Financial Market Report for the week ending February 15, 2013
1) … On Monday February 11, 2013, World Stocks, VT, traded unchanged as investors found few reasons to keep pushing shares higher following a six-weeks-long advance that has taken the S&P 500 index, SPY, to a record high. Much of Asia was shut for the Lunar New Year holidays keeping volumes on the low side.
Commodities, DBC, -0.4%, trading lower today included, the Precious Metals, JJP, -2.0%, GLD, -1.2, SLV, -1.4 and PGM, -1.7, as well as Base Metals, DBB, -1.0%, LD -2.4, JJC -1.0 and also Agricultural Commodities, JJA -1.0 Bull Market Thinking relates This Is Just Smart Money Pushing Gold To The Extremes. And BullionVault relates Gold Prices Being Driven By Currency Moves.
Stocks trading lower today included the following:
Mining stocks GDX, -2.0, GDXJ, -2.5, SIL, 1.3, SILJ, -2.1, SSRI, -1.2, BVN -4.8, as well as COPX, -1.0, SCCO, -1.7, and PICK, -1.2 lower.
Independent Oil Companies, GPOR, SN, ROSE, FANG, NBL, took Small Cap Energy, PSCE -2.0.
Biotechnology Companies, RGEN, SRPT, SGEN, ONXX, OREX, CBM, RPTP, MDVN, CGEN, XNPT, ILMN, GILD, ALNY, and AMGN, traded strongly lower.
Health Care Company, MOH, took Healthcare Providers, IHF, -1.0 lower.
Large Cap Energy Service, WFT, CAM, SLB, RIG, took OIH, -1.1
Small Cap Energy Service, LUFK, SUFK, HLX, EXH, took IEZ, -1.1 lower.
Denmark’s Pharmaceutical Manufacturer, NVO -14.0 lower.
Insolvent nations and their insolvent financial institutions cannot provide seigniorage, that is moneyness. Countries trading lower today included Greece, GREK, -2.7%, Turkey, TUR, -1.9%, Thailand, THD, -1.4, Peru, EPU, -1.4, Spain, EWP, -1.3, Argentina, ARGT, -1.3, Canada Small Caps, CNDA, -1.3%, India Small Caps, SCIN, -1.1%, and Italy, EWI, -1.0%. The National Bank of Greece, NBG, -3.9%, and Ireland’s, IRE, -1.3%, and Spain’s, SAN, -1.0% led European Financials, EUFN, -1.0% lower.
Robert Wenzel of Economic Policy Journal writes Bernanke’s Manipulated Economy: The Numbers Ed Yardeni has the details: Fed Chairman Ben Bernanke on numerous occasions explicitly stated that his ultra-easy monetary policies were aimed at boosting stock prices, resulting in a positive wealth effect on consumer spending. Stock and real estate prices are rising amid some concerns that the Fed is doing it again, i.e., pumping air into asset bubbles.
The market capitalization of the Wilshire 5000, WFVK, is up $9.2 trillion since March 9, 2009, to $16.0 trillion on Friday. The Fed’s flow of funds data show that the value of all stocks in the US has increased by $12 trillion to $26 trillion from Q1-2009 through Q3-2012. The value of stocks directly held by individuals is up $4.7 trillion to $9.8 trillion over this period. The values of equity mutual funds and equity ETFs are up $2.3 trillion and $634.7 billion, respectively, over this period.
Owners’ equity in household real estate jumped 19.6% by $1.3 trillion to $7.7 trillion during the three quarters through Q3-2012! There’s more to come given that the median existing home price rose 10.9% y/y during December, the best pace since January 2006.
Mr Wenzel continues, Greenspan was able to get away with this kind of bubble pumping without major price inflation. I don’t think Bernanke is going to be as lucky. Regulations are slowing increases in productivity, foreign countries are less interested in holding dollars and the desire to hold cash balances in the US appears to be falling, all this suggests that price in the not too distant future start to really climbing. What’s Bernanke going to do then, stop printing and allow interest rates to soar? He will allow rates to climb some, but not enough, which will mean accelerating price inflation as the most likely scenario.
Economic Policy Journal provides the Seth Martin report Homeland Security Creates Constitution Free Zones. The latest development in 4th Amendment violations is the scariest I’ve heard yet. The Department of the Fatherland has approved a policy which states in no uncertain terms that electronic devices can be seized without a warrant within 100 miles of the border. The kicker? The “border”, according to this policy, is any national barrier, political or physical. THIS INCLUDES BODIES OF WATER. So, that means that the United States has, in effect, “Constitution-free zones” stretching 100 miles inland from every coast and 100 miles from our northern and southern borders. Unbelievable! Wired has the story. I comment that the Department of Homeland Security has created an electronic perimeter about the US establishing a gulag of telecommunication imprisonment.
Robert Wenzel of Economic Policy Journal writes Mortgage Rates Climbing. This despite the Fed buying mortgaged backed securities to keep downward pressure on them. What happens when the Fed stops buying MBS? It won’t be pretty. Lock in mortgage rates now, while they are still relatively. And writes House Prices Soar: We Haven’t Had This Kind of Spirit Here Since 2005.
Bloomberg reports A Federal Reserve Governor Joins in Alarm Over Distortion It Enabled. A Federal Reserve governor is joining those warning that junk-debt investors are poised for losses, while his institution’s policies spur them to keep buying the debt. “High-yield is as overbought as I have ever seen it,” Dan Fuss, whose $22.7 billion Loomis Sayles Bond Fund beat 98 percent of its peers in the past three years, said in an interview in London last month. “This is absolutely, from a valuation point, ridiculous.” “We are seeing a fairly significant pattern of reaching- for-yield behavior emerging in corporate credit,” the Fed’s Stein said in a Feb. 7 speech in St. Louis. If the observation is accurate, he said, “it does not bode well for the expected returns to junk bond and leveraged-loan investors.” “The idea here is to keep rates low enough for a long enough time that the economy builds up enough steam,” Tawil said. “I don’t know if our economy is capable of picking up the steam necessary.”
Zero Hedge reports Italian Stocks Slump As Berlusconi Proclaims Himself Poll Leader. And reports Spain Kickback Scandal Threatens Rajoy As 79% Find Corruption Explanation Weak.
Jesus Christ is at the helm of the Economy of God, Ephesians, 1:10, pivoting the world from Liberalism to Authoritarianism.
We are witnessing the failure of Liberalism’s Crony Capitalism, European Socialism, Greek Socialism, Venezuelan Communism, Turkey Mercantilism, Thailand Growth, Peru Mining, Argentina Kirchnerism, India Small Cap Mercantilism, Italy Berlusconism, Spanish Rajoyism, Philippine Phisix Mania, and Roman Catholicism. Liberalism’s economic, political and spiritual governance is melting away as Inflationism turns to Destructionism.
Inflationism no more! Jesus Christ is bringing forth an entirely new paradigm to organize society, Ephesians 1:10.
An unwinding of the Euro Yen Currency Carry Trade, EUR/JPY, which closed today higher at 125.66, in Action Forex Chart in the middle of a week long broadening top pattern, together with Competitive Currency Devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, and the trade lower in the Japanese Yen, FXY, which closed today at 104.42, as well as by the devaluation of the Venezuelan Bolivar, is producing Destructionism, and will introduce Authoritarianism’s Beast Regime’s of regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4, as a means of organizing mankind’s economic and political experience.
Jesus Christ is powering down Liberalism, overseeing the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad
The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4. Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.
And Jesus Christ is powering up Authoritarianism on the dynamos of regional security, stability and sustainability, as is seen in bringing forth the third of three Greek Debt Bailouts, as well as is seen in the Reuters report Greece Cuts Investments To Hit January Budget Target, which have utterly destroyed Greece as a sovereign nation state, evidencing that Jesus has indeed unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, to pass the baton of sovereignty from independent states to regional governors, such as Mario Draghi, and regional governing bodies such as the Troika.
After the soon coming Financial Apocalypse, Revelation 13:3, that is a credit bust and global financial system collapse, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally through regional framework agreements.
Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat. “Paper money no more”, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth. Gold Core correctly relates Ron Paul: “6,000 years of history, gold is always money, paper money fails”.
Paul R. Viotti and Mark V. Kauppi, write in Pearson textbook International Relations and World Politics Chapter 2, the following: International relations has not always revolved around the modern idea of a nation-state. For most of history, people have been part of smaller, more localized groups, such as tribes and clans. As a result, interdependence has not always been as important as it is today. Thus, it is important to talk about the history of international systems.
International systems are groups of similar entities linked by regular interaction that sets them apart from other systems. This definition of systems is based on several smaller components. Diverse entities simply means that different actors, including states as well as non-states actors, come together in a common forum. Regular interaction means that these actors come into contact with one another, whether that contact is trade, war, or diplomacy. Each system also has structure, which sets it apart from other systems. This structure includes the idea of boundaries.
While today we speak of global systems, up until recently regional or international systems were more realistic. There are four different types of international systems discussed in the book. The first is an independent state system. The independent state system consists of political actors that claim to have the right to both domestic and foreign policy decisions. No higher power exists in the system. States in this system may work together in a balance of power setup that defends against a rising power, or they may establish rules of war, but these all fall short of establishing a superior power.
The second international system is the hegemonic state system. In the hegemonic state system, one or more states are clearly more powerful and set “the rules of the game.” These systems can be broken down according to the number of dominant states as follows: unipolar (1 hegemon), bipolar (2 hegemons), and multipolar (3 or more hegemons). There are other states within the system, but they play by the rules established by the hegemon.
The third type of international system is the imperial system. The imperial system consists of separate societal units that interact, but one of them asserts political supremacy. In an imperial system, the dominant state is more likely to be involved in other states affairs (such as appointing leaders) than in the hegemonic system.
Finally, the feudal system is the fourth system discussed. A feudal system consist of a very diverse group of entities interacting, including governmental units (not all of which became states) as well as trade associations and merchant bankers.
The Rise of the European State System. From the twelfth century onward, numerous advances were made that had and impact on the international system. The rise of literacy and capitalistic commerce, the tension between secular and religious authorities, and the Black Death all played a role in change. The Renaissance and the Reformation also both changed the way politics occurred. Conflict over the power of the Holy Roman Empire sparked the Thirty Years’ War in 1618. In 1648, the war came to an end with the adoption of the Peace of Westphalia.
The Treaty of Westphalia solidified the state’s grasp on power. Essentially, the Treaty of Westphalia gave the ruler of each state the right to determine the religion of his subjects. This sovereignty was based on territoriality (the right to political authority over a defined geographic space) and autonomy (no other authority has power within the borders of a state). This definition of the modern nation-state stays with us today.
The rise of Napoleon and his subsequent defeat at the end of the eighteenth century brought about the Congress of Vienna. The Congress of Vienna created a collective hegemonic system. Certain rules were established by the core members (Concert of Europe) that attempted to establish international rules of conduct in the international system.
Twentieth Century Hegemonic Systems And The Cold War. The inability of the European powers to respond to a rising Germany led to the collapse of the Concert of Europe and the beginning of World War I. Following World War I, the League of Nations was formed in an attempt at collective security, or the idea that an aggressive state can be responded to collectively. The League of Nations failed shortly thereafter with the outbreak of World War II. Following World War II, another attempt to solidify collective security was put into action. The United Nations was formed to pursue the collective defense.
Following World War II, the period known as the Cold War occupied the international system. Communist Soviet Union and capitalist United States were at odds with one another. The fall of China and the invasion of South Korea led to a policy of containment aimed at keeping the Soviets in check. Throughout the Cold War, the United States and USSR were never involved directly in a conflict (although they came quite close). This can possibly be attributed to several factors, including the advent of nuclear weapons, the bipolar nature of the world, or simply the obsolescence of warfare.
This chapter aims at introducing various historical examples of international systems. It examines the Roman Empire, the Greek city-states, Persia, and India up through the Cold War of recent memory. With the understanding of history, it is possible to better understand how we ended up where we are now.
It was the Concert of Europe, that is the Vienna System, from the end of the Napoleonic Wars (1815) to the outbreak of World War I (1914), that brought forth the British Empire, also called a company of nations, as the first of two iron legs of global hegemonic power. Then the US became the second of two iron legs of global hegemonic power, beginning with the political coup d’etat that established the Federal Reserve, (which is neither federal, as it is a privately held bank, and has little reserves, as it has mostly toxic debt, taken end under QE1 to QE4, as well as US Treasury Bonds held in Excess Reserves, which are the property of various banks), and with the abandonment of the gold standard in 1971 which brought forth the Milton Friedman Free To Choose Floating Currency Regime. The US Dollar, being the World Reserve Currency, gave super hegemonic strength to America. It ran budget deficits and trade deficits without ever having to balance its accounts while carrying out endless war globally, and even now is at war in Africa, establishing Africacom, which has a rapid reaction force, and is assisting France conduct a war against Muslims in Mali. And Germany is expanding its participation in the French war in Mali from week to week.
Today, Monday, February 11, 2013, Jens Weidmann spoke saying Europe’s shared currency was not overvalued at current levels; this Sovereign gave seigniorage to the Euro Yen Currency Carry Trade, the EUR/JPY, which closed up at 126.29, by driving the Euro, FXE, to close higher at 132.94, and driving the Yen, FXY, to close lower at 104.42, and which stimulated Vietnam, VNM, Japan, EWJ, Japan Small Caps, JSC, The Nikkei, NKY, and Hedged Japan, DXJ, to close higher. And which drove Spot Gold, $GOLD, to close 1.1% lower at $1649.50, and the Gold ETF, GLD, to close lower at strong support at 159.70. The US Dollar, $USD, UUP, closed higher at 80.31.
2) … On Tuesday, February 12, 2013, Financial Shares rose strongly, taking the Small Cap Nation Investment, the Russell 2000, US Infrastructure, Global Producers and Leveraged Buyouts to new highs, in advance of President Obama’s State of the Union Address, pulling Major World Currencies, DBV, to a new rally high.
The World Banks, IXG, the Too Big Too Fail Banks, RWW, such as BAC, and BK, the Investment Bankers, KCE, such as JPM, and MS, as well as the Emerging Market Banks, BPOP and BLX, traded to new highs. And the much news mentioned UK Banks, BCS, LYG, RBS, the European Financials, EUFN, and the Japanese Banks, MFG, NMR, SMFG, traded up on the day.
Financial Shares, XLF, rose strongly taking Small Cap Nation Investment, IFSM, such as Greece, GREK, Australian Small Caps, KROO, Finland, EFNL, the Philippines, EPHE, Germany Small Caps, GERJ, the UK Small Caps, EWUS, Chile, ECH, Ireland, EIRL, the US Small Caps, IWM, US Infrastructure, PKB, Global Producers, FXR, and Leveraged Buyouts, PSP, to new highs, which pulled Major World Currencies, DBV, to a new rally high.
Stocks sectors rising strongly today included Home Builders, ITB, Solar Stocks, KWT, Wind Energy, FAN, the Dig and Dirt Moving Stocks, CR, MTW, and IR, and LED Manufactures, such as CREE.
The chart of the S&P 500, $SPX, shows a closed at a five year high, being driven higher by currency demand, as indicated by its comparison with the Pure Small Cap Value Shares, RZV. The S&P ETF, SPY, gained 0.2%, to finish at a five-year high 152.02, which came through the S&P 500 High Beta Stocks, SPHB, Semiconductors, XSD, trading to rally highs.
The tone of the day was one of speculative investment in leveraged banking and in debt laden stocks.
The news of the day was stunning 2,294,700 shares traded the Japanese Yen Yen ETF, FXY, with much of it being a bullish trade, which took the Yen, FXY, up 0.33% at 104.76; this as the Euro, FXE, rose 0.36%, to close at 133.42, which produced the EUR/JPY to close, as Action Forex reports, at the middle of a broadening top pattern at 124.93, suggesting that the Euro Yen Currency Trade, that is the EUR/JPY, which has fueled Banks, IXG, Global Producers, FXR, and the S&P, SPY, higher over the last eight months is coming to an end.
With the Yen, FXY, firming at 104.76, and Major World Currencies, DBV, likely topping out at 26.88, and the 200% Bullish Dollar ETF, UUP, having broken out Friday February 8, 2013, it is likely that currency traders will commence competitive currency devaluation, with the Brazilian Real, BZF, the Indian Rupe, ICN, the Chinese Yuan, CYB, and the Emerging Market Currencies, CEW, being loss leaders, with disinvestment coming out of all of the Brics, EEB, that is Brazil, EWZ, Russia, RSX, India, INP, and China, YAO as well as the Emerging Market nations such as Chile, ECH, and the Phillippines, EPHE.
And derisking and deleveraging is likely to come very rapidly out of the Emerging Markets, EEM, the Major World Banks, IXG, the S&P High Beta, SPHB, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Russell 2000, IWM, Leveraged Buyouts, PSP, Semiconductors, XSD, Solar Stocks, KWT, LED Manufacturers, such as CREE, and the Global Produces, FXR, as well.
3) … On Wednesday, February 13, 2013, World Stocks Rose Producing Peak Stock Wealth And Peak Sovereignty.
With Gold, GLD, bottoming out today, and with Major World Currencies DBV, and Emerging Market Currencies, CEW, topping out … Nation Investment, EFA, and Small Cap Nation Investment, IFSM, as well as Global Producers, FXR, are topping out to produce Peak Stock Wealth, VT, and Peak Small Cap Stock Wealth, VSS.
Today, the Swedish Krona, FXS, and the Brazilian Real, BZF, rose, taking Major World Currencies, DBV, to its eight month rally high. Emerging Market Currencies, CEW, traded lower from its recent rally high. The British Pound Sterling, FXB, traded strongly lower. This as The Economist Magazine article Britain’s Export Drought, page 57, February 9, 2013, relates that Britain has slipped the most of all OECD countries in tangible good exports. The gap between what the country buys and what it sells is plugged by borrowing. I remark that a chart shows that it’s current account deficit as a percent of GDP has fallen to a troubling 80%. And a chart shows that its service industries, largely the City of London Financial District Banks, have done quite well; but these, HBC, LYG, RBS, BCS, all traded lower today. And the Telegraph reports In the last three years UK inflation has eroded a decade of growth, and worse is to come.
The demand for currencies today, drew Pure Small Cap Value Shares, RZV, up 0.45%; these included CSV, URI, POOL, ASR, REIS, BBSI, UHAL, SIX, FNGN, MORN, HRB, CNK.
Sectors rising today included the following:
Solar Energy, TAN,
Wind Energy, FAN,
Airlines, FAA,
Small Cap Industrials, PSCI,
US Infrastructure, PKB,
Emerging Market Infrastructure, EMIF,
Small Cap Energy Service, IEZ,
Energy, XLE,
Automobiles, CARZ,
Leveraged Buyouts, PSP,
Spin Offs, CSD, such as Madison Square Garden, MSG,
Consumer Services, IYC,
IPOs, FPX,
Global Producers, FXR, rising strongly today included, General Electric, GE, Valmont Industries, VMI, Alcoa Aluminum, AA, Eaton, ETN, Goodyear, GT, which is seen in the Morgan Stanley Cyclical Index, ^CYC, closing at a new rally high.
Major Nations rising strongly included the following:
Sweden, EWD; it rose to a new rally high on today’s strongly rising Swedish Krona, FXX.
Finland, EFNL, it rose to a new rally high; this as Nokia, NOK, traded strongly lower.
Norway, NORW, it rose to a new rally high, as Brent North Sea Oil, BNO, rallied to a new high.
Australia, EWA; it rose to a new rally high as Australia Dividends, AUSE, rose to a new high.
Ireland, EIRL, it rose to a new rally highs as its cement manufacturer CRH, rose strongly.
Russia, RSX, and South Korea, EWY.
Emerging Market Nations rising strongly included the following:
Philippines, EPHE; it rose to a new rally high.
Thailand, THD; it rose near its recent rally high.
Chile, ECH, it rose to a new rally high as its banks, BCH, and BCA, rose strongly.
Japan, EWY, and NKY, traded lower, as its banks MFG, -4.3, NMR, -2.3, MTU, -1.7 and SMFG -1.1, traded lower. Other nations trading lower included, Greece, GREK, Egypt, EGPT, Mexico, EWW.
Asia Shares Excluding Japan, EPP rose strongly to a new rally high. European Shares, VGK, rose moderately. US Shares, VTI, rose slightly.
Shares trading lower included the following:
Specialty Eateries traded lower; SBUX, fell 1.1%, and PNRA, fell 1.5%
Construction and Farm Equipment Manufacturers traded lower; DE, fell 3.4%, and CAT, fell 1.0%.
Sporting Good Retailers traded lower; BGFV, fell 2.0%, DKS, fell 1.3%, and HIBB, fell 0.9%.
Boeing, BA, traded 1.6% lower.
US Iron Ore Producer, CLF, fell 19.6%.
World Financial Institutions trading lower included The National Bank of Greece, NBG, -7.8%, the Netherlands’, ING, -3.4, Japan’s MFG, -3.2, Argentina’s, BFR, -1.6%, and The UK’s, RBS, -1.4.
Today, as stocks moved higher, the Interest Rate on the US Ten Year Note, ^TNX, rose to close at 2.03%, taking Total Bonds, BND, lower across the board, which closed at strong support at 83.20; these have traded 2% lower, as stocks, VT, rose 10%, in the last three months as is seen in this combined ongoing Yahoo Finance of the two. One can follow debt issues with this Finviz Screener.
4) … On Thursday, February 14, 2013, that is on Valentines Day, European Financials Led Nation Investment And Global Stocks Lower … Ending The Investor’s Love Affair With Stocks
Today, Valentine’s Day 2013, investors ended their love affair with stocks, as The European Financials, EUFN, led European Stocks, VGK, World Stocks, ACWI, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, lower … taking most of the whole spectrum of value stocks lower; the style loss leader of the day was Large Cap Value Style, JKF, -0.14%.
Reuters reports Euro falls as German, French economies disappoint. The euro, FXE, dropped and European Stocks, VGK, fell, as growth data from the region’s two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.
Asia Stocks, EPP, rose as Australia, EWA, Australia Dividend, AUSE, Australia Small Caps, KROO, Thailand, THD, and the Phillippines, EPHE, rose to new rally highs.
US Stocks, VTI, rose slightly. The S&P, SPY, rose, 0.09% to close at a new high of 152.29, while the Dow, DIA, traded lower. Gold Miners, GDX, traded higher, while Silver Miners, SIL, traded lower.
Emerging Markets, EEM, traded slightly lower, with Emerging Market Financials, EMFN, and Emerging Market Materials, EMMT, both trading lower.
European Financials, EUFN, led by the National Bank of Greece, NBG, Spain’s Banco Santander, SAN, and Germany’s, DB, stimulated disinvestment out of value stocks, that is out of most every dividend paying stock type. Japan’s Banks MTU, SMFG, NMR, and MFG, also traded strongly lower. Practically the only exception to World Banks, IXG, trading lower, were the Too Big To Fail Banks, RWW, the Investment Bankers, KCE, Investment Brokers, IAI, and the Asset Managers and Hedge Funds, seen in this Finviz Screener.
At the top of list of today’s sectors trading lower were Dow Telecom Stocks, IYZ, S&P Telecom Stocks, IST, such as CTL, and Communication Services Stocks such as Crown Castle, CCI.
Investors derisked out of Global Utilities, Excluding The US, DBU, US Utilities, XLU, Dividend Stocks Of Nation States, DWM, International Small Cap Dividend Stocks, DLS, Emerging Market Dividend, EDIV, Global Real Estate, Excluding The US, DRW, and US Real Estate, IYR.
REITS, VNQ, traded lower. Retail REITS, SPG, and GCP, traded strongly lower. Industrial And Office REITS, FNIO, trading lower included, SSS, CUBE, EXR, PSA, and STAG. Mortgage REITS, REM, traded lower.
Global X’s Superdividend ETF, SDIV, traded lower. And of note, International Dividend Paying Stocks Excluding Financials, DOO, traded sharply lower.
Dividend Growth Stocks,VIG, manifested a spinning top in its chart pattern to close at 63.84.
Non dividend sectors trading lower were limited to Airlines, FAA, Automobiles, CARZ, such as General Motors, GM, and Wind Energy, FAN.
Investors derisked out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM;
Nations trading lower included the following:
Poland, EPOL,
Russia, RSX, and Russia Small Caps, ERUS,
Italy, EWI
Germany, EWG
Spain, EWP
India, INP and India Small Caps, SCIN, the latter has plummeted in value for the last six days.
Japan, EWJ,
Mexico, EWW,
Sweden, EWD,
The UK, EWU
The US Dollar, $USD, UUP, rose, as did the Yen, FXY, turning the Euro Yen Currency Carry Trade, the EUR/JPY, lower from a broadening top candlestick chart pattern, as seen in the daily Action Forex Report to closer lower at 123.966. The Yen, FXY, closed up 0.79%, at 105.68; and the Euro, FXE, closed down 0.63%, at 132.52. The Brazilian Real, BZF, continued its rally higher higher to close at 19.93.
The US Dollar, $USD, rose to close at 80.46, and the Yen, FXY, rose to close at 105.68. The chart of the 200% US Dollar ETF, UUP, shows a break out today. Liberalism’s Milton Friedman Free To Choose Floating Currency Regime, has failed, as the US Dollar is no longer sinking. Look for other currencies to stop rising and fall lower, just as the Yen, FXY, fell lower. There is no longer any International Reserve Currency. All currencies, will be following the South African Rand, the British Pound Sterling, and the Japanese Yen in Competitive Currency Devaluation.
Major World Currencies, DBV, rose 0.04%, to a new high at 26.95. Emerging Market Currencies, CEW, closed down 0.14%, from yesterday’s rally high, to close at 21.28. The Australian Dollar, FXA, and the Canadian Dollar, FXC, rose slightly, taking Commodity Currencies, CCX, to a new rally high of 21.72. The UK, EWU, traded lower on a lower British Pound Sterling, FXB.
The style trading highest of the day was, Pure Small Cap Growth Stocks, RZG, which rose 0.63%, and the Pure Small Cap Value Stocks, RZV, was next in line, rising 0.62%, being led so by US Infrastructure, PKB, Small Cap Industrial Stocks, PSCI and the US Small Caps, IWM.
Solar Energy, KWT, Semiconductors, XSD, Networking, IGN, Small Cap Energy Service, IEZ, Energy Service, OIH, Small Cap Energy, PSCE, Energy, PXE, Coal, KOL, Uranium, URA, Internet Retailers, FDN, Gaming, BJK, and the Leveraged Buyouts, PSP, IPOs, FPX, US Infrastructure, PKB, traded higher. BHP Billiton, BHP, rose, with the Australian Stocks, EWA. Cement Manufacturer, EXP, Miners, PICK, such as Alcoa Aluminum, AA, and Horsehead Holding, ZINC, rose higher. Switzerland’s Industrial Equipment Manufacturer, ABB, blasted 4.7% higher, taking most of its competitors seen in this Finviz Screener higher. Many of the US Based Metal Manufacturing Companies, STLD, RS, NUE, CRS, GTLS, WOR, NWPX, SXC, VMI, MLI, AZZ, GHM, CMC, USAP, PCP, ITW, seen in this Finviz Screener, rose higher; they have been doing so on Fed Stimulus and World Exports.
Vice Stocks, which are traded by the Fidelity Mutual Fund, VICEX, and have been the best performing mutual fund investment for the last two years, traded higher today to close at a new rally high of 23.57.
Zeroes, ZROZ, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT, Build America Bonds, BABS, Long Term TIPS, LTPZ, and Mortgage Backed Bonds, MBB, rose, taking US Government Bonds, GOVT, and Total Bonds, BND, higher.
Unleaded Gas, UGA, rose very strongly. Natural Gas, UNG, fell very strongly, leading Silver, SLV, Timber, CUT, and Gold, GLD, lower. Oil, USO, traded unchanged. Agricultural Commodities, JJA, traded slightly lower. Base Metals, DBB, traded unchanged, as did Commodities, DBC.
In commentary of Valentines’ Day trading, I relate that Emerging Markets, EEM, traded slightly lower, continuing a trend that began January 16, 2013. It was the Emerging Markets, EEM, that had received the greatest seigniorage, that is the greatest moneyness, of all areas, between September 14, 2013, and January 16, 2013, as is seen in the ongoing Yahoo Finance Chart of VT, EEM, VGK, VTI, and EPP.
Just as two years ago in May of 2011, investors are now derisking quickly out of the Emerging Market Stocks, setting the stage for the European Stocks, VGK, the US Stocks, VTI, and the Asian Stocks, EPP, to trade lower, on the dynamic of the exhaustion of the World Central Banks’ monetary authority and inability to continually stimulate global growth and corporate profitability, as well the dynamic that the monetary policies of the World Central Banks have crossed the rubicon of sound monetary policy and have turned “money good” investments bad, first beginning with Bonds, BND, and now with Large Cap Value Style, JKF, as well as the whole spectrum of dividend paying stocks, seen in this Finviz Screener, trading lower.
Now that the Large Cap Value Style are turning lower, all investment styles, the Large Cap Growth, JKE, the Small Cap Pure Revenue, RZV, and the Small Cap Pure Growth, RZG, will be trading lower. This is especially true of REITS, VNQ, as they reflect the economic efficiency of value investing; one can follow the REITS’ fast fall lower in an ongoing comparison chart of them and Large Cap Value Style.
NPR reports The Eurozone economies of Italy and Spain had especially sharp economic declines.
Sovereignty provides seigniorage, that is moneyness. Insolvent sovereign nations, such as Greece, GREK, Italy, EWI, Spain, EWP, and Ireland, EIRL, and their insolvent financial institutions, EUFN, such as NBG, and SAN, are unable to provide seigniorage, that is moneyness, to stocks, such as Specialty Chemicals, LYB, Beverage Manufactuers, CCH, Energy Producers, E, Software Manufacturers, SAP, Global Mining Stocks, PICK, Copper Mining Stocks, COPX, Cement Manufacturers, JHX, Agricultural Chemicals, MON, Semiconductor Equipment Manufacturers, ASML, Retailers, LUX, Telecom Services, TEF, TI, PT, and Base Metal Commodities, such as Lead, LD, and Tin, JJT.
The failure of the Eurozone periphery nation states, that is the PIIGS, as investment vehicles, is a pivotal event in world history. Nation State Investment, EFA, and Small Cap Nation Investment, IFSM, is failing, and World Stocks, VT, are trading lower.
Volatility, VIXM, is turning up as investors are starting to derisk out of stocks and delever out of commodities.
Inflationism is turning to Destructionism. Money as it has been known, is going to be literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN.
The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, this being foretold in bible prophecy of Revelation 13:1-4. Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.
Risk on investment will be turning to risk off investment, as risk appetite turns to risk avoidance. This can be followed in the fall lower of the Currency Demand Curve, that is the ratio of Small Cap Pure Value Stocks, RZV, relative to Small Cap Pure Growth Stocks, RZG, RZV:RZG, as well as the trade lower in the UBS Risk On ETN, ONN, and the trade higher in the UBS Risk Off ETN, OFF.
A new sovereignty and a new seigniorage is coming. After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism.
The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth. And the second, will be diktat, coming from regional sovereign leaders, and from regional sovereign bodies, such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources in all of the world’s ten regions.
The Beast’s Diktat Money System will rise to Banker’s Fiat Money System. The rule of the new sovereigns will provide the seigniorage of diktat, where mandates serves as currency, credit and power.
Totalitarian Collectivism, and Debt Servitude, will be mankind’s economic economic and political experience, in all of mankind’s seven institutions.
5) … On Friday, February 14, 2013, all forms of wealth traded lower.
In a grand finale to the Mario Monti, Open Monetary Transactions, OMT, Rally, Transportation Stocks, IYT, rose 0.3% to close at 105.77; and Industrial Stocks, IYJ, rose 0.1% to close at 79.85, as Stocks, VT, Bonds, BND, Commodities, DBC, and Gold, GLD, traded lower.
Sectors trading higher included Leveraged Buyouts, PSP. Sectors trading lower included, Energy Service, IEZ, OIH, Energy, XLE, PSCE, Semiconductors, XSD, Miners, PICK, Steel, SLX, World Banks, IXG.
World Stocks, VT, -0.30%, Emerging Markets, EEM, -0.40%, Europe, VGK, -0.30%, Asia, EPP, -0.25%, US, VTI, -0.10% . S&P, SPY, -.10%
Bonds, BND, -0.10%, lower to strong support.
Commodities, DBC, -0.40%, lower.
Major World Currencies, DBV, and Emerging Market Currencies, CEW, unchanged, at their rally highs.
6) … Summary.
It is reasonable to believe that a see-saw destruction of wealth will now commence. Total Bonds, BND, will be going higher for a while, as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, trade lower in competitive currency devaluation, causing investors to derisk out of Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Producers, FXR, Leveraged Buyouts, PSP, and exoic things such as Spin Offs, CSD. Needless to say, investing in IPOs, FPX, will be a losing endeavor. Expecting a return of capital from investing in Dividend Appreciation, VIG, is an unreasonable expectation.
Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.
Sovereign nation states, and their central banks, such as the US Fed, the ECB, the BoJ, and the PBOC, are the sovereigns that have produced the seigniorage that stimulating Nation Investment, EFA, Small Country Nation Investment, IFSM, Emerging Market Investment, EEM, Global Production, FXR, Dividend Investment in REITS, VNQ, as well as risk investment in Leveraged Buyouts, PSP, Junk Bonds, JNK, Senior Bank Loans, BKLN, Emerging Market Bonds, EMB, Spin Offs, CSD, and IPOs, FPX as is seen in the ongoing two year combined chart of EFA, FXR, VNQ and PSP. The Global Producers, FXR, have provided the best capital return, and the REITS, VNQ, the second best.
And as Scott Grannis reports in article The US goes global, The U.S. economy is finally becoming globalized, like most of the world’s other major economies. The growth of international trade is an unqualified good thing, for us and for the rest of the world. It makes economies more efficient and boosts standards of living everywhere.
I comment that Keynesian and Monetarist stimulus, specifically the US Fed’s ZIRP, and Quantitative Easing, the ECB’s LTROs and OMT, the BoJ’s Unlimited Easing and PBOC monetary injections have stimulated global growth and trade, as well as have developed corporate profitability, and rewarded investors who went long when QE1 commenced, or who hung in with their investments as they recovered.
The wealth of the sovereigns is seen in metrics such as Federal Reserve Credit, Global Central Banks International Reserve Assets, and M2 Money. These have all been growing strongly over the last two years and reflect growing seigniorage, that is growing moneyness, and it has been flowing from Creditors, through Asset Managers, to Investors.
Since QE1 was announced, strong seigniorage has been given to the following Creditors, and their charts suggest a topping out of seigniorage, that is Peak Moneyness is being achieved, as The Too Big To Fail Banks, RWW, Regional Banks, KRE, and Small Cap Revenue Shares, RWJ, have topped out; and as Lenders such as Visa, V, and Mastercard, MA, have now turned lower.
The Asset Managers, such as BLK, Investment Bankers, such as JPM, and Hedge Funds, such as APO, have transferred moneyness from the Creditors, to the Investors, with great alacrity. Those who have coined, that is minted, Liberalism’s Fiat Wealth include BLK, WDR, EV, SEIC, AMG, AMP, IVZ, APO, JPM, BK, AINV, STT, BEN, AMP, and OAK, and are seen in this Finviz Screener.
Doug Noland reports Sovereign Wealth, that is the wealth of the Sovereigns, as of February 15, 2013, is rolling forward to a new high.
Federal Reserve Credit surged $26.1bn to a record $3.018 TN. Fed Credit has increased $232bn in 19 weeks. Over the past year, Fed Credit expanded $100bn, or 3.4%.
Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $708bn y-o-y, or 6.9%, to $10.958 TN. Over two years, reserves were $1.666 TN higher, for 18% growth.
M2 (narrow) “money” supply rose $7.8bn to $10.421 TN. “Narrow money” has expanded 6.9% ($669bn) over the past year.
Inasmuch as Peak Moneyness and Peak Sovereign Wealth is being achieved, Peak Sovereignty is being achieved as well.
The Sovereignty of Liberalism is at its zenith. And the US is Liberalism’s Premier Sovereign. The US, the second of two iron legs of global hegemonic power since the late 1700s, is as President Obama just finished speaking in the State of the Union Address, manifesting Peak Hegemony.
The adoption of the Milton Friedman Free To Choose Floating Currency Regime, produced Liberalism’s Peak Currencies, Peak Nation Investment, Peak Global Production, Peak Wealth, Peak Sovereignty, Peak Central Bank Wealth, and Peak US Hegemony.
Dollar Hegemony is at its peak, as Allan Sloan communicates in Fortune Magazine article The Fed’s Big Dollar Gamble. Ben Bernanke’s low interest rate policy has driven down the dollar; the Fed’s keeping-lowering-rates program doesn’t have an an indefinite shelf life. The bottom line is that pharmaceutical stimulus is forever; but Fed stimulus isn’t. It’s as Ron Paul, in Lew Rockwell, writes we are seeing The End Of Dollar Hegemony.
New sovereignty, new sovereigns, and new sovereign wealth is coming. The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US.
Jesus Christ has been given all authority and is operating the helm of the economy of God, Ephesians 1:10, to pivot the world out of Liberalism’s Milton Friedman Free To Choose Floating Currency Nation State Regime, and into Authoritarianism’s Ten Toed Kingdom of Regional Governance, Daniel 2:25-45, where the toes will be regional zones consisting of a miry mixture of iron diktat and clay democracy. Google relates that a Beast with ten horns is coming to rule mankind economically and politically.
Inflationism is turning to Destructionism. Stocks are turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad
The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4. Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.
It is Jesus Christ who is winding down Liberalism’s dynamos of global growth and corporate profitability, and who is winding up Authoritarianism dynamos of regional security, stability, and sustainability. Scott Grannis reports Retail sales post modest growth. It has been continuing growth in retails sales that has produced stunning investment returns in Consumer Services, IYC, in Retail Stores, XRT, such as KORS, HD, DDS, and in Internet Retailers, FDN, such as Amazon, AMZN.
John the Revelator, fully knew Jesus, for three-and-one-half years, before John, at the end of his life, was exiled to the Isle of Patmos, where he was given a dream by angels from Morpheus, the God of Dreams, which communicated that He, Jesus Christ, would shortly bring end time events to come to pass, Revelation 1:1, meaning that once they start to occur, they will fall in place, like lined dominoes, toppling one upon another.
End time events commenced in May 2010, when Herman Van Rompuy commenced Regionalism by bringing forth the first of what is now three Greek Debt Bailouts. Jesus is putting Liberalism’ thought leaders out to pasture; dimming Liberals include Paul Krugman. And Jesus is appointing Authoritarianism’s thought leaders to preeminence; brightening Authoritarians include Jens Weidmann, and Michael Mandelbaum.
Gold, GLD, is both a currency and a commodity; and it has now likely been fully debased by the rise of the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW; and soon will be trading higher as fiat wealth of World Stocks, VT, VSS, Base Metals, DBB, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Bonds, BND, fall into the Pit of Financial Abandon.
After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism. The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth. And the second will be diktat, coming from regional sovereign leaders, from regional sovereign bodies such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources. Yes, diktat, coming from nannycrats, will be the Beast’s Regime’s form of sovereign wealth.
7) … What constitutes good governance? And what government provides it?
An inquiring and resourceful mind asks, what constitutes good governance. And what government is best able to provide it? And what society should one live in? Bionic Mosquito writes in Economic Policy Journal Germanic Medieval Law and Designed Rights. Aware individuals around the globe are saying and thinking, “The country I am living in is becoming more authoritarian, are there any locations where freedom reigns, that I might want to move to?” This type thinking pretty much suggests that there are no “natural” rights that exist in any sense that they are provided to man and he automatically lives under them, rather the aware man thinks about and seeks societies where freedom is a designed right.
I had an epiphany, when Morpheus, the God of Dreams, that is Jesus Christ, presented me with The Morpheus Proposal, and then I became a God Aware Person. Yes, I considered the Morpheus Proposal and took the Red Pill, as in the movie The Matrix, where Morpheus relates “You take the blue pill. The story ends. You wake up in your bed and believe … whatever you want to believe. “You take the red pill. You stay in Wonderland and I show you how deep the rabbit hole goes. “Remember. All I’m offering is the truth. Nothing more.”
Red Pill people are the only genuinely aware people, and know a number of mysteries, that is truths, as revealed in the Bible, that is in Holy Scripture, sound biblical doctrines include the following:
1) …. Fate, that is Destiny, Revelation 1:1, is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism, … and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, … is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Bible Prophecy of Revelation 13:1-4, and Daniel 2:25-45, … as Jesus Christ has unleashed the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, Revelation 6:1-2. … Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states. As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7: the fourth beast, and Daniel 7:23: the world empire.
The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”. The fourth beast, Empire Germany will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings. And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.
2) … When one is born again, he is transferred into God’s society, that is the Household of God, Ephesians 2:19-22.
3) …. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become.
4) …. Inasmuch as Jesus Christ is operating at the helm of the economy of God, Ephesians 1:10, and is pivoting the world from the Liberalism’s age of investors’ choice in the use of credit and prosperity, to Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”..
8) … Commentary from Doug Noland.
Doug Noland writes Hedge Funds Gone Wild. The bearish yen trade has been a big winner. Will the speculators pile on? Will proceeds from yen selling provide liquidity for bullish “risk on” market bets globally? Could indiscriminate selling potentially risk inciting a freefall in the yen? If yen weakness turns disorderly, could this negatively impact Japan’s seemingly vulnerable bond market? Or could developments elsewhere (Europe?) shift the backdrop away from today’s global “risk on,” in the process inciting an abrupt reversal in the yen and another painful short squeeze? This has potential to be an integral facet of a “Bigger Risk On, Risk Off” global market dynamic.
There is also ongoing confirmation that the incredible global policymaking and liquidity backdrop is much more successful in inflating asset markets than it is in boosting economic performance. In particular – and especially considering policy environments – economies in Europe, Japan and the U.S. continue to un-impress. This bolsters the view of a widening global gap between inflating financial asset prices and underlying economic fundamentals.
This begs the question: how might the emboldened “global macro” community play this divergence? Will they play policymaking and the inflating Bubble for all it’s worth? Or will they begin to approach speculative markets with a more contrarian bent?
Most call it a “new bull market”. I’ll stick with “inflating speculative Bubble”.
I comment, the Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led by the European Financials, EUFN, and the Emerging Markets, EEM, as well as by Debt Issues, Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB. While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, is trading lower.
9) … in the news.
The Ventura County Star communicates that farming is a hazardous business Somis farm, packing plant to close; more than 600 workers facing layoffs
Jeff Mackie in Breakout Video Interview, relates Stocks are up big to start 2013 but Marc Faber, Editor & Publisher of the Gloom, Boom & Doom Report, says it ends in tears.
The Daily Ticker reports G7 takes aim at Currency War concerns Amid concerns over a “currency war” of competitive currency devaluations, the G7 ministers have issued a statement reaffirming a “longstanding commitment to market determined exchange rates”.
Bloomberg reports OPEC survival uncertain amid US oil uutput growth. A record surge in US oil production that has moved the country closer to energy independence threatens the existence of OPEC, according to analysts at Citigroup.
Kelly Bit of Bloomberg reports, Bridgewater Associates LP, the $140 billion hedge fund founded by Ray Dalio, is betting on global stocks and oil as it expects money to move into equities and other assets amid increased economic confidence. Bridgewater, the world’s biggest hedge fund, is bullish on stocks, oil, commodities and some currencies as it expects cash to shift to riskier assets, investment officer Bob Prince said,‘You want to be borrowing cash and hold almost anything against it.’”
Bloomberg reports, China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports of goods. US exports and imports of goods last year totaled $3.82 trillion. China’s customs administration reported last month that the country’s trade in goods in 2012 amounted to $3.87 trillion. China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries.
Tushar Dhara of Bloomberg reports, India’s trade deficit in January was $20 billion, one of the nation’s widest monthly shortfalls. Exports climbed 0.8% from a year earlier to $25.6 billion while imports advanced 6.1% to $45.6 billion. India’s exports have been hampered by an uneven global recovery even as demand for oil and gold have stoked inward shipments. Reserve Bank of India Governor Duvvuri Subbarao said, the ‘external sector is very vulnerable,’ adding the current-account gap may widen to a record in the year through March 2013 from about 4.2% of gross domestic product.
Unni Krishnan of Bloomberg reports, India’s industrial output unexpectedly slid in December for a second month as demand falters in an economy expanding at the weakest pace in a decade. Production at factories, utilities and mines fell 0.6% from a year earlier. India’s elevated inflation of more than 7% has limited the extent its central bank can cut interest rates to boost demand, while an uneven global recovery has hurt exports.
Anoop Agrawal of Bloomberg reports, Rupee debt sales slumped 75% this year as LIC Housing Finance Ltd. and Rural Electrification Ltd. delay issuance saying borrowing costs are too high even after the central bank cut rates for the first time since April.
10) … Investment returns for the week were as follows:
World Stocks, VT, -0.1%
S&P 500, SPY, 0.2%
Nasdaq 100, QTEC, 0.4%
US Stocks, VTI, 0.3%,
S&P 400 Mid Caps, MDY, 0.6%
Russell 2000, IWM, 1.0%
Dow, DIA, -.2%
Asia, EPP, 1.1%
Emerging Markets, EEM, 0.3%
Europe, VGK, -.2
Small Cap Nation Investment, IFSM, 0.9%
Global Producers, FXR, 0.8%
Nation Investment, EFA, -0.2 %
Finland, EFNL, 5.1%
Sweden, EWD, 2.5%
South Korea, EWY, 2.3%
Australia, EWA 1.7%
Philippines, EPHE, 1.1%
Thailand, THD, 1.0%
Taiwan, EWT, 0.9%
Poland, EPOL, -2.6%
Peru, EPU, -2.0%
Mexico, EWW, -2.0
Argentina, ARGT, -1.6%
Canada, EWC, -1.2%
Japan, EWJ, -1.2
Britain, EWU, -0.8
Turkey, TUR, -0.3%
Ireland, ERIL, 2.0%
Italy, EWI, -1.5%
Spain, EWP, -0.8%
Greece, GREK, -0.8%
Germany, EWG, -0.5%
China, YAO, 0.9%
Brazil, EWZ 0.4%
India, INP, -2.0% and SCIN, -4.2%
Russia, RSX -1.3% and ERUS, -1.3%
Investment Brokers, IAI, 2.7%
Investment Bankers, KCE, 2.0%
Too Big To Fail Banks, RWW, 1.1
Regional Banks, KRE, 0.7
World Banks, IXG, 0.4
European Financials, EUFN, -0.4
Solar, KWT, 11.7%
Home Builders, ITB, 3.3%
US Infrastructure, PKB, 2.6%
Leveraged Buyouts, PSP, 2.1%
Semiconductors, XSD, 1.4%
Small Cap Industrial 1.6%
Internet Retailers, FDN, 1.1%
Wind Energy, FAN, 1.0%
Paper Producers WOOD, 1.0%
Spin Offs, CSD 0.8%
IPOs, FPX, 0.5%
Airlines, FAA, 0.3%
Gaming, BJK, 0.1%
Energy Service, OIH, 1.3%
Small Cap Energy Service, IEZ, 1.4%
Small Cap Energy PSCE, -1.1%
Energy, XLE, -0.2%
REITS, VNQ, 0.5%
Dividend Appreciation, VIG, 0.3%
Pharmaceuticals, XPH, 0.2%
US Utilities, XLU, 0.1
Dow Telecom, IYZ, -3.5%
S&P Interntional Telecom, IST, -1.4%
International Dividends Excluding Financials, DOO, -0.8
Global Utilities, DBU, -0.4%
Emerging Market Dividend, EDIV, -0.3
Junk Bonds, JNK, 0.5%
Emerging Market Bonds, EMB, -.6%
Senior Banks Loans, BKLN, -0.3%
Silver Miners, SIL, -6.4%
Gold Miners, GDX, -5.7%
Copper Miners, COPX, -2.2
Automobiles, CARZ, -1.1%
Networking, IGN, -1.1%
Consumer Discretionary, IYC, -1.1%
Miners, PICK, -0.8%
Health Care Provider, IHF, -0.8%
Retail, XRT, -0.8%
Steel, SLX, -0.6%
Nasdaq Biotechnology, IBB, -0.5%
Biotechnology, XBI, -0.5%
Consumer Discretionary, IYC, -0.1%
The chart of the US Dollar, $USD, shows a breakout on Valentines Day, Thursday, January 14, 2013. The Dollar traded up 0.4%, and its 200% ETF, UUP, 0.3%. Major World Currencies, DBV, rose 0.8%, and Emerging Market Currencies, CEW, 0.5%, this week; both their chart patterns show a topping out.
The currencies this week traded as follows:
Swedish Krona, FXS, 1.9%
Brazilian Real, BZF, 0.6%
British Pound Sterling, FXB, -1.8%
Japanese Yen, FXY, -0.8%
Swiss Franc, FXF, -0.5%
Canadian Dollar, FXC, -0.3%
Australian Dollar, FXA, -0.1%
Euro, FXE, -0.1%
Commodities, DBC, -0.8% for the week
Bonds, BND, -0.1% for the week.
The US Dollar, $USD, traded up 0.4%; its 200% ETF, UUP, traded up 0.3% this week, as the US Dollar broke out Valentines Day, Thursday 14, 2013, turning World Stocks, VT, and Commodities, DBC, lower. Bonds, BND, traded lower again this week. Gold, GLD, traded lower as well. Spot Gold, $GOLD, closed at $1,611, manifesting three black crows.
The Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led lower by the European Financials, EUFN, and the Emerging Markets, EEM, as well as Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB. While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, and Dividend Excluding Financials, DTN, is trading lower. Karel Lannoo of Centre for European Policy Studies relates The only way Europe’s leaders can hope to keep the fragile equilibrium afloat is to summon up the courage to go forward with concrete proposals for political union. Read the strategy paper here in PDF format.
Countries trading lower this month so far include the following:
Turkey, TUR, -7.6%
Italy, EWI, -6.0% … TI, LUX, E
Poland, EPOL, -5.9%
Spain, EWP, -4.8%
Peru, EPU, -4.7% … SCCO
Mexico, EWW,-2.4% … AMX, SIM
India, INP, -2.3% … SLT, TTM, TCL, RDY
Argentina, ARGT, -2.1%
China, YAO, -1.9%
Canada, EWC, -1.4
Russia, RSX, -1.3
Japan, EWJ, -1.2 … MKTAY, KUB
South Africa, -0.1
Apparel Retailers such as GPS, LTD, ROST, LULU, DSW, BODY, ARO, TLYS, MW, COH, JOSB, ASNA, REE, CROX, JNY, CHS, BKE, as well as Discount Store Walmart, WMT, are retail loss leaders.
Volatility, VIXM, began to rise on Valentines Day, Thursday, February 14, 2013, portending a turn lower in stocks next week.
