The End Of Labor Productivity Has Commenced ….. The Decline Of Labor Productivity Will Be Ongoing …. As Capital Died 6-1-2012 When Mario Draghi Announced The Euro Is Unsustainable

Financial market report for June 13, 2012

Introduction

The end of labor productivity has commenced ….. The decline of labor productivity will be ongoing …. Mario Draghi gave the death sanction of capital on 6-1-2012, in announcing that the Euro is unsustainable  … Herman van Rompuy and Angela Merkel in June 2012 gave the protocol for Euro zone regional governance  to replace crony capitalism and European Socialism.

Stocks traded sharply lower today beginning at 2 PM

World stocks, VT,  -0.8%, and US Stocks, VTI, -0.9%, the Russell 2000 Growth, IWO, -1.5%, Retail, XRT, -2.9%, Italy, EWI, -1.3%, and Sweden, EWD, -1.5%, traded sharply lower at 2 PM Today, as Commodities, DBC, – 0.8%, traded lower, while Gold, GLD, and Silver, SLV, traded higher. Hat Tip to Gary of Between The Hedges for today’s news reports:

Bloomberg reports European Stocks Fall As Borrowing Costs Rise At Debt Sale. European stocks declined as borrowing costs increased at debt auctions in Germany and Italy and as Sweden’s SKF (SKFB) AB reported weakening demand for its products in the second quarter. SKF, the world’s largest maker of ball bearings, dropped 7.3 percent. Renault SA (RNO) led a selloff by carmakers, sliding 4.2 percent. Etablissements Maurel & Prom SA surged the most since 2003 amid takeover speculation. The Stoxx Europe 600 Index (SXXP) dropped 0.4 percent to 242.56 in London.

CNBC reports Germany Warns Italy Over Euro Zone Crisis. Germany told Italians on Wednesday they must keep taking Prime Minister Mario Monti’s tough economic medicine to avoid becoming the next victim of the euro zone debt crisis after a bailout for Spain’s banks failed to calm markets.

Retail stock investing died today as the retail ETF, XRT, traded 2.9% lower with M, -5.0%, ARO, -4.4%, CAB, -4.0%, FL, -3.8%, DKS, -3.4%, HBB, -3.0%, CAB, -3.0%. Bloomberg reports Retail Sales in U.S. Declined for a Second Month in May. Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed today in Washington. Sales excluding car dealerships slumped by the most in two years. The smallest wage gains in a year and unemployment exceeding 8 percent are taking a toll on the consumer spending that accounts for about 70 percent of the economy, leaving it more vulnerable to shocks from the European crisis. “The consumer is pulling back,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in sales. “There isn’t a lot of job creation. We will continue to see softer numbers.

Diktat is rising to replace capital … those with capital are wise to invest in and possess gold bullion as well as to invest in and maintain gold in Internet vaults.

Martin Hutchinson writes in Prudent Bear Baked In Inefficiency. With current policies in place, the productivity deficit is likely to get worse, especially in the U.S. Gigantic budget deficits are funded by the banking system, starving small businesses of resources and steering funding into the nation’s most unproductive sector. Ultra-low interest rates discourage saving, decapitalizing the economy further and producing declines in even labor productivity. Thus while current policies are in place, even labor productivity is likely to decline further, U.S. living standards will decline or at best stagnate and unemployment will remain very high.

I comment that we are witnessing the end of labor productivity … the decline in labor productivity will be ongoing as the end of product ingenuity, development, production and marketing  has been reached.

If capital was available, (it is not available as Money died in April 2011, on fears that a debt union had formed in the EU; and Credit died in April 2012, when investors sold out of stocks on awareness that the world central banks’ monetary authority is unable to stimulate global growth and global trade; and Capital died on 6-1-2012 when Mario Draghi announced that the Euro is unsustainable), to small businesses, there are not any products that small businesses can conceive of, develop, produce and market, as all the best of products, in every field, have been conceived, developed, produced, and marketed by large companies.

The chart of Skeechers,  SKX, reflects the gain that has come to the company as it has designed the best of walking shoes, and sells them through on-line partners at a price that competitors, large or small, cannot even come close to.

The chart of Navistar, NAV, illustrates the death of industry and enterprise.

The chart of   Ferrellgas Partners, L.P. FGP, shows its terminal rise in value as it enters fully into the age of deleveraging.

The chart of A123 Systems, AONE, and FCEL, illustrate the end of risk capital investing in new technology.

Neoliberalism was the regime of a prior age of leverage that was based upon a debt trade. Capital, enterprise, industry, and fiat wealth all died on 6-1-2012 when Mario Draghi announced that the Euro is unsustainable; the Euro currency union died on Greek Bailout 1 and Greek Bailout 2, and was buried when Spain requested a bank bailout.  Neoliberalism is being replaced with Neoauthoritarianism. Since then bonds, BND, and the US Dollar, $USD, UUP, have been trading lower. All fiat wealth is now slipping into the Pit of Financial Abandon. The chart of gold miners, GDX, is in a downtrend; the chart of junior gold miners, GDXJ, shows them slipping away; and the chart of silver miners, SIL, shows a topping out.  The weekly chart of Utilities, XLU, shows a bearish harami, at the top of an ascending wedge. The weekly chart of dividend payers, DVY, shows a topping out and cresting over. The chart of highly margined and thus high leveraged debt ETF, BOND, shows a topping out. The dynamos of Neoliberalism were global growth, global trade, and corporate profit; whereas, the dynamos of Neoauthoritarianism are regional security, regional stability, and regional sustainability. Neoauthoritarianism is a regime that will enforce debt servitude in the world’s ten regions, as foretold in bible prophecy of Revelation 13:1-4 and Daniel 2:30-33.

Mario Draghi in announcing on 6-1-2012, that the Euro is unsustainable, gave the death sanction on capital. Evidence of the death of capital and the death of fiat wealth is, first, that money supply, M2, is declining as reported by the US Federal Reserve,  and secondly, that an investment demand for gold has commenced as is seen in the chart of the gold ETF, GLD, rising.

Diktat is rising to replace choice. News media in reporting in early June 2012, that Herman van Rompuy is working on constructing a Eurozone fiscal union and banking union, and in reporting that Angela Merkel has called for a EU political union, communicates that these two European leaders have issued the protocol for European regional governance to replace crony capitalism and European Socialism.

Those with capital are wise to invest in and possess gold bullion, as well as to invest in and maintain gold in Internet vaults.

Four apostles for four purposes

God has appointed four apostles, that is sent ones; and each apostle has a special purpose. Paul established churches as the living places for the saints; Peter communicated the principle of living in virtue, James communicated the prayer of faith and need for deeds to evidence faith; and John, communicated the revelation of Jesus Christ.  All unified in communicating good conscience, grace and truth, so that the elect can experience the economy of God.

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