Investment report for the week ending November 15, 2013
The Janet Yellen confirmation hearing, a buy of the Euro, FXE, and a sell of the Japanese Yen, FXY, and a leaked Chinese economic policy document purporting free enterprise in China, drove stocks higher to attain peak stock wealth. Yet the death of fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, came with bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning October 23, 2013. When the currency traders sell the EUR/JPY, global financial institutions, IXG, and World Stocks, VT, will collapse like a house of cards. The world central bankers and regional nannycrats are introducing diktat money to replace fiat money, with the aim of establishing regional security, stability and sustainability.
2) … Details of this week’s financial marketplace trading
On Monday, November 11, 2013, The Australian Dollar, FXA, led Major World Currencies, DBV, lower, forcing Australia, EWA, and Asia Excluding Japan, EPP, lower. And the Indian Rupe, ICN, traded lower forcing India, INP, lower.
Ireland, EIRL traded higher. Emerging Market Nations trading lower included Turkey, TUR, Chile, ECH, Indonesia, IDX, India, INP, and the Philippines, EPHE. Major Countries trading lower included Australia, EWA, New Zealand, ENZL, Russia, RSX, and South Korea, EWY. Sectors trading higher included Solar, TAN, Pharmaceuticals, PJP, Transportation, XTN, Copper Miners, COPX, Resorts and Casinos, BJK, and Energy Services, OIH.
Retailers, XRT, led so by WMT, COST, JWN, LTD, and KORS rallied strongly. The rally in Retailers, carried through to US Credit Provider, MA, which traded strongly higher; while Japanese Credit Provider, IX, traded strongly lower; and the rally carried through to Advertising Agencies, as well as to Apparel Manufacturers. It’s likely that the world has attained peak retailer investment experience, as well as peak consumer credit experience, on the sovereignty of liberalism’s democratic nation state and banker regime.
Social Media, SOCL, Regional Banks, KRE, traded lower; and Mortgage REITS, REM, traded strongly lower; it is the financial market’s loss leader; this as Zero Hedge posts October Mortgage Purchase Applications Collapse To Decade Lows. Liberalism has passed through peak mortgage banking.
Aggregate Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher. The bond vigilantes in calling the Interest Rate on the US 10 Year Note, ^TNX, higher, from 2.48% beginning October 23, 2013, as well as in Steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETN, STPP, steepening, have destroyed fiat money, that is Credit, AGG, as well as Major World Currencies, DBV, and Emerging Market Currencies, CEW. The world passed through peak fiat money, that is peak credit and peak currencies on October 23, 2013.
The death of fiat money is seen first in the periphery, with the destruction of the Emerging Market debt trade, EMB, which has enabled currency traders to commence competitive currency devaluation, in Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, which has deleveraged and derisked investors out of Emerging Market Investments, EEM, Emerging Market Financials, EMFN, such as Brazil Financials, BRAF, and Brazil Small Caps, EWZS, as well as out of the Nation of Greece, GREK, and the National Bank of Greece, NBG.
And the death of fiat money is seen secondly in the high yield debt trade, with Junk Bonds, JNK, Ultra Junk Bonds, UJB, as well as short term debt, Short Term Government Bonds, SHY, and Short Term Bonds, FLOT, topping out.
Furthermore the death of fiat money is seen in the Euro Yen Currency Carry Trade, EUR/JPY, recovering to attain its October 23, 2013 value of 135.15; the double topping out of this carry trade is presented quite striking in Action Forex Report EUR/JPY Weekly Outlook, as of November 16, 2013.
The trade lower in this currency carry trade, caused disinvestment and derisking out of Global Financials, IXG, the European Financials, EUFN, UBS, CS, NBG, SAN, DB, South Korea Banks, KB, SHG, UK Banks, RBS, BCS, Mexico Banks, BSMX, Columbia Bank, CIB, Chile Bank, BCH, BSAC, BCA, Peru Bank, BAP, and Brazil Banks, BBD, ITUB, BBDO, BSBR, from which they have not significantly recovered.
When the EUR/JPY unwinds the second time, there will be a tremendous unwinding of currency carry trades not only from the aforementioned banks but from all the world’s financial institutions, IXG. Quietly, world central bankers and regional nannycrats are introducing diktat money, to replace fiat money, with the aim of establishing regional security, stability, and sustainability.
Acting behind the scenes, Jesus Christ, in oversight of the economy of God, that is in administration of all things economic and political for the completion and fulfillment of every age, epoch and time period, a concept presented by the Apostle Paul in Ephesians 1:10, enabled the bond vigilantes to call the Interest rate higher on the US Ten Year Note, ^TNX, higher from 2.48% on October 2013, pivoting the world out of liberalism’s fiat money system, into authoritarianism’s diktat money system.
As seen in the Revelation of Jesus Christ, that is the unveiling of Jesus Christ, a dream given by angels to John the Revelator, while living in exile to the Isle of Patmos, in his 90s, Jesus Christ on October 23, 2013, opened the First of Seven Seals of The Scroll, Revelation 6:1, containing the details of the culmination of history, Revelation 1:1, which releases the First of the Four Horsemen of the Apocalypse, the Rider on the White Horse, who has a bow but no arrows, signifying his role in effecting a global coup d’etat, transferring sovereignty from nation states and bankers to nannycrats and regional bodies, as they come to rule in regional governance, effecting totalitarian collectivism, in each of the world’s ten regional areas.
The US Fed be dead; He did what Ron Paul could not do; He ended the Fed, as it has been known. He decimated the creature from Jekyll Island, and is bringing forth a more horrible monster, that being the beast regime, which is rising out of the failure of fiat money, specifically out of the failure of Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW, on October 23, 2013, with the rise of the Interest Rate on the US Ten Year Note, ^TNX, from 2.48%.
Liberalism was the era of democratic nation state and banker sovereignty. But authoritarianism is the era of beast regional governance and totalitarian collectivism sovereignty, ruling in each of the world’s ten regions, and in all of mankind’s seven institutions, as presented in Revelation 13:1-4. Jesus Christ has designed the beast regime to be the ultimate predator, having feet of a bear, the mouth of a lion, and camouflage of a leopard.
The beast’s feet have emerged in the European banking supervision system run out of the ECB in Frankfurt Germany; its feet enable the monster to stand upright against all enemies, as well as to run down and trample all naysayers; and its claws enable it to root out and tear apart all opposition.
The beast’s mouth has emerged in NATO with headquarters in Brussels, as Reuters reports NATO Builds $1 Billion HQ As Allies Cut Military Spending; its feet enable the monster to devour all in its territory. Sven Heymann of WSWS reports NATO Reform Strengthens Germany’s Role. Though coalition talks between the Christian Democratic Union (CDU) and Social Democratic Party (SPD) have only just begun, Defence Minister Thomas de Maizière has already presented a new plan for NATO. It envisages Germany assuming a leading role in the military alliance. Only six weeks after the federal election, it is clear that the new government will have a far more aggressive foreign policy, seeking to lead the country back into the ranks of the major military powers.
The beast’s camouflage is the statist, collective experience of not only Obamacare but technocratic governance in Greece. Christoph Dreier of WSWS reports Vote Of No Confidence In Greek Government Fails. A vote of no confidence in the Greek government initiated by the largest opposition party, Syriza (Coalition of the Radical Left), failed by a wide margin on Sunday. “The government has emerged stronger from the vote,” said Prime Minister Antonis Samaras (ND) after the ballot, which was broadcast live on Greek television. No further no confidence motion can be proposed for six months.
The result did not come as a surprise. The government has a clear majority, with 155 seats in parliament, and DIMAR had announced that it would abstain in the event of a no confidence vote. In order to obtain the 151 votes required for new elections, SYRIZA needed the support of 20 deputies from the governing parties.
SYRIZA introduced the motion fully expecting it to fail. It was a parliamentary manoeuvre intended to provide political cover for its collaboration in the ongoing austerity offensive against the working class. The aim as well was to contain and dissipate growing popular anger over the attacks on social conditions and democratic rights, further inflamed by the police attack on the ERT workers.
There are no fundamental political differences between SYRIZA and the government. Representatives of SYRIZA have repeatedly pointed out that they do not oppose the austerity agenda of the European Union (EU), but merely want to renegotiate its terms.
Last week, SYRIZA leader Alexis Tsipras confirmed this at a forum at the University of Texas, where he reiterated that a SYRIZA government would under no circumstances leave the European Union. Under these conditions, SYRIZA is doing all in its power to defend the government and the troika against the resistance of the workers.
With the death of fiat money, one no longer has economic life in investment choice but in nannycrat diktak, as regional integration, is the dynamo of regionalism; which is replacing global growth and trade, which was globalism’s dynamo of crony capitalism, European socialism and Greek socialism.
As the beast regime rises out of sovereign crisis and banking crisis in the Eurozone, a New Charlemagne, foretold in Revelation 13:5-10, will rise as Europe’s Sovereign. And a Monetary Prophet, Revelation 13:11-18, most likely Mario Draghi, will rise as the EU’s Seignior, that is top dog banker, who taking a cut, mints money.
The banker regime featured Asset Managers such as BLK, WDR, EV, STT, WETF, A MG, IVZ, CNS, AMP, PFG, LM, BX, FNGN, BEN, VOYA, who waived wands of credit and financialization; but the beast regime features nannycrats who waive wands of debt servitude and regionalization.
Liberalism, being based upon the Milton Friedman Free to Choose concept of floating currencies, featured a mercantilist economic model, which benefited Sweden, with its ALV, Germany, with its SAP, SI, South Korea, with its SAMSUNG, Ireland, with its STX, IR, and Netherlands, with its, NXPI, LYB, which became export driven superstars having current account surpluses.
But with the death of fiat money on October 23, 2013, as seen in Aggregate Credit, AGG, failing, and the Major World Currencies, DBV, and Emerging Market Currencies, CEW, both collapsing, a regional integration economic model will emerge under authoritarianism, as fountainheads of regionalization rise to preeminence out of credit, banking, investment crisis, and fiscal crisis. It seems that crisis, can seeming come out of nowhere, as Focus reports Austria May Face A Budgetary Crisis, The nation’s budgetary deficit could reach up to €40 billion by 2018, equivalent to around half of the country’s federal budget.
These new talking heads, such as Angela Merkel, and her More Europe proposal; and new thought leaders, such Jeroen Dijsselbloem, Olli Rehn, Michel Barnier, Klaus Regling, Werner Hoyer, Jorg Asmussen and Viviane Reding, will come to the forefront of economic and political leadership in the Eurozone. These will move society away from constitutionally limited government, free markets, individual liberty, personal responsibility, and traditional property rights, and show the way forward through regional framework agreements, which renounce nation state sovereignty, and announce regional pooled sovereignty, for regional security, stability, and security.
Eurozone nannycrats are beginning EU fiscal rule, by exercising in policies of diktat in regional governance and schemes of debt servitude in totalitarian collectivism. The Telegraph reports The EU Uses New Budget Powers To Demand More Austerity In Italy And Spain The European Commission has exercised historic new EU powers allowing it to revise national budgets for the first time.
Fabio Braggion and Steven Onega write in Voxeu Firm-Bank Relationships, The depth of the recent financial crisis is often contributed to excessively high leverage of corporations and banks. This column analyzes corporate leverage in the long-run, and in particular the shift from bilateral to multilateral firm-bank relationships in the UK. This shift is related to the firms’ use of debt finance, and subsequently to their increased leverage.
Deniz Anginer, Asli Demirgüç-Kunt, Harry Huizinga, and Kevin Ma write in Vox EU Corporate governance and bank capitalisation. Bank capitalisation determines the probability of a bank failure. This column discusses how bank’s corporate governance affects its capitalisation. Corporate governance, in which the bank acts in the interest of its shareholders, is defined as a good one. Such governance, however, can lead to lower bank capitalisation. It also has possibly negative implications for financial stability.
Fabian Bornhorst, Marta Ruiz Arranz write in Voxeu Private Deleveraging In The Eurozone. Private and public debt in the Eurozone increased since the 2000s, and especially so in certain countries. This column presents evidence that high levels of private and public debt, together with deleveraging of all sectors, are especially harmful for economic growth. Private sector debt is more detrimental to growth than public sector debt. Therefore, policies aimed at reducing the private debt could yield important benefits.
Andrew Cullen of The Cantillon Observer asks Is The Next Phase Of The ECB’s Large Scale Asset Purchases Imminent? Growth of PIIGS governments’ debts as a proportion of GDP (Table 1) have now crossed above the critical 90 percent ratio advised by Rogoff and Reinhart as being the threshold above which growth rates irrevocably decline ( K. Rogoff and C. Reinhardt, “Growth in a Time of Debt,” American Economic Review (May 2010).
There is another potential problem: European commercial banks may be too fragile to fulfil their allotted role. ECB President Mario Draghi himself has initiated another round of stress testing of European banks’ balance sheets against external shocks, a sign that the ECB itself has doubts about systemic stability in the banking sector. But this testing has hardly begun. Here are four risk factors in play:
First, there has been large-scale flight of deposits from banks operating within the PIIGS’ toward banks of other Eurozone countries, as well as outside the Eurozone entirely. This phenomenon is caused by elevated risk of seizures, consequent upon the forced losses on bondholders at Greek banks and the recent “bail-in” of depositors at the Bank of Cyprus.
Second, many PIIGS’ domestic banks still hold on their books bad loans arising from the boom years (2000-2007). Failure to deleverage and liquidate losses is prolonging the banks’ adjustment process.
Third, they already hold huge quantities of sovereign debt (treasury bonds) from Eurozone governments from previous rounds of buying. Banks have had to increase their risk weightings on such debt holdings as Ratings Agencies have downgraded these investments to comply with Basel II. This constrains their forward capacity for lending to these governments.
Fourth, there is concern for rising interest rates. Since the famous “Draghi put” in July 2012, real rates remain low and yields on PIIGS’ sovereign bonds fell back closer to German bunds. But this summer yields on US Treasury bonds with long maturities started to rise on Fed taper talk Negative surprises knock confidence in the international bond markets. The risk of massive losses should bond prices drop is one that the European-based banks cannot afford given their still low capital reserves and boom phase legacy of over-leveraging.
Implementation impediments aside, a new phase of aggressive easy money policy from the ECB is both probable and imminent.
On Tuesday November 12, 2013, Major World Currencies, DBV, and Emerging Market Currencies, CEW, continued sinking in value; with ongoing global competitive currency devaluation, at the hands of currency traders who are unwinding the EUR/JPY, and the AUD/JPY, coming from the bond vigilantes calling the Interest Rate On the US Ten Year Note, ^TNX, higher since October 23, 2013, which has terminated liberalism’s Milton Friedman Free To Choose nation state floating currency banker regime, causing disinvestment out of World Stocks, VT, and is introducing authoritarianism’s beast regime of regional governance and totalitarian collectivism.
The Nikkei, NKY, traded higher, on a lower Japanese Yen, FXY. But the Emerging Markets, EEM, traded lower, on a lower Emerging Market Bond, EMB, and a lower Emerging Market Currencies, CEW. Asia Excluding Japan, EPP, traded lower on a lower Australian Dollar, FXA, which took Australia, EWA, Indonesia, IDX, New Zealand, ENZL, and Malaysia, EWM, lower. Sweden, EWD, traded lower on a lower Swedish Krona, FXS.
The National Bank of Greece, NBG, fell sharply, leading Greece, GREK, sharply lower. India, INP, traded strongly lower on a lower Indian Rupe, ICN. Argentina ARGT, Norway, NORW, Brazil, EWZ, Turkey, TUR, Egypt, EGPT, China, YAO, Mexico, EWW, and Peru, EPU, traded lower.
Australia’s WBK, The National Bank of Greece, NBG, Brazil’s BBDO, BSBR, BBD, IBN, Mexico’s BSMX, The UK’s RBS, BCS, LYG, India’s IBN, HDB, Chinese Financials, CHIX, European Financials, EUFN, Regional Banks, KRE, and the Too Big to Fail Banks, RWW, led World Financials, IXG, lower; while Ireland’s Bank, IRE, traded higher taking Ireland, EIRL, higher. And Japan’s IX, NMR, SMFG, MFG, and MTU, traded higher, taking the Nikkei, NKY, higher on the higher Yen.
Transportation, XTN, and Retail, XRT, traded higher. While Solar Energy, TAN, Steel, SLX, Metal Manufacturing, XME, Energy Service, OIH, Engineering, FLM, Paper Producers, WOOD, Copper Miners, COPX, Industrial Miners, PICB, Chinese Minerals, CHIM, and Coal Miners, KOL, traded lower. Energy Production, XOP, and Small Cap Energy, PSCE, traded lower on a lower price of Oil.
In the yield bearing sectors, Utilities, XLU, such as Next Era Energy, NEE, and Global Real Estate, DRW, traded lower.
Silver Miners, SIL, traded lower on a lower price of Silver, SLV, and Gold Miners, GDX, traded lower on a lower price of Gold, GLD. Spot Gold, $GOLD, traded lower to 1,265, with strong support seen at $1,260, which is seen by many as the price of production. The chart of Gold Miner, TGD, suggests that now is the appropriate time to invest in Gold Miners; it has lost 60% YTD, and has a PE of 7.
Investment in the Shipping State of Greece, GREK, is history on the failure of credit, AGG. Since May 2010, with the First Greek Bailout, it has been an insolvent sovereign, and its bank, NBG,is an insolvent sovereign, is loaded with Greek Treasury debt that cannot be paid. Insolvent sovereigns and insolvent financial institutions lack seigniorage to meet their fiscal spending needs. Greece’s seigniorage has come via Global ZIRP, and Euro Yen currency carry trade investment that ended October 23, 2013, when bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% and currency traders sold the EURJPY short.
The global economic and political paradigm of liberalism, mercantilism, and global growth and trade, failed October 23, 2013, as bond vigilantes called the Interest Rate higher on the US Ten Year Note, ^TNX, higher from 2.48%, and currency traders sold carry trades such as the EURJPY short.
With currency carry trades now unwinding investment in Sweden, EWD, India, INP, Brazil, EWZ, Australia, EWA, Asia Excluding Japan, EPP, as well as in Greece, GREK, as well as with the debt trade failing in the Emerging Markets, EEM, liberalism’s paradigm of Nation Investment EFA, Global Industrial Production, FXR, and Global Financial Investment, IXG, is an epitaph on the tombstones of crony capitalism, European Socialism, and Greek Socialism.
Under liberalism, the speculative leveraged investment community, consisting of Investment Bankers, KCE, Stock Brokers, IAI, Regional Banks, KRE, the Too Big To Fail Banks, RWW, European Financial Institutions, EUFN, Chinese Financial Institutions, CHIX, Emerging Market Financial Institutions, EMFN, coupled with the world central banks policies of credit easing, established schemes of carry trade investing and debt trade investment choice, producing a moral hazard based credit prosperity, for the purpose of investment gain. The world is at peak democracy, as the seigniorage, that is the moneyness, of nation investment is at its zenith, as is seen in Nation Investment, EFA, failing to attain its previous high, and is seen with former rally leader, Greece, GREK, trading lower, since October 23, 2013.
Under authoritarianism, said organizations, will be integrated regionally into policies of regional governance and totalitarian collectivism, and become known as government banks or gov banks for short, to establish schemes of diktat, producing a debt servitude based austerity, for the purpose of regional security, stability, and sustainability. The world will now be moving into ever increasing statist, collectivist, public private partnership, where regional nannycrats act as fiscal and economic cardinals overseeing the factors of production, finance, commerce, trade.
Aggregate Credit, AGG, traded lower. The pivoting of economic paradigms from liberalism into authoritarianism featuring regional integration, totalitarian collectivism, and debt servitude, began on October 23, 2013, with the failure of credit, seen in the Interest Rate on the US Ten Year Note, ^TNX, rising higher in value, and the failure of currencies, seen in the EURJPY trading lower in value.
The apostle Paul reveals in Ephesians 1:10, that The God, that is The Sovereign Lord God, has appointed His Son, Jesus Christ, as heir of all things and has tasked his with dispensation, that is the household administration of all things economic and political, as well as all things moral, that is virtuous, and ethical, that is relationally, to effect political government by kings in empires and to effect economic government in those empires by monetary priests, and to bury institutions of one age in graves and tombs, as He brings forth new empires and institutions of a new era.
Collectivism was a part of liberalism, and is seen in transfer payments such as social security disability under crony capitalism, national wage laws under European socialism and pork and patronage under Greek socialism. Now under authoritarianism, there is a tyrannical collectivism at work, as is seen in the Troika technocratic governance and the introduction of Obamacare.
The new normal of tyrannical collectivism is seen in Obamacare regulatory capture, with the WSJ reporting A New Survey Shows That Employers Will Drop Coverage And Cut Hours. One of President Obama’s proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law “makes it easier for businesses to find better coverage options” and “stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable.”
Kate Randall WSWS reporters Obama Proposes Fix To Pro Corporate Health Care Overhaul. Insurers will be allowed to offer health plans through 2014 that do meet the requirements of the Affordable Care Act and will be able to raise premiums on these policies. Yet the reality is that so far is that Four Million Americans Have Had Their Insurance Policy Cancelled, Benson Te reports. Upon realizing this, President Obama backtracks and said “insurers can extend by one year those policies they had canceled for failing to meet the law’s requirements” (WSJ) And in response, the House of Representatives just passed a bill “to let insurance companies sell health plans that had previously been canceled due to ObamaCare regulations” (Fox).
Mike Mish Shedlock writes Washington State Declares That It Will Not Allow Obama’s Fix To Go Through suggesting that rising premiums are only a symptom of the disease. And Mike Mish Shedlock asks Is Obamacare Workable And Is It Constitutional? Has anyone (on either side of the aisle) thought about how their alleged fix was going to work in real life? What constitutional right does Obama have to unilaterally change the law of the land, even if it’s only for a year? And CBS reports Obamacare marketplaces needs relatively healthy customers as Poor Get Into Obamacare Premium Crunch.
The aim of regionalism is to transfer the means of production, and all economic matters, from private ownership to the ownership of the region. While credit and currencies were the operative dynamic of liberalism, debt servitude and statist diktat is the operative dynamic of authoritarianism; private property its rights are being replaced by regional property and its rights.
While liberalism featured capitalism, European Socialism, and Greek Socialism, authoritarianism features regionalism where capital, resources, and property, are overseen by nannycrats for regional security stability, security, and sustainability. Under liberalism, Energy Limited Partnerships, AMJ, such as NGLS, WES, MMP, SEMG, TRGP, SE, ENB, ETP, and PBA, rewarded investment choice. But under authoritarianism, such will, like banks, be integrated into the government as a collective resource. Authoritarianism features regional ownership of productive assets.
Jesus Christ, acting in the economy of God, Ephesians, 1:10, terminated the British Empire, and is now terminating the US Dollar Hegemonic Empire, as He brings forth the Ten Toed Kingdom of Collectivism, seen in Daniel 2:25-45, via the destruction of both Credit, AGG, and Currencies, such as the Japanese Yen, FXY, the Euro, FXE, the Indian Rupe, ICN, and the Brazilian Real, BZF.
The press is abuzz with talk of tapering and there is much concern about ongoing investment and economic stimulus. Liberalism featured inflationism that came via central bank intervention of credit stimulus, as well as currency swaps supporting countries around the world. The failure of credit, seen in the rise of the Interest Rate on the US Ten Year Note, ^TNX, and the trade lower in Aggregate Credit, AGG, as well as the sell of currencies by currency traders, beginning October 23, 2103, is causing destructionism, that is economic deflation and economic recession; and these will be the new normal.
Ann Saphir of Bloomberg reports According to research study co-authors Richard Dobbs and Susan Lund of McKinsey & Company, All told, major central banks have added $4.7 trillion to their balance sheets over the past five years. The findings are sure to resonate among central bankers as they debate when and how fast they may be able to scale down the monetary stimulus they have used to keep deflation at bay and try and pull ravaged economies from the depths of recession. I comment that the world central bank monetary policies had nothing to do with helping economies, simply only bankers.
The world central banks monetary policies, of Global ZIRP and their asset purchases, crossed the rubicon of sound monetary policy on October 23,2013, as documented by the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX higher from 2.48%.
Any more world central bank monetary intervention with more easing will only intensify a vicious cycle of economic deflation, that is economic recession, and assure more credit failure and more currency selloffs, resulting in investors derisking out of Nation Stocks, EFA, and Financial Stocks, IXG, destabilizing democratic nation state rule, and intensifying pressure for regional leaders to renounce national sovereignty, and announce regional pooled sovereignty for regional security, stability and sustainability. Stefan Steinberg of WSWS warns Europe Tilts Back Towards Recession.
Quietly, the world central banks have came out with a new end game, that is to roll out the antifragile financial system, an Alberto Mingardi Econolog Econolib term, where banks of all types, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Nasdaq Community Banks, QABA, and Savings and Loans, S&Ls, such as BOFI, STSA, EBSB, ISBC, STSA, PULB, BANR, are going to be integrated into government, and will will be known as the government banks, or gov banks for short, and will serve as the bedrock for regional governance, which replaces democratic nation state rule.
The Fed, and other central banks don’t have an endgame that includes helping the investor, the working class or middle class. Monetary policies of easing and monetary tools such as $85 billion of purchasing of debt is history, that is history in the sense that it has any useful benefit.
The world central bankers are effecting a global economic and political coup d’etat, … with the ECB announcing a plan to supervise 130 European Banks, and the UK Central Bank providing the new monetary policy tool of the Revised Sterling Monetary Framework, and the US Federal Reserve providing two new monetary policy tools, that is Fixed Rate Full Allotment Reverse Repo Facility, and the Liquidity Coverage Ratio, … pivoting the world from liberalism’s regime of nation state democracy into authoritarianism’s regime of regional statism, specifically regional governance and totalitarian collectivism, except for the Big Apple, as the WSJ reports New York City Takes Left Turn.
Its inevitable that money market fund, MMF, will break the buck, because they are bond based, and interest rates are rising quickly destroying the underlying investment. Thus capital controls are coming soon. Arnold King writing in Ask Blog has it right Rogoff Eventually Says That One Source Of Financial Crisis Is Ordinary Debt. One of the reasons that debt is over-utilized is that it often comes with a government guarantee, either explicit or implicit. One solution he proposes is to get rid of bank deposits. Instead, he would have the Fed run ATMs, and the only transaction accounts people would have would be deposits at the Fed, which I’m guessing would not earn interest. In order to earn interest, people would have to invest in risky securities, (Rogoff was racing through his talk at this point, so I am doing some interpolation here that might not be exactly correct.)
The late June 2013, through October 2013, rally in Energy Production, XOP, and Small Cap Energy, PSCE, was at the leading edge of currency carry trade and debt trade investing; but now investors are deleveraging out of these investments, just like they are out of Emerging Market Infrastructure, EMIF, Emerging Market Mining, EMMT, and Emerging Market Financials, EMFN, as is seen in their ongoing combined Yahoo Finance Chart.
With the Euro, FXE, soon falling faster than the Yen, FXY, and the Steepner ETN, STPP, rising in value on a steepening 10 30 US Soveign Debt Yield Curve, and the Interest Rate on the US Ten Year Note, ^TNX, rising from 2.48, beginning October 23, 2013, investors will be derisking out of World Stocks, VT, and World Small Cap Stocks, VSS, as is seen in the combine ongoing Yahoo Finance Chart of FXE, FXY, STPP, ^TNX, VT, and VSS, with the Emerging Markets, EEM, leading lower. Today, Asia Excluding Japan, EPP, traded lower on a lower Australian Dollar, FXA.
I believe that the next sectors to quickly fall lower will not be the S&P 500 Companies, such as Micron, MU, but the credit dependent Small Cap Pure Growth Companies, RZG, such as HEES, and Small Cap Pure Value Companies, RZV, such as NICK.
Of note, the ongoing combined Yahoo Finance Chart of Ireland, and other EU nations, reflects that Ireland, EIRL, and its Bank, IRE, as well as Seagate, STX and Ingersoll Rand, IR, have been liberalism’s currency carry trade and debt trade darlings, largely on the guarantee of the Troika’s economic governance and implementation of austerity, with Ireland’s’ Finance Ministry reporting Successful Completion Of The Final Review Mission of the EU/ IMF Programme. And Irish Economy writing Ireland To Exit The EU/IMF Programme Without Further Support.
Yes awesome financial rewards came to those who trusted that the Troika would lord it over Ireland and risked nation investment, banking investment and corporate investment in Ireland.
The Grand Finale of liberalism’s finance is seen in the Finviz chart of Ireland, EIRL, and its Bank, IRE, racing higher in an investment crack up boom, while Greece, GREK, and its Bank, NBG, trade parabolically lower, on the falling EURJPY, and the higher Interest Rate on the US Ten Year Note, ^TNX.
Booms are always followed by a horrific bust; such is the nature of the business cycle. Great was the investment boom; how horrific and gruesome will be the bust.
Jonathan Weil of Bloomberg reports Andrew Huszar, as saying “I can only say: I’m sorry America”. He managed the Federal Reserve’s mortgage-backed-security purchase program in 2009-2010, penned an op-ed for the Wall Street Journal in which he apologized for QE: “I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time. (HT Lisa Abramowitz Tweet)
Lohud.com reports Lower Hudson Valley Housing: Buyers are ready, but where are all the homes? Wikipedia relates that Rockland County, NY, located in the lower Hudson Valley, has the largest Jewish population per capita of any U.S. county, with 31.4%, or 90,000 residents, being Jewish. Rockland also ranks 9th on the list of highest-income counties by median household income in the United States with $75,306 according to the 2000 census.About 6% of families and 10% of the population were below the poverty line, including 14% of those under age 18 and 8% of those age 65 or over. In 2010 CNNMoney.com named Clarkstown the 41st best small “city” to live in America, which was the highest such ranking in New York. According to a 2007 estimate, the median income for a household in the town was $92,121, and the median income for a family was $104,909. Males had a median income of $57,773 versus $40,805 for females. The per capita income for the town was $34,430. About 2.5% of families and 3.8% of the population were below the poverty line, including 4.5% of those under age 18 and 3.4% of those age 65 or over. Clarkstown is the most densely populated town in Rockland County and is home to New City, which is the county seat. Clarkstown has more business districts in it than any other town in Rockland County, including the Palisades Center, which is among the largest malls in the world.
On Wednesday, November 12, 2013 US Shares, VTI, rose to new highs on anticipation of Yellonomics, that is on anticipation that Janet Yellen will announce ongoing US Federal Reserve easing. US Stockbrokers, IAI, such as IBRK, ETFC, MKTX, Investment Bankers, KCE, such as MS, rose to new rally highs. The Too Big To Fail Banks, RWW, such as BAC, BK, STI, STT, Regional Banks, KRE, such as FIBK, SBNY FITB, HBAN, and Asset Managers, such as BX, AMP, AMG, rose strongly. Currency traders called the EUR/JPY higher.
Sectors trading higher included Social Media, SOCL, Solar, TAN, Nasdaq Internet, PNQI, Media, PBS, Spin Offs, CSD, IPOs, FPX, Internet Retail, FDN, Consumer Services, IYC, Retail, XRT, Consumer Discretionary, RXI, Pharmaceuticals, PJP, Semiconductors, XSD, Global Industrial Producers, FXR, Transportation, XTN, Aerospace, PPA, Software, IGV, Small Cap Pure Value, RZV, Small Cap Pure Growth, RZG, as well as Homebuilding, ITB. Macys, M, Ross Stores, ROST, Ulta Salon, ULTA, TJX Companies, TJX, Kors, KORS, Foot Locker, FL, Designer Shoe Warehouse, DSW, Nike, NKE, and Rite Aid, RAD, led Retailers, XRT, higher. Yield bearing sectors trading higher included Utilities, XLU, Global Utilities, DBU, US Real Estate, IYR, Small Cap Real Estate, ROOF.
Sectors trading lower included Copper Miners, COPX, and which sent Emerging Market Miners, EMMT, strongly lower.
Japan, NKY, traded higher, with banks, MTU, MFG, and SMFG, and Credit Provider, IX, trading higher. Other nations trading higher included Turkey, TUR, Thailand, THD, Indonesia, IDX, New Zealand, ENZL, India, INP, traded higher with banks, ITUB, IBN, trading higher. Brazil, EWZ, traded higher, with banks, BBDO, BSBR, BBD, IBN, trading higher.
Peru, EPU, traded lower as its Copper Miner, SCCO, traded lower. South Korea, EWY, traded lower with banks SHG, WF, KB, trading lower. Australia, EWA, KROO, traded lower after yesterday’s fall lower in bank WBK, on a lower Australian Dollar, FXA. China, YAO, traded lower with Chinese Financials, CHIX, trading lower.
Aggregate Credit, AGG, traded higher on a Flattening Yield Curve, as is seen in the Flattner ETN, FLAT, trading higher, and the Steepner ETN, STPP, trading lower, and as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.72 %.
On Thursday, November 13, 2013 Silver Miners, SIL, 2.8%, SILJ, 3.7%, and Gold Miners, GDX, +2.7%, GDXJ, 2.8%, led all sectors higher, and that by a much significant factor, on a higher price of Gold, GLD, 1.1%, and a higher price of Silver, SLV, 1.4%.
US Stocks, VTI, rose to a new high on a broad spectrum of stocks, mostly S&P 500, SPY, and S&P 500 High Beta, SPHB, stocks higher, such as MA, QCOM, WHR, DIS, BA, MU, DD, HON, APH, IFF, TWX, MM, JNJ, TXN, VZ, TXN, ITT, EMR, ITW, ADSK, IT,BA, MMM, HD, and MHK.
World Stock, VT, traded higher as currency traders sold the Yen, FXY, which closed lower at 97.72, sending Japan, NKY, higher, with banks, MTU, MFG, and SMFG, and Credit Provider, IX, higher.
Turkey, TUR, Mexico, EWW, Argentina, ARGT, Indonesia, IDX, and Thailand, THD, led the Emerging Markets, EEM, higher. The BRICS, Brazil, EWZ, Russia, RSX, India, INP, and China, YAO, traded higher. Emerging Market Infrastructure, EMIF, traded higher.
A market top, not only in Solar Stocks, but finally in the S&P 500, SPY, is seen in numerous stock charts. Canadian Solar, CSIQ, manifested bearish harami at the top of a parabolic curve. Sunpower Corp, SPWR, manifested a spinning top doji. And the Solar Stocks, TAN, manifested a dark cloud covering candlestick, at the top of an ascending wedge. Amazon, AMZN, Priceline, PCLN, and Nasdaq Internet, PNQI, manifested blow off market tops; seen also in their combined Yahoo chart.
The Too Big To Fail Banks, RWW, and Investment Bankers, KCE, rose to new rally highs, taking Health Care Providers, IHF, Pharmaceuticals, PJP, Homebuilders, ITB, Steel, SLX, US Infrastructure, PKB, Consumer Services, IYC, Global Consumer Discretionary, RXI, Biotechnology, IBB, Internet Retail, FDN, Aerospace, PPA, Transportation, XTN, and Global Industrial Producers, FXR, higher.
Yield bearing sectors trading higher included Mortgage REITS, REM, Utilities, XLU, US Real Estate, IYR, Small Cap Real Estate, ROOF, Industrial and Office REITS, FNIO, were spurred higher by Federal Reserve Vice Chair Janet Yellen’s dovish comments in remarks released ahead of her greatly awaited Senate confirmation hearing, which said the Fed has “more work to do” to help the economy, indicating she was in no hurry to start tapering stimulus.
Aggregate Credit, AGG, traded higher once again, on a Flattening Yield Curve, as is seen in the Flattner ETN, FLAT, trading higher, and the Steepner ETN, STPP, trading lower.
The rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48%, on October 23, 2013, was a pivotal day in investment history, as World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, have traded lower, on falling Emerging Markets, EEM, and falling Emerging Market Financials, EMFN, yet with anticipation of Yellonomics, a sell of the Japanese Yen, and a surprise economic policy in China, these recovered. It was largely money coming out of Pimco’s debt funds, such as BOND, that produced the awesome rise in dollar based stocks. The rise in US Stocks, VTI, has been noticeably bullish, this rise is simply investor euphoria, and makes the S&P 500, SPY, the Large Cap Nasdaq, QQQ, the Large Cap Growth, JKE, and the Too Big To Fail Banks, RWW, walking dead men investments, that is zombie investments.
Benson te writes US Stocks Are On A Wile E Coyote Running Off The Cliff Momentum. The melt up frenzy mode in US stock markets has been broad based. All four major benchmarks from the S&P 500, Dow Jones, Nasdaq and the Russell 2000 have performed strongly.
The bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning October 23, 2013, created an “extinction event” which terminated profitable investing, as well as liberalism, that is the age of investment choice, as Credit, AGG, failed, and Major World Currencies, DBV, such as the Swedish Krona, FXS, and the Australian Dollar, FXA, and Emerging Market Currencies, CEW, such as the Indian Rupe, ICN, and the Brazilian Real, BZF, started sinking.
With the US Dollar, $USD, UUP, trading parabolically higher, the Milton Friedman Free To Choose floating currency democratic nation state regime came to an end. Liberalism’s fiat money, that is the credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, died and outside of the US, VTI, and Japan, EWJ, are no longer able to provide seigniorage, that is moneyness, to fiat assets such as Brazil Small Cap Stocks, EWZS, Emerging Market Infrastructure, EMIF, Emerging Market Mining, EMMT, and Copper Miners, COPX.
Inasmuch as fiat money has died, the sovereignty, that is the rulership of liberalism’s democratic nation states has perished. Democracy as a political experience died, with the rise in the US Ten Year Note, ^TNX, from 2.48% beginning October 23, 2013; as this was an “apocalyptic event” that pivoted the world from liberalism, the age of investment choice, into authoritarianism, the age of diktat. Under authoritarianism, new sovereignty, that being regional governance and totalitarian collectivism, will emerge to provide economic security, stability, and sustainability. This new sovereignty will provide the seigniorage of diktat, that is the moneyness of diktat, via the diktat money system.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as those reported by the such as The Irish Times report Troika Seeking Tough Post Bailout Terms In Ireland In Exchange For Precautionary Loan, heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, budget cuts in social programs such as Head Start, sale of a country’s central bank’s gold reserves, fiscal policy councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, for Eurozone wide fiscal governance, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, as well as in the Eurozone, a fiscal union, where sovereign regional leaders, as well as sovereign regional sovereign bodies, such as the ECB, invoke all kinds of mandates for regional security, stability, and sustainability.
These leaders, that is nannycrats include, Jeroen Dijsselbloem, President of the Eurogroup meeting of euro-zone finance ministers, Olli Rehn, Vice President of the European Commission responsible for economic and monetary affairs, Michel Barnier, EU Commissioner responsible for internal market and services, Klaus Regling, Managing Director of the European Stability Mechanism, Werner Hoyer, President of the European Investment Bank, Jorg Asmussen, Member of Executive Board of the ECB, Viviane Reding, European Commissioner for Justice, Fundamental Rights and Citizenship.
And diktat money is seen in countries with high current account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.
In the age of authoritarianism, diktat and the physical possession of gold bullion will be the two forms of sovereign and sustainable wealth. As credit and currencies increasingly fail, there will be a flight to safety in this hard asset, and there will be a strong ongoing investment demand for it. Some favor silver as precious metal, but gold will have a much stronger demand as it packs more value into a compact size.
The chart of the Gold ETF, GLD, shows a 1.2% price rise; the spot price at gold, $GOLD, of $1,286, may be a bottom; a price of $1,260 is cash cost for a number of gold miners. And the chart of Silver ETF, SLV, shows a 1.4% price rise; the spot price of silver, $SILVER, closed at $20.75.
On Friday, November 14, 2013, Not only did the Janet Yellen confirmation hearings gave investment stimulus, but also in totally surrealistic way, China’s Stock Market Soars On ‘Leaked’ Reform Documents As Bond Markets Seize Up, Benson T reports. And Ambrose Evans Pritchard provides insight writing Chinese President Xi Jinping Announces Free-market Blitz.
China, YAO, China, China Industrials, CHII, China Small Caps, ECNS, China Minerals, CHIM, and
China Financials, CHIX, all rose strongly. Far East Financials, FEFN, blasted higher. Asia Excluding Japan, EPP, soared, as Australia, EWA, KROO, Philippines, EPHE, Vietnam, VNM, Thailand, THD, Indonesia, IDX, and Malaysia, EWM, rose strongly. India, INP, SCIN, Brazil, EWZ, EWZS, Russia, EWZ, ERUS, Turkey, TUR, Argentina, ARGT, rose strongly.
Industrial Miners, PICK, Steel, SLX, Coal Miners, KOL, rose strongly.
Emerging Market Infrastructure, EMIF, Emerging Market Mining, EMMT, Emerging Market Financials, EMFN, all rose strongly.
Sectors rising included Biotechnology, IBB, Transportation, XTN, Pharmaceuticals, PJP, Gaming, BJK, Automobiles, CARZ, Global Consumer Discretionary, RXI, and Retail, XRT, rose.
Yield Bearing Sectors Rising included Global Real Estate, DRW, Shipping, SEA, Utilities, XLU, Energy Partnerships, AMJ, and Global Telecom, IST, rose.
The nation of Greece, GREK, the National Bank of Greece, NBG, and Solar Stocks, TAN, traded lower.
Silver Miners, SIL, manifested no change, and SILJ, no change, and Gold Miners, GDX, -1.7%, GDXJ, -1.2%, on no change price of Gold, GLD, and no change in the price of Silver, SLV.
Call Write Bonds, CWB, rose to an all time high as John Glover of Bloomberg reports Sales of convertible bonds in Europe are at a four-year high as companies take advantage of investor demand stoked by a 15% stock market surge. Air France KLM. And the Milan-based cable maker Prysmian SpA are among companies that have sold $25 billion of notes this year that can be swapped for equity.. Globally, convertible issuance is the highest in three years. Investors are increasingly gravitating toward riskier assets as central banks, led by the European Central Bank’s surprise interest-rate cut last week, step up efforts to suppress borrowing costs and stimulate growth.
Liberalism has attained peak production, and peak profitability based upon debt levels, production facilities, and cost of labor. Peak liberalism has been achieved; that is peak crony capitalism, European Socialism, and Greek socialism, has been attained. AP reports Heinz Closing 3 Plants, Cutting 1,350 Jobs. HJ Heinz is closing three plants in North America and cutting 1,350 jobs in an effort to operate more efficiently. The food maker said Thursday that it will close facilities in South Carolina, Idaho and Canada over the next six to eight months.
And Marketwatch reports Fuji To End Toyota Camry Production in US Fuji Heavy Industries Ltd. (7267.TO) is considering terminating its production of Toyota Motor Corp.’s (7203.TO) Camry sedan at a U.S. plant as requested by Toyota, Kyodo News reported Friday, citing Fuji Heavy officials. Fuji, the maker of Subaru cars, started Camry production in 2007 at the Indiana plant which currently has an annual production capacity of 270,000 units including 100,000 units for the Camry.
International Financing Review posts Hunt For Yield Reaches Fever Pitch. Investors and bankers last week shrugged off concerns of a credit bubble forming and insisted that bumper supply volumes were unlikely to diminish before the end of the year, with issuers keen to pre-empt macroeconomic risks and make use of welcoming market conditions. Since the beginning of October, issuance in the euro and sterling markets by high-yield, corporate and financial institutions has reached US$115bn, according to Thomson Reuters data, just US$22bn short of the total issued in both October and November last year.
Economic Times reports Global Telecom Merger And Acquisition Volume Hits Highest Level Since 2000. M&A volume in the telecom sector sector soared to $ 343.4 billion so far this year, driving Global Telecom Stocks, IST, up 40% in the last year.
Jesus Christ acting in dispensation, that is the oversight, fulfillment and completion of every age, era, epoch and time period, Ephesians, 1:10, has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, with a bow, but without any arrows, has set the bond vigilantes loose to call the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning on October 23, 2013, effected a global economic and political coup d’etat, that terminated democratic nation state sovereignty, together with its credit and currency seigniorage, that since 1971, underwrote global growth and trade, as well as corporate profitability.
The Fed be dead; yes the banker regime, that is The Creature from Jekyll Island died on October 23, 2013; it exists today only as a zombie financial institution of the bygone era of liberalism.
Now, regional nannycrat pooled sovereignty, in particular the sovereignty of regional governance and totalitarian collectivism, and its debt servitude and diktat seigniorage, is underwriting regional security, stability, and sustainability.
The beast regime of regional governance and totalitarian collectivism, with its seven heads occupancy mankinds seven institutions, and its ten horns ruling in the world’s ten regional zones, Revelation 13:1-4, is rising from sovereign insolvency and banking insolvency of the nations, and is making landfall in the Eurozone, occupying with feet of a bear in EU banking supervision in Frankfurt Germany; with mouth of a lion in NATO headquarters in Brussels; and camouflage of a leopard in the statist, collective experience of not only Obamacare but technocratic governance in Greece.
Salon’s Andrew Leonard posts Ayn Rand, of course, is herself one of the fountainheads of modern get-rid-of-government libertarianism. Alexander Hamilton was something quite different. The first secretary of the Treasury not only created the nation’s first central bank, but was also the earliest and most forceful advocate of a strong government role in developing the U.S. economy. In his Report on Manufactures he laid out in painstaking detail a program for industrial policy arguing that if the United States was to compete with the established nations of Europe and make the most productive use of its labor possible, the government needed to get involved. America’s budding manufacturing start-ups needed help! He wrote “To be enabled to contend with success, it is evident, that the interference and aid of their own government are indispensable,” he wrote. To this day, hard-money libertarians, such as Thomas DiLorenzo, who writes in Mises.org, Alexander Hamilton: The Founding Father of Crony Capitalism, are aghast at Hamilton’s strong advocacy of issuing government debt to pay for infrastructural improvements and other measures that would implement federal economic policy.
Just as Alexander Hamilton fathered the interventionism of crony capitalism, there are those in the Eurozone today who are fathering the interventionism of regionalism; these fountainheads of regional governance and totalitarian collectivism include Prime Minister Antonis Samaras, Jeroen Dijsselbloem, Olli Rehn, Michel Barnier, Klaus Regling, Werner Hoyer, and Jorg Asmussen.
Summary of the financial market trading over the last week and month
The combined ongoing Yahoo Finance chart of the United States, VTI, Nikkei, NKY, Eurozone, EZU, Australia, EWA, Sweden, EWD, South Korea, EWY, China, YAO, Russia, RSX, Brazil, EWZ, EWZS, India, INP, SCIN, communicates that for the last month, the bond vigilantes in calling the Interest Rate higher on the US Ten Year Note, ^TNX, higher from 2.48%, has destroyed Aggregate Credit, AGG, and has commenced global competitive currency devaluation, in particular the Australian Dollar, FXA, and the Indian Rupe, ICN, causing disinvestment out of the periphery nations, evidencing the beginning of the failure of global growth and trade, and causing a crack up boom in the Nikkei, NKY, and US Stocks, in particular the Large Cap Growth Stocks, JKE, US Large Cap Value Stocks, Large Cap Nasdaq Stocks, QQQ, the Small Cap Value Stocks, RZV, and the Small Cap Growth Stocks, RZG, as is seen their combined ongoing Yahoo Finance chart, with the S&P 500, SPY, stocks, such as those in this Finviz Screener, such as MU, and DAL, being the primary beneficiaries of a rally in the US Dollar, $USD, UUP, and a sell of the Japanese Yen, FXY, as is seen in their combined ongoing Yahoo Finance chart.
The destruction of Aggregate Credit, AGG, is seen in combined ongoing Yahoo Finance chart of the Zeroes, ZROZ, 30 Year US Government Bonds, EDV, US Ten Year Notes, TLT, Longer Duration Bonds, BLV, Short Duration Bonds, LQD, World Treasury Debt, BWX, and International Corporate Debt, PICB. Junk Bonds, JNK, and Ultra Junk Bonds, UJB, have experienced a melt up rally in conjunction with the S&P 500 Stocks, as is seen in their ongoing combined Yahoo Finance Chart.
The Janet Yellen confirmation rally drove the S&P 500, SPY, and US Stocks, VTI, higher to attain peak fiat wealth; but it failed to bring Nation Investment, EFA, and Global Financials, IXG, to new rally highs, thus communicating that a bear market stock market commenced October 23, 2013, when these two global bellwether investments turned lower in value, as the Interest Rate on the US Ten Year Note, ^TNX, rose from 2.48, with the result of commencing debt deflation, that is currency deflation in the Major World Currencies, DBV, and Emerging Market Currencies, CEW.
Nation Investment, EFA rose 1.5%; yet it is still trading below its October 23, 2013 high.
EEM rose 2.6% these received leverage on a slight rise in Emerging Market Currencies, CEW, and a rise in the Flattner ETF, FLAT, and a decline in the Steepner ETF, STPP, and 1.5% trade lower in the Interest Rate on the US Ten Year Note, ^TNX, which closed the week at 2.71%.
VTI rose 1.7%, new high
NKY 6.1, new high; a gift from the currency traders on their sale of the Japanese Yen, FXY; Japanese 10-year “JGB” yields closed up slightly at 0.63%, which enabled a tiny rise in their inverse, JGBS.
Chikako Mogi of Bloomberg reports Japanese companies eased off on capital-spending growth in the third quarter and failed to step up exports even with a cheaper yen, contributing to an economic slowdown that puts pressure on Prime Minister Shinzo Abe. Gross domestic product rose at an annualized 1.9%, down from 3.8% the previous quarter, with the gain relying on government spending and an accumulation of inventories. A widening trade gap lopped off 1.8 percentage point from growth. Corporate investment increased 0.7%, down from 4.4%. ‘Warning lights are flashing for Abenomics,’ said Kiichi Murashima, chief economist at Citigroup Inc. in Tokyo. ‘With the absence of further weakening in the yen and a clear global recovery, Japan’s recovery is losing momentum.’”
Nations trading higher included
YAO rose 5.1%, new high
ECNS 4.0, new high
EIRL 2.6, new high
EWZS 2.2; Brazil and its Small Cap Stocks is one of the first investor-recognized failed democracies.
The Nation of Brazil, EWZ, exists solely because it has currency swaps with the US Fed and other world central banks. Brazil’s Financials, BRAF, that is Brazil’s banks, BBD, ITUB, BBDO, BSBR, are truly failed failed financial institutions BBD, ITUB, BBDO, BSBR, are truly failed financial institutions.
GREK declined 3.4%, on NBG -5.9; Greece is an insolvent nation and receives seigniorage aid from the Troika for its fiscal spending needs. Doug Noland reports Ten-year Portuguese yields slipped 2 bps to 5.87%, Italian 10-yr yields fell 5 bps to 4.09%, Spain’s 10-year yields were down 5 bps to 4.06%, German bund yields declined 5 bps to 1.71%, French yields fell 5 bps to 2.18%,. Greek 10-year note yields rose 23 bps to 8.24%.
EPU, -2.8 on COPX -2.4 and SCCO -4.2
Global Financials, IXG rose 1.5%; it is still trading below its October 23, 2013 high.
RWW 1.5, new high
IAI 1.9, new high, peak investment experience has been achieved.
KCE 1.5, new high
FEFN 6.2, new high
CHIX 4.5, new high
BRAF 1.4 Brazil’s banks, BBD, ITUB, BBDO, BSBR, are truly failed failed financial institutions
Global Natural Resources,GNR rose 1.1%
OIH, 0.2, new rally high
World Stocks, VT, rose 1.5%, a new rally high; with sectors rising as follows
XTN, 4.2, new high
PNQI 4.1, new high
XRT 3.7 new high
CSD 3.3, new high
FDN 3.1, new high
PJP 3.0, new high
PBJ 2.9, new high
PBS 2.9, new high
FXR 2.5, new high
RXI 2.5, new high
IYC 2.5, new high
FPX 2.5, new high
PKB 2.3, new high
RXI 1.7, new high
PSCI 1.7, new high
RZV 1.6, new high
RZG 1.5, new high
KXI 1.4, new high
PPA 1.0, new high
TAN 1.0, new high
Yield bearing sectors trading higher
PHO rose 2.8%
The chart of the S&P 500, $SPX, SPY, manifested a close at 1798; up 1.6% for the week; Finance My Money writes S&P Up 26% YTD.
Of note, the charts of an number of commodities, such as Corn, CORN, suggest a bottoming out. Corn is either at a bottom of 31.49 or 31.00 or 30.
Ratios suggest peak fiat wealth has been achieved
The US is likely achieving a double top peak in M2 Money as recent readings are as follows
The spot price at gold, $GOLD, closed the week at a price of $1,289; The spot price of silver, $SILVER, closed the week at a price of $20.77
I believe that there will be an investment demand for gold, but none for silver. And as such I expect Silver, SLV, to be seen as an industrial metal, just like base metals, DBB, and its price will begin to depart from gold, GLD.
3) … In news of Brazil credit, failure of coherent fiscal policy and incestious corporate government credit policy, have destroyed infrastructure development, economic growth and investment opportunities in Brazil.
11/07/2013 Bloomberg reports Investors Fear Treasury Debt Downgrade After Tax Revenue Shortfall
11/07/2013 Brazil Portal and Agriculture.com reports Brazil’s Crop Logistics Drama
11/05/2013 Bloomberg reports Brazil Real Tumbles On Concern Government Lax On Budget Deficits
11/04/2013 Bloomberg reports Shiller’s Bubble Warning Dismissed In Brazil Loan Surge. Brazil’s President Dilma Rousseff is disregarding warnings about a housing bubble and is stoking demand instead by helping people buy more homes as prices surge.
10/28/2013 Merco Press News And Brazil Portal report Rousseff And Mantega Dispute IMF Report On Brazil As Incoherent.
10/21/2013 Brazil Portal and The Economist report Public Finances In Brazil: Going For Broke In this week’s print issue we wrote about the huge increase in government-subsidised credit in Brazil in recent years, funnelled through state-controlled institutions such as the national development bank, BNDES, and Caixa Econômica Federal, a state retail bank. This is weakening the banks’ balance-sheets and cutting their credit ratings—and damaging the credibility of official statistics as the government manoeuvres to try to hide the impact on its own finances.
On October 14th the finance minister signalled a change of course, saying that over the next few years the government would gradually stop capitalising BNDES with transfers from the treasury. But as we explained in print, the electoral appeal of cheap consumer credit and the government’s desire to use BNDES to fund a big upcoming infrastructure-concession programme make it doubtful that such good intentions will become reality.
Equally worrying for Brazil’s public finances is the news that the federal government is about to make it easier for states and municipalities to take on more debt. The Fiscal Responsibility Law of 2000 bailed out local governments who had taken on debts they could not repay, with one of the conditions being the acceptance of strict limits on total future indebtedness. The law is generally regarded as having been an essential precondition for Brazil’s subsequent economic stabilisation and growth, including keeping inflation under control, gaining investment-grade status, rescuing tens of millions from dire poverty and creating a vast new lower-middle class
10/18/2013 Bloomberg reports Ending Blind Loans to Aid Crackdown on 323% Rates Brazil’s President Dilma Rousseff is disregarding warnings about a housing bubble and is stoking demand instead by helping people buy more homes as prices surge.
01/09/2013 Reuters reports Brazil Backs Away From Budget Target Policy Pillar Brazil goes after corporate taxpayers as revenue dwindles. Brazil’s hot, dry summer may lead to energy rationing.