Archive for November, 2010

ST Residential Acquires Allure Waikiki

November 30, 2010

James of RedLightRevolt reports ST Residential, a public-private partnership between the FDIC and a consortium of private-equity investors, which is managed by Greenwich, CT based Starwood Capital Group, has bought Allure Waikiki, a 35 story condo tower in Honolulu.

Case-Shiller Results Indicate Broad-Based Home Price Declines

November 30, 2010

Scott Norris reports S&P/ Case-Shiller results indicate broad-based declines

Erin Schumaker reports Windy City home prices continue their downward spiral

They Will Only Be Rescued Together

November 30, 2010

Francois Mitterrand prophetically said: “Since each nation is undergoing a crisis, they all tend toward egotism. Each country first wants to rescue itself, whereas they will only be rescued together.”  Time Magazine, An Interview with Mitterrand, October 19, 1991.

Marketwatch reports Michael Hewson, an analyst at CMC Markets. “It is now becoming increasingly clear that the only options open for a final solution are to either adopt closer fiscal policies across all European countries, and with austerity fatigue already creeping in across European populations that looks unlikely, or for the single currency to somehow restructure itself in a manner that represents the differences between the respective stronger and weaker economies.”

I’m 60, living, in the Pacific Northwest, it’s only been recently that I’ve been interested in economics and investments, and have read some on Austrian Economics, and have benefited from insight into some of its principles such as debt deflation; but I’m not a libertarian, I am a Reformed Christian and bond-servant of Jesus Christ.   

Years ago, I stumbled across the book En Route To Global Occupation by Gary H. Kah, Huntington House Publishers, Lafayette, Louisiana, 1992. And now its chapters come back to memory to fit in with the Bible’s prophetic Book of Revelation Chapter 13, to help me understand that out globalization, waves of carry trade investing, quantitative easing, and a currency union in sovereign crisis, ten regions of global governance are forming.

Bible prophecy portends that those living in the Eurozone, as well as all the world, will see a loss of national sovereignty, and live in debt servitude to the beast system of global corporatism, ruling through mankind’s seven institutions and in ten regions of global governance, as held forth in Revelation 13:1-4 where a beast, having seven heads and ten horns rises from the sea.   

We are witnessing the rise of global corporatism, that is state corporate rule in the Eurozone as David Cameron, Dominique Strauss Kahn and Olli Rehn wrapped up a seigniorage aid bailout plan for Ireland, surrounding what the International Monetary Fund chief described as sovereign crisis, as Philip Aldrick, Economics Editor of The Telegraph wrote in November 19, 2010 article, IMF Chief Dominique Strauss-Kahn Urges Leaders To Cede More Sovereignty To EU.

Sovereign crisis arose November 5, 2010 as bond vigilantes sustained the interest rate on the US 30 Year Government Bond, $TYX, above 4%, as the US Federal Reserve’s Quantative Easing 2, constitutes monetization  of debt; and as Econogirl related on November 10, 2010, that the German government has stepped up its insistence that bond holders must take on some of the costs for any new bailout of sovereign debt; and with Germany’s Merkel call for a sovereign default mechanism at the meeting of the European Task Force On Economic Governance on October 28, and October 29, 2010.  

As a result the currency traders sold the world’s major currencies, DBV, and emerging currencies, CEW, causing the US Dollar, $USD, to rise. This caused World Government Bonds, BWX, and International Corporate Bonds, PICB, to sell off. And commenced an Elliott Wave 3 Down to start in the Euro, FXE, world stocks, ACMI, as well as in the S&P, SPY.

Now, a Core of Europe is emerging in the midst of a sovereign crisis. Rompuy, Merkel and Sarkozy on November 28, 2010, negotiated and announced, a Leaders’ Framework Agreement to establish a permanent crisis mechanism, that will replace that European Financial Stability Fund, EFSF, that expires in mid-2013.  This sovereign debt default mechanism is called the European Stability Mechanism, ESM.

We see that today, Germany is one of the power forces, in attempting to find a way out of Europe’s sovereign crisis.  Ambrose Evans Pritchard commented, on May 2, 2010, in the Telegraph.co.uk, in words reminiscent of Margaret Thatcher: “If the aim of Helmut Kohl and Francois Mitterrand at Maastricht was to tie down a ‘European Germany’ with the silken chords of emu, they failed. Monetary union has delivered a ‘German Europe’ after all. And he continues, We now know the answer to Henry Kissinger’s question: “Who do I call if I want to call Europe?” Only one person matters. The Chancellor of Germany.

Evidence abounds that Portugal, Italy, Ireland, Greece and Spain no longer have sovereign debt seigniorage, and are not viably obtaining and will not be viably obtaining revenue from sovereign debt sales; any upcoming bond sales are being done by banks, which submit debt or have submitted debt to the ECB for funding of new debt issues. Such means of obtaining money is simply a Ponzi financing, it is monetization of debt, and cannot be sustained much longer.

Faced with “almost terminal problems,” Dennis Gartman on CNBC  said the euro could soon unravel. “Eventually, the euro breaks apart into a northern euro and a southern euro,” said Gartman, explaining that the Continent’s many languages, religions and cultures are too diverse for the singular currency to work.

Theyenguy believes the sovereign crisis will intensify, and that out of  Götterdämmerung, that is an investment flameout, according to Bible Prophecy, a Sovereign, Revelation 13:5-10, and a Seignior Revelation 13:11-18, an Old English term for top dog banker who takes a cut, will emerge to establish fiscal sovereignty and credit seigniorage for both Europe’s financial institutions and residents as well all the world.
  
Jean-Claude Trichet in address Global Governance Today, made before the Council on Foreign Relations, CFR, on April 26, 2010, called for this new financial state-of-being where he said: “For the good and appropriate functioning of global finance it is extremely important that we, in this new ownership of global governance, have — particularly on both sides of the Atlantic — the implementation of the same rules in the same fashion.”  

Soon there will come unified regulation of banking globally, as referred to in the James Politi and Gillian Tett Financial Times article NY Fed Chief In Push For Global Bank Framework, where The Seignior will oversee all matters of debt and credit, most likely through the Bank for International Settlements, and will eventually implement a global currency system. Carroll Quigley, in his book Tragedy and Hope, relates that the BIS will “create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.”

Francois Mitterrand, was a great prophet in saying “they will only be rescued together” — their deliverance if it be called that, will be the rule of fiscal sovereignty and monetary seigniorage coming from Europe’s Core, that is Brussels, Frankfurt and Basel where a common EU Treasury will provide credit and funding. Won’t that be a shocker to all anarcho capitalists. Such was God’s Plan from Eternity Past.

Bible Prophecy Reveals That Out Of An Investment Flameout A Sovereign And A Seignior Will Arise To Provide Fiscal Sovereignty And Monetary Seigniorage

November 30, 2010

A Core of Europe is emerging in the midst of a sovereign crisis. Rompuy, Merkel and Sarkozy on November 28, 2010, negotiated and announced, a Leaders’ Framework Agreement to establish a permanent crisis mechanism, that will replace that European Financial Stability Fund, EFSF,  that expires in mid-2013.  This sovereign debt default mechanism is called the European Stability Mechanism, ESM.  We see that today, Germany is the power force, in a type of revived roman empire, is attempting to find a way out of Europe’s sovereign crisis.  Ambrose Evans Pritchard commented, on May 2, 2010, in the Telegraph.co.uk, in words reminiscent of Margaret Thatcher: “If the aim of Helmut Kohl and Francois Mitterrand at Maastricht was to tie down a ‘European Germany’ with the silken chords of emu, they failed. Monetary union has delivered a ‘German Europe’ after all. And he continues, We now know the answer to Henry Kissinger’s question: “Who do I call if I want to call Europe?” Only one person matters. The Chancellor of Germany.

Evidence abounds that Portugal, Italy, Ireland, Greece and Spain no longer have sovereign debt seigniorage, and are not viably obtaining and will not be viably obtaining revenue from sovereign debt sales; any upcoming bond sales are being done by banks which submit debt or have submitted debt to the ECB for funding of new debt issues. Such means of obtaining money is simply a Ponzi financing, it is monetization of debt, and cannot be sustained much longer. 

Faced with “almost terminal problems,” Dennis Gartman on CNBC  said the euro could soon unravel. “Eventually, the euro breaks apart into a northern euro and a southern euro,” said Gartman, explaining that the Continent’s many languages, religions and cultures are too diverse for the singular currency to work.

Theyenguy believes the sovereign crisis will intensify, and that out of  Götterdämmerung, an investment flameout, according to Bible Prophecy, a Sovereign, Revelation 13:5-10, and a Seignior Revelation 13:11-18, an Old English term for top dog banker who takes a cut, will emerge to establish fiscal sovereignty and credit seigniorage for both Europe’s financial institutions and residents; the Seignior will be establish a common EU Treasury.

Those living in the Eurozone, as well as all the world, will live see a loss of national sovereignty, and live in debt servitude to the beast system of global corporatism, ruling through mankind’s seven institutions and in ten regions of global governance, as held forth in Revelation 13:1-4.  Jean-Claude Trichet in address  Global Governance Today, made before the Council on Foreign Relations, CFR, on April 26, 2010, called for this new financial state-of-being where he said: “For the good and appropriate functioning of global finance it is extremely important that we, in this new ownership of global governance, have — particularly on both sides of the Atlantic — the implementation of the same rules in the same fashion.”  

Soon there will come unified regulation of banking globally, as referred to in the James Politi and Gillian Tett Financial Times article NY Fed Chief In Push For Global Bank Framework, where The Seignior will oversee all matters of debt and credit, most likely through the Bank for International Settlements, and will implement a global currency system. Carroll Quigley, in his book Tragedy and Hope, relates that the BIS will “create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.”

Related Reading

I write Might A Sovereign And A Seignior Arise Out Of Europe’s Sovereign Crisis To Secure The Euro As A Currency And Provide Stability To All Nations Involved?

Gregory White reports Basically, Everything In Europe Comes Down To Germany

Mike Whitney writing in CounterPunch.org asks: Should the Irish be debt-peons in EU’s corporate Uberstate?
BrittGellette relates that the Bible reveals in Daniel 2:44, in the last days, the world will be ruled by a global government; this resurrected Roman Empire’s reign will be brief, but it will be like no other kingdom before it. This will be the first truly global government since the fall of Adam and Eve, and it will be responsible for a terrible amount of destruction being destroyed by the glorious appearing of Jesus Christ who “will set up a kingdom that will never be destroyed”.
 
Nathan Jones writes the inevitable world leader the Bible predicts who will rise from the Revived Roman Empire will crush it (Dan. 9:26), most likely when he subdues three of the kings from the very Union he rises from (Dan. 7:24). In the end, no nation will break free from the black current of globalism that will engulf first Europe then all the nations of the world. But, the Rock cut not by human hands — Jesus the Messiah — will return to “crush all those kingdoms and bring them to an end, but it will itself endure forever,” setting up the kingdom of God “that will never be destroyed, nor will it be left to another people” (Dan. 2:44-45).
Feltor writes of The Enduring Impact of German Unification, 20 Years On of which excerpts follow: When the long-sought but controversial implementation of a European Monetary Union (EMU) finally began, as part of the bundle of deals that produced German reunification 20 years ago, on October 3,  it represented a significant accomplishment.
Though the idea of a single European currency had been around at least since the Werner Report of the 1970s, German reunification provided the necessary catalyst. The 1970 Werner Report was a prime example: it originally called for an EMU within a decade, but each subsequent effort stalled short of implementation. The prospect of denationalizing currency and surrendering control over a fundamental tool of statecraft, currency valuation, was daunting to the member states of the European Community (EC). Politicians knew that they risked running afoul of voters if they surrendered too much sovereignty. West Germans, in particular, felt an extremely strong attachment to their postwar currency, the deutsche mark; for them, it was synonymous with the economic renewal, prosperity, and stability of the Cold War years, following on the trauma of the Weimar and Nazi eras. Beyond political worries, national capitals clashed over the question of independence for a future European Central Bank (ECB): West Germans cherished their independent Bundesbank and felt certain that it should have independence; the French prioritized political control over central bankers and how strict the convergence criteria should be that is, how much inflation and sovereign debt would be acceptable.
It took the opening of the Berlin Wall on November 9, 1989, and the actions of two decisive leaders — West German Chancellor Helmut Kohl and French President François Mitterrand — to cut through the controversy and make the single currency a reality. The historian David Marsh singles out the bargain that Kohl and Mitterrand negotiated in 1989-90 as “ the essential deal that launched Europe on the Maastricht monetary union path.” The deal originated in the work of European Community Commission President Jacques Delors. Heading an eponymous committee, Delors made a fresh effort to map out a path to EMU in an April 1989 report. He found that the critical step, from which all else would follow, would be to convene an intergovernmental conference (IGC) for the purpose of implementing a single currency. However, the Delors Committee Report left deadlines vague, jeopardizing the prospects for its success.

With the collapse of the Berlin Wall, Mitterrand saw an opportunity for rapid convocation of Delors’ IGC. He understood that the wall’s collapse would motivate Kohl to seek German reunification, and he realized that the smart move would be to embed increased German strength in a monetary union as soon as possible. Both Mitterrand and Kohl realized that it would be extremely difficult to reunite Germany if EC members became worried about a threatening resurgence of German nationalism. Kohl always believed strongly in European integration; the opening of the wall did nothing to undermine his trust in Konrad Adenauer’s saying that “ German problems can only be solved under a European roof.” Kohl fundamentally agreed with the goal of a common currency, although he had previously indicated that it should be accomplished in future decades. Nevertheless, he understood that West German voters, a majority of whom favored European integration and worried about the costs of rebuilding East Germany, would resist a go-it-alone reunification process that alienated the EC. Given France’s weight in the EC, this meant that Kohl needed Mitterrand’s approval to proceed.

In return, Mitterrand asked that Germany assent to move toward a single currency as soon as possible, with the crucial IGC convening by the end of 1990. Mitterrand further insisted that the opening of the IGC be announced in December 1989 during the French presidency of the European Council. If the French president could preside over a significant declaration about the future of European integration on French soil, Mitterrand would advocate within the EC for German unification. In the interest of success, Mitterrand acceded to German wishes for the full independence of a future ECB.

The 1989 Strasbourg summit announced both the opening of the IGC and the EC’s favo-rable attitude toward German unification. The IGC commenced roughly a year later in Rome, on December 15, 1990, and completed its work in December 1991 in Maastricht. In the end, the EC convened two IGCs in December 1990 — one on EMU and another on the political union of the EC’s member states. During this period, the West German officials pushed for integration and hoped to combine the single currency with a matching increase in political-institution building. Mitterrand was willing to consider robust economic governance of the eurozone but was loath to create new political institutions, and he prevailed — Europe would share a currency but not a treasury.

It is surprising and somewhat ironic that Kohl and Mitterrand achieved one of the greatest feats in the history of money. Neither had expertise, or even interest, in economic and monetary matters apart from their political impact. Indeed, the despairing president of the Bundesbank in the 1980s, Karl Otto Pöhl, told the Financial Times — while he and Kohl were both in office — that the chancellor knew nothing about economics.

Keywords

sovereignandseignior, revivedromanempire, oneeurogovernment

Half The Homes In Richmond’s 94801 Zip Code Are In Foreclosure, Or Getting There

November 30, 2010

 Julia Landau, Richmond Confidential reports in BayCitizen that Half The Homes In Richmond’s 94801 Zip Code Are In Foreclosure, Or Getting There. I relate that Richmond 94801 was targeted by Wall Street Bankers and mortgage lenders for no documentation and low documentation subprime and Alt-A and Option Arms lending.

Icon Bicknell Is An Urban Oasis

November 30, 2010

The Official Nightclub Directory reports: Now is the time to experience the icon. Icon Brickell is an urban oasis, just steps from the financial district and downtown Miami and a short drive from South Beach, Coral Gables, the Performing Arts Center, and the Design District

Bond Vigilantes Call Sovereign Debt Interest Rates Higher And Currency Traders Sell The Euro As The European Sovereign Crisis Deepens On News That van Rompuy, Merkel and Sarkozy Negotiate A Convoluted Default Mechanism

November 29, 2010

Financial Market Report For November 29, 2010

Theyenguy reports that Rompuy, Merkel and Sarkozy on November 28, 2010, negotiated and announced, a Leaders’ Framework Agreement to establish a permanent crisis mechanism, that will replace that European Financial Stability Fund , EFSF,  that expires in mid-2013. This sovereign debt default mechanism is called the European Stability Mechanism, ESM. We see that today, Germany is the power force, in attempting to find a way out of Europe’s sovereign crisis.  Ambrose Evans Pritchard commented, on May 2, 2010, in the Telegraph.co.uk, in words reminiscent of Margaret Thatcher: “If the aim of Helmut Kohl and Francois Mitterrand at Maastricht was to tie down a ‘European Germany’ with the silken chords of emu, they failed. Monetary union has delivered a ‘German Europe’ after all. And he continues, We now know the answer to Henry Kissinger’s question: “Who do I call if I want to call Europe?” Only one person matters. The Chancellor of Germany.

Forex Live provides the Market News International reports  EU Van Rompuy’s Statement On Mechanism For Future EMU Crises:  “European Council President Herman Van Rompuy Sunday greeted the  announcement by Eurozone Finance Ministers of their agreement on the creation of a new permanent crisis facility, the European Stability Mechanism, ESM. The ESM, which will start in mid-2013 after the temporary European Financial Stability Facility expires, would provide liquidity to troubled EMU states in exchange for stringent fiscal and economic policy adjustments. It also includes a process by which private creditors might have to face lower interest rates, extended maturities or haircuts on the face value of bonds issued by states that are determined to be insolvent. But that process would not affect any bonds purchased before June 2013.  Below is the verbatim text of Van Rompuy’s statement:

“The President of the European Council, Herman Van Rompuy, welcomes the statement of the Eurogroup on the European stability mechanism. It follows an agreement between the President of the European
Council, the President of the Commission and the President of the Eurogroup that, in view of markets developments, it was important to clarify some issues urgently notably in relation with the role of the
private sector. Our framework will be fully consistent with the IMF approach.

This agreement, together with the implementation of the measures proposed by the Task Force on economic governance and endorsed by the European Council of a month ago, will strengthen the economic  governance and the cohesion of the Euro area. Herman Van Rompuy will submit in December a text on a limited Treaty change which will reflect today’s decision by the Eurogroup.”

Open Europe Press Summary of November 29, 2010 reports: “The Eurozone Crisis Mechanism Will See Bondholders Involved On A Case-By-Case Basis From 2013. Eurogroup Statement ECOFIN Statement Eurozone finance ministers also reached agreement on the creation of a new permanent resolution mechanism for ailing eurozone countries. The new fund will replace the existing €440bn EFSF when it expires in 2013.

In spite of Germany’s demands to make bondholders take automatic “haircuts” in the event of future eurozone bailouts, under the scheme agreed yesterday the involvement of the private sector will be decided on a case-by-case basis. Eurozone finance ministers will decide by unanimity whether assistance is needed by a eurozone country. However, if the country’s debt position is considered unsustainable by the IMF, the ECB and the European Commission, the concerned government will have to enter negotiations with its private sector creditors to restructure its debt. To this end, “collective action clauses” will be annexed to all eurozone government bonds issued after June 2013.” 

Furthermore, Open Europe relates that Der Spiegel reports that Volker Wissing, financial expert from the FDP, German Chancellor Angela Merkel’s coalition partner, has said that, if there are no talks by mid-December about the future participation of banks and financial investors in sovereign defaults, “there will be an uprising in the FDP.”

EuroIntelligence reports “Markets Give Thumbs-Down To Irish Agreement: A snapshot of the bond markets this morning, as compared to Friday morning. The yield spread – the measure of risk is unchanged in the case of Ireland and Spain, and it is marginally low for Greece and Portugal. But the spread is only a difference. German yields themselves rose further, to 2.76% this morning, which reflects market concerns about the bailout burden on Germany, but without alleviating the concerns about default risk in the periphery. It is a kind of the worst of both worlds scenarios. This is an exceptionally bad reaction to the deal, especially as a lot of questions are now answered. To us, this suggests that the markets are concerned about Ireland’s fundamental solvency, something no bailout package can ever address. And we cannot see how interest rates at 6% are consistent with solvency”.

Ambrose Evans Pritchard writes Contagion Strikes:  “Spreads on Italian and Belgian bonds jumped to a post-EMU high as the sell-off moved beyond the battered trio of Ireland, Portugal, and Spain, raising concerns that the crisis could start to turn systemic. It was the worst single day in Mediterranean markets since the launch of monetary union.

While the Irish rescue removed the immediate threat of “haircuts” for senior bondholders of Irish banks, it leaves open the risk of burden-sharing from 2013 on all EMU sovereign bonds and bank debt on a “case-by-case” basis. Traders said bond funds have been dumping Club Med bonds frantically to comply with their “value-at-risk” models before closing books for the year.

Yields on 10-year Italian bonds jumped 21 points to 4.61pc, threatening to shift the crisis to a new level. Italy’s public debt is over €2 trillion, the world’s third-largest after the US and Japan.

“The EU rescue fund cannot handle Spain, let alone Italy,” said Charles Dumas, from Lombard Street Research. “We we may be nearing the point where Germany has to decide whether it is willing take on a burden six times the size of East Germany, or let some countries go.”

Italy distanced itself from trouble in the rest of southern Europe early in the financial crisis, benefiting from rock-solid banks, low private debt, and the iron fist of finance minister Giulio Tremonti. But the crisis of competitiveness never went away, and the country has faced a political turmoil for weeks.

If Portugal and Spain have to follow Ireland in tapping the EU’s €440bn bail-out fund – as widely feared after Spanish yields touched 5.4pc – this will put extra strains on Italy as one of a reduced core of creditor states. The rescue mechanism has had the unintended effect of spreading contagion to Italy, and perhaps beyond. French lenders have $476bn of exposure to Italian debt, according to the Bank for International Settlements.

In Dublin, Fine Gael, Labour and Sinn Fein have all vowed to vote against the austerity budget in early December, raising doubts over whether the government can deliver on its promises to the EU.
Echoing the national mood, Sinn Fein leader Gerry Adams said it was “disgraceful” that the Irish people should be reduced to debt servitude to foreign creditors of reckless banks. “The costs of this deal to ordinary people will result in hugely damaging cuts,” he said.

One poll suggested a majority of Irish voters favour default on Ireland’s bank debt. Popular fury raises the “political risk” that a new government elected next year will turn its back on the deal.

Premier Brian Cowen said there was no other option. “We are not an irresponsible country, ” he said, adding that Brussels had squashed any idea of haircuts on senior debt. Irish ministers say privately that Ireland is being forced to hold the line to prevent a pan-European bank run.

There is bitterness over the EU-IMF loan rate of 5.8pc, which may be too high to allow Ireland to claw its way out of a debt trap. Interest payments will reach a quarter of total revenues by 2014. Moody’s says the average trigger for default in recent history worldwide has been 22pc. “The interest bill is enormous. The whole process lacks feasibility,” said Stephen Lewis, from Monument Securities.”

Bespoke Investment Group charts show Spanish Credit Default Swaps Go Parabolic

Michael Patterson and Krystof Chamonikolas of Bloomberg report Hungary Stocks Enter Bear Market, Bonds Sink on Concern Crisis Will Expand. Hungary’s benchmark equity index dropped more than 20 percent from its 2010 peak and government bonds sank as a surprise interest-rate increase compounded concern that Europe’s debt crisis is spreading east.

Zoltan Simon of Bloomberg in article Hungary Follows Argentina in Pension Fund Ultimatum reports
Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension. Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.

Currency traders sold the Euro, FXE

The currency traders sold the Euro, FXE: it fell 0.95% today to close at 130.73.

An Elliott Wave 3 down commenced on November 4, 2010, as the Euro peaked out at 141.50 and fell to 139.83 on November 5, 2010, as presented in Elliott Wave Surfer Chart in article EUR/USD – Wave 3 of 3 Down Has Already Begun.  I comment that the 3 of 3 Waves are the most sweeping and energetic of all economic waves, they build wealth on the way up and destroy wealth on the way down. This wave, will for all practical purposes, destroy the Euro; and wipe out all European economic structures as they are known today.  

Currencies that the currency traders have strongly sold since November 5, 2010 include:
Euro, FXE, -6.5%
New Zealand Dollar, BNZ, -6.2%
Swedish Krona, FXS, -5.6%
Australian Dollar, FXA, -4.8%
South Africa Rand, SZR, -4.7%
Indian Rupe,  ICN, -4.3%
Swiss Franc, FXF, -4.0%
Russian Ruble, XRU,  -3.9%
British Pound Sterling, FXB, -3.9%
Emerging Market Currencies, CEW, -3.6%

November 5, 5010, was a day that will live in financial infamy as the bond vigilantes sustained the interest rate on the 30 Year US Government Bond, $TYX, above 4% on the principle that the US Federal Reserve Quantative Easing 2 constitutes monetization of debt. It was at this time also that the bond vigilantes called sovereign debt interest rates higher globally as Mrs Merkel called for a sovereign debt default mechanism. This stimulated a fall in world government bonds, BWX, from 62.60 on November 4, 2010, to 61.68; these fell strongly today from 57.93 to 56.89.

Competitive currency devaluation is well underway; it has come as the currency traders have commenced a global currency war against the world central bankers for control of the world’s resources and people.

The chart of the Optimized Currency, ICI, -0.3%, documents, that a debt deflationary bear market is underway.

US Dollar, $USD, rose +0.6% to close at 80.81

The USD/JPY rose; its inverse, JYN, fell.

Stocks fell lower

The weekly chart of World Stocks, ACWI, clearly showing an Elliott Wave 3 Down, fell 0.6% to close at 44.20.

European Financials, EUFN, -1.8% European financial stocks collapsed under selling pressure.

Emerging Market Financials, EMFN, -3.0% Emerging market financial stocks broke down today.

Banco Santander, STD, -2.2%

Turkey, TUR, -2.6%
Germany, EWG, -2.2% as The Telegraph reports: EU Rescue Costs Start To Threaten Germany Itself
United Kingdom, EWU, -1.6%
Spain, EWP, -2.8%
Italy, EWI, -2.8%
Europe, VGK, -1.3%
Europe Small Cap Dividends. DFE, -1.7%
Austria, EWO, -1.7%
Poland, PLND, -2.0%
Emerging Europe, ESR, -1.6%
The United Kingdom, EWU, -1.6%  
The New York Composite, NYC, -1.0%

International Dividend Payers, DOO, -1.4%
International Discretionary, IPD, -1.3%

International Utilities, IPU, -4.0%
CenterPoint Energy, CNP, -1.2%

Clean Energy, ICLN, -1.6%
Solar Energy, TAN, -2.2%
Wind Energy, FAN, -1.3%

Airlines, FAA, -1.0%

S&P Mid Term Futures Volatility, VXZ, may possible be in the start of an Elliott 3 wave up.

Inverse volatility, XXV, fell.

Proshares 200% ETFs; the rise provided an excellent opportunity to enter a short position or add to one’s short position.

Asia Excluding Japan, UXJ, +0.9%. It rose to support at the edge of a head and shoulders pattern.
Europe, UPV, -0.0%. It also resides on the edge.
Emerging Markets,  EET, +0.6%. In a bull market one buys dips and in a bear market one sells rises.
Financials, UYG, 1.3%

Debt deflation is underway in the Base Metals, DBB, and very strongly underway in Timber, CUT.

Base Metals, DBB, +.2%
Lead, LD, -4.0%
Tin, JJT, 2.1%
Timber, CUT, -0.4%
Natural Gas, UNG,  -4.3%

As a result, Copper Miners, COPX, fell 0.6% today. And International Basic Materials, DBN, fell 1.1%

BHP Billiton, BHP, resides at the edge of a massive head and shoulders pattern.  

Michael Patterson and Krystof Chamonikolas of Bloomberg report Baltic Index Drops A Third Session As Fleet Growth Lowers Rates. Having a position long base metals or their miners is not conducive with a falling BDI Index as seen in this chart.   

World Government Bonds and International Corporate Bonds fell sharply.

World Government Bonds, BWX, -1.8%; world government bonds broke down today under strong selling pressure as bond vigilantes called sovereign debt interest rates higher and as those owning bonds, sold. The last thing a bond holder wants to hear are words like “leaders’ agreement” and “default mechanism” and “haircut”; such define crisis, and given that the wise sold out of their bonds today.

International Corporate Bonds, PICB, -0.7%. Interest rates on corporate bonds are rising globally; this is destructive to capital investment and growth.  

Commentary

Peter Boone and Simon Johnson in Baseline Scenario outline four scenarios for resolution of the sovereign crisis, so aptly put by the International Monetary Fund chief described as sovereign crisis, as Philip Aldrick, Economics Editor of The Telegraph wrote in November 19, 2010 article, IMF Chief Dominique Strauss-Kahn Urges Leaders To Cede More Sovereignty To EU ……  The Eurozone Endgame: Four Scenarios  

Evidence abounds that Portugal, Italy, Ireland Greece and Spain no longer have sovereign debt seigniorage, and are not viably obtaining and will not be viably obtaining revenue from sovereign debt sales; any upcoming bond sales are being done by banks which submit debt or have submitted debt to the ECB for funding of new debt issues. Such means of obtaining money is simply a Ponzi financing, it is monetization of debt, and cannot be sustained much longer. Theyenguy believes the sovereign crisis will intensify, and that out of  Götterdämmerung, an investment flameout, that according to Bible Prophecy, a Sovereign, Revelation 13:5-10, and a Seignior Revelation 13:11-18, an Old English term for top dog banker who takes a cut, will emerge to establish fiscal sovereignty and credit seigniorage for both Europe’s financial institutions and residents.

Robert Wenzel questions activities of the President’s Advisory Council on Financial Capability relating that it will hold its first meeting on Tuesday November 30 at 2:00 PM at the Treasury. According to the Treasury, the meeting will include “the unveiling of a new coordinated National Strategy for Financial Literacy. That National Strategy is designed to guide the ongoing efforts of the federal government and private organizations to empower average Americans with the financial skills they need to strengthen their long-term economic security and stability.”

Keywords: fiscalsovereignty, asovereignandaseignior, sovereignandseignior,

Götterdämmerung Is Coming Soon

November 28, 2010

We are witnessing the rise of global corporatism, that is state corporate rule on in the Eurozone as David Cameron, Dominique Strauss Kahn and Olli Rehn are wrapping up a seigniorage aid bailout plan for Ireland, surrounding what the International Monetary Fund chief described as sovereign crisis, as Philip Aldrick, Economics Editor of The Telegraph wrote in November 19, 2010 article, IMF Chief Dominique Strauss-Kahn Urges Leaders To Cede More Sovereignty To EU.

Sovereign crisis arose November 5, 2010 as bond vigilantes sustained the interest rate on the US 30 Year Government Bond, $TYX, above 4%, as the US Federal Reserve’s Quantative Easing 2, constitutes monetization  of debt. And as the currency traders sold the world’s major currencies, DBV, and emerging currencies, CEW, causing the US Dollar to rise. This caused an Elliott Wave 3 Down to start in the world stocks, as well as in the S&P.

Sovereign crisis has its epicenter in the Eurozone as Germany’s Merkel called for a sovereign default mechanism at the meeting of the European Task Force On Economic Governance on October 28, and October 29, 2010. The specter of sovereign default causes a run on Ireland’s banks, called the PIGS bond interest rates explosively higher as Fureyous relates, and the Euro, FXE, to fall lower, as Martin Sibileau reports,  And, Spain is now the focus; its ETF, that is EWP, fell hard this last week, as did Banco Santender, STD.

As a result of this crisis, and/or perhaps, a failed US Treasury Auction, or other major incident, Götterdämmerung, a world-wide investment flame out, is about to occur.

All of this was foretold in Bible Prophecy by the Apostle John writing in Revelation 1:1,  as he wrote of those things which must shortly come to pass, meaning, that when they first start to occur, they fall in place like lined-up dominoes collapsing one upon another.

In Revelation 13:1-2, John describes the Beast System rising from the sea of humanity through the process of globalization, central bank easing, waves of carry trade investing, Leaders’  Announcements of Framework Agreements and Seigniorage Bailout Agreements.

Revelation 13:3, prophecies that the soon coming apparent fatal wound to the world’s economic and political systems will be healed.

Out of the soon coming investment “flame out”, a leader and a banker will rise to establish order. A Sovereign and a Seignior, an Old English word meaning top dog banker who takes a cut, will ascend to govern.  According to bible prophecy their word, will and way will be the law of the land superseding constitutional law and traditional rule of law that comes with national sovereignty.

Christian Believers Assembly in article The Stunning Revival of the New Roman Empire, writes: Ireland, Greece, Spain and Portugal has just seen the murder of their democracy and rights as a country as EU budget and commission has imposed stringent economic and fiscal rules over their country bypassing the laws of the countries. Over the course of the week, we have seen how the EU parliament has imposed strict budget rules over a sovereign country, Ireland. Ireland now will be forever in debt to the Euro.  

Perhaps Herman Van Rompuy will rise to be The Sovereign of Revelation 13:5-10,  as  the Afteramerica website relates that he has called for global governance: nation states are dead … The EU chief relates the belief that countries can stand alone, is a ‘lie and an illusion!’

And perhaps Tony Blair, because of his business connections, will rise to be The Seignior of Revelation 13:11-18 ….. Or perhaps the Seignior will be Olli Rehn, one known for calling for calm as related by Ambrose Evans Pritchard in article Telegraph article Greek Rescue Frays as Irish Crisis Drags On: The eurozone bail-out for Greece has begun to unravel after Austria suspended aid contributions over failure to comply with the rescue terms, and Germany warned Athens that its patience was running out. The clash caught markets off-guard and heightened fears that Europe’s debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue. Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. “I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism.” ….. And yet again, The Seignior might be the co-chair of the Council on Foreign Relations, the CFR, Robert Rubin, who was Treasury Secretary. He is shown in a 1995 photo by Stephen Crowley of The New York Times, with Alan Greenspan, who was Federal Reserve Chairman, at a House Hearing, in The New York Times article The Reckoning Taking Hard New Look At A Greenspan Legacy by Peter S. Goodman, who said of Alan Greenspan: “And his views held the greatest sway in debates about the regulation and use of derivatives, exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. He related: “What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added.

All seigniorage will come and go through The Seignior: all sovereign wealth funds, and banks will report to him, as there will be unified regulation of banking globally as referred to, in the James Politi and Gillian Tett Financial Times article, NY Fed Chief Timothy Geithner In Push For Global Bank Framework.

Soon there will be no national seigniorage anywhere as sovereign debt interest rates will explode to the point where there will be no buyers. This is already the case for Portugal, Italy, Ireland, Greece and Spain, as they have lost their seigniorage authority. Their fiscal needs are now provided for by the ECB which buys their bond issues, as well as debt from their banks. The ECB is the sole lender to these nations. Currently the ECB is The European Seignior.

Sovereign nations and their constitutions will be history, as principles of global governance working through regional economic and security pacts and leaders’ agreements will serve as the basis for regional currencies or a global currency.

The Seignior’s financial and economic power will complement the military and political power of the Sovereign; and between the two they own the world “lock, stock and barrel”.

After Götterdämmerung strikes, Bible prophecy foretells that this apparent wound to fiscal seigniorage and credit seigniorage will be healed, and that the people will be amazed and follow after the beast, meaning that people will give allegiance to global governance, as all vestiges of national sovereignty is swept away. The people of Ireland will be giving commitment to European economic governance where fiscal sovereignty comes from Brussels or other major political center. Fiscal sovereignty and economic governance are two sides of the same coin.

Anarcho Capitalists and all other Libertarians are soon going to learn who and what is Sovereign.

I do not suffer from any libertarian misperceptions, as I am not a free individual. I am a love servant, that is a bond servant, of the Lord Jesus Christ.

Over the years, I have asked myself who, just who, were those who participated in the American Revolution? I was told that it was Libertarians and Christians. Today, I’ve come to discern the truth in that most important question: It was NOT Christians, rather Libertarians, and Free Masons, that is Freemen and the Illuminati combined, who participated in the American Revolution, as each had firm conviction as to what the future would hold. Once united in common action, they now stand diametrically opposed. And it was all God’s doing to bring us to sovereign crisis. And I say all is glory, praise and honor to the Soveign Lord Of The Universe, The Lamb Slain Before The Foundation of the Worlds.

Keywords: fiscalsovereignty, asovereignandaseignior, sovereignandseignior, iscomingsoon

Currency Traders Sell The Resource Currencies And The British Pound Sterling On Sovereign Crisis Concerns … Causing Stocks, World Government Bonds, and International Corporate Bonds To Fall Lower

November 27, 2010

Financial market report for November 26, 2010

The currency traders sold most of the resource currencies on sovereign crisis concerns; and they sold the British Pound Sterling on the UK’s provision of seigniorage aid to Ireland, EIRL.

Currencies falling strongly today included:
FXA
BNZ
FXC
FXE
CEW
FXF
FXB
FXM
SZR

Chart of the Euro FXE,

The fall in the Optimized Currency ETN, ICI, from its November 8, 2010 high of 47.40, suggests that peak fiat currency wealth has been achieved and that debt deflation is underway globally in all currencies.

World stocks, ACWI, fell lower today, as did the S&P, SPY, as well as the Nasdaq 100, QTEC and the New York Composite, NYC.

When one reflects that the emerging market world currencies, CEW, major world currencies FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, CYB, BZF, XRU, FXY, BNZ, have fallen as a group 3.7% since November 5, 2010 and that world stocks, ACWI, has fallen from 46.51 to 44.45 and Bonds, BND, have fallen from 82.61 to 81.82, it is reasonable to conclude that a global debt deflationary bear market is underway.

Debt deflation is the contraction and crisis that follows credit expansion.  One of the most famous quotations of Austrian economist Ludwig von Mises is from page 572 of Human Action: “There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”

The global yen carry trade, ACWI:FXY, manifested a lollipop hanging man candlestick and has now fallen lower suggesting that world stocks are experiencing an unwinding of yen carry trade investing.

European shares, VGK, India shares, INP, India Earnings, EPI, Brazil, EWZ, South Korea, EWY, The Philippines, EPHE, Asia Excluding Japan, EPP, Asia High Yielding Stocks, DNH, New Zealand, ENZL, Thailand, THD, Poland, PLND, Columbia, GXG, Copper Miners, COPX, are all experiencing unwinding carry trade investment as risk appetite has changed to risk aversion and repayment of low cost Bank of Japan Yen carry trade and Wall Street Dollar carry trade loans has commenced.  

China shares, FXI, have turned down on China’s vows to stop inflation.   

China bank shares, CHIX, have turned down on China bank tightening.

International dividend payers, DOO, fell today. The chart of DOO says that all the value shares, big and small are done.

Basic Materials, DBN, and Australian Mining Giant, BHP Billiton, BHP, fell lower.

Today’s fall in the shares of global financial institutions, IXG, gives testimony that sovereign debt shocks are spreading like a deadly virus throughout the world’s banking and lending institutions. This week the Banks, KBE, have been near the top of “the leading down sectors”.  Home builders, ITB, has been another leading loss sector this week as well.  Emerging markets, EEM, has as well.  Weekly chart of the global financial institutions, IXG shows a 4.5% loss.

The Japanese small cap shares, JSC, similar in experience with the Russell 2000 shares, IWM, and the Canadian Small Caps, CNDA, have seen little debt deflation, that is currency depreciation; where as other small cap shares, such as the Emerging Market Small Cap Dividend Shares, DGS, the Korean Small Caps, SKOR, the Australian Small Caps, KROO, the Brazilian Small Caps, BRF, and the Indian Small Caps, SCIF, have experienced significant debt deflation, since November 4, 2010, when the bond vigilantes sustained the Interest Rate on the 30 US Government Bond, $TYX, above 4%, as Quantitative Easing 2 constitutes monetization of debt, and as sovereign crisis arose when Mrs Merkel called for a sovereign debt default mechanism.  

This week sovereign crisis deepened over the seigniorage aid package provided to Ireland, EIRL, and on Mrs Merkel’s even more recent call for bondholders to take a haircut on liquidation national bank debt. Three Black Crows appeared in the chart of the World Government Bonds, BWX, International Corporate Bonds, PICB, today. Emerging Market Bond, EMB, are breaking down significantly on falling Emerging Market Currencies, CEW, which are driving down the Emerging Market shares, EEM down.

Chart of the World Government Bonds, BWX

Chart of International Corporate Bonds, PICB, shows that interest rates are rising on corporation loans. This is destructive to business lending.

Taken together, the fall seen in the World Government Bonds, BWX, and the International Corporate Bonds, PICB, suggests that fiscal seigniorage and corporate lending died the week ending November 26, 2010, as a result of sovereign crisis and the rise of the UK, the IMF, and the EU to become a sovereign governing power and instituting economic governance over Ireland.

The defining metric of debt deflation is the ratio of the small cap pure value shares relative to the small cap pure growth shares, RZV:RZG. It fell sharply today continuing a trend that commenced on November 5, 2010, when it fell from 0.800.

A strongly rising US Dollar, $USD, has finally caused the USD/JPY to rise.

This has induced a fall in the USDJPY’s inverse ETF, JYN.

A rising US Dollar, and falling commodity currencies has finally taken a toll in gold, GLD, and silver, SLV. Even more so the HUI precious metals, ^HUI, traded by the ETF, GDX. The junior gold mining shares traded, GDXJ, down today as well.

The chart of the gold mining shares relative to the price of gold, GDX:GLD, GDXJ:GLD, shows that the gold mining shares are now disconnecting from the price of gold as carry trades unwind and the liquidity trade coming from QE 2 is finished. One can no longer profit by investing in gold mining shares such as NSU, NGD, GOLD, GFI, GBG, BVN, AZK, ASA, and ANV. The chart of AEM shows an evening star.

Historical research shows that the gold mining shares, $HUI, CONSISTENTLY turns down when US Treasuries, $USB, turn down. This is the case today, as is seen in the chart of $HUI:$USB.

The HUI precious metal stocks have now gone into the Investment Hall of Fame as perhaps the all stars of investment history; as has the many outstanding precious metal mining mutual funds such as Van Eck Intl Investors Gold C

Their peer in natural resource investing, the energy service companies, OIH, turned lower today, on a lower price of oil, USO. And the giant of energy production and distribution, XOM, fell lower as well. With rising interest rates and falling currencies beginning November 5, 2010, the world has entered into the age of deleveraging and the age of debt deflation. Higher natural resource stock prices cannot be sustained on a falling price of oil.        

The chart of the S&P shows that an Elliott Wave 3 Down commenced November 5, 2010, in the S&P, SPY, when the bond traders sustained the interest rate on the US 30 Year Government Bond, $TYX, above four percent in response to QE 2 and Mrs Merkel’s call for a sovereign debt default mechanism.

The twin spigots of credit liquidity were the ZIRP Bank of Japan lending for carry trades loans and quantitative easing by the US Federal Reserve, this being both QE 1 and the anticipation of QE 2; these spigots have been turned off; and in the case of quantative easing, has actually turned toxic, as Ben Bernanke’s actions monetize debt and destroys bond values. The MSN Finance chart of the 10 to 20 Year US Government bonds, TLT, relative to world shares, VT, TLT and VT, shows that as awareness of QE2 become well known and accepted, then Ben’s debt turned down and a liquidity trade developed in stocks. But November 5, 2010 is a day that will live in investment infamy, as both US Government bonds and world stocks turned down together, as currencies, the major world currencies, DBV, and the emerging currencies, CEW, fell lower, on a higher 30 Year US Government Bond Interest Rate, $TYX.       

The 30 10 US Government Yield Curve Monthly, $TYX:$TNX Monthly,communicates that the risk trade in sovereign debt is no longer being bought. The fall in 30 10 US Government Yield Curve from its November 4, 2010 high suggests that peak wealth has been achieved. The world has passed from an age of prosperity and Milton Friedman Free To Choose Neoliberalim; and into an age of austerity and Global Governance, where the word, will and way of the Leaders operating through framework agreements and bailout agreements is sovereign. As in the case of Ireland, the announcement of leaders, disannuls national sovereignty, and establishes a region of Supra Government, consisting of the International Monetary Fund, the UK and the EU. Those living in Ireland no longer are citizens living in a sovereign nation, they are residents, residing in a region of global governance, along with peers in the UK and Europe.      

Credit liquidity has been poisoned by the bond vigilantes calling the FOMC’s actions monetization of debt. The economic fathers, Milton Friedman, and Alan Greenspan, begot the floating currency regime, which as documented above, many want to replace with a new global economic order. But, global corporatism and the hand of the bond traders and the power of the currency traders is sovereign, and the currency traders will continue their global currency war bringing debt deflation to both bonds and stocks.

Scouring the Internet for insigthful comments, I came across this by Michael Pettis: “Once the dust finally settles Europe will either be a unified country with fiscal sovereignty firmly established in Berlin or Brussels, or it will be fragmented with little chance of reunion.

Very soon there will come a Götterdämmerung, that is a global financial system flameout. Then global governance will be established regionally, with a experienced politician rising to be Europe’s Sovereign, and also an established finance minister rising to be the Europe’s Seignior, which is an Old English word meaning top dog banker who takes a cut.

The Seignior will oversee all matters of debt and credit, and provide both credit and fiscal seigniorage to Portugal, Italy, Ireland, Greece and Spain, as they will have lost their sovereign debt seigniorage, and as the ECB will have stopped buying their debt.

Perhaps European Council President Herman Van Rompuy, will rise to be the Europe’s Sovereign as he said November 9, 2010:  ”We have together to fight the danger of a new euro-scepticism. … This is no longer the monopoly of a few countries. In every member state, there are people who believe their country can survive alone in the globalised world … It is more than an illusion: it is a lie!”, reports OpenEurope in November 10, 2010 Daily Briefing.

Perhaps, EU Economic and Monetary Affairs Commissioner Olli Rehn, will rise to be Europe’s Seignior.

The chart of world government bonds, BWX, shows that the world governments have lost their national seigniorage. And the chart of International Corporate Bonds, PICB, suggests investing in corporate bonds is no longer profitable. These charts also suggests that the end of credit has commenced and that the world has passed through Peak Credit.  

Chart of the 10 to 206 Year US Government Bonds, TLT, shows that investing in longer out US Government Debt is no longer profitable.

Chart of the US Government Mortgage Backed Bonds, MBB, shows that this investment has turned sharply down.  

The US Federal Reserve’s QE 1 and QE 2 have had an unstated but commonly perceived goal of sustaining mortgage backed bonds, MBB as well as Mortgage REITS, REM. These have, as the chart suggests topped out as well.

The European Financials, EUFN, in addition to the Interest Rate on the US 30 Year Interest Rate, $TYX, are the current focal points of the global currency war, which started November 4, 2010 as the global currency traders have undertook a plan to establish global corporatism and themselves as sovereign over humanity. The European Financial Institutions are now white washed tombs of a prior age of investment liquidity. Spanish shares, EWP, fell heavily today. Banco Santander Madrid, STD, is now a zombie bank. And as for the Euro, FXE, it is a walking dead currency.

In a world characterized by deleveraging, debt deflation, and sovereign crises, I believe that there will be an ongoing investment demand for gold, $GOLD, in spite of its nominal all in price today. The chart of gold in Australian Dollars, GLD:FXA, shows that gold has maintained its value since November 5, 2010, documenting that gold is the world’s sovereign currency and storehouse of investment wealth.

iStar Financial Sells Terrazas Riverpark Village Condominium Complex

November 26, 2010

James Albrino of the CoStarGroup reports that iStar Financial has sold the two-tower, 324-unit, Terrazas Riverpark Village condominium complex west of Greater Downtown Miami,  located at 1861 NW South River Drive in Miami, FL, to Wood Partners for $44 million, or $135,800 per unit. I report that the development stands on nearly 2.2 acres north of the site of the new Florida Marlins ballpark.


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