question of Greece’s current crisis. Is the nation’s political culture, the civil culture, responsible for the economic and social ills facing Greece today?
Probably to the surprise of those who still hold on to a caricaturish image of contemporary Greek culture, the majority of Greek citizens seem to be convinced that the political culture is indeed primarily responsible for the catastrophic crisis currently facing the nation – although it is uncertain to what extent they all understand, or accept, the idea of political culture as a reflection of the customs and mores of a society. For instance, while tax evasion has been traditionally a national sport for all social classes in Greece, almost everyone expects and demands that the state provide free services in all areas of public life, generous benefits to the unemployed and the pensioners, subsidies to small businesses and farmers, and so on and so forth. Likewise, people may speak of meritocracy, but family amoralism permeates every pore of the national life. As yet another example of distorted values shaping a nation’s culture, students with the overwhelming majority of faculty on their side want free access to university education and books free of charges, but no conditions placed upon academic progress and the completion of studies. Hence, students are not required to attend classes, may repeat course exams as many times as they like, and there are no limits to how many years they may remain enrolled in a university program. In sum, lots of rights, but no obligations.
For a nation that throughout its history has fought heroic battles for precious rights and liberties recall only Winston Churchill’s famous words, inspired by the Greek resistance to the Italian and German invasions of Greece in the course of World War II: “Hence we will not say that Greeks fight like heroes, but that heroes fight like Greeks!”, gaining rights and privileges but shedding obligations and social responsibilities developed, somehow, into something of a cultural movement in contemporary times in Greece. The roots of this trend can be traced to the immediate period following the re establishment of parliamentary democracy after seven years of a brutal dictatorship 1967-1973, but it takes off and becomes an institutionalized incentive system of behavior with the rise of PASOK Panhellenic Socialist Movement of the 1980s and the irresponsible populism of its leader Papandreou.
While populism, clientelism and cronyism were ever-present ingredients in modern Greek political life, under the pseudo-socialism of PASOK, they became constitutive of the party’s fundamental strategy: locking voters into long-term relationships based not on the delivery of public goods and a just social order, but on promises of targeted resource distribution to the party faithful. At least two generations of “leftist” voters were shaped and molded in the Papandreou/PASOK era, including the major syndicalist movement, the General Confederation of Greek Workers GSEE. Of course, the conservatives relied on the same unscrupulous tactics thus making it virtually impossible to judge which of the two parties was more immoral, corrupt and dangerous to the nation’s interests, but they did not have history on their side, let alone the fact that they were no match for Papandreou’s political canniness and personal magnetism.
Under PASOK, the public sector became a cash cow to be bled, not just milked, a practice the conservatives also did not shy away from on the few occasions they found themselves in power during the past 30 years. After all, it is far more difficult to change the culture of an organizational setting than to create a new one, especially if the parties involved are the main beneficiaries. Thus, for decades, socialists and conservatives alike were involved in various large-scale scandals centered on exploiting state resources to transfer wealth from the public to the private sector, to enrich themselves and to redistribute wealth from the bottom to the top. Corruption became so endemic that it was perceived as normal for public sector employees in Greece’s tax, urban development and municipal government offices to be bribed and even to confuse at times public finances with their personal finances. It was normal for hospital doctors to be recipients of cash gifts by a patient’s family members who were afraid that their loved one would not otherwise receive proper medical attention. It was normal for people to hold two, three and sometimes even four different paid appointments in the public sector. It was normal for already employed journalists to be simultaneously on the payroll of government ministers
Benson te writes Essentially the UnTaper seem to have been designed to burn short sellers with particular focus on the bond vigilantes, where the latter may impact the balance sheets of the banking system. Dramatic volatility from the May “taper talk” even compelled Fed chair Dr. Ben Bernanke to explicitly say “I don’t think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low. If we were to tighten policy, the economy would tank” . In other words, the taper option functioned as a face saving valve in case the rampaging bond vigilantes would force their hand. For me Dr. Bernanke’s calling of the Poker “taper” Bluff has been part of the tactic.
The bond vigilantes have gone beyond the Fed’s assumed control over them. And since the Fed construes that the rising yields has been built around the expectations of the Fed’s pullback on monetary accommodation, what has been seen a Fed “spook” for the mainstream may have really been a desperate ALL IN ante “surprise strike” gambit against the bond vigilantes. The UnTaper was the Pearl Harbor equivalent of Dr. Bernanke and company against the bond vigilantes.
The question now is if the actions in the yield curve have indeed been a function of perceived “tapering”. If yes, then given the extended UnTaper option now on the table, bond yields will come down and risk assets may continue to rise. But if not, or if yields continue to ascend in the coming days that may short circuit the risk ON environment, then this may force the FED to consider the nuclear option: bigger purchases. With shrinking budget deficits, meaning lesser treasury issuance and with the FED now holding $1.678 trillion in ten year equivalents, or 31.89% as of August 30th total according to ZeroHedge , the Fed’s size in bond markets have been reducing availability of collateral. Reduced supply of treasuries, which function as vital components of banking reserves will only amplify volatility. The Fed’s policies are having far wider unintended effects on the bond markets. Should the Fed consider more purchases it may expand to cover other instruments. Quantitative Easing extrapolates to discoordination or the skewing of consumption and production activities which leads to massive misallocation of capital or “malinvestments”. QE also translates to grotesque mispricing of securities and maladjusted price levels in the economy benefiting the first recipients of credit expansion. Eventually such imbalances will be powerful enough to overwhelm whatever interventions made to prevent them from happening, specifically once real savings or capital has been depleted.
Austrian Ludwig von Mises warned in Interventionism An Economic Analysis  The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances.
Banks, that is the Too Big To Fail Banks, and the Regional Banks have been the engine of QE. Currently the Too Big To Fail Banks, RWW, are trading 2%, and the Regional Banks, KRE, are trading 7%, below their August 1, 2013, high, in stark contrast to the Large Cap Growth Stocks, JKE, which led the No Taper Rally as is seen in the combined Google Finance Chart of JKE, together with RWW, and KRE. The reason for the banks relatively strong decline is the large amount of US Treasury Based Excess Reserves, such as 10 Year US Government Bonds, TLT, residing at the Fed, which have lost a lot of value since early May, 2013, creating very much a deadweight loss for the banks. Banks certainly do not have any incentive to hold Excess Reserves other than loyalty to the Fed.
On Friday, September 20, 2013, the financial markets pivoted from risk-on to risk-off, as seen in the Market Off ETN, OFF, trading higher. The financial markets manifested an inflection point that marked the beginning of the end of financialization, which will come through a soon coming global credit bust and financial system breakdown, foretold in Revelation 13:3-4, whereby nannycrats will act to integrate banks of all types into government; these will be know as the government banks or gov banks for short, and in so doing there will be a great tidying up of the Banks Excess Reserves at the US Fed.
Along this line of thought James Brewer of WSWS writes Detroit’s emergency manager plans early payoff of top banks
Michael Snyder of The Economic Collapse Blog writes Too Big To Fail Is Now Bigger Than Ever Before. The too big to fail banks are now much, much larger than they were the last time they caused so much trouble. The six largest banks in the United States have gotten 37 percent larger over the past five years. Meanwhile, 1,400 smaller banks have disappeared from the banking industry during that time. What this means is that the health of JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley is more critical to the U.S. economy than ever before. If they were “too big to fail” back in 2008, then now they must be “too colossal to collapse”. Without these banks, we do not have an economy. The six largest banks control 67 percent of all U.S. banking assets, and Bank of America accounted for about a third of all business loans by itself last year. Our entire economy is based on credit, and these giant banks are at the very core of our system of credit. If these banks were to collapse, a brutal economic depression would be guaranteed. Unfortunately, as you will see later in this article, these banks did not learn anything from 2008 and are being exceedingly reckless. They are counting on the rest of us bailing them out if something goes wrong, but that might not happen next time around.
Yardeni posts Government Support Increasingly Boosts Incomes (excerpt) The big story here is that entitlements (“government social benefits to persons”) has soared from less than 5% of national income in the early 1950s to recent record highs around 17%. The federal and state governments are currently redistributing income at an annualized rate of almost $2.4 trillion, which slightly exceeds the sum of federal income and payroll taxes. In effect, every tax dollar collected from workers by the federal government is redistributed to entitlement beneficiaries.
Liberalism was characterized by clientelism, and in particular transfer payments to Social Security recipients in the form SSI Disability which for many is simply another name for welfare; many “live free” from work by claiming and being awarded SSDI, and SSI, for conditions such as chronic pain, anxiety, antisocial disorder, ADHD, Depression, Asperger Syndrome, PTSD, Bipolar Disorder, Depression, and Fibromyalgia, make it impossible for them to work.
Real Clear Markets posts America’s Growing Social Security Disability Problem. The latest Social Security Administration data document that Social Security Disability Insurance (SSDI) rolls reached a record high of 8.85 million in March 2013, an increase of 1.6 million or 21 percent since the start of the Great Recession.
This long running disability epidemic, which hit its pandemic stage in the aftermath of the 2007 recession, has almost nothing to do with a decline in the overall health of working age Americans or in the severity of their health-based impairments. Rather, it is primarily the consequence of fundamental flaws in the SSDI program and its administration which have increasingly made it a long term unemployment program rather than the last resort transfer program for those unable to work due to their health-based impairments that Congress intended it to be. These flaws become most evident during severe during economic downturns but will remain long after we recover from the Great Recession.
Most SSDI growth is driven by its incentive structure and the increasing difficulty of its administrators to determine disability (as discussed in my recent book, co-authored with Mary Daly, The Declining Work and Welfare of People with Disabilities (AEI Press, 2011) and in our point-counterpoint debate article in The Journal of Policy Analysis and Management).
The New American reports Record Number: 10.9 Million Americans Collecting Disability
And The New American reports Disability Recipients Admit Finding Employment Isn’t a Priority. The Examiner reported that many recipients were in a “general cycle of poverty”, a way of life wherein families break down, education efforts fail, and government dependency is virtually assured. The cycle is especially apparent when evaluating recipients who have little knowledge about their fathers.
For example, 30 percent of SSDI recipients are unsure of the highest year or grade their father finished in school, while 40 percent of SSI recipients answered the same; thirty-one percent of SSDI recipients noted that their father did not complete high school or receive a GED, while 26 percent of SSI recipients reported the same.
The number of people claiming disabilities has climbed upward since the recession began. Investor’s Business Daily noted in a 2012 report: “More workers joined the federal government’s disability program in June than got new jobs, according to two new government reports, a clear indicator of how bleak the nation’s jobs picture is after three full years of economic recovery.”
With an aging U.S. population, a weakened job market, and a relaxing of eligibility requirements for disability, fraud has undoubtedly played an integral role in the government’s rapidly expanding disability system. The U.S. Senate’s Permanent Subcommittee on Investigations reported last September that 25 percent of disability cases were granted benefits “without properly addressing insufficient, contradictory and incomplete evidence.”
According to a 2009 study by the Social Security Administration, recipients of federal disability checks acknowledge that finding a job is not a priority, with a startling majority making no effort to gain professional or educational skills to find employment. While the study was published years ago, it was just recently brought to light by the Washington Examiner, which released a lengthy report on the findings, including the fact that many recipients admit that pursuing opportunities to escape the disability rolls is not among their goals. Compiled from responses of 2,300 disability beneficiaries, the report noted that most recipients had not seen a doctor or received medical treatment for their condition within a year, even though medical issues are the basis for qualification of disability benefits. The Examiner inspected the results from the individuals surveyed and condensed the findings into a pool, which helped highlight the survey’s trends.
Unearned disability, or Supplemental Security Income (SSI), applies to individuals who have very limited income and assets, and who have petitioned to be classified as disabled. Earned disability, or Social Security Disability Insurance (SSDI), applies to individuals who were previously employed and have rendered at least some of their income into Social Security before becoming disabled. Approximately 11 million Americans are on the SSDI roll, while seven million Americans are receiving SSI benefits.
Whereas if recipients’ claims for disability are genuine one would expect both groups to give similar answers to questions about their levels of suffering, this was not the case. Recipients of government checks in the SSI program were found to have less bodily pain than recipients who paid into the system, according to the analysis, and they are typically uneducated, overweight, or were raised in broken homes.
SSDI – Earned Disability for those who paid into Social Security prior to applying for disability benefits.
SSI – Unearned Social Security disability benefits.
2) … Details of this week’s financial market trading
On Monday, US Stocks, VTI, such as US Infrastructure, PKB, Home Building, ITB, and Regional Banks, KRE, led World Stocks, VT, lower as Bloomberg reports Markit PMI Factory Index In US Fell To 52.8 in September From 53.1 providing more evidence that the business cycle has peaked and is turning lower. And Zero Hedge reports US PMI Misses Expectations To 3-month Lows. And Yahoo News reports U.S. Factory Activity Loses Momentum In September..
Sectors trading lower included Too Big To Fail Banks, RWW, Solar, TAN, Internet Retail, FDN, Networking IGN, and Biotechnology, IBB. Yield bearing sectors trading lower included Global Utilities, DBU, and Global Real Estate, DRW. European Financials, EUFN, traded lower. Countries trading lower included Thailand, THD, and Indonesia, IDX. Gold Mines, GDX, and Silver Miners, SIL, traded lower, on a lower price of Gold, GLD, and Silver, SLV. The EUR/JPY closed lower at 133.31. MarketWatch reports JP Morgan, Bank of America, Citi, And Financials Drop On Fears Of Trading Decline.
Mike Mish Shedlock reports Europe Hooked On Easy Money Too: ECB President Draghi Threatens Another LTRO, Sings Praises OF Excess Liquidity. It’s liquidity full throttle in the Eurozone as well because Draghi Says ECB Will Offer More Long-Term Loans If Needed, Bloomberg reports. The largest global-coordinated financial gambit in history shows no real signs yet of slowing down.
September 20, 2013, was a pivotal day in global economic history from which there is now no return, despite what liquidity measures Mario Draghi might propose. With Jesus Christ at the helm of the Economy of God, Ephesians 1:10, World Stocks, VT, and Nation Investment, EFA, traded lower, with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Indonesia, IDX, Malaysia, EWM, Turkey, TUR, and Chile, ECH, traded lower, on the the exhaustion of the US Fed’s monetary policies of easing, as the provision of QEternity marked the crossing of the Rubicon of sound monetary policy, and destabilized global economics pivoting the world from liberalism’s banker regime of democratic nation states into authoritarianism’s beast regime of regional governance and totalitarian collectivism.
On Tuesday, Small Cap Energy, PSCE, and Energy Production, XOP, rose to new highs as Oil, USO, and Natural Gas, UNG, traded lower. Global Telecom, IST, rose to a new rally high with TI, and NOK, rising to new highs. Home Builders, ITB, US Infrastructure, PKB, Solar, TAN, and Internet Retail, FDN, bounced higher. Facebook, FB, Applied Material, AMAT, and Rite Aid, RAD, gapped open higher to new rally highs. ASML Holding, ASML, Delta Airlines, DAL, General Motors, GM, Safeway, SWY, and Illinois Tool Works, ITS, traded higher.
Small Cap Pure Value, RZV, such as FNGN, NCI, III, CEB, NEWT, EXAM, III, MCS, RICK, STAN, ACXN, MEG, LOV, AHC, ASGN, ADUS, NICK, ECPG, WRLD, FTK, ODC, STMP, FICO, BYD, MOVE, CKEC, MDCA, NXST, FCFS, and DXPE, rallied to a new high, manifesting a questioning harami, as Large Cap Value, JKE, continued to trade lower from their rally high.
Software, IGV, traded lower. Investment Banker, JPM, traded strongly lower, inducing the Too Big To Fail Banks, RWW, to trade lower. Real Estate, IYR, traded lower.
Gold Miners, GDX, and Silver Miners, SIL, traded lower on a lower price of Gold, GLD, yet their chart patterns suggest a bottoming out.
The Vice Stocks, traded by Fidelity Mutual Fund VICEX, traded lower, communicating an end to leveraged speculative investing.
The Market Off ETN, OFF, rose as the US Dollar, $USD, traded slightly higher, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, led so by the Australian Dollar, FXA. The EUR/JPY closed lower at 133.05.
Greece, GREK, traded higher as Holly Ellyatt of CNBC reports Temperature rises in Athens amid 48-hour strike. Asia Excluding Japan, EPP, traded lower as Indonesia, IDX, IDXJ, Thailand, THD, the Philippines, EPHE, Malaysia, EWM, and New Zealand, ENZL, traded lower. China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower. India, INP, Chile, ECH, Peru, EPU, and Turkey, TUR, traded lower; all of which drove the Emerging Markets, EEM, and the BRICS, EEB, lower.
A see saw destruction of fiat wealth is underway, as Major World Currencies, DBV, Emerging Market Currencies, CEW, and World Stocks, VT, are trading lower, and Aggregate Credit, AGG, is trading higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.65%, from its recent high of almost 3.0%. Eurozone Debt, EU, traded higher on comments by Mario Draghi for ongoing ECB liquidity. Fiat wealth as it has been known, and the Milton Friedman Free To Choose Floating Currency Regime which generated that wealth be no more, as Jesus Christ is operating in the Economy of God, as presented by the Apostle Paul in Ephesians 1:10, pivoting the world out of liberalism and into authoritarianism. Liberalism was the era of investment choice based upon credit and carry trade investing. Authoritarianism is the era of diktat based upon debt servitude.
John Rubino references Forbes article China Corporates Not Making Debt Payments and highlights Credit Excesses In China. This article is even more apocalyptic than its title implies. To extract a few data points: China’s corporate debt has risen from 86% of GDP to 155% since 2008; “Net debt of the corporate sector was 30 times net earnings in 2012, up sharply from 10 times in 2011”; and “free cash flow is severely negative.” These are some serious trend reversals. Using IOUs to pay bills is exactly the same thing as borrowing the money, in the sense that it creates an obligation that eventually has to be satisfied with cash. So “acceptances” rising from 3% to 11% of GDP is a helluva jump in private sector debt. It’s not clear whether the analysts quoted above are counting this in their other totals.
Robert Wenzel of Economic Policy Journal Venezuela Orders Takeover of Toilet Paper Factory. Price controls in action. Reuters reports Venezuelan state agency on Friday ordered the temporary takeover of a factory that produces toilet paper in what it called an effort to ensure consistent supplies after embarrassing shortages earlier this year. Critics of President Nicolas Maduro say the nagging shortages of products ranging from bathroom tissue to milk are a sign his socialist government’s rigid price and currency controls are failing. A national agency called Sundecop, which enforces price controls, said in a statement it would occupy one of the factories belonging to paper producer Manpa for 15 days, adding that National Guard troops would “safeguard” the facility. “The action in the producer of toilet paper, sanitary napkins and disposable diapers responds to the state’s obligation to ensure a steady supply of basic goods for the people,” Sundecop said, adding it had observed “the violation of the right” to access such products … Mr Wenzel comments Notice the use of National Guard troops. When price inflation heats up in the US, will price controls be implemented here? My greatest fear is that they will then be enforced by TSA and other DHS employees let loose on the land. Then you will know why you don’t want a surveillance state, even if “you have nothing to hide.” You will when you need to buy from a back market to survive.
Benson te writes Inflation and price controls are siblings. First government inflates, then they place the blame on the public for the ramifications of their actions, thus justifying price controls. Yet the consequence of this inflation price control feedback loop has been to create shortages. The toilet paper shortage in Venezuela is great example. The average Venezuelans seek titles to capital goods or proxies to real assets as haven from massive loss of purchasing power. As one would note, interventions breed interventions until the economy eventually collapses.
I comment that nannycrats, such as Sundecop, are now the economic leaders. Christ has been working and continues to work in dispensation, that is in the management plan of God, to complete and fulfill all things in every epoch, era and time period, as presented by the Apostle Paul in Ephesians 1:10. He is laboring to make diktat complete in the age of authoritarianism. Gone is free enterprise, it is simply an epitaph on the tombstone of the age of liberalism, as statism governs and is the legislator of economic value and is the legislator that shape one’s means and one’s ends. Authoritarianism features a new trust; liberalism featured trust in bankers, carry trade investing and credit, in particular nation state Treasury debt; but authoritarianism features trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude.
Reuters reports If You Live In Venezuela And Want To Fly Abroad, Get In Line. Flights are booked solid months in advance, not from a new interest in exotic destinations but because locals are profiting from a play on the nation’s tightly controlled currency market.
The airline scramble has added to shortages, power cuts and runaway prices as another symbol of the Byzantine economic challenges facing the new government of President Nicolas Maduro in the South American OPEC nation.
“It’s like you’re trapped here,” said travel agent Doris Gaal, telling a customer he would be better off taking a boat to a Caribbean island because the daily flights are fully booked. “It’s all because of these stupid dollars!”
After a decade of currency controls set up by late socialist leader Hugo Chavez in 2003, the disparity between the official and black-market rates for the local bolivar currency is higher than ever. Greenbacks now sell on the illegal market at about seven times the government price of 6.3 to the dollar.
There are strict limits on the availability of dollars at the 6.3 rate, but Venezuelans are cashing in on a special currency provision for travelers. With a valid airline ticket, Venezuelans may exchange up to $3,000 at the government rate.
Some are not even flying, leaving many planes half empty.
“It is possible to travel abroad for free due to this exchange rate magic,” said local economist Angel Garcia Banchs.
The profit is realized from an arbitrage process known locally as “el raspao,” or “the scrape.”
Credit cards are used abroad to get a cash advance — rather than buying merchandise. The dollars are then carried back into Venezuela and sold on the black market for some seven times the original exchange rate. The large profit margin easily absorbs the cost of flights and accommodation for a trip.”I’ve been able to buy new clothes and give some cash to all my closest family members!” said one delighted Venezuelan lady, just back from a trip to Europe. “It was really easy. There was a guy in a hotel room with 10 point-of-sale machines who swiped my card for $1,000 each day,” said a Venezuelan pensioner, also asking not to be named as he described his trip to a Caribbean island.
Some Venezuelans do not even bother leaving the country, but merely send their credit cards to friends overseas, who swipe the cards and send the cash back to Venezuela. “This is the reason many airlines are sending half-empty planes,” Ricardo Cusanno, head of a local tourism council, told Reuters, saying the government should cross-reference flight lists with those requesting foreign exchange to outwit the no-shows.
As a result of the high level of unused seats, some airlines are beginning to overbook at much higher rates than usual.
“Raspao” was now the “most dynamic sector” of the country’s economy, the story added.
The currency controls that Chavez implemented have exacerbated some of the very problems they were meant to address: inflation and capital flight from the country. The lack of dollars has left importers struggling to pay for basic items that range from toilet paper to bread and wine for church masses.
It is also fueling the highest price rises in the Americas, 45 percent in the last year. For critics of the government, the phenomenon of sold-out flights is a symbol of excessive interference and economic mismanagement during the last 14 years of socialist rule.
For Maduro and his team, it is symptomatic of unscrupulous and greedy capitalist opponents who are “sabotaging” Venezuela’s economy in order to sink him. Maduro recently set up a new telephone hotline, 0-800-SABOTAGE, for Venezuelans to report illegal economic activity.
Adding to the frenetic demand for plane tickets is the low cost of flights – when they are available – for those with hard currency that they have changed on the black market. This has turned Caracas into an informal hub for frequent fliers across the region. “People from all over Latin America come here to buy flights using black market money,” said Gaal, the travel agent. Given the high demand, at least one foreign airline is looking to expand in Venezuela.
Alexander Fangmann of WSWS writes Amid Extreme Inflation And Severe Shortages, Venezuela To Revamp Currency Laws Although the country’s severe problems result from global economic pressures along with deteriorating industry and infrastructure, Venezuelan President Nicolás Maduro has claimed they are the result of sabotage.
Bionic Mosquito, writes, “Gary North is far and away the expert when it comes to the intersection of economics and the Bible” I ask, well what about me, theyenguy? I’m not being proud, but I believe that I run a close second, as I write on the Economy of God, continually, like day and night, and am here now to relate that Money as it has been known no longer exists. Fiat money died Friday September 18, 2013, with the trade lower in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Economies, CEW. Diktat Money is rising it its place, as the sovereignty of nation states gives way, and nannycrats meet in summits and in work groups to renounce national sovereignty, and establish ever increasing regional sovereignty. Liberalism featured credit, and trust in the world central bankers. Another word for credit is trust. Now in authoritarianism, specifically out of waves of economic and political turmoil in the Mediterranean Sea nation states of Portugal, Italy, Greece, and Spain, people will come to trust in the word, will, and way of statist regional leaders for regional security, stability, and sustainability, as communicated in Revelation 13:3-4.
Bionic Mosquito continues “The problem isn’t big business, the problem is the political entrepreneur; the idol isn’t money, it is central planning serving those who fail at serving customers. This is what the Pope should attack…humbly offered, of course.” I respond that the problem is that people fail to comprehend the Bible doctrines of
1) Dispensation, Ephesians 1:10, specifically that Jesus Christ is acting in the household administration of God to bring about the completion and fulfillment of every age, epoch, era and time frame.
2) The Ordination of Empires, Daniel, 2:25-45, specifically The British Empire and the US Dollar Hegemonic Empire, where the UK becomes a global power as a multitude of nations, and the US follows it to be the leading world power, as promised to Abraham in Genesis 12:2, Genesis 17:4-6, and Genesis 48:16, immediately before these loose their global domination to a Ten Kingdom of Regional Governance, comprised of ten toes of a miry and unstable mixture of iron diktat and clay democracy.
3) Apocalyptic Bible Prophecy, specifically that three Beasts are rising to rule mankind. The First, a Beast Regime, Revelation 13:1-4. The Second, a Beast Sovereign, that is ruler, Revelation 13: 5-10, Daniel 9:25. And Third, a Beast Seignior, that is a top dog banker who takes a cut, Revelation 13:11-18.
4) Bible Prophecy of the Syrian War of Isaiah 17:1-11, will precede the Ezekiel 38-39 War, where war against Iran will be initiated. Robert Fisk relates in Common Dreams Iran, Not Syria, Is the West’s Real Target. Business Insider reports The US Strategy In Syria Is Unraveling. CNN reports Syrian Rebels Reject Interim Government, Embrace Sharia. A collection of some of Syria’s most powerful rebel brigades have rejected a Western-backed opposition group that announced the creation of an interim government in exile this month. The 13 rebel groups, led by the al Qaeda linked al-Nusra Front, also called on supporters of the Syrian opposition to embrace Sharia law “and make it the sole source of legislation. The WSJ reports UN Members Agree on Syria Disarmament. Security Council’s five top powers draft resolution that requires destruction of chemical arsenal but puts off enforcement.
In conclusion to Bonito Mosquito, I write that Austrian Economists are in denial of the truth as they hold forth that there be sovereign individuals who have experience in human action, as Ludwig von Mises wrote in Human Action (p.240 the scholars edition)
Theism and Deism of the Age of Enlightenment viewed the regularity of natural phenomena as an emanation of the decrees of Providence. When the philosophers of the Enlightenment discovered that there prevails a regularity of phenomena also in human action and in social evolution, they were prepared to interpret it likewise as evidence of the paternal care of the Creator of the universe. This was the true meaning of the doctrine of the predetermined harmony as expounded by some economists. The social philosophy of paternal despotism laid stress upon the divine mission of kings and autocrats predestined to rule the peoples. The liberals retorted that the operation of an unhampered market, on which the consumer–i.e., every citizen–is sovereign, brings about more satisfactory results than the decrees of anointed rulers. Observe the functioning of the market system, they said, and you will discover in it the finger of God
The reality is there is only the administration of Jesus Christ, Ephesians 1:10, in all things, and that it is Jesus Christ who appoints power structures under both liberalism, which came to an end September 20, 2013, on the failure of World Stocks, VT, Major World Currencies, DBC, and Emerging Market Currencies, CEW, as well as under authoritarianism.
On Wednesday, Scott Grannis posts Dramatic Improvement In Household Balance Sheets
The Federal Reserve today released its estimate of households’ balance sheet as of the end of June. The report contained some significant upward revisions to past estimates of financial assets and net worth, with the result that household net worth now stands at $74.8 trillion, up some $4.5 trillion from the previous (March ’13) estimate, and up $18.4 trillion from the recession low. Virtually every metric of households’ financial health has shown significant improvement over the past several years. Owner’s equity in household real estate has surged 50% since 2009; net worth and financial assets are up 35% from their March 2009 low; the value of households’ real estate holdings is up 17% in just the past two years; owner’s equity as a percent of household real estate has jumped to almost 50%, up from its all-time low of 37% four years ago; household debt has declined by almost $1 trillion from its 2008 high, and is now back to the levels of early 2007. Net worth at a new high, financial assets at a new high, real estate values recovering, debt declining: what’s not to like?
I comment that Liberalism was defined by fiat investment wealth, specifically ETFs such as Gaming and Casinos, BJK, and Vice Stocks, such as those traded by the Fidelity Mutual Fund, VICEX, all of which were leveraged up by first the trade in debt, such as Eurozone Debt, EU, as well as the toxic debt taken in by the US Federal Reserve, such as that traded by the Fidelity Mutual Fund FAGIX, under QE1, and secondly by carry trade investing, such as the EUR/JPY. The Fed be dead, and its twin, Japanese Yen based carry trades, be dead as well; both died the week ending September 20, 2013, on the climax on the No Taper Rally, where QEternity was announced, which pivoted the world from Liberalism to Authoritarianism. Now, Authoritarianism is defined by the diktat of statist regional nannycrats, as well as by the physical possession of gold bullion for wealth preservation, and physical possession of silver bullion for bartering.
Silver Miners, SIL, and Gold Miners, GDX, and the Silver ETF, SLV, and Gold ETF, GLD, traded higher, as Spot Silver, $SILVER, traded higher to 21.78 and Spot Gold, $GOLD, traded higher to 1,333, continuing above its $1,300 breakout level.
The Gold ETF, GLD, moved higher in its Elliott Wave 3 UP, to close at 128.79, a move that commenced in July 2013, as Gold started to rise from its July 2013 bottom, as is seen its Weekly Chart, as Bloomberg reported US Budget Concerns Escalate. The Elliott Wave 3 Ups are the most dramatic of all economic waves, and create the bulk of wealth gains, of all of the five waves.
The No Fed Taper Rally, commenced global debt deflation, that is global competitive currency devaluation, as the US Fed’s QEternity monetary policy has crossed the Rubicon of sound monetary policy, and has turned money good investments bad. The chart of the US Dollar, $USD, shows a death cross, as it traded lower on September 18, 2013, on the UnTaper Rally, to $80.00, terminating the US Dollar’s power to be the world’s reserve currency.
World Stocks, VT, traded lower on lower Major World Currencies, DBV. China, YAO, traded lower on a lower Yuan, CYB. Sweden, EWD, traded lower on a lower Swedish Krona, FXS. Emerging Markets, EEM, traded lower on lower Emerging Market Currencies, CEW. Brazil, EWZ, EWZS, traded lower on a lower Brazilian Real, BZF. Indonesia, IDX, and Malaysia, EWM, traded lower. Argentina, ARGT, Greece, GREK, and Egypt, EGPT, traded higher.
As seen in the Statue of Empires, presented in Daniel 2:25-45, liberalism was characterized by the twin iron legs of global hegemonic power of the British Empire, and the United States of America. Now, authoritarianism is characterized by ten toes of iron diktat of regional goverance and totalitarian collectivism, manifesting as statism in the Eurozone, and alliances in other regions, such as the ASEAN group of nations. Ulrich Rippert of WSWS reports Forming A New German Government: Parties Prepare For War And Social Attacks. All the parties are trying to establish a ruling coalition stable enough to push through unpopular measures on behalf of the ruling class.
GoldSilverWorlds reports CFTC Believes That Silver Is A Free Market After 5 Year Investigation. I comment that I hope this news puts to rest the ongoing debate as to potential of the price of silver to rise higher over the price of gold. Silver will never, ever, leverage higher over the price of gold. One of the reasons is because of the huge potential for production by Silver Standard Resources Inc, SSRI, which has been one of the most speculative and carry traded investments of all time. The company does not have a forward PE, and it has plenty of contracts to sell its production, so the result is that the price of silver will never, ever outperform gold. Silver Standard Resources is a dead investment, and serves as an epitaph on Liberalism’s age of speculative leveraged investment.
In the last month, Gold Mining Stocks, GG, ABX, and NEM, have been unable to leverage up over the price of Gold, GLD, as is seen in their combined ongoing Yahoo Finance Chart. Gold Mining Stocks are now lagging the price of Gold because their PE’s have topped out; for example, Goldcorp, GG, has a Forward PE of 20; American Barrick, ABX of 8, and Newmont Mining, NEM, of 15.
Solar Stocks, TAN, traded higher. Aggregate Credit, AGG, traded higher as the Interest Rate, ^TNX, traded lower to close at 2.61%. Eurozone Debt, EU, traded lower.
Shares of Deutsche Bank, DB, traded 2.4%, lower as Bloomberg reports Jain Says Deutsche Bank’s Debt-Trading Revenue Falls. Deutsche Bank AG, DB, co-Chief Executive Officer Anshu Jain said third-quarter revenue from trading debt probably slumped at Germany’s largest bank. “We currently anticipate debt sales and trading revenues in the third quarter to decline significantly from last year,” Jain, 50, told investors at a conference in London today. “Market activity was substantially lower which has affected our corporate banking and securities revenues.”
Deutsche Bank, DB, has been an Eurozone Financials, EUFN, Germany, EWG, and Eurozone, EZU, stalwart, as is seen in the combined ongoing Yahoo Finance chart of EUFN, EWG, and EZU. The trade lower in DB, heralds a soon coming trade lower in Eurozone Financials, Germany and Eurozone stock.
The profitability of Deutsche bank and trade in Eurozone Financials has been predicated upon trading in Eurozone Debt, EU. Jesus Christ, acting in Dispensation, that is in the administration of all things economic and political, for the completion and fulfillment of every age, era, epoch and time period, is terminated trade in Eurozone debt, as part of the process of ending the sovereignty and seigniorage, of Liberalism, and introducing a the sovereignty and seigniorage of Authoritarianism.
A new sovereignty is coming, specifically from that of the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of statist regional governance, Revelation 13:1-4, where eventually there will be ten regional kings ruling in the world’s ten regions, Revelation 17:12. And a new seigniorage is occuring, that is a new moneyness, is happening, from the seigniorage of investment choice, to the seigniorage of diktat.
The change of sovereignty and seigniorage comes largely through Jesus Christ releasing the First Horseman of the Apocalypse, Revelation 6:1-2, where The Rider on the White Horse, who has a bow but no arrows, symbolizes a non-bloody economic and political coup d’etat, where the baton of sovereignty and seigniorage is being passed from democratic nation states to nannycrats in statist regional governance and totalitarian collectivism.
Fox News reports Kerry Signs UN Arms Treaty, Senators Threaten To Block It. US Secretary of State John Kerry signed a controversial U.N. treaty on arms regulation, riling U.S. lawmakers who vow the Senate will not ratify the agreement. As he signed the document, Kerry called the treaty a “significant step” in addressing illegal gun sales, while claiming it would also protect gun rights.
On Thursday, Inverse Volatility, XVZ, rose, as Volatility, XVZ, traded lower, as World Stock, VT, rose, as Solar Stocks, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, Biotechnology, IBB, Media, PBS, Casinos and Resorts, BJK, Global Consumer Discretionary, RXI, Smallcap Industrials, PSCI, US Infrastructure, PKB, and Shipping Stocks, SEA, traded higher. Energy Production, XOP, and Small Cap Energy, PSCE, rose to new rally highs. The Russell 2000, traded to a new rally high on higher Small Cap Pure Growth, RZG, and Small Cap Pure Value, RZV, both rising to new rally highs. In yield bearing sectors, Leveraged Buyouts, PSP, traded higher, and International Telecom, IST, rose to a new rally high, while Utilities, XLU, traded lower.
Japan, EWJ, JSC, rose taking the Nikkei, NKY, to a new rally high. Other nations trading higher included Egypt, EGPT, Indonesia, IDX, IDXJ, South Korea, EWY, New Zealand, ENZL, Australia, EWA, KROO. Peru, EPU, Turkey, TUR, Netherlands, EWN, traded lower.
Intel, INTC, Broadcom, BRCM, Atmel, ATML, traded lower, turning Semiconductor, XSD, lower. Networking, IGN, and Transportation, XTN, traded lower.
China, YAO, traded unchanged as Value Walk reports Chinese Bank Problems Echo Those Of Japan (Not US), Michael Pettis Says. And Mike Mish Shedlock references Michael Pettis asking So why is China’s GDP growth rising again? The simple answer is shadow banking has revived. Is it sustainable? Of course not. Debt is growing faster than it can possibly be paid back. In his email Pettis stated that he felt like a broken record, repeating the same story over and over again.I don’t mind, because it’s clear that people have not gotten the message, especially in regards to using alleged reserves. Please reread that section until you understand it.
The UnTaper rally drove up Nation Investment, EFA, to an all time high, with the following nations leading the way higher: EGPT, 31%, ARGT, 23, EFNL, 22, EWY, 18, KROO, 17, YAO, 17, EIRL, 16, EZA, 16, EWN, 16, as is seen in their combined ongoing Yahoo Finance Chart. Ireland, EIRL, has been liberalism’s nation investment superstar.
The EUR/JPY closed up at 133.42, supporting Eurozone Stocks, EZU, despite a lower European Financials, EUFN, led so by Ireland’s IRE, and Germany’s DB, while Banco Santander, SAN, rose taking Spain, EWP, to a new rally high.
Silver Miners, SIL, and Gold Miners, GDX, lower on a lower price of Silver, SLV, and Gold, GLD.
Aggregate Credit, AGG, traded lower as The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%; and the Steepner, STPP, rose after having fallen for two weeks, reflecting a re-steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX. The No Taper Rally supported a rally in the longer duration debt such as The Zeroes, ZROZ, 30 Year US Government Debt, EDV, High Yield Munis, HYD, Longer Duration Corporated Debt, BLV, Emerging Market Bonds, EMB, but inasmuch as money failed with the UnTaper Rally, the rally in these debts has ended as is seen in their combined ongoing Yahoo Finance Chart.
Patti Dom of CNBC reports Corporate America Took On A Record Amount Of Debt In September as corporate Treasurers rushed to take advantage of a dip in rates and a receptive market. Verizon’s biggest ever $49 billion offer helped drive the month’s investment grade offerings to an all-time high of $147.8 billion so far, besting the $133.9 billion of May, 2008, according to Informa Global Markets. But the offers picked up momentum as the month wore on, and particularly after the Fed surprised markets last week by leaving its $85 billion monthly bond buying program intact for now.
Zero Hedge reports Greece On The Verge? Military Special Forces Have 15 Demands, Or Else. As the website Keep Talking Greece notes, the statement on the union’ website included 15 demands, including the resignation of the Greek President, and urged people to gather at the infamous Syntagma Square on Saturday. The statement was interpreted by some as a call to a coup d’etat, denied by the union, but prompted Greece’s Supreme Court to meet to discuss it.
Open Europe in their for fee newsletter reports Greek Golden Dawn MPs Consider Resigning, Could Trigger Fresh Elections. MPs of the far-right Golden Dawn party have threatened to resign from the Greek parliament, a move which could lead to demands for snap general elections. Kathimerini Kathimerini 2 EUobserver Times Reuters AFP HLN Volkskrant AFP2 Guardian Guardian 2
The ratio of equity to debt such as Eurozone Stocks relative to Eurozone Debt, EZU:EU, as well as Nation Investment relative to World Treasury Debt, EFA:BWX, and World Stocks relative to Aggregate Credit, VT:AGG, communicates that stocks are leveraged at terrific levels attained through the No Taper Rally.
The WSJ reports No Clear Path to Avoid Shutdown as House GOP Stands Firm. Congress’s rocky path to avoiding a government shutdown became even rougher Thursday, as Speaker John Boehner said the House wouldn’t accept the spending plan likely to emerge from the Senate. The Ohio Republican’s announcement foreshadows a set of last-minute legislative volleys between the House and Senate to fund federal agencies ahead of a deadline Monday, the final day of the fiscal year. he Senate is expected to pass a bill Friday that would fund the government for the first 1½ months of the new fiscal year. But Senate Democrats plan to restore money for the Affordable Care Act that House Republicans had stripped out, leaving the two chambers in conflict.
On Friday, September 27, 2013, The stock markets moved from risk-on, to risk-off, as the Risk On ETN, OFF, traded higher, as both Industrials, XLI, ie Small Cap Growth Stock, ROLL, and Large Cap Growth Stock, ITW, Transports, XTN, as well as Dividend Growth, VIG, traded lower on the week, establishing a turn from a bull stock market to a bear stock market, on the exhaustion of the world central banks monetary authority, specifically that the US Fed’s monetary policies have crossed the rubicon of sound monetary policy, and have turned money good investments bad, resulting in the end of the age of Nation State Investment, EFA, in countries such as the Netherlands, EWN, and its companies, PHG, CNH, YNDX, NXPI, and profitable global industrial production, FXR, ie WHR.
The chart of the Dollar’s 200% ETF, UUP, turned terribly bearish as The US Dollar, $USD, traded lower. The US Dollar, $USD, is being dethroned as the world’s reserve currency as AP reports Preparing for Shutdown, Government Plans Furloughs. More than a third of federal workers would be told to stay home if the government shuts down, forcing the closure of national parks from California to Maine and all the Smithsonian museums. The EPA would essentially be closed to most of its approximately 17,000 employees, except for those involved in shutting down systems, tasked with emergency cleanups, or doing legal work in ongoing federal cases, said John O’Grady, president of the local union of EPA employees in Chicago. NASA is still working on shutdown plans, but the agency doesn’t have a launch scheduled until Nov. 6, spokesman Bob Jacobs said. Nearly all but a few hundred of the space agency’s 18,000 employees would be furloughed under a contingency plan outlined in 2011.
Money as it has been known, died on the unwinding of the No Taper Rally, which some call the Un Taper Rally, as evidenced by a trade lower in World Stocks, VT, and Major World Currencies, DBV, as well as Emerging Market Stocks, EEM, Emerging Market Currencies, CEW, and Emerging Market Bonds, EMB.
Jesus Christ, operating at the helm of the Economy of God, that is in administration of all things economic and political, has completed the age of liberalism by producing a moral hazard and currency carry trade prosperity. With peak prosperity having been achieved, He is introducing the age of authoritarianism, which features a debt servitude based austerity.
Jesus Christ has unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, where the Rider on the White Horse, having a bow but no arrows is effecting coup d’etat word wide, passing the baton of sovereignty to new sovereigns. A new money, that being diktat money is being established, as nannycrats meet in summits and workgroups to renounce national sovereignty and to pool sovereignty regionally for regional security, regional stability and regional sustainability.
The turn lower from the No Taper Rally of September 18, 2013, ends liberalism’s sovereignty of nation state democracy and marks the beginning of authoritarianism’s sovereignty of regional governance and totalitarian collectivism.
Liberalism was the epoch of the Milton Friedman Free To Choose Floating Currency Banker Regime, featuring policy of investment choice, and schemes of credit and carry trade investing. Now, Authoritarianism is the epoch of the Angela Merkel Diktat Beast Regime of Revelation 13:1-4. featuring policies of diktat and schemes of debt servitude.
Brian Parkin and Tony Czuczka of Bloomberg report Germany’s Free Democrats, who have held the balance of power more than any other political party in the republic’s history, were ousted from parliament for the first time after voters defected to Angela Merkel’s Christian Democrats and the euro-skeptic AfD. The liberal FDP, which served as the junior partner in Christian and Social Democrat-led governments, gained just 4.8% in federal elections yesterday, less than the 5% needed to enter the Bundestag. The party’s worst result contrasts with its best of 14.6%, gained four years ago to rule under Angela Merkel. The FDP’s exit from Germany’s lower house marks the end of 64 years of parliamentary representation, in which it championed free market policies and personal freedoms, challenging the postwar consensus-orientated politics of the larger people’s parties.
Competitive currency deflation is strongly underway on the unwinding of the No Taper Rally, which some call the UnTaper rally. Debt deflation, that is currency deflation is seen in Major World Currencies, DBV, of which the US Dollar, $USD, is a component, which traded strongly lower.
Emerging Market Currencies, CEW, traded lower on a lower Indian Rupe, ICN, which forced India, INP, SCIN, and its banks, HDB, IBN, strongly lower. The Brazilian Real, BZF, traded lower, which forced Brazil, EWZ, EWZS, lower. The Mexico Peso, FXM, traded lower, taking Mexico’s Bank, BSMX, and Mexico, EWW, strongly lower. Emerging Market, EEM, Emerging Market Small Cap Dividend, DGS, and Emerging Market Bonds, EMB, finished the week lower.
The Euro, FXE, traded to a new rally high, and yet the Yen, FXY, traded even higher, taking the EUR/JPY, lower on both the day and on the week, to close at 132.77; yet Eurozone Stocks, EZU, traded near their week’s high; European Financials, EUFN, traded lower on the week. The Swiss Franc, FXF, traded higher, taking Switzerland, EWL, higher. Netherlands, EWN, Italy, EWI, traded lower. Spain, EWP, and Greece, GREK, traded higher.
Egypt, EGPT, traded higher. Argentina Banks, BFR, GGAL, and BMA, traded higher, taking ARGT, higher.
The Chinese Yuan, CYB, traded lower as China’s Financials, CHIX, led China, YAO, China Industrials, CHII, and China Infrastructure, CHXX, lower.
US Stocks, VTI, traded lower; the chart of the S&P 500, $SPX, traded by the ETF, SPY, shows a 1.0% trade lower on the week. A lower US Dollar, kept losses in World Stocks, VT, to a minimum. Countries with balance of payment issues traded lower, these included Thailand, THD, Turkey, TUR, South Africa, EZA, Philippines, EPHE, Malaysia, EWM, and Peru, EPU. Russia, RSX, ERUS, and Italy, EWI, traded lower. Yahoo Finance Chart communicates that Peru, has the worst amount of derisking and deleveraging amongst all of the Emerging Markets over the last six months. John Quigley of Bloomberg reports Peru’s bond risk is soaring more than any investment-grade debtor nation in the Americas as tumbling metal exports erode the country’s budget surplus and prompt the government to double its borrowing. The cost to protect Peruvian dollar debt against non-payment for five years using credit-default swaps has climbed 0.4 percentage point to 1.40 percentage points in the past six months..
Metal Manufacturers XME, such as CRS, MLI, STLD, WOR, RS, traded lower, Steel, SLX, such as TS, MT, SID, NUE, Coal, KOL, such as CLF, Uranium, URA, Industrial Miners, PICK, such as VALE, ZINC, GSM, PKX, Rare Earth Miners, REMX, and China Miners, CHIM, traded lower.
Utilities, XLU, such as those seen in this Finviz Screener, traded lower.
International Paper, IP, traded lower, taking Paper Produces, WOOD, lower.
Halliburton, HAL, traded lower, taking Energy Service, OIH, lower.
Networking Stocks, IGN, traded lower.
Semiconductors, such as BRCM, ATML, INTC, MSCC, MRVL, FCS, TSM, FSL, XLNX, ADI, and LLTC, traded lower, taking Semiconductors, SMH, lower
Bank of America, BAC, traded lower, taking the Too Big To Fail Banks, RWW, lower. Asset Managers, such as BlackRock, BLK, traded lower. Investment Bankers, KCE, traded lower.
Life Insurance companies, such as ING, seen in this Finviz Screener, traded lower.
Shipping Stocks, SEA, such as those seen in this Finviz Screener, traded lower.
Agriculture, MOO, and Fertilizers, SOIL, traded lower.
Silver Miners, SIL, and Gold Miners, GDX, are unable to leverage higher on a rising price of Gold, GLD, and a rising price of Silver, SLV, as is seen in the charts of SIL:SLV, and GDX:GLD.
Liberalism was an era that was characterized by free-money, coming from the world central banks monetary policies of Global Zirp, a record level of margin credit, and the Bank of Japan, and its lenders such an NMR, MTU, SMFG, MFG, as well as China’s SHG, presented together in the chart of Far East Financials, FEFN, providing Yen carry trade loans. Leveraged Buyouts, PSP, traded higher. Debt laden Blackstone, BX, is trading near its rally high, as CNBC reports its chief Joseph Baratta, saying “We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity,” … “The cost of a high yield bond on an absolute coupon basis is as low as it’s ever been.” And Gerry Murray, head of JPMorgan Chase & Co.’s North America leveraged finance business, said The Federal Reserve’s surprise decision last week to not reduce its stimulus ‘gave a shot of adrenaline into the leveraged markets
Solar Stocks, TAN, seen in this Finviz Screener, traded to a new rally high.
Aggregate Credit, AGG, traded higher, as The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.62%.
Jesus Christ acting in Dispensation, that is in oversight of all things economic and political, has fully completed Liberalism as an age of investment choice powered by credit and carry trade investing, by expanding fiat wealth to an unprecedented level, as Doug Noland relates in Safehaven.com article, The Federal Reserve has created a massive Bubble of risk assets. Since since ’08 Household holdings of mutual funds and equities have surged $10.640 TN, or 85%, to $23.191 TN. Pension Fund Entitlements jumped $4.675 TN, or 33%, to $18.737 TN. It’s no longer true that American households have the majority of their wealth in savings and real estate. These days, and much the product of experimental monetary policy, Household perceived wealth is wrapped up in the risk markets. Those of a bullish persuasion would argue these dynamics confirm the underlying strength and stability of the U.S. economy. I’ll counter with the view – one supported by Fed data – that massive federal deficits and Federal Reserve monetization have created unprecedented and deeply systemic financial and economic distortions
In the age of authoritarianism, physical possession of gold bullion, and diktat will be the only forms of sovereign and thus sustainable wealth.
3) … The development of character begins in childhood. Elaine Meinel Supkis writes Berlin High Students Join Other Party-time Teens In Upstate NY To Vandalize Football Player’s Mansion.
It’s apparent that a wilding took place, it’s part of what the Bible refers to as the mystery of iniquity.
I live in the inner city, and use public facilities, like the local bus depot and the library, as well as reside in an apartment building owned by a non-profit charity which exposes me to many who live not only libertine but antisocial.
Psychopathy can be inherited, and can does develop as young people cross the rubicon of sound ethical behavior, so that over time the boundary between ruling over others and being independent from others is erased; so I feel sorry, in a sense, for the 300, as everyone of them now has eroded the ethical standard of responsible living and they live exposed to living more in iniquity.
There is a responsibility on the part of parents to educate their children in ethical living. I’m not particularly a fan of William J. Bennett, but he with the help of two individuals, wrote The Book of Virtues, and the Chapter on Responsibility presents CS Lewis Men Without Chests, and develops the idea that parents and mentors have a responsibility to educate children in moments of learning to have the right response; specifically to train children to feel pleasure in doing and seeking after things which are noble and praiseworthy, and to feel disgust and contempt for things which are injurious, so that when the age of reason comes, he will embrace virtue and ethics, into his soul, and be nourished thereby, and in so doing become a person of gentle spirit and good way.
I feel sorry for the parents, they are the largest losers of all, as they lost the reward that comes from raising children who go on to live noble lives. Thank God, I have never had any children and have never been a parent. Residing where I do in the downtown area, I see daily the mystery of iniquity being played out and pray that I will have a love of Christ, and through his Spirit, live in the mystery of righteousness.
4) … The richest and poorest states revealed. Mike Sauter of 24/7 Wall St lists America’s Richest and Poorest States Maryland is the wealthiest state while Mississippi, Arkansas, West Virginia, Alabama and Kentucky are the places of greatest poverty. In Mississippi, about one in five households depended on food stamps last year, second only to Oregon. The state’s poverty rate was 24.2%, the highest in the nation by more than three percentage points.
5) … Are electrical waves making you sick? Liberty Crier reports Customers say OG&E smart meters making them sick, giving them headaches