For your listening enjoyment Blues Brothers 2000 – Opening : John the Revelator, uploaded at BluesBrothers.de
For your listening enjoyment Blues Brothers 2000 – Opening : John the Revelator, uploaded at BluesBrothers.de
Financial Market Report for the Week Ending September 20, 2013
1) … The possibility of withdrawal of US Central Bank monetary stimulus caused investment growth in the emerging markets to collapse beginning in May 2013.
The global central bank credit bubble, BWX, began to collapse, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.1% on May 24, 2013, and then to 2.9% on Friday September 13, 2013, on fears of US Fed tapering, with the result that the crack up boom in stocks began to implode; but only reflated with QEternity, on September 18, 2013. The benchmark rate fell to 2.73% the week ending September 20, 2013.
Beginning in May, 2013, investors began to sell mining export nations such as Chile, ECH, and Peru, EPU, Emerging Market Nations, EEM, with high balance of payments, such as Turkey, TUR, Indonesia, IDX, IDXJ, Malaysia, EWM, India, INP, SCIN, Philippines, EPHE, Thailand, THD, and New Zealand, ENZL, as well as interest rate sensitive stocks such Homebuilding Stocks, ITB, Utility Stocks, XLU, and Real Estate Stocks, IYR, such as REM, ROOF, REZ, FNIO.
Bloomberg reports on the collapse of state owned banking in India. Record Rout in Government Banks as Buffers Drop: Corporate India. Shares of India’s state-run banks are trading near record-low valuations as concern grows about narrowing risk buffers and rising bad loans. Indian Bank, United Bank (UNTDB) of India Ltd. and Union Bank of India, have fallen more than 55 percent this year to Sept. 12, the most among the nine government banks that are leading declines for India’s 40 bank stocks. Shares of the nine lenders are all trading below the value of their assets amid lower-than-average capital adequacy levels and bad loan ratios that are about double those of private-sector lenders.
Brand names disappear from the retail shelves when the balance of payments issue becomes extreme as Francisco Toro of Caracas Chronicles reports Keep walking…right over the BoP cliff-edge. Been having trouble shaking that end-of-times feeling over the looping Balance of Payments cliff-edge? Here’s some confirmation-bias catnip for you from Confirmando.com Faced with an acute shortage of dollars and no end-in-sight, the unthinkable has now happened: licquor stores in Caracas have started rationing the sale of Scotch. “No hay garantía de inventarios para el mes de mayor demanda como es diciembre y ha obligado a imponer una especie de racionamiento. ‘Vendemos solo 4 botellas de Old Parr, Buchanan’s o Etiqueta Negra 12 años’, apunta una de las promotoras de la tienda de Licores Mundial en la urbanización Las Mercedes.Una situación similar ocurre en las licorerías de varios supermercados en Caracas, donde se prohibió la venta de cajas de 12 botellas de estas marcas y sólo se acepta un máximo de 3 unidades. Frente al alza del precio y la limitación en la venta, hay consumidores que optan por migrar a otras marcas, pero no abandonan su hábito por el escocés. Fin. Du. Monde”!
Francisco Toro of Caracas Chronicles writes Occam’s razor on sabotage. Willie Neuman’s piece in the New York Times on Maduro’s sabotage-obsession is a pretty good primer for people who haven’t been following the story. It bothers me a bit, though, that he barely mentions, in passing, the government’s obvious political rationale for making up outlandish tales that have no evidence to back them: deflecting blame for its own appalling record of neglect over the nation’s infrastructure. To Venezuelans with dos dedos de frente, this is obvious, but perhaps it is less so for Willie’s readers stateside: the maintenance culture inside Pdvsa and Corpoelec has frayed badly over the last 15 years, leaving a brittle infrastructure that’s given rise to an appalling industrial safety record. At Corpoelec in particular, efforts to face up to the crisis have taken the form of a loosening of safeguards against corruption, leading to the Bolichicos scandals we’re all too familiar with. So not only does the National Grid suck, the billions spent to fix it are being looted.
2) … A disavowment of a Chinese taper stimulated Chinese stocks to rally beginning July 2013.
Tyler Durden writes in Zero Hedge China: No Leverage, No Growth. When it comes to the very simplest axiom on modern Keynesian economics, it seems one can’t repeat it enough times: have leverage, have growth … don’t have leverage, don’t have growth.
That is the main reason why in lieu of any organic credit growth (total consumer bank loans and leases now are still below the level when Lehman filed), it has been up to the Fed to step up and provide “leverage” into the system, in the form of excess reserves, resulting in $2.5 trillion in excess deposits over loans, or just the void filled by the Fed’s printing of lower powered money. That is also the reason why in early summer, China tried to conduct a mini-taper of its own to streamline its monetary pipeline which had been so filled with bad and non-performing credit, that the PBOC effectively pulled the switch on new liquidity for over a month.
What happened almost immediately after, when rates on ultra short term funding soared to 20%+, nearly destroyed the domestic banking system and resulted in a major slowdown in the Chinese economy. “Luckily” for China, its close encounter with the taper was brief, if quite painful, and following a period of shock, the Chinese central bank had no choice but to resume injecting banks with their daily dose of monetary morphine all over again.
This in turn, has brought us to square one: nothing in the local banking system has been fixed, and what’s worse, while China has bought itself a few months respite, the dominant old problem of a collapsing credit impulse, as described before, in the country with the largest corporate credit bubble in the world, is about to come back with a bang in a few short months. In short: China just did what the US has boldly done so many times before kicked the can.
NidStyles comments On December 1913, when the monetary system was fraudulently changed into a debt based fractional reserve monetary system through the creation of the Federal Reserve. Since then, there can be no economic growth without credit growth. Economic growth is tied up to credit growth. If the overall debt of the system was to be reduced then the entire system would collapse into a deflationary death spiral. For this reason, no government in this fiat based currency world should have a balanced budget. They all have to keep a certain amount yearly growth of their national debt. The EU for example is aiming at a yearly growing debt rate of 3% of GDP for each Euro Zone country (they are still far from it though). And Tabarnaque commentsI was about to forget. In case you haven’t seen this classic Youtube Video Money as debt. This is a must be seen in order to understand the monetary system we live in.
Investors bought China’s kicking the can credit rally, from Mid June 2013 to September 13, 2013, as is seen in the ongoing Yahoo Finance Chart of China Financials, CHIX, China YAO, China Industrials, CHII, China Mining, CHIM, and China Real Estate, TAO, providing investment gains of 20%, in just three months; as well as similar gains in Industrial Mining Stocks, PICK, such as RIO, Steel Mining, SLX, such as MT, GSM, as well as in Asia Regional Stocks, Australia Small Caps, KROO, Australia Bank WBK, New Zealand, ENZL, South Korea, EWY, as well as in Distant Regional Stocks, Egypt, EGPT, South Africa, EZA, Argentina, ARGT, as well as in Shipping Stocks, SEA, seen in this Finviz Screener. These stock investments are ready to implode.
In early September, China, YAO, Finland, EFNL, Shipping, SEA, Solar, TAN, Biotechnology, IBB, Casinos and Resorts, BJK, Semiconductors, SMH, Internet Retail, FDN, Design Build, FLM, Internet Retail, FDN, Small Cap Industrial, PSCI, Automobiles, CARZ, S&P High Beta, SPHB, and Paper Producers, WOOD, such as TIS, SWM, KS, SEE, PKG, GPK and IP, seen in this ongoing Yahoo Finance Chart have outperformed and are primed for a great fall.
3) … Nation investment soared the week ending September 20, 2013, on confirmation of QEternity
On Monday September 16, 2013, Stocks rally, dollar dips as Summers quits Fed race. Marc Jones of Reuters reports that investors wagered that U.S. monetary policy would stay easier for longer should the other leading candidate for Fed chair, Janet Yellen, get the job. Markets had perceived Summers as less wedded to aggressive policies such as quantitative easing and more likely to scale stimulus back quickly than Yellen, who is currently second in command at the Fed.
Nation Investment, EFA, and Small Cap Nation Investment, IFSM, traded to new rally highs.
The Eurozone, EZU, and the traded to a new rally high, as Italy, EWI, Netherlands, EWN, Spain, EWP, Italy, EWI, Ireland, EIRL, Greece, GREK, and Germany, EWG, EWGS, traded higher.
US Stocks, VTI, traded to a new rally high.
Asia Excluding Japan, EPP, traded to a new rally high.
World stocks, VT, and Global Industrial Producers, FXR, rose to a new rally high.
Sectors trading higher included Paper Producers, WOOD, Solar, TAN, Design Build, FLM, Gaming, BJK, Automobiles, CARZ, Inverse Volatility, XIV.
Filled black candlesticks formed in a number of stock charts such as SPY, IWM, FXI, EZU, EUFN, SMH, IBB, KROO, SPHB, XTN, YAO, PSP, and RXI, as well as the Euro, FXE, foreshadowing a market reversal.
Yahoo Finance chart shows the EUR/JPY closed at 132.26.
The US Dollar, $USD, traded lower, as the Indian Rupe, ICN, the Swedish Krona, FXS, and the Australian Dollar, FXA, and the Euro, FXE, traded higher.
The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.87%.
Oil, USO, traded 1.9% lower.
The Gold ETF, GLD, traded 1.1% lower as Spot Gold, $GOLD, traded lower to $1313.
On Tuesday, September 17, 2013, Volatility, XVZ, and the US Dollar, $USD, traded lower, as World Stocks, VT, traded slightly higher, ahead of FOMC Day. Reuters reports Wall Street ends up amid Fed talks; Nasdaq logs best close in 13 years. US Stocks, VTI, rose on Tuesday on expectations the Federal Reserve will make only modest changes to a monetary policy that has been highly supportive of stocks and other assets.
Gold Mining Stocks, GDX, such as those seen in this Finviz Screener, traded higher, on a slight rise in the price of the Gold ETF, GLD; the internals of their chart patterns suggest that their direction is going higher once again.
Australia’s Westpac banking, WBK, led New Zealand, ENZL, Australia, EWA, and Asia Excluding Japan, EPP, higher, while Shanghai, CAF, led China Industrials, CHII, Indonesia, IDX, and Indonesia Small Caps, IDXX, lower. German Small Cap Stocks, GERJ, and Greece, GREK, led the Eurozone, EZU, slightly higher.
Sectors trading higher included, Inverse Volatility, XIV, Nasdaq Internet, PNQI, IPOs, FPX, Networking, IGN, Retail, XRT, such as RAD, KR, TJX, Semiconductors, SMH, Consumer Services, IYC, Internet Retail, FDN, Small Cap Pure Value, RZV, Stockbrokers, IAI, and Aerospace and Defense, PPA. Regional Bands, KRE, traded higher. Energy Production, XOP, and Small Cap Energy, PSCE, traded higher despite a trade lower in Oil, USO.
Credit Provider MasterCard, MA, rose strongly, and Delta Airlines, DAL, rose strongly on recent announcement that it will join the S&P 500.
The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.85%.
On Wednesday September 18, 2013, Wall Street ends at record, Fed maintains stimulus US stocks rallied to record highs on Wednesday after the Federal Reserve surprised investors and decided against trimming its bond-buying stimulus program, which has fueled Wall Street’s rally of more, Reuters reports. Volatility, XVZ, traded strongly lower. The US Dollar, $USD, traded strongly lower to close at 80.23. Major World Currencies, Brazilian Real, BZF, Indian Rupe, ICN, Australian Dollar, FXA, Swedish Krona, FXS, Swiss Franc, FXF, British Pound Sterling, FXB, and the Euro, FXE, as well as Emerging Market Currencies, CEW, all rose strongly.
Spot Gold, $GOLD, rose 4.2% to close at $1,365. The Gold, ETF, GLD, rose 4.4%, and the Silver ETF, Silver, SLV, 6.4%, taking Gold Miners, GDX, 8.9%, and Silver Miners, SIL, 11.0%, higher. Oil, USO, rose 2.5%.
In what amounts to debt monetization, that is free money for investors, World Stocks, VT, rose 2.0%, Nation Investment, EFA, 2.7% … Emerging Markets, EEM, 4.2% … The BRICS, EEB, 3.2%, with INP 5.3, EWZ 5.1, RSX 4.9, YAO, 1.7 … Asia Excluding Japan, EPP, 2.6%, with, IDX, 8.6, EPHE 7.2, THD 5.9, TUR 5.6, EWM 4.6, ENZL, 2.2 … Others with ECH, 5.3, EZA 4.6, ARGT 4.5, EWY 4.1 … The Eurozone, EZU, 2.6%, with EWP, 3.8, EFNL, 3.4, EWI, 3.3, GREK, 2.8, EWG, 2.6, EIRL 2.2, EWN 2.2, EWGS, 1.7 … US Stocks, VTI, 1.2%, with SPY 1.2, QQQ 1.2% with sectors Home Building, ITB 4.8%, Inverse Volatility, XIV 3.7, Coal Miners, KOL 3.7, Industrial Miners, PICK 3.2, China Industrials, CHII 3.2, Solar Stocks, TAN 2.9, Steel Producers, SLX 2.9.
Investors have been clamoring for Growth Stocks, Large Cap Growth, JKE, and Small Cap Pure Growth, RZG, have been outperforming their peers, Large Cap Value, JKF, and Small Cap Pure Value, RZV, as is seen in their combined ongoing Yahoo Finance Chart
Aggregate Credit, AGG, rose strongly as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close at 2.71%, as the Father of QE, Ben Bernanke, called for ongoing monetary intervention.
The apostle of QE Unlimited, a promise to buy assets every month until conditions improve, Dr. Marc Faber, and investment newsletter publisher of The Gloom Boom & Doom Report, posts in Zero Hedge My view was that they would taper by about $10 billion to $15 billion, but I’m not surprised that they don’t do it for the simple reason that I think we are in QE Unlimited. The Fed will continue to print and if the stock market goes down 10%, they will print even more. And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate. The endgame is a total collapse, but from a higher diving board now. Wikipedia relates He correctly predicted QE to infinity. And On March 27, 2013 Faber said that the U.S. is creating “nowhere to hide” bubbles in many emerging economies such as Indonesia, the Philippines, Thailand (up four times from 2009 lows).
I comment that when one can not go left or right, and when one can not go up or down, then all one can do is go further in at an accelerated rate. which will result in total destruction known as supernova, in this case Financial Armageddon, a global credit bust and worldwide financial system breakdown, that is foretold in Bible Prophecy of Revelation 13:3-4.
Benson te writes Inflationism represents just one of the many slippery slope towards more interventionism (price controls, foreign exchange and capital controls, wage and labor controls, trade controls, border controls and more) and even risks of wars.
And Benson te also writes Poker bluff called: US Federal Reserve balks at taper. I have been saying so. The supposed taper talk, like all the rest of “exit” talks since 2010, has all been but a poker bluff.
Given the entrenched dependency relationship by the mortgage markets and by the US government on the US Federal Reserve, the Fed’s QE program can be interpreted as a quasi-fiscal policy whose major beneficiaries have been the political class and the banking class. Thus, there will be little incentives for FED officials to downsize the FED’s actions, unless forced upon by the markets. Since politicians are key beneficiaries from such programs, Fed officials will be subject to political pressures.
This is why I think the “taper talk” represents just one of the FED’s serial poker bluffs. The US Federal Reserve called the bluff. The FOMC announced that they will refrain from tapering until supposed evidence will warrant it.
The global system has been acutely hooked on steroids which will only be given up when forced upon by the markets. Such dependency will even be more entrenched.
Such actions by the FED also runs in contradiction to supposed claims of economic recovery as the Zero Hedge rightly observed. It seems the Fed is so scared about something (despite every long-only asset manager telling us day after day that the economy is recovering and the US doesn’t need crisis support… oh and can withstand higher rates) that they have gone against consensus and decided that Tapering now is premature.
FED policy represents a subsidy or transfer of resources to Wall Street and the government diverted from the main street, the economy will hardly post a robust real recovery. And worse, such transfers encourage malinvestments and consumption of capital.
Naturally markets addicted to the FED steroids went into a bacchanalia. The markets has turned into a full Risk ON mode. The taper bluff reinforces the record run for the S&P 500.
QEternity in September 2012 had a 3 month effect of the tempering of bond yields. Confirmation of QEternity will have a shorter duration of impact. In other words, the bond vigilantes will be having a short vacation but they will back soon, perhaps in less than a month.
Back in August PBS Holdings wrote Emerging markets want QEternity. Over the past few years, QEternity is the humorous moniker that’s been used to describe the Federal Reserve’s seemingly never ending monetary stimulus. But the beginning of the end of QE and one of the most liberal monetary experiments in human history is nigh.
Central banks from emerging market countries like Brazil, India,Indonesia, and Turkey, are already taking aggressive steps to prepare for massive capital outflows ahead of the Fed’s decelerated asset purchases.
But as money flows away from emerging economies back into to developed countries, funding future economic growth and servicing debt becomes more difficult. Also, there’s the problem of containing inflation, which is still too high in BRIC nations like Brazil and India.
Emerging markets have been among the greatest beneficiaries of the Federal Reserve’s five-year easy money cycle. Essentially, Bernanke & Co. encouraged the “risk-on” trade of owning riskier assets by pushing investors out of low-yielding “safe” assets.
On Wednesday September 18, 2013, a QEternity rally drove the Emerging Market Stocks which had sold off, strongly higher, as is seen in the combined ongoing Yahoo Finance Chart of New Zealand, ENZL, Chile, ECH, Malaysia, EWM, India, INP, and especially thailand, THD, Philippines, EPHE, Turkey, TUR, and Indonesia, IDX, with the latter recovering 20% from their sell off lows.
Mike Mish Shedlock writes One sided risk assessment. The Fed sees risks all the time. But it’s all one-sided. The Fed never sees risk in tightening too little. The Fed always sees risks in tightening too much. The result is a series of bubbles of ever-increasing amplitude.
And Mike Mish Shedlock writes Let’s see how long this rally in emerging market currencies lasts. I suspect not long. Brazilian state development bank president Luciano Coutinho who expects currency volatility to increase because the Fed didn’t start tapering. “For us, the sooner it starts and ends, the better. I would rather see it start today and have some date to finish because then we will feel the whole impact. The worst thing is the uncertainty.” And Bloomberg reports One-hundred-year bond wipeout in Mexico triggered by Fed.
Back in July Wall Street Fool wrote Home builders about to feel the wrath of The Titans. The FED tapering its QEternity Program, is probably the single worst news for Home Builders Stocks.
QEternity rallied Home Builders, ITB, more than any other sector.
On Thursday September 19, 2013, Stocks soared In overnight trading. Benson te writes Asian markets jump on the FED’s QE extension. The reality is that all these stock market-currency market movements have been representative of the pricing of distortions brought about by FED and other central bank policies that has nurtured the market’s addiction to low interest rates environment and the subsequent credit fueled asset boom that has largely little to do with “fundamentals” or the real economy. Europe’s parallel universe should be a prime example. What really has been a bubble has been misconstrued as a boom. Eventually booms end up in busts and crises as have been through history.
And in overnight trading, AP reports Fed shock sweeps through financial markets. Global stocks surge after Fed maintains stimulus in surprise move. The response in financial markets was immediate, tocks around the world surged, with the major U.S. indexes and Germany’s DAX striking record highs, while the dollar and U.S. government bond yields were pummeled. Commodities, such as oil and gold, were also in demand as were financial assets in many emerging markets as much of the money generated by the stimulus over the years has been invested around the globe to seek potentially higher returns. “Given the extreme moves in financial markets overnight and this morning, some participants have been on the receiving end of a short and sharp lesson on the dangers of attempting to second guess the U.S. Federal Reserve,” said Brenda Kelly, senior market strategist at IG.
Volatility, XVZ, traded slightly higher. AP reports Dow, S&P End Lower After Record-Setting Run; Groupon, GRPN, Tesla, TSLA, Spike after record setting rally. Rite Aid, RAD, spiked higher as well.
Global Producers, FXR, trading higher included TWX, ETN, FLS, ROK, SNA, CIR, ITT, DOV, and JBT.
Eurozone Stocks, EZU, trading higher included TS, ASML, and CRH.
Japanese Stocks, EWJ, trading higher included IX.
US Regional Banks, KRE, such as RF, STI, HBAN, SNV, traded lower. Global Banks such as LBCS, YG, RBS, SAN, and IBN, HDB, and BPOP traded lower as well. European Financials, EUFN, traded lower. Emerging Market Financials, EMFN, blasted higher, reflecting yesterday’s rally.
Nations trading lower included South Africa, EZA, Russia, RSX, ERUS, Australia, EWA, and the Philippines, EPHE. Nations trading higher included Turkey, TUR, and Thailand, THD. Sectors trading lower included Health Care Providers, IHF, Home Building, ITB, and Leveraged Buyouts, PSP, as well as Gold Miners, GDX, and Silver Miners, SIL.
The chart of the US Dollar, $USD, shows a slightly higher close at $80.50. The Chinese Yuan, CYB, as well as Major World Currencies, DBV, Emerging Market Currencies, CEW, traded slightly higher to a rally highs; these are now primed for a competitive currency devaluation at the hand of currency traders as investors derisk and deleverage out of World Stocks, VT.
Yahoo Finance reports that EUR/JPY blasted higher to close at 134.5 but below its recent high of 135, as the Euro, FXE, closed at 133.87, and the Japanese Yen, FXY, shows close lower at 98.41. The Stockcharts.com chart of EURJPY shows what may turn out to be a dark cloud covering evening star candlestick, communicating an end to Liberalism’s carry trade investing.
The Stockcharts.com charts of World Stocks relative to Aggregate Credit, VT:AGG, Nation Investment relative to World Government Treaury Bonds, EFA:BWX, and Eurozone Stocks relative to EU Deb, EZU:EU, communicate the end of Liberalism’s credit induced speculative leveraged invesing, as well as the achievement of peak wealth: Liberalism’s fiat wealth system is at its zenith.
The Interest Rate on the US Ten Year Note, ^TNX, traded slightly higher to close at 2.75%.
Business Insider reports BlackBerry Plans To Fire Up To 5,000 Employees.
Robert Wenzel of Economic Policy Journal writes White House signals “Yale School” Yellen will be nominee for Fed Chief. For the record, Yellen comes out of the “Yale school” of Keynesian macroeconomics. Her dissertation adviser was the Keynesian James Tobin. Tobin was a huge advocate of using government intervention to stabilize financial markets
CNBC reports Eurozone’s North South divide to widen further. Economic differences between the euro zone’s core and periphery are their most marked in over 10 years, according to a new report, and look set to widen as the region’s nascent recovery takes hold.
Professional services firm Ernst and Young (EY) said that euro zone countries were now at their most economically divergent since the early 2000s, according to its “convergence indicator,” which takes into account variables including gross domestic product, inflation, unemployment rates and government balances.
The gap can been seen in terms of growth – Germany’s economy expanded by 0.7 percent in the second quarter of this year, but the economies of a number of countries, such as Spain and Italy, continued to shrink – as well across lending and employment.
“Sharp differences in financing conditions and labor market developments will maintain stark divergence between euro zone countries,” according to the Eurozone Forecast, published on Thursday. “This poses a threat to efficient decision-making and further economic integration – both of which are necessary to ensure the eurozone’s stability.”
EY said it expected unemployment in the region to continue to rise, peaking at 12.6 percent in the middle of next year, and warned that the “substantial divergence” in unemployment rates across the continent would persist. It said it expected joblessness in Spain and Greece to peak at 27.6 percent and 29 percent respectively in 2014 – while Germany’s will be remain substantially lower at 5.4 percent.
On Friday September 20, 2013, Volatility, XVZ, rose, as the US Dollar, $USD, rose slightly to close at 80.56. The Market Off ETN, OFF, rose in value. Currency Carry Trades unwound worldwide with the Japanese Yen, FXY, trading higher and individual currencies such as the India Rupe, ICN, and the Euro, FXE, trading lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing investors to derisk and deleverage out of World Stocks, VT, and Global Industrial Producers, FXR, such as Boeing, BA.
Masaki Kondo, Mariko Ishikawa and John Detrixhe of Bloomberg report Federal Reserve Chairman Ben S. Bernanke’s surprise decision yesterday to refrain from reducing the central bank’s unprecedented stimulus threatens one of the surest bets in currency markets this year. Traders borrowing funds in Japanese yen and using the proceeds to buy dollars earned an annualized 21% this year through Sept. 17, a record based on data compiled by Bloomberg back to 1990.
Nation Investment, EFA, traded lower, with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Turkey, TUR, and Chile, ECH, traded lower.
India Banks, EPI, such as IBN and HDB, led India, INP, and the Emerging Market Financials, EMFN, lower.
The National Bank of Greece, NBG, Ireland’s IRE, and Germany’s DB, led Greece, GREK, Ireland, EIRL, and the European Financials, EUFN, lower.
China’s SHG, and China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower.
Interest Rate Sensitive Stocks, that is Leveraged Buyouts, PSP, Home Builders, ITB, Utilities, XLU, Global Utilities, DBU, Real Estate, IYR, and Global Real Estate, DRW, traded lower.
Sectors trading lower included Aerospace, PPA, Paper Producers, WOOD, and Automobiles, CARZ.
Metal Manufacturing, XME, was led lower by Coal Miners, KOL, Industrial Miners, PICK, and Steel Producers, SLX.
Gold, GLD, and Silver, SLV, traded lower, forcing Junior Gold Mines, GDXJ, Gold Miners, GDX, Junior Silver Miners, SILJ, and Silver Miners, SIL, lower.
Aggregate Credit, AGG, traded unchanged, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close the week at 2.73%.
Summary of this financial market trading for the week ending May 20, 2013.
Liberalism achieved peak prosperity on a non taper rally. On going monetization of debt, specifically Ben Bernanke’s call for no tapering, that is for QEternity, made for a sell of the US Dollar, $USD, which closed the week down 1.2% at 80.56, and propelled Nation Investment, EFA, 2.2%, World Stocks, VT, 1.6%, Global Producers, FXR, 1.4%, US Stocks, VTI, 1.3%, and the S&P 500, SPY, 0.8%, to new all time highs.
Sectors rising this week included Solar Stocks, TAN, 3.8%, Nasdaq Internet, 3.6%, Home Builders, ITB, 3.0%, Small Cap Pure Value, RZV, 2.4%, Casinos and Resorts, 2.2% higher. Global Real Estate, DRW, popped 3.9%, higher.
The Eurozone, EZU, rose 3.1%, to a new rally high, as Italy, EWI, rose 3.8%, Spain, EWP, 3.6%, Germany, EWG, 3.3%, and Ireland, Ireland, EIRL 3.2%, and Finland, EFNL, 3.0%.
Asia Excluding Japan, EPP, rose 2.5%, to a new rally high, as THD, rose, 6.7%, IDX 5.6%, New Zealand, ENZL, 4.4%, EWM 4.1%, and the Philippines, EPHE, 3.8%.
Emerging Markets, EEM, rose 2.2%, to a new rally high, as Turkey, TUR, rose, 9.5%, Chile, ECH 4.9%, Argentina, ARGT, 4.7%.
US Stocks, VTI, rose 1.4%, and the S&P 500, SPY, 0.8%, both to new all time highs, with the chart of the S&P 500, $SPX, showing a rise of 1.3% to its new all time high.
Doug Noland reports Last week set an all-time weekly record for corporate debt issuance. The year is on track for record junk bond issuance and on near-record pace for overall corporate debt issuance. At 350 bps, junk bond spreads are near 5-year lows (5-yr avg. 655bps). At about 70 bps, investment grade Credit spreads closed Thursday at the lowest level since 2007 (5-yr avg. 114bps). It is a huge year for M&A. And with the return of “cov-lite” and abundant cheap finance for leveraged lending generally, U.S. corporate debt markets are screaming the opposite of tightening.
August existing home sales were the strongest since February 2007. National home prices are now rising at double-digit rates. An increasing number of local markets certainly including many in California are showing signs of overheating. Prices at the upper-end in many markets are back to all-time highs. And despite a backup in mortgage borrowing costs from record lows, housing markets have yet to indicate a tightening of Financial Conditions. Clearly benefiting from loose lending conditions, August auto sales were the strongest since 2006.
Anna-Louise Jackson and Anthony Feld of Bloomberg reports More Americans took to the water in new boats this summer, often buying smaller, less expensive models, as the industry is showing signs of a recovery. Purchases of powerboats, which include yachts, pontoons and fishing vessels, rose 18.9% in July from a year earlier, according to Statistical Survey.
Lisa Abramowicz of Bloomberg reports America’s companies, from Apple to Verizon, are saving about $700 billion in interest payments with the Federal Reserve’s unprecedented stimulus. Corporate bond yields over the past four years have fallen to an average of 4.6% from 6.14% in the five years before Lehman Brothers Holdings Inc.’s demise, a savings equal to $15.4 million annually per every $1 billion borrowed. Businesses took advantage of the Fed’s largesse to lock in record low rates, extend maturities and raise cash by selling $5.16 trillion of bonds. ‘The stimulus was a huge saving grace in the economy overall,’ said J. Michael Schlotman, the chief financial officer at Kroger. The grocery store operator that estimates it’s paying about $80 million less in interest than it would have pre-crisis.
I comment that the Fed’s ongoing stimulus has created unprecented inflation in the most debt ridden of stocks such as Kroger, KR, whose stock value has more than doubled since November 2011.
The 37 ETFs seen in this Finviz Screener, have risen strongly under US Fed relentless QE monetary policy, and are poised to fall strongly lower on the exhaustion of the US Fed’s and world central bank’s monetary authority, that is as bond vigilantes, begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.75%, and currency traders once again, begin selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, these are XIV, FDN, CARZ, PBS, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, FXR, BJK, PBJ, EFNL, YAO, PPA, PNQI, EZA, KROO, ARGT, EWY, GNW
Jim Sinclair writes of the Wednesday September 17, 2013, money printing operation by the US Federal Reserve in article QE to infinity. QE is in fact debt monetization but central banks do not want to call it that because the historical and traditional understanding of debt monetization is and will in time follows.
I comment that a re-monetization of the world’s only debt-free money, that being gold, is underway. And that the chart of the Gold ETF, GLD, shows that it entered an Elliott Wave 3 up with a 4.4% rise on Wednesday, September 17, 2013; these are the most powerful of all economic waves, generating the bulk of wealth gains.
Jesus Christ has always been at the helm of the economy of God, Ephesians 1:10, operating in dispensation, that is in active oversight of human economic and political endeavors, for the fulfillment of every age, epoch, era and time period.
Under his administration the fiat wealth of liberalism has been surging ever higher. With Fed Chairman Ben Bernanke affirming QEternity; it’s provision constitutes passing the Rubicon of sound monetary policy, as evidenced by the trade lower in World Stocks, VT, on Friday September 20, 2013 manifesting as Liberalism’s fated day of instability, with the Market Off ETN, OFF, and Volatility, XVZ, as well as TVIX, VIXY, and VIXM, rising in value. Peak Prosperity has come via a policy of investment choice in the moral hazard based fiat money system, which is based on schemes of credit and carry trade investing, all designed for investment gain.
Nikolaj Gammeltoft and Cecile Vannucci of Bloomberg report The next drop in U.S. equities may spur a bigger jump in the Chicago Board Options Exchange Volatility Index as investors rush to cover their record bets against the gauge, according to Societe Generale SA. Hedge funds and other large speculators have more than doubled short positions on VIX futures to 189,020 contracts since the end of June. This year’s rally in U.S. stocks has led to a 19% plunge in the VIX, creating profitable strategies to bet against volatility futures. A decline in equities and subsequent increase in share-price swings would bring losses for VIX short sellers, which may drive them to cover the trades, according to Ramon Verastegui of Societe Generale. Increased demand for the contracts will push volatility higher and may exacerbate the stock-market selloff, he said. ‘The concentrated short in the VIX futures is like a red point if you look at a map of the market, signaling potential risk,’ Verastegui, head of engineering and strategy at the French bank, said. ‘A short squeeze in the VIX will have an impact on the volatility market and that can spill over into other markets, accelerating a move down in the S&P.’
The zenith of liberalism was foretold in the statue of empires, as foretold in Bible prophecy of Daniel 2:25-45, where two iron legs of hegemonic power, would rise to rule the world, these being the British Empire, and the US Dollar Hegemonic Empire, only to experience dissolution into an unstable mixture of ten toes of iron diktat and clay democracy, that is ten zones of regional governance and totalitarian collectivism, this being confirmed by the rise of the Beast Regime of Revelation 13:1-4, to replace liberalism’s Banker Regime. God’s idea of economy has been, is now, and will ever be one of empire. The Libertarian dream of freedom, and free things like “free prices” for labor, for example, is an illusion on both the liberalism as well as authoritarianism “desert of the real”.
Under authoritarianism, the schemes of debt servitude schemes, are the order of the day and include such things as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability; all of which enforces austerity.
The details of the US Hegemonic Empire are provided by Robert Wenzel of Economic Policy Journal in the post of Llewellyn H. Rockwell, Jr. article Who are the champions of the common man?
As the country at large endures great economic distress, civilian employment has skyrocketed in Washington, DC, where the average federal worker earns more than double the salary of the average worker in the private sector. The parasite-host relationship that exists between the ruling few and the toiling many is rarely so stark.
It’s no coincidence that Murray Rothbard, was also a pioneer in power-elite analysis. For instance, Rothbard’s essay “Wall Street, Banks, and American Foreign Policy,” published as a small book by the Center for Libertarian Studies, proposes that there might be a teensy bit more to American foreign policy than a disinterested dedication to promoting “democracy.”
Consider just a few paragraphs:
A glance at foreign policy leaders since World War II will reveal the domination of the banker elite. Truman’s first Secretary of Defense was James V. Forrestal, former president of the investment-banking firm of Dillon, Read & Co., closely allied to the Rockefeller financial group. Forrestal had also been a board member of the Chase Securities Corporation, an affiliate of the Chase National Bank.
Another Truman Defense Secretary was Robert A. Lovett, a partner of the powerful New York investment-banking house of Brown Brothers Harriman. At the same time that he was Secretary of Defense, Lovett continued to be a trustee of the Rockefeller Foundation. Secretary of the Air Force Thomas K. Finletter was a top Wall Street corporate lawyer and member of the board of the CFR while serving in the cabinet. Ambassador to Soviet Russia, Ambassador to Great Britain, and Secretary of Commerce in the Truman Administration was the powerful multi-millionaire W. Averell Harriman, an often underrated but dominant force within the Democratic Party since the days of FDR. Harriman was a partner of Brown Brothers Harriman.
Also Ambassador to Great Britain under Truman was Lewis W. Douglas, brother-in-law of John J. McCloy, a trustee of the Rockefeller Foundation, and a board member of the Council on Foreign Relations. Following Douglas as Ambassador to the Court of St. James was Walter S. Gifford, chairman of the board of AT&T, and member of the board of trustees of the Rockefeller Foundation for almost two decades. Ambassador to NATO under Truman was William H. Draper, Jr., vice-president of Dillon, Read & Co.
That’s just half of Rothbard’s analysis of the power elite surrounding just one president’s foreign policy team.
Who has benefited from the American warfare state? Who, that is, apart from those with political connections or government jobs? The question answers itself. Everyone else has suffered from the trillions of dollars looted from them so the Pentagon might have the power to obliterate every conceivable enemy city a dozen times over. We have suffered from increased indebtedness, and – because capital formation is undermined by the squandering of resources in war and in massive diversion of resources to the military sector – lower real wages than we would otherwise have enjoyed. We’ve suffered from the civilian research and development that never occurred because the brains behind it were siphoned into military research. The costs go on and on.
Who angled for the Federal Reserve? The American public, or the bankers themselves? Anyone reading Rothbard knows the answer. It is not reasonable to expect us to believe that in just this one case, an interest group coming together to enshrine its preferences in law was doing so entirely for the public welfare.
The Fed, meanwhile, has not “stabilized the economy,” contrary to the usual propaganda, and in recent years gave rise to a housing bubble that wrecked the finances of a great many ordinary Americans. Then, adding insult to injury, it bailed out – on preposterous and indefensible grounds – some of the most reckless and irresponsible institutions.
What has the Fed’s economic planning accomplished for Main Street? The Fed’s planning, according to David Stockman, was based on the “wealth effect”: if the Fed pushed stock prices higher, Americans would feel wealthier and would be likely to spend and borrow more, thereby stimulating economic activity.
The results? Zero net breadwinner jobs created between early 2000 and early 2007. From 2000 to 2012, there have been 18,000 new jobs created each month. That’s about one-eighth of the growth in the labor force over the same period.This is what the average person is supposed to be so grateful for?
The state, in short, enriches itself at the expense of the public it fleeces, all the while using its influence over education, the media, and culture to persuade the people that all this fleecing is good for them, that taxes are donations, and that bombing foreigners on ludicrous pretexts is “serving your country.” It urges the general public to consider the absence of the state as the most horrifying, inconceivable scenario of all.
The libertarian tears off the mask of the state, revealing it as the wealth-destroying, poverty-enhancing instrument of terror and expropriation it is. The advances that constitute civilization, libertarians argue, have resulted not from the orders of hangmen and other executioners, or the social planning of bureaucrats and academics, but from human beings cooperating voluntarily in ways that will amaze and astonish anyone who opens his eyes to see them.
And that makes libertarianism the most liberating political philosophy of all.
In rebuttal to Llewellyn H. Rockwell, Jr, I state that God, and His Son Jesus Christ are sovereign over all; that there are no sovereign individuals, and that there is no human action, as there is only the dispensation of Jesus Christ, Ephesians 1:10, in all things, and that it is Jesus Christ who appoints power structures under both liberalism as well as under authoritarianism. God operates in empires; always has, and always will. He has a King, that being Jesus Christ, and a Kingdom, and it is coming by the Revelation of Jesus Christ, Revelation 1:1, where we are witnessing “those things which must shortly come to pass”, before it begins as the 1000 year rule and reign of Jesus Christ on planet earth.
I’m rejoicing because I know the truth, and it has set me free from the deception of human philosophy of Libertarianism, which is simply just another experience in will worship, that is the worship of human things desired, as communicated by the Apostle Paul in Colossians 2:23.
Now under authoritarianism, the only form of genuine wealth will be diktat and the physical possession of gold, as the diktat money system becomes fully established enforcing austerity; where debt servitude schemes, are the order of the day and include such things as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability.
4) … Regional governance will arise out of the failure of nation investment as well as out of the collapse of the US Dollar and the Rise of the Petro Yuan
Deviant Investor provides the Bill Fleckenstein quote Money-printing cannot solve problems. It doesn’t really give us much gross domestic product growth, as we have seen. It hasn’t really helped on the employment front either, as job growth is meager (of course, it is also hampered by other government policies). What money-printing has accomplished is to push the stock market high enough to cause people to once again become delusional in their expectations” … and Deviant Investor relates To the extent we rely upon the fantasies of ever-increasing debt, money printing, and credit bubbles, we are vulnerable to financial collapses.
Nation Investment, EFA, is now peaking. Yet out of a soon coming Financial Armageddon, a global credit bust and worldwide financial system breakdown, foretold in Bible Prophecy of Revelation 13:3-4. regional governance will rise as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, for regional security, stability, security and sustainability.
Zero Hedge reports Canadian Billionaire Investor Ned Goodman in video report relates The dollar is about to be dethroned as the world’s de facto currency. The President and CEO of US $ 9.6 billion Dundee Capital markets sees the end of the US dollar as the world’s reserve currency with the rise of the Petro Yuan, as China is replacing the USD with oil being traded in the Renminbi, that is the RMB, or Yuan, CYB. Dan Collins in Financial Sense writes Rise of the PetroYuan. No more King Dollar.
US Dollar hegemony accelerated when massive money printing took place after 2001. As the U.S. government began buying its own bonds with money it printed to keep interest rates low for the domestic market, it dropped the bond yields of countries like Saudi Arabia and China, reinforcing the petro-dollar as a means of global growth and trade.
Now, history is being written in the East, and the petro-yuan will be a driving factor in the rise of the king of the east, who presented in Bible prophecy, will come with a 200 million man army to the Battle of Armageddon.
5) … A Soon Coming Global Credit Bust And Financial System Breakdown Will Lead To The Establishment Of a New Global Religion, Specifically A One World Religion Unifying Mankind.
Libertarian Dr. Ron Paul keynoted the Fatima Center conference “Fatima: The Path to Peace”, held in Niagara Falls, Ontario, Canada on September 8-13, 2013. Other speakers included John McManus, president of the John Birch Society, and William F. Jasper, senior editor of the JBS publication New American. John McManus’ presentation was titled “We’re being led to a one world government and a one world religion”.
It was Milton Friedman who received the Nobel Peace Prize for his Free To Choose economic doctrine that provided Liberalism’s bedrock floating currency regime and which served as the basis for interventionist policies of monetary inflation by the world central banks. Out of the ruin of a soon coming global credit bust and financial system breakdown, a world sovereign, that is a world leader, and a world seignior, that is a top dog banker who takes a cut, will unify the world in the establishment of a one world religion establishing Authoritarianism’s beast regime of diktat.
The first attempt to establish a one world religion was by humans coming together with a single language and migrating from the east, that is the land of Shinar to build the Tower of Babel, Genesis 11. Mitt Vittnesbord writes on the emergence of a one world religion. The word Babel is from the Hebrew Ba-bhel, from Akkadian ba-b-ilu “gate of god.” Bab is the semitic word for gateway or portal and el means deity or god. So Bab-il means gate or portal to god. These people were attempting to unite into a powerful ecumenical force.
Francisco Toro of Caracas Chronicles writes of a state religion in Journey into the heart of Chavista Chronicles. Because chavismo, deep-down, isn’t really a political movement. Its essence is mystical, afro-caribbean, rooted in a form of spirituality that nobody in Germany has any kind of reference point for. What Hugo Chávez brought to Venezuela isn’t a “dictatorship” in any sense that would make sense to Erich Honecker or even Nicolae Ceaușescu. What we have is the takeover of the state, and much of the public sphere, by a new kind of religious cult that borrows heavily from the language of the political left to create a new devotional system.
I reply that those of apocalyptic vision, perceive that Bible Prophecy of Daniel 2:25-45, foretells of the soon coming of a Ten Toed Kingdom of regional governance, consisting of toes, that is regions, consisting of a miry mixture of iron diktat and clay democracy, which is synonymous with the Beast Regime of diktat and totalitarian collectivism, seen in Revelation 13:1-4, will arise out of a global credit bust and financial system breakdown, having its origins in the sovereign insolvency and banking insolvency of the Mediterranean Sea PIGS; the Beast Regime, which is replacing the Creature from Jekyll Island, will be popular with many, even to the extent that they will actually worship this monster, as presented in Revelation 13:3-4.
Through this soon coming financial apocalypse, the sovereignty and seigniorage of the nation state banker regime will fail and a fierce individual committed to policies of regional diktat, and schemes of debt servitude, will come to rise to rule the Eurozone, as foretold in bible prophecy of Daniel 8:23-25. This leader is also presented in Revelation 13:5-10, as the New Pharaoh, who will be accompanied by the New Prophet, Revelation 13:11-17, who will call for emperor worship, Daniel 9:25, and who will introduce the charagma money system, that is the 666 one world currency system, where all will be required to take the Mark, in order to buy or sell, Revelation 13:18.
John the Revelator in Revelation 13:4, foretells that people will worship the Dragon, that is Satan, Lucifer, the Devil, and the Beast as people will be so amazed of the economic recovery that comes through regional governance and totalitarian collectivism, that the trust engendered in the Beast Regime’s diktat, will be defined as worship.
Worship is one thing Satan has always wanted for himself, and he will receive it through the success of the Beast Regime, the Sovereign and the Segnior, as he imbues, and comes to occupy in all three. In Revelation 5, the Lamb is declared worthy to take the scroll and to “receive power and riches and wisdom, and strength and honor and glory and blessing.” But in Revelation 13, it is three Beasts, a Beast Regime, A Beast Ruler, and a Beast Prophet, who take the place of the Lamb and rule over mankind.
6) … A potential government shutdown looms for October 1, 2013
Andre Dimon of WSWS reports The House also passed a bill that would link continued government operations to the removal of funding for the Obama administration’s Affordable Care Act, setting the stage for a potential government shutdown on October 1.
Financial Market Report for the week ending Friday September 13, 2013
1) … Mike Mish Shedlock writes End of U.S. Imperium? Finally? We should all hope so.
I commented on his article relating lease do not include me in the “all hope so”. That end, will not come through Congressional vote. God will soon terminate US Imperium only to raise up Euro Imperium, where a Sovereign, presented in Revelation 13:5-10, and a Seignior, Revelation 13:11-18, that is a prophet and banker, to rule first Europe, and then the entire world from Jerusalem as presented in Daniel 9:25.
Your Austrian Economics moralizing, is spectacular denial of the truth of bible prophecy. I don’t want any morals or ethics coming out of the will worship of any human philosophy or any bankrupt human religion. My values are found in Reformed New Testament doctrine, and my life experience is found in the virtues and ethics are found in the Economy of God, Ephesians 1:10. The Statue of Empires found in Daniel 2:25-45, provides historical proof and presents mankind’s destiny that there be truly hegemonic empires, the last one was the iron leg of the the British Empire, and the current iron leg is the United States, which will fall to the Ten Toed Kingdom of regional government.
Accompanying the rise of the Beast System as foretold in Revelation 13:1-4, which is replacing the Milton Friedman Free to Choose Banker Regime, that commenced beginning with the Greek Bailout I in May 2010, and intensified with the rise of the Interest Rate on The US Ten Year Note, ^TNX, to 2.1% in May 2013, to 2.8% at the end of August 2013, there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and a third world war, foretold in Ezekiel 38.
Illuminati Prophet Albert Pike had Luciferian insight that there would be three world wars. D. Robert Singer writes the article The Modern State of Israel: Providence, Miracle, or What Really Happened. In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.
ThreeWorldWars.com writes The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view.  [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15,
Bible Prophecy there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and that following this there will be a third world war as foretold in Ezekiel 38, which will be the basis for the rise to power of Europe's Sovereign, Revelation 13:5-10, and Revelation 13:11-18, to their power in Jerusalem, as they promote a middle east peace plan, Daniel 9:25.
With the soon coming war in Syria, and all kinds of economic and political implications in my life, I ask myself what is it that want?
Do I want freedom? Do I want free prices, a free market economy, More time? More opportunity to use my talents? Protection of my personal property? More relationships or better relationships?
The only thing I want is to do the Lord's Will, which is to keep his Word of endurance, and shrink not from His Name, that is presence and authority.
Andrew Oliver reports Massachusetts housing inventory: very little available at lower prices The median price for a home in Salem is 326,000. I relate that the 3 Bedroom and 2 Bath home at 9 Cottage St, Salem, MA 01970 presented by Redfin for $339,900 typifies homes in Salem. .
Benson Te writes US Equity Markets: The Deepening Wile E. Coyote Moment the cost of servicing debt has been climbing alarmingly faster than the economy’s ability to pay them (via real economic growth) and from Ponzi finance dynamics, where the liabilities are growing far more than the increases in asset prices.
I comment that the Apostle reveals in Ephesians 1:10, that Jesus Christ is acting in dispensation, that is in oversight of all things political and economic, bringing completion and fulfillment to every age, epoch, era, and time frame.
Liberalism was the era of credit, that is trust, that supported monetary inflation. Jesus Christ terminated Liberalism in August 2013, by enabling the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher, and currency traders to call the Euro, FXE, and other major currencies, as well as the Emerging Market Currencies, CEW, lower since mid August 2013, on competitive currency devaluation, causing debt deflation, in World Stocks, VT.
Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4, and will usher in Authoritarianism’s era of debt servitude, as a result of monetary deflation. Liberalism featured credit and a moral hazard based prosperity; but Authoritarianism features a debt servitude based austerity.
2) ... Financial market trading for the week ending September 13, 2013
On Monday September 9, 2013, Volatility, XVZ, traded lower, as the stock market turned to Risk On, forcing the Risk Off ETN, OFF, to trade lower, as Reuters report Wall Street rises after Chinese data, deals. Stocks rose on Monday to extend last week's advance as upbeat Chinese data and merger activity boosted sentiment, and concerns eased about an imminent Western strike against.
The chart of the S&P 500, $SPX, shows a rise to 50 day moving average.
Nation Investment, EFA, rose to its previous high; nations and regions traded higher,
EFA, 1.4, a new rally high
EPP, 1.5%, a new rally high
YAO, 2.1, a new rally high.
ECNS, 1.7, a new rally high
EWA, 1.5, a new rally high.
KROO, 1.5, a new rally high.
EWT, 1.2, a new rally high.
EWY, 1.2, a new rally high
ENZL, 1.0, a new rally high
VTI, 1.1, with IWM, 1.6
EEB, 2.6, a new rally high
RSX, a new rally high
ERUS, 2.7, a new rally high
EFNL, 1.8, a new rally high
EZA, 1.5, a new rally high
EWUS, 1.2, a new rally high
ARGT, 2.5, a new rally high
VT, 1.4, a new rally high,
EEM 2.8, a new rally high
Sectors traded higher
SLX, 2.8, a new rally high, taking PICK,2,3, KOL, 3.0, and XME,2.4 higher.
IEZ, 1.6, a new rally high
OIH, 1.6, a new rally high,
XOP, 1.2, a new rally high,
PSCE, 1.5, a new rally high
SPHB, 1.7, a new rally high
FLM, 2.2, a new rally high
IGV, 1.4, a new rally high
IBB, 2.0, a new rally high
TAN, 2.4, a new rally high,
BJK, 2.1, a new rally high,
SMH, 1.3, a new rally high,
FDN, 1.2, a new rally high
Yield bearing sectors traded higher
SEA, 1.7, a new rally high
PSP, 1.5, a new rally high
CHIX, 2.8, a new rally high
FEFN, 2.3, a new rally high, led by SHG
Robert Wenzel of Economic Policy Journal writes So Much for Congress: Kerry Gives Assad One Week Deadline. The Guardian reports: The US secretary of state has said that President Bashar al-Assad has one week to hand over his entire stock of chemical weapons to avoid a military attack. But John Kerry added that he had no expectation that the Syrian leader would comply.
Kerry also said he had no doubt that Assad was responsible for the chemical weapons attack in east Damascus on 21 August, saying that only three people are responsible for the chemical weapons inside Syria – Assad, one of his brothers and a senior general. He said the entire US intelligence community was united in believing Assad was responsible.[...]Kerry said Assad might avoid an attack if he handed every bit of his chemical weapons stock, but added that the Syrian president was not going to do that.[...]
Kerry said the Americans were planning an “unbelievably small” attack on Syria. “We will be able to hold Bashar al-Assad accountable without engaging in troops on the ground or any other prolonged kind of effort in a very limited, very targeted, short-term effort that degrades his capacity to deliver chemical weapons without assuming responsibility for Syria’s civil war. That is exactly what we are talking about doing – unbelievably small, limited kind of effort.”
And Robert Wenzel of Economic Policy Journal writes Rand Paul’s Neocon Meetings. In a Politico blog post on Rand Paul’s position on NSA spying on Americans, I found this side report quite interesting: Paul has had meetings with, among others, Republican mega-donor Paul Singer, a pro-Israel hardliner, and former Mitt Romney adviser Dan Senor. Hmm, Dan Senor. Now that’s a very smart guy who could provide very useful information to Rand on how to run an early presidential campaign and who has the connections in MSM to make sure Rand is treated correctly. Has Politico provided us with an important clue as to who is providing valuable guidance to Rand.
I comment Dan Senor is a political advisor, and zionist of zionists, advocating for war in Syria. His profile on NNDB, communicates that he is a zionist of zionists, as that he is a founding member together with Robert Kagan, a founder of PANC, and Bill Kristol, a correspondent with The Weekly Standard, at The Foreign Policy Initiative. He was a Senior Advisor for Romney for President and was a Spokesman for Coalition Provisional Authority in Iraq. He married Campbell Brown on April 2, 2006, then weekend anchor of The Today Show on NBC.
David Edwards of Raw Story writes Bush neocon Dan Senor worries that Syria vote means that Congress won’t back Iran strike.
On Tuesday, September 10, 2013, Volatility, XVZ, traded lower, The chart of the S&P 500, $SPX, manifested a strong rise above its 50 day moving average. Liberalism has achieved Peak Prosperity as both World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rose to new all time highs, taking Major World Currencies, DBV, higher to strong resistance, as the Yen, FXY, traded lower, as UK Stocks, EWU, EWUS, such as LYG, rose to rally highs taking the British Pound Sterling, FXB, higher, and as Australia Stocks, EWA, KROO,such as WBK, rose to rally highs taking the Australian Dollar, FXA, higher, as investors cheered the possibility of averting a Western military strike against Syria and China’s economy showed strength, with Bloomberg reporting China August industrial output rises 10.4%.
Nations and regions trading higher included
EZU, 1.7, a new all time high
EFNL, 1.5, a new all time high
GREK, 0.6, a new rally high
EIRL, 0.4, a new all time high
YAO, 1.3, a new all time high
NKY, 0.9, a new rally high
ARGT, 2.6, a new all time high
VTI, 0.7, with IWM, 1.0
Sectors trading higher included
TAN, 1.2, a new rally high,
SMH, 1.8, a new rally high
FLM, 2.5, A new all time high,
BJK, a new all time high,
FDN, 1.3, a new all time high
IGV, 1.2, a new all time high,
WOOD, 0.8, a new all time high
PBS, 1.2, a new all time high
XTN, 2.6, a new all time high
FXR, 1.5, a new all time high
XLI, 1.5, a new all time high
PSCI, 1.4, a new all time high
CHII, 1.6, a new rally high
Yield Bearing Sectors trading higher included
PSP, 0.6, a new all time high
SEA, 0.6, a new all time high
CHIX, 1.7, a new rally high
EUFN, 1.0, a new all time high
IAI, 1.6, a new all time high
Sectors trading lower included
GDX, -3.9, GDXJ, -4.3 and SIL, -3.1, SILJ, -2.8, SSRI, -3.9
Mail Online reports Now Putin calls the shots on Syria: Russia tells U.S. to call off strikes before chemical weapons deal. USA Today reports Syria will sign arms ban, open storage sites and the Washington Post reports Syrians divided on support for Russian move but appear to agree it has undercut Obama
Tehran Times reports Iranian official, Syrian FM discuss Russian initiative. Damascus and Tehran believe that Russia’s proposal must put an end to hostilities against the Syrian people and to measures [which are taken] to support terrorist and Takfiri groups in the country,” Iranian Deputy Foreign Minister Hossein Amir-Abdollahian said in Moscow on Tuesday following a meeting with Syrian Foreign Minister Walid al-Muallem, Press TV reported.“Damascus and Tehran believe that although Moscow’s initiative provides all sides with an appropriate political opportunity to resolve the Syrian issue peacefully, the entire region must become free of [all kinds of] weapons of mass destruction,” Amir-Abdollahian added.
Jason Ditz of Antiwar writes Kerry still pushing for Syria War, says US won’t wait long. He argued that the US strikes were vital and that the US needed to increase aid to the rebels, declaring that if Assad wins Syria could give rise to terrorist groups “worse” than al-Qaeda.
There is no human action as Libertarians such as Justin Raimondo of Antiwar posts We beat the War Party. Rather, there is only Jesus Christ moving to accomplishing the Economy of God, as described by the Apostle Paul in Ephesians 1:10, specifically to accomplish God’s purposes as foretold in Bible Prophecy, as in today’s case, a soon coming war in Syria, where Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1; and which will serve to draw Russian out military forces to commence World War III, specifically to put hooks in Russia’s jaws, and lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4. Duane and Shelley Muir of Signposts of the Times write Starting World War III
In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.
Through the US Federal Reserve’s “crisis aid”, losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America. Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.
There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO. And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.
The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.
Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW. Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.
On Wednesday, September, 11, 2013, Volatility, XVZ, traded lower. Italy, EWI, Finland, EFNL, Spain, EWP, Ireland, EIRL, Germany, EWG, and Greece, GREK, traded higher, taking the Eurozone, EZU, to a new rally high. Poland, EPOL, Israel, EIS, Norway, NORW, Sweden, EWD, and the UK, EWU, traded higher.
On September 11, 2013, the world passed through an epic pivot point on the topping out of stock wealth, VT, as well as exhaustion of the world central banks’ monetary authority to stimulate global growth and trade, as the US Federal Reserve has crossed the Rubicon of sound monetary policy and has made “money good” investments bad, on the rally from defeat of Obama’s Push War In Syria, and as this upcoming Wednesday the Fed will reveal its much-anticipated “tapering” plans.
The most toxic of debt, such as Fidelity’s Distressed Investments, FAGIX, specifically assets taken in by the US Federal Reserve under QE1, Junk Bonds, JNK, Emerging Market Bonds, EMB, and Eurozone Debt, EU, have been the credit basis of Liberalism’s Grand Finale Stock Rally that that began June 2012 with a Euro Yen, EUR/JPY, currency carry rally, and attained its zenith on September 11, 2013, at 133, with Nation Investment, EFA, World Stocks, VT, Eurozone Stocks, EZU, and Global Industrial Producers, FXR, all topping out in value.
Major World Currencies, DBV, and Emerging Market Currencies, CEW, have been trading lower since May 2013, as competitive currency devaluation is underway on debt deflation, in particular World Treasury Bonds, BWX, and Mortgage Backed Bonds, MBB.
The seigniorage, that is the moneyness of the Milton Friedman Free To Choose Floating Currency Regime, based upon national sovereignty of democratic states, failed on May 21, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, stimulating currencies to fail, giving confidence to the concept that regionalism is rising to replace capitalism and European socialism and Greek Socialism, with the result being that Large Cap Dividend Stocks, Excluding Financials, DTN, such as S&P Telecom, IST, Utilities, XLU, and Pharmaceuticals, PJP, are no longer underwriting Dividend Growth, VIG.
The global debt bubble served to leverage up the most speculative of stocks, such as the vice stocks held in the Fidelity Mutual Fund VICEX, the Casino and Resorts ETF, BJK, as well as Small Cap Value Shares, RZV, such as PSUN, with the result being that the dynamos of global growth and corporate profitability are winding down, and the dynamos of regional security, stability and sustainability are winding up regionalism, and terminating the concept of investment choice.
Investors should start thinking an investment strategy that is based upon the concept that regional leaders, such as the EU Finance Ministers, and regional bodies such as the ECB, are going to introduce regional governance with new taxes, bank deposit bailins, and capital controls.
The topping out of the EUR/JPY at 133 on September 11, 2013, has opened the door to the short selling opportunity of a lifetime where one should commence selling into rallies as they appear, as in a bull market one buys in dips, but in a bear market one sells into pips.
The 35 ETFs and Stocks seen in this Finviz Screener are excellent short selling opportunities; these being XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, SPHB, FXR, IGN, BJK, PBJ, EFNL, YAO, NKY, SEA, IX, PRAA, GNW, LYG.
One should consider using the Market OFF ETN, OFF, for the basis for one’s short selling account, as well as buying small amounts of the Gold ETF, GLD, as it dips below 130; and one should consider dollar cost averaging the purchase of physical gold, that is gold bullion as it dips lower, as gold is in a bull market.
On Thursday, September 12, 2013, Volatility, XVZ, (also seen in ^VIX) and the Market Off ETN, OFF, traded higher, as the Euro Yen currency carry trade, EUR/JPY, traded lower, inducing Gold, GLD, 3.0% lower, and Silver, SLV, 5.5%, lower, taking Gold Miners, GDX, GDXJ, Silver Miners, SSRI, SIL, SILJ, lower. Sectors trading lower included Solar, TAN, Automobiles, CARZ, Small Cap Industrials, PSCI, and Transportation, XTN, as well as Metal Manufacturing, XME, Steel Producers SLX, Coal Miners, KOL, Industrial Miners, PICK, and Copper Miners, COPX. World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, traded lower. European Financials, EUFN, and the Eurozone Stocks, EZU, traded lower. China Financials, CHIX, traded lower, inducing China, YAO, lower. Mexico, EWW, Indonesia, IDX, Philippines, EPHE, Thailand, THD, Peru, EPU, Chile, ECH, Argentina, ARGT, and India, INP, traded lower.
ETF Daily News reports Higher Interest Rates Are Disrupting The Job Market
Tabinda Hussain of ValueWalk writes EUR Likely To Fall As Selling Pressure Looms Societe Generale’s latest hedge fund monitor sees some troubling signs for the Euro, FXE, ahead, the report expects selling pressure to return to euro soon as monetary policy in U.S. and Europe takes decidedly different course. Currently hedge funds are net buyers of euro against the dollar
Benson te rightly asks Who says stock markets reflect on the state of the economy European stocks represented by the STOXX 50 have been rising since the last quarter of 2011 and have presently been drifting at 2 year highs
Even as the Eurozone has been mired by a continuum of negative growths (based on annual and quarter growth) for the entire 2012 until the 1st quarter 2013
GDP by quarter
The parallel universe and the divergence between stock market performance and economic activity such a GDP, began to narrow ever so slightly on Thursday, September 12, 2013.
Jesus Christ acting in dispensation, Ephesians 1:10, that is working to fulfill and complete every age and era, brought liberalism’s moral hazard based investment prosperity to its zenith on September 11, 2013, on a Euro Yen currency carry trade, and on a Renminbi/Yuan currency carry trade, and now money, that is currency and stock wealth, is dissipating as trust waines in the authority of nation states and central bankers. The result being that the fiat money system, which has been the driving factor for all economic and political activity since 1971 when President Nixon followed Milton Friedman’s advice and took the US off the gold standard, is being replaced by the diktat money system.
Through the failure of money, that is currency and stock wealth, the new paradigm of authoritarianism and trust in regional governance, totalitarian collectivism and nannycrats is commencing, by Jesus Christ laboring in the household administration of God, Ephesians 1:10, to produce a new epoch and time period. There is neither choice nor human action, there is only destiny and fate coming through the movement of the Spirit of God in the lives of people, producing the will of God in all things. It is not as Ludwig von Mises relates “Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”
Liberalism was the era of investment choice powered by credit, and was shaped by great leaders; authoritarianism is the era of diktat powered by debt servitude, it will also be shaped by great leaders.
Time Magazine always comes up timely and thought provoking articles. Time Magazine’s cover for the September 23rd issue states How Wall Street Won. And Chris Rossini writes in Economic Policy Journal, The Stalwart thinks that it’s different this time around. You’d think Keynesian Joe would be happy with the big bold letters. Wall Street did “win” right? They got their bailouts, and their fat bonuses, at the taxpayer expense. They also got a slew of QE’s from The Fed to help artificially pump up the stock market again. And let’s not forget that The Fed also “saved the system”. With such a victory, what problem can Weisenthal have? Well, right underneath the prominent headline, it mentions the 2008 crash, and how “It could happen all over again”. Weisenthal will have none of that dispirited talk!
Can’t everyone just wise up and understand just how powerful The FED is? They can counterfeit $1 Trillion per year out of thin air? Who else has that kind of power?
You see, according to Joe, this time is different. This time, the economic laws of supply and demand have been removed from existence. Cause & Effect too…they’re gone. This is typical thinking for those who operate without theory. Keynesians, like Weisenthal, just focus on the latest data (and anyone who reads Joe knows that he’s like a kid in a candy store anytime numbers are released). There’s no perception past that data. This is why Keynesians are always “shocked” when the downturn occurs. Once again, those of us who do see it coming, will have to weather yet another tough economic downturn. And we’ll have to do it with our “shocked” antagonists telling the world that “no one saw it coming.” It’s getting old.
Siite refers us to the Time Media Kit Biographies of Time Magazine Founder Henry Luce. Henry R. Luce, co-founder of TIME magazine, was described in 1961 by Current Biography as “the giant of twentieth-century American journalism.” He served as editor-in-chief of all TIME Inc. publications until 1964, when he resigned and became editorial chairman of TIME Inc.
The camaraderie Luce felt with Hadden continued to develop as the two enrolled together as members of the class of 1920 at Yale University. With Hadden as chairman, Luce served as editor of the Yale Daily News. Luce and Hadden entered Yale’s Reserve Officers Training Corps and both rose to the rank of second lieutenant. Luce often spoke of the countless nights he spent at Camp Jackson in South Carolina with Hadden discussing journalism and the need for a new kind of newspaper or magazine to help educate a misinformed populace. Luce was voted “most brilliant” of his class at Yale and, after graduation, parted ways with Hadden to study history at Oxford University for a year.
Luce returned to the U.S. and accepted a job as a cub reporter at the Chicago Daily News. He joined Hadden in Baltimore in December 1921 where they worked side by side as reporters for The Baltimore News. Nightly discussions of the concept of a newsmagazine led the two, both age 23, to quit their jobs in 1922. Having raised $86,000 of a $100,000 goal, the first issue of TIME was issued on March 3, 1923. Hadden became editor and Luce business manager. With regards to this arrangement, Luce said, “When the Time came to decide who was editor, Brit Hadden just had to be it, so I took the business side.” Luce and Hadden annually alternated year-to-year the titles of president and secretary-treasurer.
Upon Hadden’s sudden death in 1929, Luce assumed the role of editor of TIME magazine.
Henry Luce died in March of 1967 and was remembered by Life magazine as “the most successful editor of his TIME, a great popularizer of ideas, a man who revolutionized modern journalism.”
Wikipedia relates The group Skull & Bones is featured in conspiracy theories, which claim that the society plays a role in a global conspiracy for world domination. Theorists such as Alexandra Robbins suggest that Skull and Bones is a branch of the Illuminati. The yearbook listing of Skull & Bones membership for the 1920 delegation included co-founders of Time magazine, Briton Hadden and Henry Luce.
Members are assigned nicknames (e.g., “Long Devil”, the tallest member, and “Boaz”, a varsity football captain, or “Sherrife” prince of future). Many of the chosen names are drawn from literature (e.g., “Hamlet“, “Uncle Remus“), religion, and myth. The banker Lewis Lapham passed on his nickname, “Sancho Panza“, to the political adviser Tex McCrary. Averell Harriman was “Thor“, Henry Luce was “Baal“, McGeorge Bundy was “Odin“, and George H. W. Bush was “Magog“.
In the 2004 U.S. Presidential election, both the Democratic and Republican nominees were alumni. George W. Bush wrote in his autobiography, “[In my] senior year I joined Skull and Bones, a secret society; so secret, I can’t say anything more.” When asked what it meant that he and Bush were both Bonesmen, former Presidential candidate John Kerry said, “Not much, because it’s a secret.”
The society’s current class meets every Thursday and Sunday night during their senior year.
Sarika Gangar and Veronica Navarro Espinosa of Bloomberg report: “Verizon Communications Inc. and Ecopetrol SA are leading the busiest week ever for dollar- denominated bond sales. Corporate borrowers have issued $80.1 billion of debt this week, surpassing the previous record of $60.4 billion set in March 2012. Verizon’s unprecedented $49 billion offering followed a $2.5 billion sale by Colombian oil producer Ecopetrol and $2.42 billion of subordinated debt from Citigroup Inc. that removes the last vestiges of its government bailout during the financial crisis.”
Puerto Rico, like the nations of Chile, ECH, Peru, EPU, is a failed democracy and has no fiscal or financial seigniorage, as Laura Marcinek and Michelle Kaske of Bloomberg report Popular, Puerto Rico’s biggest bank, extended a three-day slide after the island’s economy shrank and yields on the government’s debt rose past 10%..The shares have declined 15% since their two-year high on Aug. 20. Chief Executive Officer Richard Carrion has sought to rid Popular of bad loans after a $935 million U.S. bailout in 2008. The local economy contracted 5% this year through July, the most since February 2010. Puerto Rico’s bonds rank one step above junk, and yields have soared amid doubt about the government’s ability to carry more debt. Popular’s bailout debt is the largest still outstanding in the Troubled Asset Relief Program’s capital purchase fund. It’s almost three times more than the second-largest debtor, Puerto Rico’s First BanCorp, which owes $254 million.
3) … On Friday September 13, 2013, five years out from the financial crisis, liberalism has produced peak prosperity with World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rising to all time highs.
The collapse of the Investment Bank Lehman Brothers occurred five years ago, on September 15, 2008, and brought to the surface the global financial crisis. In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.
Through the US Federal Reserve’s “crisis aid”, losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America. Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.
This week margin credit drove World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, to their all time highs. In the US, VTI, the Russell 2000, IWM, and the S&P 500, SPY, rose for all practical purposes to their all time highs. It has been margin credit coming from the leveraged speculative investment community, specifically Regional Banks, KRE, such as RF, the Too Big To Fail Banks, RWW, such as BAC, Asset Managers, such as BlackRock, BLK, Stock Brokers, IAI, such as ETFC, as well as a topping out of the Euro Yen currency carry trade, that is the EUR/JPY, that has given seigniorage, that is moneyness, to the Russell 2000, IWM, and the S&P 500, SPY, as is seen in the ongoing combined Yahoo Finance Chart of IWM, KRE, SPY, and RWW. Of note, Biotechnology, IBB, Casinos and Resorts, BJK, and Semiconductors, SMH, soared this week, as Volatility ETF, XVZ, and the Market Off ETN, OFF, traded near their all time lows.
There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO. And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.
The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.
Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW. Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.
4) Summary thoughts on Bible Prophecy and Syria.
If God’s Word of Bible Prophecy be true, Russian President Vladimir Putin who op-ed in The New York Times about Syria, will have to eat his words, “We must stop using the language of force and return to the path of civilized diplomatic and political settlement,” as Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1, and as God will put hooks in Russia’s jaws, and will lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4. Perhaps one might consider reading Duane and Shelley Muir of Signposts of the Times who appropriately write Starting World War III.
Bloomberg reports Hoyer Says Obama Could Strike Syria Without Congress Vote. The second-ranking House Democrat said President Barack Obama has the authority to use military force against Syria without returning to the U.S. Congress for approval should diplomacy fail to compel Syria to surrender its chemical weapons arsenal. Democratic Whip Steny Hoyer of Maryland said neither he nor House Minority Leader Nancy Pelosi “believe the president is required to come to Congress in this instance, and could act on his own.” He made his comments in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.
Bloomberg reports Washington Leadership Vacuum Raises Risks of Shutdown. President Barack Obama couldn’t get Democrats to go along on Syria. House Speaker John Boehner couldn’t get fellow Republicans to go along on a budget bill. The one man who has proven he can cut deals with the White House, Senate Republican leader Mitch McConnell of Kentucky, is consumed with a tough re-election bid. It’s enough to have Americans asking: Who’s running Washington.
Financial market report for the week ending August 6, 2013
1) … Jesus Christ has completed the economic and political paradigm of liberalism and is introducing that of Authoritarianism.
Liberalism’s dollarization scheme of credit is failing. Bloomberg reports Asian bonds tumble below par in capital flight. Asia dollar-denominated bonds have dropped below par for the first time since 2011 as investors pull money out of the region amid concerns that growth is slowing and as currencies from the rupee to rupiah plunge. Average prices of company debentures in the region fell to 98.61 cents on the dollar on Aug. 22, the least since October 2011, Bank of America Merrill Lynch indexes show. Dollar bonds globally have held above 100 cents since September 2009. Both investment- and non-investment-grade debt in Asia were below par on Aug. 22. The last time that happened was in September 2008, when Lehman Brothers Holdings Inc. collapsed. Investor sentiment toward Asia is shifting as economic growth in China slows and currencies in India and Indonesia — the two countries with the biggest external funding needs in the region — plunge. About $44 billion has been pulled from emerging-market stock and bond funds globally since the end of May, data provider EPFR Global said on Aug. 23. “You risk being swept away by fund outflows even if you buy bonds from the best companies in Asia,” said Ben Bennett, a global credit strategist in London at Legal & General Investment Management, which manages $670 billion. “You’d need to be very brave to add credit risk before currencies show signs of stabilization.”
And a complete hemorrhaging of the Milton Friedman Free To Choose Floating Currency Regime has commenced, as Andrew England and Robin Harding of FT report in article Call for aggressive action over emerging markets crisis at conclave of central bankers at Jackson Hole. South African finance minister Pravin Gordhan spoke of the “inability to find coherent and cohesive responses across the globe to ensure that we reduce the volatility in currencies.” And Agustin Carstens, Mexico’s central bank governor said the “volatility of [capital] flows has been very pernicious.”
Sam Ro of Business Insider reports The meltdown of the 4 worst emerging market currencies in 2 charts. Foreign selling of emerging market assets has caused the currencies of many developing economies to depreciate vis-à-vis the U.S. dollar). Among large developing economies, the worst performing currencies over the past three months have been the Turkish lira, which has weakened about 10 percent against the greenback, the Indonesian rupiah and the Brazilian real (both down about 15 percent or so). The Indian rupee has plunged 20 percent, and it nosedived to an all-time low against the dollar this week. What these countries have in common is that they each run current account deficits at present.
With the failure of not only credit, but also of currencies, Jesus Christ, acting in dispensation, that is the oversight of all things economic and political, Ephesians 1:10, is completing the old things of liberalism, and is establishing the new things of authoritarianism.
New dynamos are in operation. The dynamos of corporate profit and global growth were based upon investment opportunities in sovereign nation states, are powering down; now the dynamos of regional security, stability and sustainability, are powering up, reflecting responsibilities to regional authority. The emergent solutions came from markets opportunities, are snuffed out by top-down, elite-driven commands.
A new seigniorage, that is a new moneyness, is developing. The seigniorage of investment choice, is waning; and the seigniorage of diktat is gaining strength. Robert Stevens of WSWS reports Euro zone hatches plan to wring further billions from Greece. According to a report, the EU, ECB and IMF sent an email to the Greek government “insisting on liquidating state enterprises and dismissing their employees without compensation.”
A new trust is emerging. Gone is trust in bankers, carry trade investing and credit, in particular Treasury debt, to increasing trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude, growing to the point of deification of regional governance, as is presented in Revelation 13:3-4, where the people’s trust comes to constitute worship. There be no more citizens or patriots of countries, there be only residents of a regional state, that is one of ten regional zones. Countries are developing bilateral arrangements that avoid the US, the US dollar, such as the Ambrose Evans Pritchard report China to dictate tough terms on BRICS rescue fund. Under authoritarianism, regional undollar economies are overseen by regional technocrats, who oversee the factors of production, commerce and trade for regional security, stability, and sustainability.
A new order of financial control is developing. Automatic Earth reports Holders of financial derivatives enjoy super-priority in municipal and financial institution bankruptcy; this may potentially leave nothing for other creditors to divide during subsequent proceedings. Along this line of reporting Andre Damon and Barry Grey of WSWS write The Detroit bankruptcy and the drive toward dictatorship. And Ellen Brown, of Web of Debt writes The Detroit Bail-In Template: Fleecing pensioners to save the banks. Banks will be integrated into the government and be known as government banks or Govbanks for short.
2) … Financial market trading for the week August 3, 2013, to August 6, 2013.
On Tuesday, August 3, 2013, The Japanese Yen, FXY, fell sharply lower, on the failure of Kuroda Abenomics, and as the NYT reports Japan panel backs sales tax hike coupled with stimulus, and as Reuters reports Total JGB issuance set to hit record high in 2014/15. The Euro, FXE, fell slightly lower, which forced the Swiss Franc, FXF, lower. The India Rupe, ICN, traded lower, forcing India, INP, and India Small Caps, SCIN, lower. The Australian Dollar, FXA, rose strongly. The US Dollar, $USD, rose to 50 day moving average at 82.41.
The strong fall lower in the Japanese Yen, FXY, popped the Nikkei, NKY, higher; yet debt deflation drove the Interest Rate on the Japanese Government Bonds, higher, causing its inverse, JGBS, to rise from a recent double bottom.
China, YAO, blasted to a new rally high, as China Industrials, CHII, China Financials, CHIX, China Small Caps, ECNS, China Real Estate, TAO, and Far East Financials, FEFN, rose as Yardini reports China’s economy perking up (excerpt) The manufacturing purchasing managers’ index (M-PMI), compiled by China’s National Bureau of Statistics, rose to 51.0 in August from 50.3 in July, the highest level since last April and ahead of market expectations of 50.6 in a Reuters poll. The official survey showed an across-the-board recovery in all sub-indexes, ranging from new orders and quantity of purchases to input prices and employment, pointing to a positive picture for the huge factory sector.
Confirming the strength of China’s economy are electricity output and crude oil usage. Both rose sharply during July to new record highs. On August 13, I noted that an exclusive report in South China Morning Post revealed that the “mainland government is quietly offering financial stimulus to key cities and provinces to help them maintain local economic growth.” Instead of massive economy-wide stimulus, the government is targeting big projects around the country to stimulate growth. The new approach seems to be working
Finland, EFNL, and Nokia, NOK, popped higher, as Microsoft, MSFT, traded strongly lower, as Microsoft announced a deal to acquire Nokia’s mobile handset business for 5.44 billion euros.
World Stocks, VT, traded higher. Sectors trading higher included, 200% Volatility, XIV, Design Build, FLM, Casinos and Resorts, BJK, Biotechnology, IBB, Solar, TAN, Internet Retail, FDN, Global Consumer Discretionary, RXI, S&P High Beta, SPHB, Leveraged Buyouts, PSP, and Automobiles, CARZ.
Technology Stocks, MTK, seen in this Finviz Screener, such as ALU, ERIC, MU, QCOM, PHG, TEL, EGHT, ENVI, CIEN, CALX, TLAB, CLFD, CAMP, IDSY, HRS, WSTL, VCRA, WTT, ROP, ST, BSX, ALGN, MTSC, MEAS, and FEIC traded higher. Sweden, EWN, Norway, NORW, and the UK popped higher in sympathy with Finland. Facebook, FB, and LinkedIn, LNKD, rose to new rally highs. And Global Industrial Producers, PICK, copper Miners, COPX, Rare Earth Miners, REMX, Metal Manufacturers, XME, Steel Producers, SLX, and Coal Miners, KOL, traded higher.
Asia Excluding Japan, EPP, traded higher. The ever volatile, Taiwan, EWT, and South Korea, EWY, popped higher. But Indonesia, IDX, traded lower.
Utilities, XLU, traded lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening, as the Interest Rate on the US Ten Year Note, ^TNX, spiked the most in two months, blasting strongly higher to 2.85%, sending Aggregate Credit, AGG, and the Credit ETFs, seen in this Finviz Screener lower. Michigan Closed End Municipal Bonds, MIW, Pennsylvania Closed End Municipal Bonds, EIP, New York Closed End Municipal Bonds, ENX, the Zeroes, ZROZ, and 30 Year US Government Bonds, EDV, are leading Bonds, BND, lower.
Jack Chan’s chart of the Euro, FXE, shows that it has broken down, and is no longer a viable currency.
Jack Chan’s chart of the Interest Rate on the US Ten Year Note, TLT shows it to be a failed investment, communicating that trust in US Treasury Debt has failed, and that the US has lost both its financial sovereignty and its financial seigniorage, that is financial moneyness, communicating the soon coming end of the American SSI Disability and Transfer Payment State, what some call the American Welfare State of TANF, and SSI Disability Payments, as well as the US Dollar Hegemonic Empire, known as the United States of America; and also known as the Milton Friedman Free To Choose Banker Regime, this coming at a time when Justin Raimondo of Antiwar writes A blank check for war.
Jesus Christ has been operating in economy of God, Ephesians 1:10, first to establish liberalism, beginning in 1971, when President Nixon, followed Milton Friedman’s advice, to take the US off the gold standard, and to pursue endless wars via the military industrial complex; and second to complete liberalism in August 2013, when the bond vigilantes drove the Interest Rate on the US Sovereign Debt, ^TNX, to 2.75%, destroying Credit, AGG.
In today’s news, The WSJ reports New York’s next mayor faces union showdown The city’s next mayor will face the biggest showdown with labor unions since New York’s brush with bankruptcy in the 1970s,
Daily KOS posts The Nation article NYC Mayor: Bill de Blasio (D), The only candidate who will end the stop-and-frisk era. In running for mayor, de Blasio has promised to tackle the city’s inequality crisis head-on, harnessing what he has called “the most powerful local government on earth” to bring affordable housing, living-wage jobs, universal pre-kindergarten and genuine opportunity to the city’s millions of forgotten residents. “My job is to help New Yorkers live in New York,” he told New York magazine in a recent interview.
There is a lot to like, from proposals on education and homelessness to public safety—but among the ideas that we found most persuasive is his unusually diverse economic development strategy, which embraces not only job creation but also enhanced labor protections and long-overdue investments in New York’s once-great public universities. De Blasio was a major force behind living-wage and paid-sick-leave legislation—indeed, he fought for much stronger bills than those ultimately passed by the City Council—and his platform contains additional policies to increase wages for the city’s working poor. He is also steadfastly pro-union, which is both a welcome change and a crucial one after twelve years of an administration so hostile to labor that all 152 of the city’s public unions are without contracts. And in an effort to stanch New York’s affordable-housing crisis, he has put forward an ambitious plan to build or preserve nearly 200,000 affordable-housing units over the coming decade, while pledging to remove wasteful tax breaks for real estate developers.
Perhaps most unexpected is the centerpiece of de Blasio’s platform: a city income-tax surcharge on New Yorkers earning over $500,000 a year to provide truly universal, full-day pre-kindergarten to every child in New York City—a game-changing investment in the next generation of New Yorkers. The revenue from this surcharge would also fund after-school academics, athletics and cultural programming for every middle-schooler. It is notable that deBlasio made this tax proposal in the belly of the beast, at a meeting of the city’s corporate leaders.
Finally, de Blasio has been one of the fiercest critics of the NYPD’s stop-and-frisk policy, which has seen hundreds of thousands of young black and Latino men wrongly detained and subjected to searches. And of the candidates, he has been the most vocal and persistent supporter of a bill to prohibit racial profiling and impose greater police oversight. He has also pledged to replace Police Commissioner Ray Kelly, who stubbornly defends stop-and-frisk. – The Nation, 8/8/13
On Wednesday, August 4, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.9% today. World Stocks, VT, traded higher. Sectors rising included Networking, IGN, Semiconductors, SMH, Solara, TAN, Biotechnology, IBB, Transportation, XTN, S&P High Beta, SPHB, Internet Retail, FDN, Small Cap Industrial, PSCI. Australia, EWA, rose, taking Asia excluding Japan, EPP, higher. Oil Price reports Tesla opens first European Model S assembly plant and supercharger network. Finviz Daily Chart of Tesla, TSLA, shows its parabolic rise from its April 1, 2013, price of 44, to its September 3, 2013, price of 168.
Many libertarian bloggers are writing today that they are disgusted with both political parties as ABC News reports Boehner’s Aboard: Obama gains Syria strike support. President Barack Obama gained ground Tuesday in his drive for congressional backing of a military strike against Syria, winning critical support from House Speaker John Boehner while key Senate Democrats and Republicans agreed to back a no-combat-troops-on-the-ground action in retaliation for a chemical weapons attack.
I am not disgusted with any political party, as I know that according to the Apostle Paul in Ephesians 1:10, that Jesus Christ is operating in the economy of God, bringing Liberalism to its zenith, and introducing Authoritarianism as the world’s economic and political paradigm.
How can I be disgusted, when I know according to the Prophet Daniel in Daniel 2:25-45, that God ordained there be two great world powers, these being the British Empire and the US Empire of Crony Capitalism, whose iron legs of hegemony would rule before their empires collapse, and a Ten Toed Kingdom of regional governance would come to govern the world, in a miry mixture of iron diktat and clay democracy.
In fact, I’m rejoicing because I know the truth, and it has set me free from the deception of human philosophy of Libertarianism, which is simply just another experience in will worship, that is the worship of human things desired. as communicated by the Apostle Paul in Colossians 2:23.
It was the true great and original libertarian, the one who set the world on the course away from control by the state, John Calvin, who described will worship as that “which men choose for themselves at their own option, without authority from God.” What a fitting description of libertarianism today. Libertarianism is self-made religion, as it has its origins in the concept that individuals are sovereign individuals. Scripture reveals that only God be sovereign. Libertarianism is a worship of “free choice” rather than that of “divine choice”. Because libertarianism comes from a sense of self-determination, it is enslaving, corrupting, intoxicating, and ultimately destructive.
The Prophet Daniel, in Daniel 2:25-45, has presented the reality that God operates in empires, always has, and always will. And John the Revelator adds emphasis in Revelation 13:1-4, describing the soon coming Ten Toed Kingdom, as a Beast Regime that will occupy not only in ten zones of regional governance; but also in totalitarian collectivism in all of mankind’s seven institutions.
So if one be disgusted today, one will only be enraged tomorrow.
Brandon Cornett of The Home Buying Institute reports San Francisco home prices have rebounded the furthest from their crisis low point. Since March 2009, when this market officially hit bottom, prices have risen by a whopping 49%. That’s more than any other metro area tracked by the Case-Shiller Index. I comment, that if you are looking for a home in Excelsior, well then, perhaps the 3 Bedroom and 1 Bath home at 206 Lisbon St, San Francisco, CA 94112, is for you.
Ask Blog provides Another essay for everyone to ignore on housing finance reform. It’s appropriate to focus and then refocus again for emphasis on housing finance reform, as Jesus Christ has been in dispensation, that is in the active management of all things economic, political, and spiritual, as revealed by the Apostle Paul in Ephesians 1:10, bringing forth Liberalism in 1931, with the establishment of the US Fed; and then again maturing Liberalism in 1971, with the provision of the Milton Friedman Free To Choose floating currency system, and in 1999 with the Repeal of the Glass Steagall Act establishing a modern banking regime, and with the provision of the Euro currency as a platform for further monetary expansion as well as regional political intervention.
Liberalism’s policy was one of investment choice, with all kinds of credit schemes like Ask Blog mentions, and all kinds of currency carry trade schemes as well, as some bought their homes using FX currency carry trades originated by Austrian bankers.
But now with the Interest Rate on the US Debt having soared to 2.75% in August 1, 2013, Jesus Christ like a ship’s steward, has fully completed the ship’s manifest, providing a moral hazard based prosperity, where gains have been privatized to the bankers and losses socialized to the public.
And with John McCain fathering World War III in the Middle East, Jesus Christ is fully pivoting the world into Authoritarianism, with its policies of diktat, and schemes of control and debt servitude producing austerity for all.
Ron Paul writes in Liberty Crier Private property is the essence of liberty. Similar thoughts come from Hoppe, Hans-Hermann, writing in Lew Rockwell, 2004. “The Ethics and Economics of Private Property.” I comment that respect for the person of others, and the property of others is the basis of ethics.
On Thursday August 5, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.97%, causing Aggregate Credit, AGG, to trade sharply lower. The 10 30 US Sovereign Debt Yield Curve, $TNX:$YTX, steepened, as is seen in the Steepner ETF, STPP, steepening. World Treasury Debt, BWX, Longer Duration Corporate Debt, BLV, traded lower.
Inverse Volatility, XIV, rose, as YAO, and China Financials, CHIX, China Industrials, CHII, China Small Caps, ECNS, and Chia Real Estate, TAO, rose strongly higher, taking Far East Financials, FEFN, South Korea, EWY, and Taiwan, EWT, higher. Solar Stocks, TAN, rose. India, INP, Brazil, EWZ, Russian, RSX, rallied with China, taking the BRICS, EEB, and the Emerging Markets, EEM, higher. The US Dollar, $USD, rose strongly to close at 82.66. Gold, GLD, and Silver, SLV, traded lower, taking Gold Mining, GDX, GDXJ, and Silver Mining, SIL, SILJ, SSRI, lower. Yet, Poland, EPOL, fell 5%, as Poland Government Seizes Half of Pension Funds
On Friday August 6, 2013, This week Aggregate Credit, AGG, traded 0.70% lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher from 2.75% to 2.94%.
Lisa Abramowicz and Liz Capo McCormick of Bloomberg report “The worst losses in U.S. debt in at least 37 years are being magnified by investors exiting the market at the same time new regulations prompt Wall Street firms to cut back on trading corporate bonds. Bank of America Merrill Lynch’s U.S. Broad Market Index is on pace to drop 4.41%, the biggest annual loss since at least 1976. Investors pulled $123 billion from bond funds since May, according to TrimTabs. Trading in corporate fixed income securities is the lowest ever as a proportion of outstanding debt, and volumes in Treasuries are little changed from 2007 levels even though the market has almost tripled to $11.5 trillion, Financial Industry Regulatory Authority and ICAP Plc data show. Bonds are getting riskier even with inflation at bay and corporate profits hitting new highs. ‘When bond investors start to meaningfully divest themselves of their positions, it will be analogous to yelling fire in a crowded theater,’ Michael Underhill, the chief investment officer at Capital Innovations LLC, which manages $1.5 billion, said”
Brian Chappatta of Bloomberg reports “The biggest losses since 1999 for municipal debt signal that Detroit’s bankruptcy and 14 weeks of withdrawals from mutual funds are overwhelming historical trends pointing to a rebound in the $3.7 trillion market. Local debt lost 1.6% in August, the steepest drop for the month in 14 years. It marked just the second time in 25 years that the obligations fell in both July and August, a period in which the market usually rallies as investors get cash from coupon and principal payments while issuance dwindles. Benchmark yields are the highest since 2011 and exceed those on Treasuries and AAA company debt by the most in at least 20 months”
Sean McLain and I Made Sentana of the WSJ report on the failure of Liberalism credit scheme of Dollarization “Companies across Asia are facing a debt repayment crunch as plunging local currencies make it more costly to repay foreign loans, a situation that is exacerbating stresses on the region’s economies. Asian companies took out sizable foreign loans in recent years as the U.S. Federal Reserve kept interest rates low and printed money. For firms in nations like India and Indonesia, rates on U.S.-denominated debt were more attractive than local borrowing costs. But the current exodus of capital from emerging markets, amid expectations the Fed will end its period of extraordinary monetary stimulus later this year, has changed that equation. Foreign funds are pulling out of Asian bonds and other assets amid expectations U.S. rates will rise further. That is pushing currencies in Asia sharply lower and raising the cost of repaying U.S. denominated borrowings.”
Ben Bland of the Financial Times reports “The gloom surrounding Indonesia continued to deepen on Monday after southeast Asia’s biggest economy posted a record monthly trade deficit and inflation climbed to a four-year high. The trade deficit jumped to $2.3bn, much higher than expected, in July as imports remained strong while exports fell because of the slowdown in China and ongoing troubles in Europe and the US. Annual consumer price inflation rose to 8.8% in August, from 8.6% one month earlier, with economists predicting that inflation may reach double digits by the end of the year, putting pressure on the central bank to continue hiking interest rates. Indonesia has been hit hard by the recent sell-off, which has also ensnared other emerging markets with large current account deficits and a need for foreign financing like Brazil, India, South Africa and Turkey.”
James Crabtree of Financial Times reports “Fears are rising for the health of India’s banking system as slowing economic growth and rapid currency depreciation threaten to worsen asset quality and reduce demand for bank credit from large industrial companies. The growing concerns complicate the task facing Raghuram Rajan, who takes over today as head of the Reserve Bank of India, a role that includes responsibility for bank regulation, as he attempts to chart a path through the deepening currency crisis. Non-performing and restructured loan levels in Asia’s third-largest economy have risen steadily over the past year to stand at around 9% of assets and could reach 15.5% over the next two years, according to Morgan Stanley. Indian companies hold around $225bn of US dollar-denominated debt, as much as half of that estimated to be unhedged, while some larger Indian banks including State Bank of India and ICICI have raised money via dollar-denominated bonds in recent years.”
The chart of the S&P 500, $SPX, shows a massive dark filled questioning harami on Friday September, 6, 2013, and a 1.4% rise for the week. Sectors trading higher this week included
Solar, TAN, 9.2 (a new rally high)
Inverse Volatility, XIV, 5.5
Networking, IGN, 4.7
Biotechnology, IBB, 4.0 (a new rally high)
Internet Retail, FDN, 3.7 (a new rally high)
Automobiles, CARZ, 3.6
Casinos and Resorts, BJK, 3.5 (a new rally high)
Semiconductors, SMH, 3.4
Design Build, FLM, 3.3
S&P High Beta, SPHB, 3.2
Stock Brokers, IAI, 3.1
Eurozone Financials, EUFN, 3.0
Global Consumer Discretionary, RXI, 2.9
Life Insurance Companies, GNW, 2.8 (a proxy for life insurance companies)
Media, PBS, 2.6
Energy Production, XOP, 2.5
Transportation, XTN, 2.4
Too Big To Fail Banks, RWW, 2.3
Small Cap Pure Industrials, PSCI, 2.2
IPOs, FPX, 2.1, (a new rally high)
Small Cap Pure Value, RZV, 2.0. It is Regional Airlines, Business Services, Personnel Services, and Business Software and Services, that have been leading lower, as this month’s loss leading sector, despite Bespoke Investment Blog reporting, ISM Services Index Hits Highest Level Since 2005!
Countries trading higher this week included
Nikkei, NKY, 3.4
US Stocks, VTI, 1.6
Sweden, EWD, 3.5
Eurozone, EZU, 2.6
Europe, VGK, 2.6
Norway, NORW, 2.5
Asia Excluding Japan, EPP, 4.1, a new rally high
Thailand, THD, 6.7
South Korea, EWY, 5.5, a new rally high
Australia, EWA, 4.3, a new rally high
Taiwan, EWT, 3.8
The Philippines EPHE, 3.4
The BRICS, EEB, 6.1, with Brazil, EWZ, 6.8, Russia, RSX, 5.4, India, INP, 6.5, and China, YAO, 4.8, a new rally high. In the last month, SHG, and CHIX, have been leading CHII, ECNS, and TAO higher, as is seen in their ongoing Yahoo Finance chart. Emerging Market Financials, EMFN, rallied 4.4%, and Far East Financials, FEFN, 3.0%, this week.
Chile, ECH, 7.1
Poland, EPOL, traded 4.8 lower this week.
2) … Authoritarianism’s paradigm of diktat and debt servitude is emerging as Jesus Christ is in active administration of the economy of God terminating Liberalism’s paradigm of investment choice and credit … Luciferian Worship Will Emerge Out of a Middle East Third World War.
Eleni Panagiotarea authors the book Greece in the Euro: Economic Delinquency or System Failure.
I comment that the Euro, currently a currency without a state, is about to become the world’s preeminent region of economic governance and totalitarian collectivism, rising out of sovereign and banking insolvency of the PIGS. And Canada, Mexico, and America, is about to become the leading example of the Security State. The centuries-old individualistic American culture which featured diversity and volunteerism, will be will be washed away through compulsion and uniformity, as foretold in Revelation 13:4, where John the Revelator wrote, “So they worshiped the dragon who gave authority to the beast; and they worshiped the beast, saying, “Who is like the beast? Who is able to make war with him?”
In 1998, at a Symposium on the Continuing Political Relevance of the Peace of Westphalia, the then NATO Secretary-General Javier Solana said that “humanity and democracy [were] two principles essentially irrelevant to the original Westphalian order” and levied a criticism that “the Westphalian system had its limits. For one, the principle of sovereignty it relied on also produced the basis for rivalry, not community of states; exclusion, not integration.”
In 2000, Germany’s Foreign Minister Joschka Fischer referred to the Peace of Westphalia in his Humboldt Speech, which argued that the system of European politics set up by Westphalia was obsolete: “The core of the concept of Europe after 1945 was and still is a rejection of the European balance-of-power principle and the hegemonic ambitions of individual states that had emerged following the Peace of Westphalia in 1648, a rejection which took the form of closer meshing of vital interests and the transfer of nation-state sovereign rights to supranational European institutions.”
In the aftermath of the 11 March 2004 Madrid attacks, Lewis ‘Atiyyatullah, who claims to represent the terrorist network al-Qaeda, declared that “the international system built up by the West since the Treaty of Westphalia will collapse; and a new international system will rise under the leadership of a mighty Islamic state”.
Benedict Anderson refers to putative “nations” as “imagined communities.” Others speak favorably of the Westphalian state, notably European nationalists and American paleoconservative Pat Buchanan. Some such supporters of the Westphalian state oppose socialism and some forms of capitalism for undermining the nation state. A major theme of Buchanan’s political career, for example, has been attacking globalization, critical theory, neoconservatism, and other philosophies he considers detrimental to today’s Western nations. In a 2008 article Phil Williams links the rise of terrorism and other violent non-state actors (VNSAs), which pose a threat to the Westphalian sovereignty of the state, to globalization.
A new notion of (humanitarian intervention and) contingent sovereignty seems to be emerging, but it has not yet reached the point of international legitimacy. Neoconservatism in particular has developed this line of thinking further, asserting that a lack of democracy may foreshadow future humanitarian crises, or that democracy itself constitutes a human right, and therefore nation states not respecting democratic principles open themselves up to just war by other countries. However, proponents of this theory have been accused of being concerned about democracy, human rights and humanitarian crises, only in countries where American global dominance is challenged, such as the former Yugoslavia, Iraq, Iran, Russia, China, Belarus, North Korea, Sudan, Venezuela, etc., while hypocritically ignoring the same issues in other countries friendlier to the United States, such as Pakistan, Saudi Arabia, United Arab Emirates, Jordan, Egypt, Georgia, and Colombia.
The seigniorage of Liberalism’s nation state single reserve currency system is failing; the seigniorage of Authoritarianism’s undollar regional governance and totalitarian collectivism diktat system is rising as Joseph Stuber writes in Seeking Alpha As The Bernanke Era Comes To An End A New Global Paradigm Is Almost Certain But Few See It Coming
Many of us wondered if the Jackson Hole Summit this year would offer anything of significance with Bernanke not in attendance. The primary focus for most was the hope that we would we get some clues on the matter of the Fed’s timing on pulling back on the controversial QE program?
Surprisingly we did indeed get something of significance coming out of the Jackson Hole Summit but it was not what most expected. The following quote is the opening statement in a Reuter’s article entitled Central bankers debate risks from withdrawing global liquidity:
Global financial stability is at risk as central banks draw back from ultra-easy policies that have flooded the world with cash, because emerging markets lack defences to prevent potentially huge capital outflows, top officials were warned on Saturday.
The Fed’s talk of tapering is real and relevant to investors but it is only of secondary importance as far as this article is concerned. The primary focus of this article is whether or not the US dollar will remain the world’s reserve currency. It is a very complex and highly controversial subject that gets almost no play in the press but an enormous amount of focus behind the scenes.
The harsh truth is that we have reached the end of an era and it is blatantly clear to those of us who understand the subject that Keynes was right when he stated at the 1944 Bretton Woods conference that a sovereign currency would not work as the world’s reserve currency. The reasons are multifaceted and complicated to say the least and I am not sure I can explain the complexity of the issue in terms the average investor will understand but at the request of a number of my readers I am determined to give it a try.
Why would a decision by the United States to withdraw monetary stimulus by slowing down or terminating QE create global instability?
The answer to that question is complex but we need to start with a discussion on the nature of a reserve currency. The US dollar is the world’s reserve currency and providing a sufficient supply of US dollars to the world’s sovereign nations is the principal function of the US as it relates to its role as supplier of reserve assets. To understand the implications one needs to understand what was decided in 1944 at the Bretton Woods Conference that resulted in what French Finance Minister Valery Giscard d’Estang termed “exorbitant privilege” – a privilege bestowed on the United States when the US dollar was established as the world’s reserve currency.
Here is the condensed version of what happened at Bretton Woods back in 1944: The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states in the mid-20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.
Preparing to rebuild the main international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known at the Bretton Woods Conference. The delegates deliberated during 1-22 July 1944, and signed the Agreement on its final day.
Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.
The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments.
So the outcome of this new system was that the US dollar was designated as the world’s reserve currency and the United States guaranteed that those sovereigns holding dollars would be allowed to exchange them at a rate of $35 for 1 ounce of gold. We all know how that worked out though – it didn’t – and for reasons that were easily predictable by competent economists.
The motivation for a system of trade that was fair was well articulated by Cordell Hull, United States Secretary of State from 1933-1944:
Unhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war…if we could get a freer flow of trade…freer in the sense of fewer discriminations and obstructions…so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance of lasting peace.
We of course didn’t create that system Hull hoped for – we simply transferred preferred status from Great Britain to the United States. Great Britain no longer held exboritant privilege but the United States did. And the very thing that Hull hoped for – a system based on fairness – has to this day eluded us and we now find ourselves once again at the point where something is about to happen that will dramatically change the system.
In an article entitled - Bretton Woods and the Forgotten Concept of International Seigniorage – Dix Sandbeck expands further on the debate at Bretton Woods on the nature of the new reserve currency:
Keynes envisaged the bancor as an international trade currency and unit of account. Its management and issue was to be in the hands of an another planned international organization, the International Clearing Union (ICU). The value of the bancor was to be determined by the value of the different national currencies in a trade weighted basket. Values of currencies would be fixed, but could be changed by mutual agreement.
A fundamental aim of Keynes’ plan was to install a truly multilateral system. No nation would be allowed to dominate; nations in surplus or in deficit would be disciplined alike. Shortly before the conference however, the Americans rescinded their support for the bancor. Presumably, they felt that the bancor scheme, with its control in the hands of the ICU, was a shrewd strategy to rob the United States of its greatest spoil of victory: unfettered post-war dominance.
Instead, the Americans insisted on a system where the US dollar would be fixed to a gold value of $35 per ounce, though convertible only for central banks. All other currencies were to be aligned to this dollar-gold anchor. If adopted, this would confer on the US an unprecedented supremacy Even Britain, at the pinnacle of her power had not enjoyed such a position. But at Bretton Woods the exhausted European nations were eager for the continued flow of dollars to finance the war and the impending reconstruction. No nation was in a position to challenge the American volte-face.
Seigniorage is the difference between the value of money and the cost of producing it. It is that concept that sets the US apart from every other nation in that it derives the benefit of the currencies purchase value and bears almost no effective cost at current interest rates. Here is how it works. The US government expands the debt ceiling at will and then borrows money by issuing treasuries.
Countries who are net exporters then buy those instruments from the United States in order to invest the dollars they receive in international trade. If you are a net exporter then you build a surplus of US dollar denominated assets. If you are a net importer the inverse is true.
The benefits to the reserve currency issuer is that they are allowed to borrow in great quantity relative to other sovereigns without the commensurate cost these other countries would incur were they to do the same. The reason is simple – if you want to import or export goods and services you do so using US dollars as the form of payment. In other words there is a high demand for dollar denominated assets for reasons unrelated to the interest rate paid on those assets.
A country like China then ends up with a surplus of dollars and here is why. A company in China exports goods and receives in return US dollars. That exporting company then needs to convert those dollars back to the sovereign currency and so the central bank exchanges those dollars for yuans. Now the central bank has dollars which it uses to buy US debt.
That isn’t the way most investors see it though. Most investors see China as deliberately buying US debt for any number of sinister purposes. Others see us at the mercy of China and that may end up being true but not for reasons that are readily apparent.
China by the way has a unique arrangement that links the yuan to the US dollar and that would suggest that the yuan would not appreciate if China sold US dollars and bought the yuan but that is only partially true. The problem with China is multi-faceted. A strong dollar necessarily results in a strong yuan relatively speaking due to the yuan’s link to the US dollar. In other words a strong dollar could end up having a modest impact on Chinese export demand. On the other hand a weak US dollar could have an inflationary effect on the yuan domestically.
Additionally, the Chinese use a novel approach to curbing inflation domestically. They simply raise bank reserve requirements in lieu of withdrawing liquidity. That creates an instant muting of the expansionary impact of the fractional bank multiplier. At the same time it can produce a serious liquidity crisis domestically in China when they attack inflation in this manner.
Another problem as far as China is concerned is rooted in the US blunders from a domestic perspective that create instability in the dollar and in US Treasuries. Blunders like consistently inflating investment assets as in the mortgage debt crisis that impacted global economies across the spectrum.
So what happens then that causes a crisis in the emerging market economies. Here is what Jim Rickards – author of Currency Wars: The Making of the Next Global Crisis - sees happening:
If the Fed does what they say they’re going to do-which I don’t think they will-but if they do… and they reduce asset purchases and U.S. interest rates go up, the capital outflows are going to come from the emerging markets back to the U.S., the carry trades are going to be unwound and that’s going to leave these economies high and dry,” says Jim Rickards, senior managing director of Tangent Capital.And ultimately, those emerging markets “will have unsustainable projects and bank debt, and it could be the beginning of another emerging market crisis which as we know in 1997-1998 spread to major economies.
Rickards made the above statement back in June. There seems to be a pretty broad consensus view today that tapering will start this year. Furthermore, projected deficit levels this year suggest that new Treasury issues will be substantially reduced in fiscal 2013 meaning that the Fed’s bond buying program at current levels will consume roughly 70% of new issue.
So even though there are a very few reasons for tapering there are perhaps a lot more reasons for not tapering. My guess is Rickards will end up being right and the US will not taper but for reasons that are again not so obvious.
When rates start to climb the dollar carry trade loses its appeal and not just in the emerging market economies. Borrowing short term to invest long term works as long as the yield curve remains attractive. But what happens to bonds when rates start to climb. Bonds at the long end of the curve lose value and that applies to all bonds – not just emerging markets. That of course exacerbates the problem as the selling pressure on bonds begets more selling pressure.
Is the Fed really to blame for recent bond weakness?
The following excerpt on the matter of foreign sales of US Treasuries suggests that there is a lot more than QE taper talk driving bonds lower:
(Reuters) – China and Japan led an exodus from U.S. Treasuries in June after the first signals the U.S. central bank was preparing to wind back its stimulus, with data showing they accounted for almost all of a record $40.8 billion of net foreign selling of Treasuries.
The sales were part of $66.9 billion of net sales by foreigners of long-term U.S. securities in June, a fifth straight month of outflows and the largest since August 2007, U.S. Treasury Department data showed on Thursday.
One can argue that China and Japan are selling US Treasuries as they fear the Fed is losing control of the bond market. One can also argue that they are doing so as they are no longer trading exclusively in US dollars.
Consider this from Aljazeera on the matter of trade agreements not involving the US dollar:
Over the past two years, China has announced a string of yuan internationalization efforts that are systematically chipping away at the dollar’s importance to global trade. Financial blog Zero Hedge reports: “One more domino in the dollar reserve supremacy regime falls. [T]he announcement two weeks ago that ‘Australia and China Will Enable Direct Currency Convertibility’ … was the culmination of two years of yuan internationalization efforts as summarized by the following”:
“World’s Second- (China) and Third-Largest (Japan) Economies to Bypass Dollar, Engage in Direct Currency Trade” “China, Russia Drop Dollar in Bilateral Trade” “China and Iran to Bypass Dollar, Plan Oil Barter System” “India and Japan Sign New $15bn Currency Swap Agreement” “Iran, Russia Replace Dollar With Real, Ruble in Trade, Fars Says” “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran in Rupees” “The USD Trap Is Closing: Dollar Exclusion Zone Crosses the Pacific as Brazil Signs China Currency Swap”
What we know is that the Fed hasn’t begun the process of tapering back QE purchases yet the yield on US Treasuries has skyrocketed – doubling since the mid-2012 lows:
(click to enlarge)
This can only be explained in the context of foreign sales of US Treasuries. In June foreign sales of US Treasuries exceeded the Fed’s purchases by roughly $27 billion. In other words US Treasuries aren’t falling as a result of taper talk but as a result of the selling pressure created by those countries no longer trading in US dollars.
If China, Japan, Australia, Brazil or one of the many other countries now by-passing the US dollar no longer receive US dollars in payment for exports then it creates an altogether different dynamic that tends to diminish the exorbitant privilege of the US.
Take Japan as an example. If they receive US dollars in trade settlements they either hold the dollar or interest bearing treasuries. In other words they buy US Treasuries pushing bond prices up and yields down. Do they want to do that? The answer is no but they have no choice. If they simply sell US dollars and buy yens they drive the yen higher and the result is a dampening of demand for Japanese produced goods. It hurts the domestic economy so they are forced to reinforce the exorbitant privilege of the reserve currency nation.
How are bilateral trade agreements affecting markets?
Let’s look at the bond market to see if this dynamic is really occurring. Here is the bond market (TLT):
(click to enlarge)
Once again we know why bonds have been weak of late – foreign sales of US Treasuries. And we know why that is occurring – bilateral trade agreements that don’t result in US dollars being received to the degree they have in the past. It can be argued that the recent spike is the result of a safe haven bid for US Treasuries based on the prospects of heightened tensions in the middle east arising from the mess in Syria but will it last? Probably not as the overriding influence on bonds is the bilateral trade agreements that are bypassing the US dollar.
Debunking the capital flowing to US equities bull market argument
The idea that capital will flow to US equities as US equities are the best value is refuted by the fact that US equities will likely suffer a major hit as China, Japan, Russia, Brazil, India and others bypass the US dollar. What will occur instead is an end to the demand for US Treasuries that has driven bond prices higher and yields lower. This can occur at a much more rapid rate than many would imagine.
The result is an end to exorbitant privilege status for the US. Interest rates will continue to climb or normalize as some say and that will necessarily result in a deleveraging – a reduction in debt levels – that will cause M2 growth to stall out and perhaps decline. So the take away then is that even in a period of disinflation or deflation we could still see the US dollar fall relative to other currencies. It isn’t supposed to work that way of course but then we don’t have a period we can reference to inform us on what happens to the US dollar when it loses its reserve currency status.
Each of us has to judge for ourselves what will occur in the coming months and all I can do is inform readers of what I see and what I see is a major seminal moment that will come upon us with a suddenness that few expect. The big question is will a sell off be in the category of normal or will it be much more dramatic. I am confident that it will be the latter and wonder if maybe the time is now upon us.
I continue, as having brought liberalism with its policies of investment choice and schemes of credit and carry trade investing to fulfillment, Jesus Christ, acting in dispensation, Ephesians 1:10, is now introducing authoritarianism, and John The Revelator’s Beast Regime, with its policies of diktat and schemes of nannycrat control, where through a soon coming credit bust and global financial system breakdown, foretold in Revelation 13:3-4, regional leaders, that is, nannycrats, will meet in summits, to renounce national sovereignty, and announce regional pooled sovereignty, in each of the world’s ten regional zones, most likely first with the Eurozone, and secondly with the North American Continent, which will become a North American Union, or NAU, a region I call CanMexAmerica. Thus the The Westphalian System of sovereign nation states is collapsing, and out of its ashes the Beast Regime of regional governance and totalitarian collectivism is rising to rule the world.
Accompanying the rise of the Beast System, will be a war in Syria foretold in Isaiah, 17, and a third world war, foretold in Ezekiel 38. Illuminati Prophet Albert Pike had Luciferian insight that there would be three world wars. D. Robert Singer writes the article The Modern State of Israel: Providence, Miracle, or What Really Happened. In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.
ThreeWorldWars.com writes The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view.  [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15, 1871.
3) One light in the Lord, and the other dark in the world
As I’ve shared in the past, I reside in the Sea Breeze Apartments, in downtown Bellingham; its the bottom of the social pyramid, specifically Claritas Prizm Sector 65, Inner City Blues 66; the most economically challenged of all demographic areas.
Most individual here have physical health, emotional health, and mental health handicaps.
Two returned late in the day on saturday. One guy, who has lived here seventeen years, is a sabbatarian, always observant of keeping his faith, returned dressed in pressed white shirt, black tie, and black shined shoes, holding his Bible. One gal, returned with pulling an overnight bag, holding a bouquet of flowers. One has relationship with the Lord, and the other has a relationship with her significant other.
There be no choice; there is only the Lord, with the Spirit, moving in the lives of people. All things are of his choice. He in His Providence of space and time brought forth John Calvin in the reform movement to bring forth genuine liberalism, that is freedom from the state, and also Witness Lee in the recovery movement to recover living principles of grace and truth. People are who they are, because they are both vessels of the Lord, and are shaped, molded, and brought forth by Him, to produce things of His choosing.
I’ve often wondered about the FWB relationship. When growing up, and into young adulthood, my parents entertained on the holidays and had their friends over. One of mom’s friends brought another; and I asked mom about the relationship, and she said “just friends”. It wasn’t until my third year of college, that I came to understand what friends with benefits means. I’m ok with it when I see it, if there be a ring on the finger communicating a fidelity to the other, and a presence with the other.
Fidelity with the Lord is that which I purpose. I don’t go to a church, yet I endeavor to keep the first day of the week special to and with Him. As we are headed off strongly into another age; I purpose to keep His word of endurance and not deny his name, by living within His presence and authority,
4) … Prophetic signs of the endtimes, by Duane and Shelley Muir, of Sign Posts of The Times.
The forsaking of the Gospel Message. How the Seeker-Sensitive, Consumer Church Is Failing a Generation
The destruction of Damascus. Russia warns Of Nuclear Disaster If Syria Is Attacked
The implementation of the daily sacrifices. Temple Institute Opens New School For Training Priests
5) … Charts of the week
Daily chart of the S&P 500, $SPX, courtesy of Stockcharts.com
Weekly chart of the Small Cap Pure Value Stocks, RZV, courtesy of Finviz.
6) This is possibly my last post
There comes an end to all writing. I’ve enjoyed writing about what John the Revelator says are “those things which must shortly come to pass”, Revelation 1:1; many of these are about to burst on the scene as the Isaiah 17 War with the destruction of Damascus, and the Ezekiel 38 War as a major assault by Islam against Israel, and vice versa. Inasmuch as these things will become reality, I see diminishing reward to write about them.
Financial Market Report for the Week Ending August 30, 2013
1) … News reports reveal groundwork was laid for a war in Syria on Saturday August, 24, 2013. Donn Abu-Nasr, Roger Runningen & Silla Brush of Bloomberg report UK’s William Hague, Germany’s Steffen Seibert, and France’s Laurent Fabius say Syria used chemical arms as UN probes allegations. The U.K.’s Hague and Turkey’s Davutoglu signaled that action may be taken even without the backing of the UN Security Council. “Is it possible to respond without complete agreement on the security council? I would argue yes it is,” Hague said. “Other countries including France are very clear that we can’t allow the idea that chemical weapons in the 21st century can can be used with impunity. US intelligence officials and international partners have concluded that chemicals were used, based on the reported number of victims, reported symptoms of those who were killed or injured in the Aug. 21 attacks, witness accounts and other facts gathered, according to (a emailed) US statement. “There is very little doubt at this point that a chemical weapon was used by the Syrian regime against civilians in this incident,” according to the official’s statement. The statement was released on condition of anonymity because the person wasn’t authorized to speak publicly.
Bloomberg reports Syria is headed for Western Strike, Russia says. The U.S. and its allies are on a “slippery slope” to military intervention in Syria that will have “extremely dangerous” consequences for the region, Russian Foreign Minister Sergei Lavrov said. Any military intervention without UN Security Council approval would be “a gross violation of international law,” Lavrov told reporters in Moscow today. He ruled out a Russian military response.
Robert Wenzel of Economic Policy Journal writes Alert: Unusual White House economic meeting. Robert Willmann, Jr. emails, This past Monday, 19 August, 2013, president Obama had a closed-door meeting with the heads of the Federal Reserve Bank, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Comptroller of the Currency. As Mark Knoller, tweets, and as the White House posts.
This curious meeting, a rarity with the chiefs of all the financial agencies plus the Not-Federal Reserve Bank, means that either there is significant deterioration of the financial “system” and the economy, or he wanted to advise them of possible military escalation in Syria and the Middle East and ask them about the economic impact of such military action, or both. If Obama asked them if military action against Syria would trash the economy, they certainly answered “no”, because two days later came the so-called “gas attack”, to further lay the groundwork for military escalation.
1A … A short history is helpful to understand the developing war in Syria.
1) … Wikipedia communicates that the Syrian Military Intelligence Directorate is the political authority governing Syria. It is controlled by Syrian President Assad, who is of the Alawite Muslin faith.
2) … Wikipedia provides details on Shia Sunni relations. According to some reports, as of mid-2013, the Syrian civil war has become “overtly sectarian” with the “sectarian lines fall most sharply” between Alawites and Sunnis. With the involvement of Lebanese Shia paramilitary group Hezbollah the fighting in Syria has reignited “long-simmering tensions between Sunnis and Shi’ites” spilling over into Lebanon and Iraq.
Syria is approximately three quarters Sunni, but its government is predominately Alawi, a Shia sect that makes up less than 15% of the population. Under Assad, Alawi dominated the Baath Arab Socialist Party, a secular Arab nationalist party which has ruled Syria under a state of emergency since 1963 and has not tolerated any opposition. Alawi are often considered a form of Shia Islam, that differs somewhat from the larger Twelver Shia sect.
A very serious 20th century conflict in Syria with sectarian religious overtones was that between the Alawi-dominated Assad regime and the Islamist Sunni Muslim Brotherhood, culminating with the 1982 Hama massacre. An estimated 10,000 to 40,000 Syrians, mostly civilians, were killed by Syrian military in the city. During the uprising, the Sunni Muslim Brotherhood attacked military cadets at an artillery school in Aleppo, performed car bomb attacks in Damascus, as well as bomb attacks against the government and its officials, including Assad himself, and had killed several hundred.
The 2011-2012 Syrian uprising has reawakened the sectarian tensions in Syria, gradually becoming a full-blown sectarian strife between the Alawi dominated Army and government vs. Sunni rebels and former members of the regular Syrian Army.
3) … The Guardian reports Iran and Hezbollah have built 50,000-strong force to help Syrian regimen. Major General Aviv Kochavi, the director of military intelligence in the Israel defence forces (IDF), said Iran intended to double the size of this Syrian “people’s army”, which he claimed was being trained by Hezbollah fighters and funded by Tehran, to bolster a depleted and demoralised Syrian army. Kochavi, also said Assad’s troops had readied chemical weapons but so far had not been given the order for them to be used.
Israel opposes the western arming of Syrian rebels because of its fears that the weapons will end up in the hands of such groups. Defence officials say they are focused on Assad’s sizeable arsenal of chemical weapons and missiles and they are prepared to carry out more air strikes to stop such arms being transferred to Hezbollah, even at the risk of what a senior official predicted would be an ugly new war in Lebanon.
Israel has warned the UK and France against arming Syrian rebels, arguing there will be no guarantees that sophisticated weapons such as portable anti-aircraft missiles will not ultimately find their way to al-Qaida affiliates and other extremist groups, and be turned against Israel. Israel’s immediate focus is on preventing any of Assad’s stockpile of chemical weapons and anti-aircraft and anti-ship missiles reaching Lebanon.
4) … The Independent reports Saudi Prince with close ties to US at the heart of the push for war.
1B) … The Bible is clear that Syria’s capital Damascus will be utterly, absolutely, and totally destroyed, that is obliterated, per Isaiah 17. Whether this is done by the USA, UK, the EU, or Israel, the Bible does not specify, but it will happen. It was ordained in eternity past that the Syrian War of Isaiah 17:1-11 will precede the Ezekiel 38-39 War, where war against Iran will be initiated. Robert Fisk relates in Common Dreams Iran, Not Syria, Is the West’s Real Target.
This just as it was ordained that the UK become a global power as a multitude of nations, and the US follow it to be the leading world power, as promised to Abraham in Genesis 12:2, Genesis 17:4-6, and Genesis 48:16.
Robert Phillips, writes of the Liberalism’s Anglo American Empire foretold in Bible prophecy in article, Ephraim and Manasseh, To fully appreciate the significance of the blessing of Joseph’s two sons, we need to understand some background with regard to both history and prophecy in relation to Israel. The promises to the tribes of Israel were specifically reserved for the “last days”, or “Christian era”, Genesis 49:1, Hebrews 1:1,2. Britain’s Ephraim-Mandate is evident in that it was Britain that colonised and built the world’s greatest Empire, and established its Commonwealth of Nations. It was Britain that led the way in Industrial Revolution. Britain was in the forefront of many major technological and engineering developments, including building the first computer. In fact, there have sadly been attempts to re-write history, in order to play-down or ignore the significant role played by Britain, in major technological, scientific and military achievements. For a number of years America has been enjoying Manasseh’s portion of the birthright. Some believe that, although Jacob appointed his younger brother Ephraim as Israel’s firstborn, this did not prejudice Manasseh’s inheritance as Joseph’s firstborn. In other words, whilst Ephraim would inherit the primary Israel birthright, territorial blessing and monarchy, Manasseh would receive the double-portion of Joseph’s material legacy of wealth and power. As long as Britain remained predominant, America could never enjoy Joseph’s prominence of wealth and power. This may explain why Britain had to diminish, for a time, so America could receive Manasseh’s inheritance, becoming, in his season, prevalent in material blessings.
I continue, and just as it was ordained that out of these two iron pillars, or better said, two iron legs of hegemonic power, that a ten toed kingdom of regional governance, will rule mankind, as foretold in the Statue of Empires prophecy in Daniel 2:25-45.
1C) … Bible prophecy of Revelation 13:1-4 foretells that out of waves of Mediterranean Sea nation state chaos, beginning in May 2010 with Greek Bailout I, God is bringing forth a Beast regime, to occupy in all of mankind’s seven heads, that is in each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones.
The seven institutions are 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology. Each of these seven institutions will increasingly be integrated with each other, in totalitarian collectivist regional governance, in each of the world’s ten regions. A growing intertwining of institutions is seen in today’s news analysis. Via a workgroup, the institution of US Banking and Financial Trading, is being fully integrated with the institution of US Body Politic, and the institution of the US Military, in what will eventually be a North American Continental Government, that is a North American Union. Leaders from each of the seven institutions will increasingly be working in statist public private partnerships to oversee the factors of production to manage regional commerce and trade, for regional security, stability and sustainability.
While nannycrats rule in the age of Authoritarianism, the elect rule in the age of the Kingdom of God, as foretold in bible prophecy, as the saints are seen proclaiming “and have made us kings and priests to our God; and we shall reign on the earth”, Revelation 5:9-10.
2) … Stocks drop as UniCredit falls on Italy wrangling and as Yen rises on plans for war develop.
On Monday, August 26, 2013, Volatility, VXZ. rose entering an Elliott Wave 3 Up. The chart of the EUR/JPY shows a slight trade lower to 131.61 with Eurozone Stocks, EZU, trading lower, as Italy, EWI, Spain, EWP, and the European Financials, EUFN, traded lower, on a lower Euro, FXE, and a higher Yen, FXY. Bloomberg reports Europe stocks drop as UniCredit falls on Italy wrangling. And Zero Hege repaorts Italian bonds plunge to worst ay In 9 weeks. Inverse Volatiliy, XIV, Food and Beverage, PBJ, Consumer Staples, KXI, led by Meat Proucts, PPC,SN, HRL, Regional Banks, KRE, Solar Energy, TAN, and Dow Telecom, IST, traded lower. The BRICS, EEB, traded lower, on lower Russia, RSX, India, INP, Brazil, EWZ, and China Industrials, CHII. Pharmaceuticals, PJP, and Biotechnology, IBB, traded higher. Briefing.com reported light trading volume has persisted throughout the day, which, in turn, has made for a very quiet trading day. Similar to the S&P, the Treasury market is little changed with the benchmark 10-yr yield off one basis point at 2.81.
On Tuesday, August 27, 2013, In overnight trading, Reuters reports Geopolitical jitters unsettle Asia stocks; yen rises. Asian stocks fell on Tuesday and the Turkish lira hit a record low after the United States signaled possible military action against the Syrian government over a suspected chemical weapons attack last week. Dealers said there was no panic selling though, just truncated trading as investors waited nervously to see how the situation unfolds.
U.S. Secretary of State John Kerry, in the most forceful reaction yet to the August 21 gas attack outside Damascus, said President Barack Obama “believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”
Kerry said Obama was consulting with allies before he decides on how to respond. His comments saw U.S. stocks end 0.4 percent lower in light volumes on Monday. The risk of supply disruption lifted Brent crude above $111 a barrel to five-month highs. It last traded up 0.3 percent at $111.06 a barrel. U.S. crude gained 0.3 percent to $106.19
In Asia, the Indian rupee and the Malaysian ringgit were notable movers. The rupee hit a record low at 65.71 per dollar, while the ringgit reached a three-year low around 3.3300 per dollar. “It’s has been a tough time for many emerging market currencies over recent weeks,” said Greg Gibbs, currency strategist at RBS.
And Bloomberg reports Yen rises on haven demand amid emerging market rout. The yen climbed against all of its 16 major counterparts as a selloff in emerging markets boosted demand for haven assets. Asian shares fell amid a freefall in the currencies of India and Indonesia, and as tensions in Syria escalated.
Aggregate Credit, AGG, bounced higher as the Interest Rate on the US Ten Year Note, ^TNX, receded to 2.72%. Gary of Between the Hedges post the Bloomberg report Bond binge expanding leverage toward crisis peak. Debt levels have increase faster than cash flow for six straight quarters, boosting the obligations of investment-grade companies in the second quarter to 2.09 times earnings before interest, taxes, depreciation and amortization, according to JPMorgan Chase. That’s up from 2.07 times in the first three months of 2013 and compares with 2.13 in the third quarter of 2009, when it peaked after the deepest recession since the Great Depression
On Tuesday August 27, 2013, the US planning a war in Syria, terminated Nation Investment, EFA, and Small Cap Nation Investment, IFSM, commenced a global financial system, IXG, meltdown. During the day, Volatility, VXZ, rose strongly as the Yen, FXY, blasted higher, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and Global Banks, IXG, to trade parabolically lower. The Too Big To Fail Banks, RWW, Regional Banks, KRE, Nasdaq Community Banks, QABA, Emerging Market Financials, EMFN, European Financials, EUFN, and Foreign Regional Banks, such as BPOP, a liberalism currency carry trade leader, fell vertically lower.
With the Indian Rupe, ICN, crashing lower, India, INP, and its banks, HDB, and IBN, traded strongly lower, inducing other BRICS, EEB, specifically China, YAO, Russian, RSX, and Brazil, EWZ, lower. Emerging Markets, EEM, trading lower included Chile, ECH, Indonesia, IDX, Philippines, EPHE, Turkey, TUR Thailand, THD. Countries trading lower included Argentina, ARGT, led by its banks, BMA, BBVA, BCA, BFR, GGAL, the Great Britain, EWU, led by its banks LYG, RBS, BCS, Mexico, EWW, led by its bank BSMX, Switzerland, EWL, led by its banks UBS and CS, and Israel, EIS.
Benson writes of debt deflation, that is treasury debt and currency devaluation, causing deleveraging and derisking out of stocks, in article ASEAN Meltdown. Weiyi Lim, Anuchit Nguyen and Ian Sayson of Bloomberg add The MSCI Southeast Asia Index has dropped 11% this month and is down 21% from this year’s peak on May 8 (this was when the Interest Rate on the 10 Year US Government Note, ^TNX, started to rise sharply
Reuters asks The rupee is where? Currency collapse confounds India Inc. Indian companies such as Whirlpool of India Ltd say they can’t plan more than a couple of months out as a fast-falling rupee currency drives up the cost of imports, forcing them to raise prices even as consumer spending crumbles.
Richard Frost and Santanu Chakraborty of Bloomberg report Oil and gold prices have never been so high for Indian buyers as they are now, hampering government efforts to contain inflation and reduce the nation’s record current-account deficit. Oil has jumped 31% this quarter to the highest since at least 1988 in local currency terms, while the precious metal surged 3%. India imports almost 80% of its energy needs and is the world’s biggest buyer of gold. The rupee has tumbled 20% versus the dollar this year, heading for the worst annual loss since a balance of payments crisis in 1991 forced the nation to seek loans from the International Monetary Fund. Consumer prices in Asia’s third- largest economy rose 9.64% in July. ‘The last thing India needs is higher oil prices,’ Kelvin Tay, the chief investment officer for the southern Asia-Pacific region at UBS AG’s wealth management.
The chart of the EUR/JPY showed a strong fall lower to 129.98, with the Eurozone, EZU, and European Financials, EUFN, led by Greece’s NBG, Ireland’s IRE, Spain’s SAN, Germany’s DB, trading strongly lower, as Greece, GREK, Ireland, EIRL, Spain, EWP, Italy, EWI, Netherlands, EWN, France, EWQ, and Germany, EWG, EWGS, traded lower, inducing Norway, NORW, Sweden, EWD, and Switzerland, EWL, lower. Eurozone stocks, EZU, trading lower included, Ireland’s STX, IR, WCRX, ICLR, COV, CRH, JHX, Netherland’s, ING, PHG, ASML, LYB, ST, CNH, YNDX, AER, QGEN, NXPI, TRNX, and France’s, ALU, VE. Eurozone Debt, EU, manifested bearish engulfing, portending a fall lower.
Republic Airways, RJET, led Regional Airlines, seen in this Finviz Screener, lower. And United Airlines, UAL, led Major Airlines, seen in this Finviz Screener lower. And Genworth, GNW, led life insurance companies, seen in this Finviz Screener, lower.
Sectors trading strongly, lower included 200% Inverse Volatility, XIV, Solar Energy, TAN, Small Cap Industrials, PSCI, Transportation, XTN, Automobiles, CARZ, Biotechnology, IBB, and Small Cap Pure Value, RZV. Yield bearing sectors trading lower included Water Utilities, PHO, Global Utilities, DBU, Leveraged Buyouts, PSP, and Shipping, SEA.
The National Bank of Greece, NBG, fell 9.5% lower, leading Global Financials, IXG, lower. Regional Banks, KRE, Nasdaq Community Banks, QABA, the Too Big To Fail Banks, RWW, Investment Bankers, KCE, Stockbrokers, IAI, European Financials, EUFN, Chinese Financials, CHIX, and Emerging Market Financials, EMFN, all traded lower. Bloomberg reports US Bank legal bills and penalities exceed $100 Billion. Silver Miners, SIL, and Gold Miners, GDX, led Metal Manufacturing, XME, Uranium Miners, URA, Industrial Metal Miners, PICK, Coal Miners, KOL, Copper Miners, COPX, and Rare Earth Miners, REMX, lower.
The WSJ reports Debt Drags on China’s Growth. Interest costs leave companies with less cash to invest; the Case of Shougang Group. As worries over China’s debt problem mount, the burden of paying off those loans could be the trigger that tips runaway credit into slower economic growth and financial stress. Few areas illustrate the problems better than the old industrial sector, where state-owned steel plants and cement kilns continue to borrow and expand even as overcapacity grows. With debts high and profits low, some companies, such as state-owned steel giant Shougang Group, are using new loans to repay old ones, according to Dagong Global Credit Rating Co.
Ambrose Evans Pritchard reports Saudis offer Russia secret oil deal if it drops Syria. Saudi Arabia has secretly offered Russia a sweeping deal to control the global oil market and safeguard Russia’s gas contracts, if the Kremlin backs away from the Assad regime in Syria.
Jim Lobe writes in Antiwar of today’s false flag. Neocon hawks take flight over Syria. It is expected that Britain and France and possibly Turkey will also take part in operations under a NATO mandate and with the support of the Arab League which, meeting in Cairo Tuesday, blamed Syria for the attack and called for its perpetrators to be brought to justice.
Despite the fact that U.N. inspectors, who on Monday visited the site of the alleged attack outside Damascus and took blood and tissue samples from some victims, have not yet submitted their findings, administration officials said they had concluded that the attack did take place and that government forces were responsible. At the White House Tuesday, spokesman Jay Carney said the administration will release a report detailing the basis for its conclusions later this week and that Obama was currently considering various options prepared by the Pentagon, although he also insisted that any action taken by the United States will not be intended to achieve “regime change” in Damascus.
That assurance will no doubt frustrate neo-conservatives, many of whom have long held the Assad dynasty in their sights and who had hoped that the 2003 invasion of Iraq – which they promoted through organizations like PNAC, the American Enterprise Institute (AEI), and the Foundation for Defense of Democracy (FDD) – would lay the foundations for Assad’s ouster, too. Indeed, a number of neo-conservatives, including signatories of the FPI letter, are insisting that US action aim to end Assad’s regime. One, Eliot Cohen, argued in a Washington Post op-ed Monday that “a bout of therapeutic bombing is an even more feckless course of action than a principled refusal to act altogether,” a point echoed on the Wall Street Journal‘s editorial page – a favorite neo-conservative forum – Tuesday. Another signatory, Reuel Marc Gerecht, who promoted the Iraq war at AEI and is now based at FDD, called for a “devastating” attack targeting “elite military units, aircraft, armor and artillery; all weapons-depots; the myriad organizations of the secret police; the ruling elite’s residences; and other critical Alawite infrastructure” in a New York Times op-ed Tuesday.
Founded by two prominent neo-conservatives in 1997, Bill Kristol and Robert Kagan, PNAC published a series of letters and manifestos that helped shape the foreign policy trajectory, especially regarding the Middle East, of Bush’s first term. Among its charter members are eight men who held key posts under Bush, including Cheney; his chief of staff, I. Lewis “Scooter” Libby; Defense Secretary Donald Rumsfeld; his deputy, Paul Wolfowitz; Abrams and the Pentagon’s foreign policy chief, Peter Rodman.
In 1998, PNAC published letters favoring legislation adopting “regime change” as official US policy toward Iraq that was eventually signed into law by then-President Bill Clinton. Nine days after 9/11, it published another letter to Bush signed by 41 policy analysts – virtually all neo-conservatives – that laid out an ambitious agenda for his “global war on terror”. It insisted that failure to remove Iraq’s Saddam Hussein from power “will constitute an early and perhaps decisive surrender in the war on international terrorism.” It also urged that Bush “should consider appropriate measures of retaliation” against Iran and Syria if they refused to comply with demands that they cease support for Lebanon’s Hezbollah.
PNAC faded into oblivion by the beginning of Bush’s second term as the situation in Iraq deteriorated and neo-conservatives lost influence. In early 2009, however, Kagan and Kristol founded FPI and were joined as directors there by Edelman and Dan Senor, a former spokesman for the Coalition Provisional Authority (CPA) in Iraq. In January 2011, FPI published a letter signed by 40 policy analysts, including more than a dozen former Bush administration officials, calling on Obama to press NATO to establish a no-fly zone over Libya and the country’s naval vessels. By the following summer, it joined with FDD in calling for tough economic sanctions against Syria and the creation of no-fly or no-go zones in Syrian territory to protect civilians, and in December 2011, it released a letter signed by 58 individuals – most of whom also signed Tuesday’s letter – calling for military aid to opposition forces “whose political goals accord with US national security interests”.
Elain Meinel Supkis comments on The Guardian article White House: Syria action ‘not about regime change’. Sheesh. ALL our wars are about ‘regime change’ and the brutal suppression of a feeble attempt at self government in Egypt was a coup and regime change sponsored by the Saudi Royals who hate democracy with a passion and are extremely brutal rulers.
Meanwhile, the Arab League Rejects Attack Against Syria and we have this warning: Strike on Syria Would Cause One on Israel, Iran Declares. All are allegations and are remarkably similar to the allegations of the Bush regime. And this is due to the same cast of criminal characters in the State Department and Pentagon writing this junk, the ‘neocons’. They are Zionists who also work with the Saudis. After 9/11, all jets were grounded in the US except…for a fleet of jets that picked up Saudis and flew them all out so they couldn’t be questioned by the FBI!
9/11 was a staged event to drive us into wars with Muslims. The Saudis were very thick in this matter as was Mossad and the CIA, DARPA and others. The Saudis were the only ones allowed to travel on 9/12. They were SECRETLY flown out while citizens were basically locked out of transportation because exactly zero citizens were terrorists or working with terrorists whereas a huge number of Saudis were exactly that. And they got to flee with State Department assistance and our media giants barely made a murmur and didn’t investigate this.
Zero Hedge reports What a US strike on Syria would look like Via Stratfor, In the event of a punitive strike or a limited operation to reduce Syrian President Bashar al Assad’s chemical weapons delivery capability – for instance, by targeting key command and control facilities, main air bases and known artillery sites – the United States already has enough forces positioned to commence operations.
Considering that al Assad’s forces have a number of ways to deliver chemical weapons, ranging from air power to basic tube and rocket artillery, an operation that seeks to degrade the regime’s ability to launch chemical weapons would necessarily be far wider in scope and scale. This means tactical aviation would have to play a key role in such a campaign, which in turn would entail the deployment of significant enabler aircraft such as aerial refueling tankers and intelligence, surveillance and reconnaissance assets.
Given the threat from Syrian air defenses to manned tactical aircraft flying over Syria, considerably more ships equipped with cruise missiles would be needed for the inevitable suppression of an enemy air defense campaign, and aircraft carriers would be needed to bolster the tactical aviation assets available for the operation.
The United States has not yet begun to deploy the forces needed for this level of intervention, but significant combat power is not far off. Two U.S. supercarriers and their escorts in the U.S. 5th Fleet area of operations are only a few days away, and the U.S. Air Force can rapidly surge squadrons into the theater if necessary, especially if air bases in Turkey, Greece, Jordan and Cyprus are available.
Dr. Jeremiah writes, Only those who know the future and what it holds can live at peace in the midst of a world going mad. And the only way to know the future is to know God and His Word. Simply fill out the information on this link and immediately download Dr. Jeremiah’s 43-page, digital guidebook, The Future of the World is in Your Hands, for peace of mind.
Zero Hedge reports Despite austerity Greek debt is rising at its fastest rate since March 2010.
Bloomberg reports Fiat said to extend layoffs for 5,300 Turin factory workers.
The WSJ reports Zero Worship: Credit card firms compete with no-interest transfers. Hunt for Customers Pushes Banks to Revive Terms That Were the Rage in the 1990s. U.S. credit-card companies, hungry for new customers as many Americans continue to shun debt, are pumping up a popular promotion that can be risky for both lenders and consumers. Financial companies that issue plastic are flooding mailboxes and email accounts with offers that allow new customers to transfer their existing credit-card balances from other institutions without paying interest for as long as two years.
On Wednesday August 28, 2013, Volatility, VXZ, subsided. Global Design Build, FLM, traded lower. Energy sectors, OIH, IEZ, PSCE, XOP traded higher on a higher price of Oil, USO.
I have no financial wealth, and am barely able to afford to rent a SRO in the downtown area of Bellingham, WA; but perhaps you looking for a home in Irvine; well then, the 3 bedroom and 3 bath home at 41 Tall Oak, Irvine, CA, 92603, listed at $728,000, may be for you.
The Denver Post reports Level 3 cuts 700 jobs worldwide, including 150 in Broomfield, Jefferson County, Colorado. Perhaps you are looking for a home in Broomfield; well then, the 3 bedroom and 3 bath home at 3723 Jenny Ln, Broomfield, CO 80023, listed at $624,000 may be for you.
On Thursday August 29, 2013 Volatility VXZ, rose, as Reters reports Dollar rallies broadly as Syria fears spur bid for safety. The Swiss Franc, FXF, and the Swedish Krona, FXS, traded strongly lower, inducing Switzeland, EWL, strongly lower. Sectors trading lower included, Energy Services, IEZ, OIH, and Steel, SLX.
Sectors rising in short sell covering included TAN, RZV, IBB, PKB, PSP, FDN, PJP, and KCE. Yield bearing sectors rising in short sell covering included IST. Ultra Junk Bonds, UJB, and Junk Bonds, JNK, rose in short selling covering as well. South Korea, EWY, with its banks, WF, SHG, KB, Semiconductor Manufacturer, MX, Wireless Telecom, SKM, and Electornics Manuacturer, LPL, rose in short sell covering. Gary of Between the Hedges relates Bloomberg reports Record $100 billion debt due as sales plunge 44%. Corporate bond sales in South Korea are falling to a six-year low just as companies face a record debt bill and credit-rating downgrades raise borrowing costs. Companies from SK Telecom, the country’s largest mobile phone operator, to POSCO, Asia’s fourth-biggest steelmaker, have almost $100 billion of won-denominated bonds and loans due before March 31, data compiled by Bloomberg show. Hanwha Investment Securities Co. says the “maturity wall” is hitting records in both 2013 and 2014. Local-currency note sales plunged 44% this year to $18.6 billion. South Korea industries are paying for a 57% jump in borrowing after the 2008 financial crisis when the government ensured easy credit to help create jobs. Robert Fisk writes in Common Dreams Obama set to aid al-Qaeda in Syria. And Jason Ditz writes US ready to go it alone against Syria; the coalition of the Willing may just mean France. The Cable reports US Doesn’t Know Who Ordered Chemical Strike Jason Ditz of reports Assad to blame for chemic attack even if he did’t do it, US says; and reports Three other chemical attacks by rebels in same area.
On Friday August 30, 2013, On Friday August 30, 2013, Volatility, XVZ, entered an Elliott Wave 3 Up, as Eurozone Financials, EUFN, such as NBG, SAN, led Eurozone Stocks, EZU, such as ENL, ALU, SI, CNH, NOK, SNY, NVO, QGEN, MT, TS, LUX, BUD, CGG, DEG, AEG, ING, and Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such as Spain, EWP, Germany, EWG, Italy, EWI, Ireland, EIRL, Greece, GREK, Netherlands, EWN, Norway, NORW, Sweden, EWD, and Switzerland, EWL, lower, inducing the currency carry trade, EURJPY, to close the week 2% lower at 129.75. The Nikkei, NKY, traded lower, as its banks, SMFG, MFG, and MTU, traded lower. Amongst sectors, Inverse Volatility, XIV, Homebuilding, ITB, Design Build, FLM, Industrial Miners, PICK, Uranium Miners, URA, Automobiles, CARZ, Retail, XRT, Biotechnology, IBB, Pharmaceuticals, PJP, Steel, SLX, Networking, IGN, and also Investment Bankers, KCE, Stockbrokers, IAI, Regional Banks, IRE, and Asset Managers, such as Blackrock, BLK, traded lower.
Financial market trading summary for the week ending August 30, 2013. This week the chart of the S&P 500, $SPX, shows a 1.8% decline. The Eurozone, EZU, -5.2, Nikkei, NKY,2.7, Russell 2000, IWM, 2.7, and Asia Excluding Japan, EPP, 1.5.
The $US Dollar, $USD, rose 0.9% to close at 82.10, at the edge of a massive head and shoulders pattern going back to March 2013. The Yen, FXY, traded +0.5% higher; but the Swedish Krona, FXS, -2.0, the Brazilian Real, BZF, -1.9, the Australian Dollar, -FXA 1.4, the Euro, FXE -1.2, the Swiss Franc, FXF, -1.0, and the British Pound Sterling, FXB, -0.5.
Sectors and countries traded lower this week reflect the failure of banking and nation investment.
Mining and Metal Manufacturing, PICK -5.3, XME 4.5, SLX 4.4, URA 3.4, KOL, 3.3
Gold and Silver Mining, SSRI, -11.6, SIL 5.3, SILJ, 3.2, EGO, 7.7, GDX 6.6, GDXJ, 6.1
Sectors from 30 credit and currency trade leveraged sectors seen in this Finviz Screener trading lower included XIV -13.9, EUFN 5.9, FLM 4.4, TAN 4.3, GNW 3.9, RZV 3.8, CARZ 3.7, XTN 3.5, PSCI 3.5, IGN 3.3, FXR 3.2, RWW 3.1, SPHB 3.0, PBJ 2.9, IAI 2.8, PPA 2.7, PSP 2.4, XRT 1.3, and SMH 1.2.
Of note, the strong sell of the Eurozone Financials, EUFN, drove, European Nations, Germany, EWG, Spain, EWP, Netherlands, EWN, Italy, EWI, Greece, GREK, and Ireland, EIRL, lower, driving down the value of Eurozone Treasury Debt, EU, as is seen their combined ongoing Yahoo Finance Chart.
Doug Noland reports The vice grip the failure of credit and money on the rise of the Interest Rate on the Ten Year US Government Note beginning in May 2013. India’s central bank implemented a currency swap arrangement with the country’s major energy companies, in a plan that would provide dollar liquidity to finance the rapidly escalating cost of energy imports. Sinking currencies coupled with surging crude prices ensures that already rising inflationary pressures will intensify. This is especially an issue for India, Indonesia, Brazil, Turkey and Russia. And rising inflation and resulting bond market losses will only work to exacerbate “hot money” and investment outflows. Weak markets, robust “hot money” outflows, rising inflation and higher policy rates all point to a consequential tightening of EM financial conditions.
Onur Ant of Bloomberg reports Turkey’s trade deficit grew more than expected in July as exports to the Middle East sank and imports of consumer goods surged. The $9.81 billion trade deficit exceeded the average estimate of $8.77 billion. Imports grew 10% from a year earlier to $22.9 billion, compared with a 2% increase in exports. Exports to the Middle East dropped 30% to $3.1 billion from a year ago.
Doug Noland continues on relating The transition from inflationism to destructionism. When risk is being embraced and leveraged positions are being expanded, this is constructive for marketplace liquidity and a loosening of financial conditions more broadly. When, instead, risk aversion and de-leveraging are in play, market liquidity suffers and financial conditions tighten. The markets’ fixation with tapering has distracted attention away from potentially far-reaching market developments. Has a multi-decade bond Bubble about run its course? Are global central banks finally losing control of market yields? After unprecedented inflows, does the abrupt reversal of flows away from EM (and resulting selling of international reserves by EM central banks) mark a major inflection point for Treasuries and global bonds more generally?
I think I can make a decent case that over recent years the U.S. (and global) bond market succumbed to “terminal phase” excess. Fed policies ensure Trillions of Treasury, municipals, MBS and corporate debt were issued at artificially low yields (inflated prices). This great mispricing is now coming back to trouble the system. Investors are being hit with losses and a self-reinforcing re-pricing dynamic is seeing flows begin to exit the sector. This reversal of flows coupled with EM central bank selling has significantly altered the risk profile of maintaining leveraged speculative positions in long-term fixed income instruments.
Fed QE notwithstanding, I believe the market backdrop today implies an important tightening of financial conditions going forward.
If financial conditions are indeed tightening globally, I would expect the typical “periphery to core” dynamic to begin to jump from EM to the more fragile peripheral developed markets. Europe and the euro initially benefited from the flight out of EM, although this week’s market performance was noteworthy. The euro dropped 1.2% (1.75% vs. the yen), its worst performance in weeks. Germany’s DAX index was hit for 3.7%, France fell 3.3%, Spain sank 4.6% and Italian stocks dropped 3.8%. Perhaps indicating hedge fund de-risking/de-leveraging, European sovereign bond yield spreads (to bunds) widened this week. German bunds widened 8 bps verses French yields to a one-month high 61 bps. Bund to Italian and Spanish bond spreads widened a notable 15 and 16 bps. And at the troubled Eurozone periphery, Portugal saw its 10-yr yields jump 16 bps to 6.59% and Greece yields rose 24 bps to 10.02%
3) … The World has passed from liberalism to authoritarianism on the fast rise in the Interest Rate On The US Ten Year Note, ^TNX, to 2.78%, as the US announced plans for a war in Syria. Liberalism was fathered by Milton Friedman, who laid the bedrock of Free To Choose economy, with proposing floating currencies, and an abandonment of the gold standard, which featured the development of a Leveraged Speculative Investment Community, where The Too Big To Fail Banks, RWW, Investment Bankers, KCE, and the Asset Managers, such as Blackrock, BLK, seen in this Finviz Screener, coined Liberalism Stock Wealth, VT, with stocks of all kinds such as Life Insurance Company, GNW, Retailer, PSUN, ETFs of all kinds such Small Cap Pure Value Stocks, RZV, and Mutual Funds, such as VICEX.
My Budget 360 writes An increasingly large part of our economic growth is coming from massive leverage. In the last 10 years, GDP has gone up $5.2 trillion however, the total credit market has gone up by $24.5 trillion. This is why the market sits fixated on the Fed’s next move regarding interest rates even though in context, rates are already tantalizingly low. The FIRE economy is driving a large portion of corporate profits yet most Americans are left in the cold winds of austerity.
Under the sovereignty of democracy, Crony Capitalism Militarism, European Socialism, and Greek Socialism Clientelism, flourished as the Speculative Leverage Investment Community, IXG, helped give seigniorage, that is moneyness, to Nation Investment, EFA, and Small Cap Nation Investment, IFSM, Global Industrial Production, FXR, all of which soared in value based schemes of credit and carry trade investing, such as Dollarization, POMO, and the EURJPY.
Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which terminated Emerging Market Investment, EEM, Utility Stock Investment, XLU, and Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO. And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies. And then the announcement of war in Syria, on Saturday, August 24, 2013, quickly drove the Interest Rate even higher to 2.78%, terminating Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Industrial Production, FXR, as well as stimulating a Global Financial System, IXG, with The Too Big To Fail Banks, RWW, Regional Banks, KRE, Nasdaq Community Banks, QABA, Emerging Market Financials, EMFN, European Financials, EUFN, and Foreign Regional Banks, such as BPOP, a liberalism currency carry trade leader, all falling parabolically lower.
The monetary policies of the world central banks has exhausted, and have finally crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad. The Global Government Bond Bubble burst in May 2013 through August 2013, as is seen in the YTD Google Finance Chart of World Treasury Bonds, BWX, together with Ten Year US Treasury Notes, TLT, Emerging Market Bonds, EMB, Nation Investment, EFA, and Emerging Market Investment, EEM.
Global Money Trends reports Bond vigilantes hold upper hand over central bankers. I comment that with higher interest rates, the sovereignty of nation states is collapsing, and the sovereignty of regional governance is rising, as foretold in bible prophecy of Revelation 13:1-4, and Daniel 2:25-45. This will eventually come to a head, as the Southern European countries, that is the PIGS, are the most debt ridden, competitiveness challenged, and democratically bankrupt nations in the world.
God’s word specifically reveals that the Beast Regime will rise to replace the Banker Regime, out of waves of Mediterranean Sea country economic and political disturbance, to occupy in all of mankind’s seven heads, that is in each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones. The seven institutions being 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology; each of these seven institutions will increasingly be integrated with each other, in statist collectivist regional governance, in each of the world’s ten regions.
Authoritarianism is the new global economic and political paradigm, and it is fathered by Angela Merkel, who is engineering the debt servitude economy, under the sovereignty of regional governance and totalitarian collectivism. She is quoted by the Telegraph saying in the Telegraph, Greece should never have been allowed in the euro, and puts the blame on former chancellor Gerhard Schroeder. The debt servitude economy, is seen in the Daily Europe report that references a Tagesspiegel article which argues that Greece must be given more help, either by writing off some of its debts or with a fresh bailout, Commentator Harald Schumman argues.
With the failure of Credit, AGG, Money, DBV, CEW, and Wealth, VT, Jesus Christ, acting in dispensation, that is the oversight of all things economic and political, Ephesians 1:10, has completed the old things of liberalism and is bringing forth the new things of authoritarianism.
New dynamos are in operation. The dynamos of corporate profit and global growth were based upon investment opportunities in sovereign nation states, are powering down; now the dynamos of regional security, stability and sustainability, are powering up, reflecting responsibilities to regional authority.
A new seigniorage, that is a new moneyness, is developing. The seigniorage of investment choice is waning; and the seigniorage of diktat is gaining strength.
A new trust is emerging. Gone is trust in bankers, carry trade investing and credit, in particular Treasury debt, to increasing trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude, growing to the point of deification of regional governance, as is presented in Revelation 13:3-4, where the people’s trust comes to constitute worship. There be no more citizens or patriots of countries, there be only residents of a regional state, that is one of ten regional zones.
A new religion will emerge. Liberalism featured religions and philosophies based upon the worship of one’s own will, eventually a mandatory one world religion consisting of emperor worship will emerge; yet for the elect, that is God’s chosen ones, a persecuted faith in Christ
Libertarian Robert Wenzel posts on democracy’s Clientelism. De Blasio close to 40% in New York City mayoral race. With 13 days until the primary election, Public Advocate Bill de Blasio has surged ahead of the Democratic pack in the New York City mayoral race with 36 percent of likely voters, close to the 40 percent threshold needed to avoid a runoff, according to a Quinnipiac University poll released today. As mayor, I will spend every waking moment fighting to bring opportunity to every New Yorker, with a plan to create jobs in all five boroughs; a dramatic expansion of affordable housing and accessible health care; increas-ing taxes on the wealthy to fund early childhood and after school programs; and building police community relations that keep everyone safer. I comment that such Bill de Blasion agenda is a rear view mirror vision back into the age of liberalism, and an anachronism in the age of authoritarianism.
Ron Paul writes in Ludwig von Mises Institute Private property is the essence of liberty. I comment that the desire to develop and use private property is simply a mirage on the Authoritarian desert of the Real. Genuine freedom comes from possessing the life of Christ, Colossians 3:3-4, and experiencing Christ as the all-inclusive life experience, Colossians 3:11.
Ellen Brown writes The leveraged buyout of America and Cliff Kule blogs America is headed toward a feudalistic economy. I add that soon the banks, every one of America’s banks, the Nasdaq Community Banks, QABA, the Regional Banks, KRE, the Too Big To Fail Banks, RWW, and the US Regional Banks, such as PNC, HOMB, STI, which were largely recapitalized by QE I’s TARP in 2009, where Distressed Investments, such as those traded in Fidelity’s Mutual Fund FAGIX, were traded out for money good US Treasuries, which were placed in Excess Reserves, will effectively be nationalized and integrated into the US Federal Reserve, and be known as Government Banks, or Gov Banks, for short.
EUObserver.com reports The erosion of southern Europe. The article points out that Southern Europe, that is Latin Europe, is characterized by a lack of economic competitiveness. Italy has been ridden by contraction for nine consecutive quarters. Enrico Letta’s government has been strong enough to stay in power, but too weak to achieve major changes. The more flexible approach to austerity across the Eurozone has benefited Italy and may allow Rome’s exit from the excessive deficit procedure (EDP) in 2014. But Italy suffers from structural challenges, which translate to continued decline of industrial production and the end of the Letta government by 2014”.
The article is highly critical of austerity measures. In Portugal, the recession will continue until 2014, which means that unemployment will remain close to 20 percent. In July, the resignation of two ministers led to a new cabinet. Greater flexibility in austerity measures and rising sentiment are softening the contraction impact.
Despite the impending German elections and expected political turmoil across the southern periphery of Europe, the Eurozone is suffering a lost decade, which could have been avoided with more sensible policies.
During the past half a decade, prosperity levels, as measured by per capita incomes, have stagnated or fallen across Southern Europe. In this way, they have amplified the historical trend line.
In 1980, the prosperity levels were not that different in France, Germany, and Italy. In contrast, per capita incomes in Spain and Greece were barely half of that in France. In turn, the Portuguese were far behind most of Southern Europe – barely a fourth of French per capita income.
At the turn of the 1990s, French prosperity surpassed that of Germany, which was coping with the costs of re-unification. While the two had almost identical prosperity levels until the global recession in 2008-2009, France has trailed behind Germany thereafter. By 2018, average GDP per capita will be almost $49,000 in Germany but less than $48,000 in France”.
In the global economy, the relative share of Southern Europe is likely to halve to about 6 percent between 1980 and 2018, as measured by GDP based on purchasing-power-parity share of world. In France, it means a decline from less than 5 percent to less than 2.5 percent of the world total. In Italy, the decline has accelerated ever since the mid-1990s and is steeper. The same goes for the tiny economies of Greece and Portugal, respectively. Only in Spain, the relative decline has been somewhat slower.
The article banters against austerity, and calls for more ECB fiscal support despite it running full on. In these countries, harsh austerity regimes, coupled with inadequate short-term fiscal support and insufficient pro-growth policies, have contributed to the challenges, as evidenced by excessive debt. In 2013, it is likely to soar to 180 percent of the GDP in Greece, while hovering over 120 percent in Italy and Portugal. In Spain, it is currently 85 percent but will soar to more than 110 percent by 2018 – thanks to strict austerity and weak growth.
At Brussels, the current forecasts, including projections of per capita income, debt, unemployment, are predicated on the idea that 2013 is the year of the great turnaround, when debt will start to decline, recovery will broaden, per capita incomes will climb and high unemployment rates are expected to decrease by some 20 percent by 2018. These gains are anticipated, even despite the impact of aging populations on productivity and growth, and thus on prosperity.
The article concludes putting the onus of decay on austerity and the inadequacy of ECB fiscal support at a time when such support through LTRO1, 2, and OMT has been overwhelming. In reality, Southern Europe is coping with long-term erosion, which has been compounded by excessive reliance on austerity, at the expense of fiscal support, pro-growth policies and structural reforms. There is no easy way out anymore.
I comment that the article fails to present the concepts 1) that European Socialism and Greek Socialism have been Liberalism’s crowing achievements in Clientelism, that is, no where on planet earth has pork and patronage been so well manipulated as in the PIGS, 2) that the wine and agricultural production of France has boomed and provided great prosperity under common EU laws, 3) that credit schemes of funding municipal debt by Franco-Belgian financial institution Dexia supported money market fund development in the US for many years, 4) and that financialization of ADRs of Eurozone companies, especially those in Ireland, EIRL, specifically ICLR, RYAAY, CRH, STX, COV, IR, WCRX, FLTX, as well as in European Financials, EUFN, such as IRE, SAN, DB, provided great reward for leveraged speculative investing through the EUR/JPY carry trade scheme.
Doug Noland writes of Periphery to core transmission of the destruction of credit and money. Over liquefied and complacent markets were content to continue lending to Greece, despite increasingly obvious issues. In November 2009, Greece could tap the markets for two-year paper at just over 2%. and the marketplace could presume a Eurozone backstop and ignore fundamentals. Six months later, with market yields at 16%, Greece was hopelessly insolvent.
If financial conditions are indeed tightening globally, I would expect the typical “periphery to core” dynamic to begin to jump from EM to the more fragile peripheral developed markets. Europe and the euro initially benefited from the flight out of EM, although this week’s market performance was noteworthy. The euro dropped 1.2% (1.75% vs. the yen), its worst performance in weeks. Germany’s DAX index was hit for 3.7%, France fell 3.3%, Spain sank 4.6% and Italian stocks dropped 3.8%. Perhaps indicating hedge fund de-risking/de-leveraging, European sovereign bond yield spreads (to bunds) widened this week. German bunds widened 8 bps verses French yields to a one-month high 61 bps. Bund to Italian and Spanish bond spreads widened a notable 15 and 16 bps. And at the troubled Eurozone periphery, Portugal saw its 10-yr yields jump 16 bps to 6.59% and Greece yields rose 24 bps to 10.02%.
The article is correct, there is no easy way out, as Jesus Christ is operating in dispensation, that is in the political and economic plan of God, Ephesians, 1:10, and has produced a moral hazard based peak prosperity, as is seen in the ratio of Eurozone Stocks, EZU, relative to Eurozone Debt, EZU:EU, topping out. He is terminating the sovereignty of democratic nation states, by releasing the First Horseman of the Apocalypse, the rider on the white horse who has a bow, yet no arrows, Revelation, 6:1-2, to pass the baton of sovereignty to regional nannycrats who will rule in statist public partnerships, in a EU One Euro Government, featuring a fiscal, banking, and debt union, as these are the most vulnerable of all of Liberalism’s democracies, as they are insolvent sovereign, having insolvent financial institutions, whose seigniorage has come only through the ECB’s Mario Draghi and his monetary policies of LTRO 1, 2, and OMT.
Now with all of the world central banks’ monetary policies, in particular global ZIRP, having exhusated, and in fact having turned “money good” investments bad on the fear that Treasury Debt cannot be paid, the bond vigilantes are calling interest rates higher on Sovereign Debt, BWX, destroying the sovereign authority of all nations as well as destroying their fiscal spending capability, and thus entire economies.
Although Greeks cannot be Germans, through God’s hand of destiny, they will soon be one, living in a region of economic and political governance, where the Southern EU Nations, will be hollow moons revolving about planet Germany, as nannycrats meet in summits to waive national sovereignty and announce pooled EU sovereignty, for regional security, stability, and sustainability. As seen in the Statue of Empires in Daniel 2:25-45, God’s idea of economy is and always has been empire; the two global kick as empires that have existed since the late 1700s, first the British Empire, and second America, are at peak sovereignty, and peak seigniorage. Soon, out of a global credit bust and financial system breakdown, presented in Revelation 13:3-4, the ten toed kingdom of regional governance, also known as the Beast Regime of Revelation 13:1-4, will rule the world.
The fiat money system be no more; the diktat money system is emerging in its place.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. And diktat money is seen in countries with high current account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.
Financial market report for the week ending August 23, 2013
On Monday, August 19, 2013, Indonesia Banks, BBRI, BBCA, BMRI, BBNI, India Banks, IBN, HBN, and The National Bank of Greece, NBG, led all forms of fiat money lower.
World Stocks, VT, Nation Investment, EFA, such as Indonesia, EIDO, India, INP, SCIN, Thailand, THD, and Greece, GREK, as well as Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, all traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.88%.
The eight week long rally in the Eurozone Stocks, EZU, (up 32%) and the European Financials, EUFN, (up 44%), that was sustained with a Euro Yen currency carry trade, that is supported by a EUR/JPY above 130, ended, as the Eurozone ADRs, seen in this Finviz Screener, traded lower; loss leaders included Ireland’s, IR, Greece’s CCH, PRGN, NM, France’s DEG, ALU, TOT, Belgium’s BUD, Netherland’s VPRT, ING, Luxemburg’s TS, MT, Italy’s E, Spain’s TEF, and Germany’s SI, And losses carried through to Argentina’s Bank BBVA.
Gary of Between the Hedges relates LiveMint.com reports Indonesia rupiah, stocks plunge on record current-account deficit. The current account remains in deficit for seven quarters and overseas sales decreased for a 15th month in June.
MarketWatch reports More asset purchases just won’t help economy, Fed’s Lacker says. Richmond Federal Reserve Bank President Jeffrey Lacker made a case Sunday for ending QE3: the costs of asset purchases are rising and any future benefits are likely to be small.
Sectors trading lower included
Home Building, ITB, -3.1
200% Inverse Volatility, XIV, -2.7
Energy Production, XOP -2.0, led lower by PXD, PDCE, APC, EOG, NBL, COG, FANG, GDP, ERF, RRC, BCEI, CRZO,
Energy, XLE -1.7, led lower by E, TOT, XOM, CVX, PTR, EC, IMO, STO, SNP, COP,
US Infrastructure, PKB, -1.6, led lower by PGTI, TREX, MAS, USG, AMWD, BECN, IP, LPX, JEC,
Clean Energy, PBD, -1.5, led lower by GPRE, PSTX, CECE
Yield bearing sectors trading lower included
Mortgage REITS, REM -4.3
Industrial Office REITS, FNIO -3.7
Small Cap Real Estate, ROOF -2.5
Premium REITS, KBWY -1.7
Ultra Junk Bonds, UJB -1.7
Global Utilities, DBU -1.6
Mining sectors trading lower included
Global Miners, PICK -3.6
Silver Miners, -2.8
Coal Miners, KOL -2.6
Metal Mining, XME -2.5
Gold Miners, GDX -1.7
Copper Miners, COPX -1.6
Financial sectors trading lower included
Emerging Market Financials, EMFN -2.1
European Financials, EUFN -1.5
Investment Bankers, KCE -1.5
Too Big To Fail Bankers, RWW -1.1
Global Financials, IXG -1.0
Countries trading lower included
Indonisia, EIDO -7.4
Greece, GREK -5.3
India Small Caps, SCIN -5.2
Thailand, THD -5.1
India, INP -4.5
Turkey, TUR -3.6
Philippines, EPHE -3.1
Italy, EWI -3.0
Spain, EWP -2.8
Reuters reports Amplats to cut 7,000 South African jobs. Anglo American Platinum, Amplats, said it planned almost 7,000 job cuts at its South African operations including thousands of compulsory lay-offs, drawing an angry response from a labor union and raising the risk of renewed unrest at its mines. Amplats (AMSJ.J), the world’s top platinum producer and a unit of Anglo American (AAL.L), had aimed for 14,000 job cuts after posting its first loss last year, but lowered the target after a backlash from the government and the unions, which organized a series of strikes.
Top Performing Stocks, such as POWR, and RAD, traded lower,
Ben Eisen of Market Watch reports Treasury yields jump to fresh two-year highs. Yes, the story of the day is that the Interest rate on the US Ten Year Note, ^TNX, rose to 2.88%.
Three cheers for higher interest rates, this is very good news for all Christians, as the world has passed decisively from Liberalism into Authoritarianism, and this means that Christ’s Kingdom of Heaven on Earth, after the Tribulation and Great Tribulation, is now one day more significantly closer.
Yet, three more tears for those invested in US 30 Year Bonds, EDV, and 10 Year US Government Notes, TLT.
Yields are up because investors are aware that the world central banks’ monetary policies have crossed the Rubicon of sound monetary policy and have turned “money good investments” bad, and are no longer able to stimulate credit global growth and trade, nor corporate profitability. The age of credit schemes such as Dollarization, and Currency Carry Trade Investing, is over, through, finished and done.
It was on May 24, 2013, that Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that has terminated fiat money.
Today’s trade lower in all forms of fiat wealth, puts the nails in the coffin for the death and burial of Liberalism.
With the failure of Credit, AGG, on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism.
From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.
The Financial Physician writes A loss of confidence in the bond market will send stocks and the dollar crashing while gold and silver soar.
In news of a US China trade war on solar panels, Amy Martinez of The Seattle Times report reported on August 18, 2013, China trade tiff threatens Moses Lake REC Silicon plant. A large manufacturer of solar-grade polysilicon in Central Washington, warns of a “massive blow” to its business if China and the United States don’t resolve a trade dispute.
PV Magazine reported July 18, 2013, Norway’s Renewable Energy Corporation announced a plan to separate its REC Silicon and REC Solar businesses. While the group’s current headquarters are located in Sandvika, Norway, corporate operations for the two newly independent companies will be transferred to new head offices in Singapore for the solar business and the U.S. for the silicon division.
The group has been consistently decreasing its presence in Norway since last year while re-focusing its operations overseas.
REC will establish REC Solar and REC Silicon as independent listed companies. The group said the move would improve the financing of both companies, with REC Solar established as a debt-free leading provider of solar panels and solutions. The REC parent said it would ensure the companies would have a strong financial base that would provide “a competitive advantage and a solid fundament for both companies going forward.”
Ole Enger, REC president and CEO, said: “With these new entities, we are able to launch two independent and strong companies in an industry which is rapidly maturing.”
Enger said the current senior management of the solar and silicon segments would head up the new companies after a transitional period.
Dividing the company along the segment lines will place the two new entities in favorable positions for future growth, according to Enger.
“Solar has become a highly competitive source of energy and we strongly believe the solar industry will experience significant growth over the coming years,” Enger said.
“We recognize that it will be increasingly demanding to grow and maintain a leading position with a vertically integrated business model. By launching a pure play solar company and a pure play silicon company, both companies will be in a favorable position for attracting capital, and well equipped to streamline the market approach and stay in the forefront in terms of technology development,” he added.
The group will launch the separate entities through a financial transaction whereby REC offers 100% of the shares in REC Solar to the existing REC shareholders. In the transaction, REC Solar is valued at NOK 800 million (€102 million) and the offering is fully underwritten by REC’s largest shareholders.
REC Solar have a net cash position of NOK 300 million (€38 million) and apply for a listing on the Oslo Stock Exchange.
“With an equity ratio of 67%, REC Solar will be uniquely positioned as one of the few debt free solar panel suppliers in the industry,” the group said.
As part of the plan, the REC brand and trademark will be owned by the new Singapore-based REC Solar, headed by CEO Oyvind Hasaas, while the parent company and the associated silicon business will be rebranded in due time.
The REC parent group will receive proceeds of NOK 500 million (€63 million) from the transaction and hold a net debt of about NOK 1.7 billion (€216 million), with an equity ratio of about 53%.
The transaction is pending approval by REC shareholders through an extraordinary general meeting and by REC bondholders.
On Tuesday, August 20, 2013, World Stocks, VT, and US Stocks, VTI, bounced higher as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.81%.
Currency traders took the Euro, FXE, strongly higher to close at 132.86, and the Yen, FXY, marginally higher to close at 100.51, with the result that the chart of the EUR/JPY, showed a closed at 103.58; but this did not boost Eurozone Stocks, EZU, or European Financials, EUFN; both of which closed slightly lower. The US Dollar, $USD, closed strongly lower at the edge of a massive head and shoulders pattern at 80.96, suggesting that it will either sell off from here or bounce higher.
Nation Investment, EFA, and Small Cap Nation Investment, EFA, traded lower. Countries trading lower included, Indonesia, EIDO, China, YAO, Thailand, THD, Norway, NORW, the Philippines, EPHE. and the Nikkei, NKY.
Of note Business Services Company, Information Services Group, III, rose to a new high.
Most all non interest bearing sectors rose on the day
XRT, 1.7, on rising PSUN, URBN, ROST, TJX, FL, BKE, LTD, PLCE,
RZV, 1.6, on rising URI, MDCA, UNTD, EGL, III, PCTI, GK, BLOX, ADUS, NICK, MOVE, FUN,
XOP, 1.6, on rising BCEI, PDCE, COG, GPOR,
PSCI, 1.1, on rising HEES, CLC, NPO, TRS, MWA, APFC, ACET, PENX, ODC
PBS, 1.0, on rising MEG, EVC, P, SNI, WPO, NYt, ENL, RUK, SIRI, CMLS, GCI, CMLS,
PSP, 0.7, on rising DLPH, TUP, LBY, MIC, IHG, LGF, LYV, OWW, CHTR, BAH, VIAB, GPK,
CARZ, -1.2, yet TSLA, MOD, DORM, AXL, DAN, FSS, TEN, LKQ, BWA, WBC, rose
Metal and mining sectors rising today included
XME, 2.0, on rising CMD, STLD, GTLS, RS, WOR, ITW
Precious metal mining sectors rising today included
SSRI 3.9 and SIL 3.1
GDX 3.9 and GDXJ 2.0
Financial sectors traded today as follows
Jesus Christ, operating in the Economy of God, Ephesians, 1:10, has completed the corporate profit, global growth and trade, part of the Business Cycle, having fully expanded the world central banks’ monetary policies, and the potential of the speculative leveraged investment community, to produce peak stock wealth, VT, peak nation investment, EFA, peak small nation investment, IFSM, peak major currencies, DBV, peak emerging market currencies, CEW, and thus has produced peak fiat money, based upon world wide policies of investment choice, and credit schemes of all types.
Liberalism was an era of investment choice which featured investment in Global Producers, FXR, seen in this Finviz Screener, which rose 0.8% today; but as a group are now trading lower from their August 1, 2013, high. The exhaustion of the US Fed’s monetary policies of easing is seen in the weekly chart of Dividend Growth Investing, VIG, turning lower in August 2013.
It was a great day for implementing a short selling strategy. Yes, today, Tuesday August 20, 2013, was a good day to go short the 30 ETFs, seen in this Finviz Screener; well 29 ETFs and 1 stock, which is a proxy for life insurance companies; as in a bull market one buys into dips, and in a bear market one sells into pips.
Over the last month; these have traded as follows:
GNW, -9%, a proxy for life insurance companies.
I would never ever send a boy to school; I believe children, especially boys, should be homeschooled or sent to private schools. Boys have a greater propensity for developing psychopathy, and the environment of school and the indoctrination coupled with lack of education that takes place there, greatly raises the risks that one’s son will develop antisocial speech and behavior. Christina Hoff Sommers writes in the Education section of Time School has become too hostile to boys. And efforts to re-engineer the young-male imagination are doomed to fail.
Wikipedia profiles her as Author, an equity feminist, university professor, scholar at The American Enterprise Institute. She is also a member of the Board of Advisors of the nonpartisan Foundation for Individual Rights in Education. Author Barbara Marshall has stated that Sommers explicitly identifies herself as a “libertarian.” Sommers is also a registered Democrat. The Stanford Encyclopedia of Philosophy categorizes Sommers’ equity feminist views as classical liberal or libertarian and socially conservative.
Sommers wrote in The Atlantic, about her own book The War Against Boys, that misguided school curriculum, based on flawed research, is a likely cause for many problems in education including the falling reading scores of lower-school boys. Sommers writes that there is an achievement gap between boys and girls in school, and that girls in some areas are achieving more than boys. She writes, “Growing evidence that the scales are tipped not against girls but against boys is beginning to inspire a quiet revisionism. Some educators will admit that boys are on the wrong side of the gender gap.” Writing for The New York Times, Richard Bernstein wrote of The War Against Boys, “Observations like that lift Ms. Sommers’s book from polemic to entreaty. There is a cry in the wilderness quality to her book, a sense that certain simple truths have been lost sight of in the smoky quarrelsomeness of American life. One may agree with Ms. Sommers or one may disagree, but it is hard not to credit her with a moral urgency that comes both from the head and from the heart.” Her main thesis for the book deals with the inherent differences of boys and girls, and how we should not suppress them. Christina Hoff Sommers criticizes Carol Gilligan’s claim that “young women suffer in a male dominated society,” as well as William Pollack’s contention that “young men are oppressed by cultural ideals of masculinity.”
According to liberal magazine The Nation, “Hoff Sommers carefully explains to the students that much of the fault for this unfortunate phenomenon [of "pathologizing maleness"] lies with women’s studies departments. There, ‘statistically challenged’ feminists engage in bad scholarship to advance their liberal agenda. As her preliminary analysis of women’s studies textbooks has shown, these professors are peddling a skewed and incendiary message: ‘Women are from Venus, men are from Hell’. In a book review in the conservative magazine National Review, Mary Lefkowitz writes of Who Stole Feminism that “[Sommers] provides clear guidelines on how to distinguish indoctrination from education. That alone is a major service to all of us who are struggling to distinguish fact from fiction in today’s troubled academic world.”
The War Against Boys was a New York Times Notable Book of the Year for 2000. Richard Bernstein, a New York Times columnist, praised the book, writing, “The burden of [this] thoughtful, provocative book is that it is American boys who are in trouble, not girls. Ms. Sommers…makes these arguments persuasively and unflinchingly, and with plenty of data to support them.”
E. Anthony Rotundo of the Washington Post, in reviewing Sommers’ The War Against Boys, has stated: “In the end, Sommers fails to prove either claim in the title of her book. She does not show that there is a ‘war against boys.’ All she can show is that feminists are attacking her ‘boys-will-be-boys’ concept of boyhood, just as she attacks their more flexible notion. The difference between attacking a concept and attacking millions of real children is both enormous and patently obvious. Sommers’s title, then, is not just wrong but inexcusably misleading… Sommers’s book is a work of neither dispassionate social science nor reflective scholarship; it is a conservative polemic.”
On Wednesday, August 21, 2013, All forms of fiat wealth, traded lower, as the Interest Rate on the US Yen Year Note, ^TNX, traded higher to 2.86%.
All, that is every one of the World’s Major Currencies, DBV, -0.9%, such as ICN, BZF, FXS, FXA, FXC, FXY, FXF, FXE, as well as the Emerging Market Currencies, CEW, -1.1, traded lower, and the US Dollar, $USD, traded slightly higher to 81.35. Currency traders continued to successfully sell currencies short in their successful war on the world central banks, now that the bond vigilantes have control of interest rates globally, and are calling interest rates higher worldwide, as is seen in Aggregate Credit, AGG, trading lower once again.
Commodities, DBC, traded lower.
Debt deflation is starting to get underway as is seen in World Stocks, VT, US Stocks, VTI, the Nikkei, NKY, Eurozone Stocks, EZU, Asia Excluding Japan, EPP, Emerging Markets, EEM, the BRICS, EEB, and Global Producers, FXR, such as WHR, MMM, ABB, IP, SI, CNH, JNJ, LPL, trading lower.
Nation Investment, EFA, traded lower, with Asia Excluding Japan, EPP, specifically, Turkey TUR, India, INP, Indonesia, IDX, Thailand, THD, South Korea, EWY, Taiwan, EWT, Malaysia, EWM, the Philippines, EPHE, trading lower. In Europe, Sweden, EWD, and Norway, NORW, traded lower. In Latin America, Brazil, EWZ, and Mexico, EWW, traded lower. Bloomberg reports Philippine stocks tumble most in five years as trading resumes. Philippine stocks tumbled, with the benchmark index posting its biggest intraday retreat since October 2008, as local markets resumed trading after a three-day closure. The peso weakened to a two-month low and bonds dropped. And Benson te writes ASEAN Meltdown: Phisix got smoked dives 6%, Philippine Peso wilts.
The chart of the EUR/JPY showed a trade higher to 130.63, sustaining Eurozone, EZU, losses to 0.7%
Stock sectors trading lower included Inverse Volatility, XIV, Energy Production, XOP, Retail, XRT, Paper and Container Producers, WOOD, Networking, IGN, Automobiles, ,CARZ, Food and Beverage, PBJ, Global Consumer Discretionary, RXI, and Leveraged Buyouts, PSP.
Mining and Metal sectors trading lower included Steel, SLX, Metal Manufacturing, XME, Copper Mining, COPX, Global Industrial Mining, PICK, Coal Production, KOL, Uranium Mining, URA, Rare Earth REMX, Gold Mining GDX, Junior Gold Mining, GDXJ, Siler Mining, SIL, and Silver Standard Resources Inc, SSRI.
Yield bearing stock sectors trading lower included Global Real Estate, DRW, Chinese Real Estate, TAO, Electric Utilities, XLU, Global Utilities, DBU, and Shipping, SEA.
Global Financials, IXG, traded lower as European Financials, EUFN, Chinese Financials, CHIX, Far East Financials, FEFN, and Emerging Market Financials, EMFN, traded lower. India’s Banks IBN, HDB, traded lower; and Brazil’s BBDO, BSBR, BBD, and ITUB traded lower.
Emily Coyle in Wall Street Cheat Sheet reports Home Sales Hit Best Level Since 2009 In the face of higher interest rates and a sluggish economy, existing home sales in July were better than expected, hitting their best level in almost four years. The National Association of Realtors announced Wednesday that total existing home sales, which are completed transactions including single-family homes, town homes, condos, and co-ops, jumped 6.5 percent to a seasonally adjusted annual rate of 5.39 million units last month.
The Chicago Daily Herald reports Illinois reports second highest unemployment rate in July.
Denise Roland in the Telegraph reports Jens Weidmann slams ‘reckless’ talk of euro break-up as Greece bail-out talk intensifies. A break-up of the Eurozone would have “grave consequences”, the head of Germany’s central bank has warned, while talk of a third bail-out for Greece has intensified
And in Blogs Northwood.edu., Dr. Richard M. Ebeling is interviewed by Alvino-Mario Fantin in article, The Importance of Austrian Economics and F. A. Hayek for Understanding the Current Economic Crisis and for the Future of Freedom, with the Austrian Economics Center (AEC), affiliated with the Friedrich A. Hayek Institute in Vienna, Austria, and which was originally published in two parts on the AEC’s website, “Free Markets, Free People” (August 8 & 13, 2013).
AEC: What lies behind the dominant ideology of today?
Dr. Ebeling responds, “The fact is there is a “specter” that continues to haunt Europe; it is the “specter of communism”, not communism in the sense that many people want a return to the totalitarian state and Soviet-style central planning. No, I mean in the sense that Europe, and America to a slightly different extent, are still haunted by Marx’s critique of capitalism and the market order. The presumption among policy makers and many others in European society is implicitly that Marx was right in his criticisms of capitalism.
Left to its own devices, capitalism exploits workers and leads to harmful monopoly. Unregulated by the state, private capitalism is guided by the profit motive, and pursuit of profit is considered to be almost always in opposition to the “common good” or the “general welfare.” Dictated by market forces, competition always results in an “unjust” distribution of wealth.
Of course, liberal, free market capitalism produces just the opposite of these “accusations.” Competitive capitalism creates employment opportunities and rising wages for the vast majority of workers over time. Open competition is the great enemy of monopoly, since the only sustainable monopolies are those that receive support and protection from the government.”
AEC: And the only way forward is to try to move towards greater freedom, exchange, and competition?
(I relate, that Dr. Ebeling in response, communicates that meritocracy in a free market, one without government intervention, provides an individual the opportunity to earn a profit that provides him with the financial wherewithal to buy those things he desires and to improve his skills, resources and energies, to produce what others willingly take in trade)
AEC: Just as we have seen happen over and over again around the world. What do you think about the viability and long-term sustainability of the Euro? Do you foresee a collapse?
Dr. Ebeling responds, The stability and viability of a common currency requires that the regions within the currency area allow their relative price and wage structures to adapt to and reflect changes in the demands for goods and money over the common currency zone. This is a theme in Hayek’s highly insightful but neglected 1937 lectures on Monetary Nationalism and International Stability.
The member states of the EU are not willing to do this; or I should say that interest groups within these countries, including the government bureaucracies, are unwilling to fully and consistently adjust to the reality of the supply and demand for goods and money across Europe, as well as with the world economy with which the European Union inescapably interacts.
This is the reason why some groups in the countries hardest hit in the current economic crisis are calling for a return to their national currencies. Their panacea is currency devaluation and domestic price inflation through money creation to fund government spending to resist relative price and income adjustments in their economies. Inflation, however, is only an illusionary solution that soon brings about its own distortions, imbalances, and injustices.
The Eurocrats in Brussels are frightened by the fact that their dream of a United States of Europe, which they would command and control through the EU regulatory and legislative mechanisms, might implode with a successful currency “secessionist” movement. Thus, the survival of the Euro is partly dependent upon the willingness of those at the helm of the EU and the European Central Bank to provide the loanable funds and central bank-created money to put off the necessary national internal adjustments.
(I comment the inflation of the Eurozone Stocks, EZU, and the inflation of Eurozone Debt, EU, has reached its zenith and is a real force in holding back the specter of a currency secessionist movement. The prevailing force and zenith of Eurozone sovereignty of democratic nation states is seen in the chart of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, that is EZU:EU, standing at a near all time high. Bespoke Investment Group in blog article Sovereign 10-Year Yields reports that Eurozone Debt 10 Year Yields have risen very little, compared to others. And I relate that this is seen in the value of Eurozone Debt, EU, remaining steady, while the US Ten Year Notes, TLT, have sold off strongly, as is seen in the combined ongoing Yahoo Finance chart of EU and TLT.
Truth is that the periphery southern Eurzone nations, that is the PIGS, Portugal, Italy, Greece and Spain, are insolvent nations and have insolvent banks loaded with nation state debt that cannot be paid; and are nations with terrible, ever-increasing Debt to GDP ratios. These insolvent sovereigns no longer have genuine treasury debt seigniorage, rather their seigniorage, and fiscal spending capability, comes from Mario Draghi’s and the ECB’s Open Monetary Program, OMT, which has spurred nation investment in Italy, EWI, and Spain, EWP, as well as world class global producers Ireland, EIRL, and Germany, EWG, EWGS.
It has been trust in Quantative Easing, and the US Dollar, as the world’s reserve currency, seen in the value of Fidelity’s FAGIX Mutual Fund rising in value, as well as Mario Draghi’s OMT, beginning in June to July of 2012, that has given moneyness to US Stocks, VTI, and Eurozone Stocks, EZU. But now with talk of tapering, trust in the monetary policies of the World Central Banks, and the Banker Regime, is starting to unwind, as is seen in the ongoing Google Finance chart of FAGIX, VTI, EZU, EEM, and DBC.
Fiat wealth, that being stock value, the Euro currency value, and the value of Eurozone debt residing in banks, stands at or near all time highs and precludes internal adjustments such as the elimination of national wage contracts and highly paid unionized public sector employment. There will be no internal adjustments, only a global credit bust and world wide financial system collapse, and out of it the bible prophesied establishment of the Beast regime of regional governance, and totalitarian collectivism, as presented in Revelation 13:1-4, together with a Communist Leader, Revelation 13:5-10, and a Communist Cleric, Revelation 13:11-18, calling people to a common vision of unity, for regional security, stability, and sustainability).
AEC: Why do people find it so hard to allow the market to function without calling for government solutions? Is it simply a fear of risk? Or is there something in our psychological make-up that makes us look to the state for help?
Dr. Ebeling responds here. And Dr. Ebeling goes on to relate, Nothing is more “revolutionary” or “progressive” than the classical liberal ideal of individual liberty, under which every human being is viewed and treated as an end in himself, who “owns” himself, to shape his own life according to his own values and meaning for living. Nothing is more moral than a social ideal of voluntary association and freedom of exchange, under which violence and coercion are removed from all human relationships to the greatest extent possible. Nothing is more “visionary” than a conception of a world in which free men may use their creative potentials in any way they desire, and which creates a world of wide opportunities and improvements in the human condition that elements poverty and generates rising prosperity for all.
That is the future that freedom can give us all. What greater ideal is worth fighting for and achieving? If, that is, we are willing to try and not waver from focusing our vision on that point on the horizon that represents the free society of the future that can be ours.
(I comment that God’s economic thinking started Liberalism, that is one be free from religious control of the pope and the nation state leader, with John Calvin’s reforms of government and society beginning in 1541 in Geneva Switzerland, as presented by Wikipedia)
(I relate that God’s idea of economics is one of kingdom and empire, where either God is sovereign or a ruler is sovereign; and this stands in contrast to Dr. Ebeling’s Libertarianism idea of personal sovereignty where “every human being is viewed and treated as an end in himself, who “owns” himself, to shape his own life according to his own values and meaning for living.”)
And Dr. Ebeling continues “Nothing is more “visionary” than a conception of a world in which free men may use their creative potentials in any way they desire, and which creates a world of wide opportunities and improvements in the human condition that elements poverty and generates rising prosperity for all.”
(I relate that God provided two great visionaries, each with visionary prophecies, these being the prophet Daniel and John the Revelator.
The first, that is Daniel, presented the vision of the Statue of Empires in Daniel 2:25-45, where Authoritarianism would rule the world in a Ten Toed Kingdom, with toes of a mixture of iron diktat, and clay democracy, would emerge from the British Empire, and the US Dollar Hegemonic Empire of Crony Capitalism, where Jesus Christ operating in Dispensation, that is economic and political plan of God, Ephesians 1:10, to expand Liberalism to provide the fullest amount of clientelism and greatest level of moral hazard based prosperity, via a Speculative Leveraged Investment Community.
The second, that is John the Revelator, presented the vision of three Beasts rising to rule the world, a Beast Regime, Revelation 13:1-4, a Beast Ruler, Revelation 13:5-10, and a Beast Prophet and Banker, Revelation 13:11-18.)
And Dr. Ebeling states “That is the future that freedom can give us all. What greater ideal is worth fighting for and achieving? If, that is, we are willing to try and not waver from focusing our vision on that point on the horizon that represents the free society of the future that can be ours.”
(I relate that God never purposed, designed, nor desired for a future of freedom apart from Jesus Christ. Freedom comes from knowing Christ as one’s all inclusive life experience, Colossian 3:1-11. The elect of God, that is the saints, those sanctified by Jesus Christ, know that the vision of a free society is an illusion on the Authoritarian Desert of the Real)
On Thursday, August 22, 2013, The chart of the Euro Yen Currency Carry Trade, that is the EUR/JPY, closed strongly higher at 131.84, largely through the trade lower in the Japanese Yen, FXY, to strong support at 99.13, taking Eurozone Stocks, EZU, 1.5%, higher, on surging Italy, EWI, Spain, EWP, Germany, EWG, EWGS, Netherland, EWN, Ireland, EIRL, and Global Producers, FXR, which took Nation Investment, EFA, higher with Russia, RSX, China, YAO, China Industrials, CHII, and China Financials, CHIX, rising strongly and’s Bank, IRE, blasted to a new rally high. And Argentina’s banks, BFR, BBVA, GGAL, and BMA, rose strongly, taking Argentina, ARGT, near its recent high.
However, the Philippines, EPHE, and Malaysia, EWM, continued lower.
Sectors rising today included, Solar, TAN, Inverse Volatility, XIV, S&P High Beta, SPHB, Energy Production, XOP, Energy Service, OIH, Home Construction, ITB, US Infrastructure, PKB, Transportation, XTN, Software, IGV, Media, PBS, Small Cap Pure Value, RZV, and Small Cap Industrial, PSCI.
Mining and Metal sectors rising strongly today included Coal, KOL, Copper Mining, COPX, Metal Manufacturing, XME, Steel, SLX, Copper Mining, COPX, Industrial Mining, PICK, Rare Earth Mining, REMX. And Silver Mining, SIL, and Gold Mining, GDX, rose today.
The chart of the US Dollar, $USD, shows a slight rise to close higher at 81.52.
Corporate debts that have come through Liberalism’s credit scheme of Dollarization have become an albatross, as well as a curse that is driving Emerging Market Bond Interest Rates higher, and Emerging Market Currencies, lower, destabilizing Nation Investment in India, INP, Brazil, EWZ, and Asia Excluding Japan, EPP, in particular, Singapore, EWS, Malaysia, EWM, the Philippines, EPHE, Thailand, THD, and Indonesia, IDX.
Stratrisks cites Tapering threat. The risk for the so-called deficit economies is that as global liquidity is reeled back by the Fed, weakness in the real or the rupee will force investors to flee stocks and bonds. That could exacerbate the currency selloff in a self-perpetuating vicious cycle leading potentially to balance of payments crises. All these countries rely heavily on foreign capital inflows to plug current account gaps
Ambrose Evans Pritchard of The Telegraph writes Emerging market rout threatens wider global economy. The $9 trillion (£5.8 trillion) accumulation of foreign bonds by the rising powers of Asia, Latin America and the emerging world risks going into reverse as one country after another is forced to liquidate holdings to shore up its currency, threatening to inflict a credit shock on the global economy.
India’s rupee and Turkey’s lira both crashed to record lows on Thursday following the US Federal Reserve releasing minutes which signaled a wind-down of quantitative easing as soon as next month.
Dilma Rousseff, Brazil’s president, held an emergency meeting on Thursday with her top economic officials to halt the real’s slide after it hit a five-year low against the dollar. The central bank chief, Alexandre Tombini, cancelled his trip to the Fed’s Jackson Hole conclave in order “to monitor market activity” amid reports Brazil is preparing direct intervention to stem capital flight.
A string of countries have been burning foreign reserves to defend exchange rates, with holdings down 8pc in Ecuador, 6pc in Kazakhstan and Kuwait, and 5.5pc in Indonesia in July alone. Turkey’s reserves have dropped 15pc this year. “Emerging markets are in the eye of the storm,” said Stephen Jen at SLJ Macro Partners. “Their currencies are in grave danger. These things always overshoot.”
Yields on 10-year bonds jumped 47 basis points to 12.29pc in Brazil on Thursday, 33 points to 9.72pc in Turkey, and 12 points to 8.4pc in South Africa. There had been hopes that the Fed might delay its tapering of bond purchases, chastened by the jump in long-term rates in the US itself. Ten-year US yields – the world’s benchmark price of money – have soared from 1.6pc to 2.9pc since early May.
Hans Redeker from Morgan Stanley said a “negative feedback loop” is taking hold as emerging markets are forced to impose austerity and sell reserves to shore up their currencies, the exact opposite of what happened over the past decade as they built up a vast war chest of US and European bonds.
The effect of the reserve build-up by China and others was to compress global bond yields, leading to property bubbles and equity booms in the West. The reversal of this process could be painful.
“China sold $20bn of US Treasuries in June and others are doing the same thing. We think this is driving up US yields, and German yields are rising even faster,” said Mr Redeker. “This has major implications for the world. The US may be strong to enough to withstand higher rates, but we are not sure about Europe. Our worry is that a sell-off in reserves may push rates to levels that are unjustified for the global economy as a whole, if it has not happened already.” Sovereign bond strategist Nicolas Spiro said India is “caught between the Scylla of faltering growth and the Charybdis of currency depreciation” as hostile markets start to pick off any country with a large current account deficit. He said India’s central bank is playing with fire by reversing its tightening measures to fend off recession. It has instead set off a full-blown currency crisis that is crippling for companies with dollar debts.
Tyler Durdin of Zero Hedge reports Why Asian markets are collapsing in 3 simple charts. Emerging Market stocks and Asian stocks have turned lower on diminished global growth prospects and massively releveraged balance sheets.
Reuters reports Brazil central bank launches $60 bln currency intervention. Brazil’s central bank announced a currency-intervention program on Thursday that will provide $60 billion worth of cash and insurance to the foreign-exchange market by year-end, a move aimed at bolstering the country’s currency, the real, as it slips to near five-year lows against the dollar.
The bank said in a statement it will sell, on Mondays through Thursdays, $500 million worth of currency swaps, derivative contracts designed to provide investors with insurance against a weaker real. On Fridays, it will offer $1 billion on the spot market through repurchase agreements.
Both are designed to prevent companies and individuals with dollar obligations from scrambling to the market at the same time, afraid that waiting will force them to pay more to buy dollars. When that happens, the real tends to weaken further and faster.
“This shows the firm determination of monetary authorities to keep the exchange rate from slipping further,” said Andre Perfeito, chief economist with Gradual Investments in São Paulo.
The program starts on Friday and runs until December, the central bank said, adding it may announce additional auctions if it sees fit.
The move comes as the government seeks ways to control inflation and keep the real from sliding while at the same time trying to kick-start an economy that has stagnated despite a rapid expansion of credit. While a weaker real can help Brazil’s export of commodities and manufactured goods, it makes raw materials and other imports more expensive, helping drive inflation higher. Brazil cut its outlook for gross domestic product (GDP) growth to 2.5 percent from 3 percent in 2013 and to 4 percent from 4.5 percent for 2014, Finance Minister Guido Mantega said in an interview with Brazil’s Globo Television Network late on Thursday.
For Perfeito, the move signals the central bank’s intention to limit interest rate hikes. In addition to controlling inflation, higher rates would attract investment to Brazil, helping the real firm against the dollar. At the same time higher rates could also slow growth by making borrowing more expensive.
“I think that this is an effort to adjust expectations a bit because $60 billion is a lot,” Perfeito said. “This kind of attitude just before a Copom meeting shows that exchange rate controls won’t be carried out only through monetary policy.”
The bank’s Copom monetary policy committee, which sets Brazil’s benchmark rate, meets on Aug. 28.
Interest-rate futures contracts suggest that there is a 76 percent chance that the central bank will raise the benchmark Selic target rate half a percentage point to 9 percent and a 24 percent chance of raising it 1.25 percentage points to 9.25 percent, according to Thomson Reuters data.
The real’s weakening and the Copom meeting come as the United States’ central banking authority, the Federal Reserve, is moving closer to ending a bond-buying program that has injected billions into the U.S. economy driving down interest rates.
With the end of the Fed’s “quantitative easing” program expected soon, capital flows have flowed out of emerging markets such as Brazil and back to the United States and other developed countries, helping to weaken the real.
Investment Broker Blunderbus in Mumbai writes Funding the current account deficit – focus on the real economy. Undue focus on financial markets while completely ignoring the problems of the real economy is not likely to make India an investment destination of choice. The faster our government understands this, the better for our unemployed millions.
BelleNews reports Indian rupee has hit a new all-time record low against the US dollar, Bank of Singapore’s chief economist Richard Jerram relates “Weakness concentrated in the Brazilian real and Indian rupee makes sense, as these are current account deficit economies with limited ability to defend their currencies. International investors have withdrawn $11.58 billion in shares and debt from India’s markets since the beginning of June, (when the Interest Rate on the US Ten Year Note, ^TNX, began to soar) according to official data. India, which is Asia’s third-largest economy, grew at an annual rate of 5% in the 2012-13 financial year, the slowest pace in 10 years.
The WSJ reports Thailand GDP highlights policy dilemma. Exports to China, Thailand’s biggest overseas market, have slumped as China’s economy cools. Meanwhile high domestic credit growth has kept local demand high, sucking in imports. The current account swung from a $1.3 billion surplus in the first quarter to a $5.1 billion deficit in the second quarter.
As economic growth has slowed, central banks normally would ease rates. But Thailand’s central bank, like many others in Asia, including the Reserve Bank of India, have been forced to keep rates stable in recent months to attract capital amid signs of an end to global easy-money policies.
Expectations U.S. rates will rise later this year as the U.S. Federal Reserve pulls back its massive stimulus program add to pressures on Asia policy makers to keep their own rates stable – or even to tighten policy – to attract capital.
In Thailand, robust private credit growth of over 12% on-year in recent months and high household debt add to reasons not to cut rates. The bank last cut its key policy rate in May. “The Bank of Thailand may have a concern about the current account deficit, which also shows that domestic spending and consumption are still quite high and that may squash the need to lower interest rates,” said Piyasak Manason, chief economist at Kiatnakin Bank. “Household debts have been rising and it’s a risk, although it’s not something to be panic about at this time,” he said.
Usara Wilaipich, a senior economist at Standard Chartered Bank, said: “Maintaining financial stability has become more important, due to increasing household debts and loans. We think the interest rate in the second half of the year will not be lowered.”
Other countries in the region are facing slowing economic growth and widening current account deficits – a worrisome combination for economies.
In India, the central bank recently effectively tightened monetary policy through measures which make it harder for banks to get hold of liquidity.
India is running a massive current account deficit because of dropping exports and a high fuel import bill.
Malaysia’s economy also appears to be heading toward its first current account deficit since the late 1990s and investors are concerned about the government’s large stock of public debt.
Arun Kumar of Mainstream Weekly writes India’s economic growth rate has been falling continuously while the consumer price inflation, current account deficit in the external sector and fiscal deficit in the Budget remain at high levels.
All the major economies of the world have been growing slowly or slowing down.
India’s exports have consequently suffered. (See Table) Imports have remained high because of the high prices of energy and India’s rising demand for energy. Further, due to uncertainty the demand for gold in India has remained high in a period when gold prices have risen globally. Thus, the gold and energy import bills have been high keeping the import bill high. This is the reason for the continuing high trade account and current account deficits. The problem has been aggravated by the high debt ($ 365 billion in September 2012) in relation to the reserves ($295 billion in January 2013) the country holds, and this prevents the RBI from intervening more aggressively. Further, the proportion of short-term debt in the total debt has increased since 2008 and this is the one that can evaporate quickly destabilizing the position of the country’s foreign exchange reserves.
With the slowing down of the Indian economy, high rate of inflation and fiscal problems, the international community has been losing confidence in the Indian economy. Thus, the credit rating agencies have been threatening to lower India’s rating. This would lead to a higher cost of borrowing abroad and devaluation of the currency adding to the repayment burden. These would lead to an increase in the current account deficit. This sets up a vicious cycle of declining growth, higher current account deficit and lowered credit rating for India.
Esandish reports India targets outflows. India’s biggest stock market slide in almost two years, surging bond yields and an unprecedented plunge in the rupee are pressuring officials for fresh steps to stem capital outflows and revive a struggling economy.
The monetary authority targeted outflows on Aug. 14, cutting the amount Indian companies can invest abroad without approval to 100 percent of their net worth from 400 percent, and saying residents can remit $75,000 each financial year compared with a previous limit of $200,000. Finance Minister Palaniappan Chidambaram said last week curbs on gold and silver imports and plans to compress inward shipments of non-essential items will trim the current-account gap to $70 billion, or 3.7 percent of GDP, this fiscal year. India will “remain exposed to funding risks” if the current-account deficit exceeds 2.5 percent of GDP and consumer-price inflation stays above 7 percent, according to Chetan Ahya, a Morgan Stanley economist in Hong Kong. Global funds have cut holdings of rupee debt by about $10 billion since May 22, when U.S. Fed Chairman Ben S. Bernanke said $85 billion a month of debt purchases could be reduced if America’s jobs market shows sustained improvement.
The Economist reports Capital controls in India. On August 14th the central bank clamped down on Indians’ ability to take money out of the country in two ways. The limit on personal remittances has been cut to $75,000 per year, from $200,000 per year. And companies are now barred from spending more than their own book value on direct investments abroad, unless they have specific approval from the central bank. Both changes reverse the gradual liberalisation of India’s balance of payments over the last decade.
The restriction on personal outflows is, apparently, to deal with incipient signs of capital flight by India’s rich. Brokers, bankers and assorted hustlers, mainly based offshore, have been rushing to offer wealthy Indians cash extraction services. Marketing emails from them have been circulating widely. The pitch is primitive: take your dough out now, convert it into a hard currency, wait for the rupee to fall to 70 against the dollar, then bring it back into the country and convert it back to rupees at the more favourable rate. Outbound personal remittances by Indians have been small historically—perhaps $1bn a year, a drop in the ocean given India’s current-account deficit of $70-80 billion. But the Indian authorities’ aim is to crack down on these schemes before they cause a much bigger speculative outflow and a self-fulfilling panic.
The second measure, the prevention of firms investing much abroad
OnePakistan reports India struggles to arrest rupee fall as output sinks. India has pledged to curtail some imports to narrow a record current account deficit and arrest a sliding currency as a sharp contraction in industrial output underlined the weakness of Asia’s third-largest economy.
Riskelia’s Blog writes Some takeaways from the ongoing emerging meltdown. The currency fragility of Turkey, India, Brazil and South Africa, all having to fund a current account deficit over 3% (the current account deficits are respectively 7%, 4.5%, 3% and 6% of GDP for the four countries).
This group of countries, dubbed the “TIBS”, must indeed constantly attract foreign flows to fund their external deficits. These flows may take the form of foreign direct investment (FDI) or of more liquid forms of investments into equity or sovereign and private debts.
When foreign investors go away (as they have been doing since the start of the year), a country running a current account deficit is faced with two alternatives: it may either devalue to restore its competitiveness and default on its external debt (at least the part of the external debt which is funded in domestic currency) or defend its currency, by consuming its foreign reserves or tightening its monetary policy. It is the monetary tightening solution which has been chosen by the TIBS. Brazil has hiked interest rates by 1.25% since April, Turkey by 0.75%, whereas India tightens liquidity to domestic lenders. This solution has been largely ineffective to counter the currencies depreciation so far.
Emerging countries are caught into a recessive spiral: it all starts from a standard “balance of payment” crisis, then interest rates hikes in turn exacerbate the growth slowdown and worsen the foreign investors’ capital flight. The unfolding currencies’ depreciation raises inflationary pressure and demands even more monetary policy tightening causing in turn further damage on growth. This is a perfect doom loop.
The TIBS should perhaps contemplate another solution: give up defending their currencies in the short run and address the lack of competition and the structural supply gluts which are the root causes of inflation in the long run. This could be done by liberalizing further the economy and fostering investments into housing, roads, rails, ports, power plants and storage facilities.
In any case, the recent events in the markets have shown that a US monetary tightening is even more damaging to emerging countries than to the US. This is probably because countries funding a part of their debts in dollars suffer from a double refinancing problem when the Fed tightens: the first problem is due to the rates hike itself (and is faced by US borrowers as well), the second one is linked to the USD appreciation relative to the domestic currency, which increases the value of future debt repayments for the borrowing country. As for the debt funded in domestic currency, it also causes some problems if the currency depreciates too much as foreign (e.g. US, EUR) investors become scared by the loss of capital due to the currency effect and go away.
Riskelia Currency Chart shows competitive currency devaluation that has come as the currency traders have successuflly sold emerging market currencies short. This has cuased a sell off in stocks in Brazil, India, Chile, Philippines, Thailand, Indonesia, and Turkey as is seen in the combined ongoing chart of Emerging Markets, EEM, together with the CAD seven, EWZ, INP, ECH, EPHE, THD, IDX, TUR.
PJP’s blog writes Of sustainability and current account deficit. To my mind, one of the most critical problems hindering India’s growth prospects is the unsustainable Current Account Deficit. Therefore, it is very clear that the only sustainable solution to tackle the large Current Account Deficit is to create extreme competitiveness in higher value-added goods and services. It is my belief that tomorrow’s world belongs to those who create, nurture and own intellectual property. Therefore, creation of intellectual property assets is a vital pre-requisite for attaining international competitiveness.
Even for items of daily consumption, the brands consumed by millions of households in India are predominantly owned by overseas enterprises.
The list is large and unending. Be it baby food, baby care products, home care & personal care products, toothpastes, toothbrushes, shaving creams, razors, breakfast cereals, snack foods, tea, coffee, cosmetics, soaps, shampoos, detergents, dish cleaners, beverages, ice creams, chocolates, confectionery, non-generic pharmaceuticals, washing machines, music systems, personal computers, laptops, refrigerators, mobile phones, televisions, cameras, air conditioners, apparel & fashion accessories, stationery products, toys, console games, sports and fitness equipment, luggage, diapers, sanitary napkins, burgers and pizzas, automobiles and many others, including even packaged drinking water, the leading brands in the Indian market are the property of foreign enterprises. Every time these products are consumed, value flows out of the country to pay for trademarks used, licences provided, services consumed and so on. With rising aspirations and growing disposable incomes, this outflow has the potential to increase exponentially over time. These foreign brands have so much been a part of the daily lives of Indian households, and for so long, that most people would genuinely think that they are Indian brands. A majority would have no inkling that every purchase would send value out of the country to the foreign owners.
This unenviable situation is indeed a disheartening reflection of the competitive capacity of India’s home-grown brands. Despite so many years of Independence and the country’s multi-dimensional strengths, it is a sad augury that we do not possess globally competitive brands created by Indian enterprises. True, there are worthy exceptions. Indian consumer brands such as Airtel, Amul, Bajaj, Godrej, Hero, Mahindra, Reliance, Tata, amongst others have found a pride of place in Indian households. Yet these examples are few and far between. For the most part, India’s market space has been abdicated to foreign-owned brands.
Be that as it may, apart from a re-examination of the merits of the revised policy currently in force, this issue also needs to be looked through a different lens altogether. Instead of bemoaning the huge outgo in terms of royalty or other payments, it is much more important to align national and corporate energies to create world-class Indian brands. Domestic enterprises must build globally competitive brands that can compete with the best in the world on equal terms. In the first instance, such brands by gaining larger franchise in the Indian global market would reduce the outflow on account of consumption of foreign brands in India. Over time, such world-class Indian brands can aspire to win global markets generating an additional flow of wealth into the country.
Sunstone Business Review writes Understanding India’s financial statements like a company’s. India imports oil, gold, metals and minerals and exports software.
India’s CAD has to be funded by borrowing in dollars in the international market where India competes with all other nations. The borrowing rate in dollars depends, in a large part, on the credit rating of the country, called the sovereign credit rating. For India, it is “BBB-”, which is just one level above a level called “junk”. A lower credit rating means a higher rate of interest. Now, if this deficit is persistent, then this will have an effect on the dollar/rupee exchange rate.
EXIM, or EXport-IMport, is predominantly a market in which the participants are corporates comprising of importers and exporters. For the country, if the CAD is persistently high, the deficit will be bridged by buying dollars and selling rupees in the global forex markets. This will have the effect a weakening rupee and strengthening dollar. This is predominantly which has been happening over the past few months. The rupee is getting weaker on account of the high CAD since India is a net importer.
Tyler Durden reports India bans all gold coin imports. India declares total ban on the importation of gold coins and medallions. “We will leave no stone unturned” to control the current account deficit and stabilize the rupee.
Karthickday writes Gold: Why and how does it impact the Indian economy? Gold is considered more liquid compared to Real estate. It also doesn’t require huge investment. Typically, it is said Peasants are the largest consumers of Gold. It protects them from Inflation. It is said to the best Hedge from uncertainties. It has been found that for every 1 % increase in income, gold consumption increases by 1.5%. India’s Golden period also happened between 2003 and 2010 when the GDP growth was spectacular and the per capita income increased tremendously. Also the MNREGA scheme increased the income of Rural masses and their primary investment turned out to be Gold.
Why has this become a big issue all of a sudden? To know this, we need to know what Current Account Deficit is. Current Account is the difference between a country’s Total Exports to Total Imports. If we have more exports compared to imports, we have Current Account Surplus. If we import more, we have Current Account Deficit (CAD). If we have CAD, we need to use our Forex reserves to settle and in the process, we deplete the Forex reserves. If it continues, in the long run we might not have money to get imports.
From 2007 to 2012, CAD has increased from 1.3 to 4.2% of GDP. Net Gold imports has increased from 1.1 to 2.7% of GDP. Net Gold to Current Account Balance has hovered around 70%. Gold export as percentage of Gold Import has decreased from 41% in 2008-09 to 29% in 2011-12. Gold has remained as one of the chief contributors to CAD. In brief, if we stop importing gold, our CAD would become 1.2% of GDP.
Andy Mukherjee of Reuters reports Indonesia imitates India’s costly growth obsession. Indonesia is failing to learn from India’s economic misery. That makes it a candidate for a disorderly decline in the currency, runaway inflation and financial instability.
The country’s central bank, which has tightened monetary policy by just 75 basis points this year, left the benchmark interest rate unchanged at 6.5 percent in its Aug. 15 meeting. It also asked banks to rein in credit if they don’t have adequate deposits. While the warning is welcome, it’s not a substitute for raising the price of money.
Indonesia’s real interest rates are already negative: the 8.6 percent inflation rate in July exceeds the 8 percent yield on 10-year government bonds. The longer Jakarta delays tackling the problem, the more entrenched its current account deficit, already high at 2.4 percent of GDP, will become. Then it will be hard to finance the gap, and even harder to reduce it without stalling growth altogether.
New Delhi’s woes should make Indonesia wary. China’s waning appetite for investment and the likely unwinding of excess dollar liquidity by the U.S. Federal Reserve may have already ended a seven-year run during which the country could safely extract 6-percent-plus growth from cheap money and abundant natural resources. Back in 2006, when China was guzzling Indonesian coal, the current account was comfortably in surplus. That helped reduce exchange-rate volatility, which was “integral” to stabilising inflation expectations and reducing capital costs, says Morgan Stanley economist Deyi Tan.
With that era now over, the authorities’ reluctance to raise interest rates is risky. Negative real interest rates will push wealthy Indonesians to take money out of the country, while rising real U.S. interest rates will make it less attractive for foreigners to bring money in. A disorderly slide in the rupiah, which has fallen 8 percent against the US dollar in the past year, will be both inflationary and destabilizing.
WhyGoldCo posts Ben Otto of Dow Jones Investors grow wary of Indonesia. Indonesia’s economy expanded by just 5.9% in the second quarter, its worst showing since 2010. Prices for commodities exports such as palm oil and coffee are down, driving the trade balance deeper into the red. Inflation hit a 4½-year high in July after the government raised fuel prices.
The country’s stocks, bonds and currency, the rupiah, all have sold off this summer as investors pulled cash out of emerging markets amid speculation the Federal Reserve was preparing to wind down its bond buying. The rupiah is down 6% against the dollar since the start of May. Over the same period, yields on 10-year government debt denominated in rupiah jumped to 7.63%, from 5.5%. Yields rise when prices fall.
Some investors see more trouble ahead. Indonesia is one of several emerging markets dealing with slowing growth, high inflation and a widening current-account deficit, a toxic combination for policy makers. If the rupiah continues to slide, it will make imported goods more expensive, driving up inflation and worsening the country’s finances. Higher interest rates and lending restrictions would shore up the currency, but further depress growth.
Channel News Daily reports Indonesia hikes fuel prices despite popular anger. Indonesia on Friday announced the first hike in fuel prices since 2008 despite violent protests against the unpopular measure, as Southeast Asia’s top economy seeks to reduce crippling subsidies.
Energy Minister Jero Wacik said the price of fuel would go up more than 30 per cent on average from Saturday, in a bid to slash handouts which gobble up a huge chunk of the national budget and have caused concern among investors. “This is a very difficult decision and the government made this choice as a last resort,” Hatta Rajasa, coordinating minister for the economy, said in a televised address to the nation. “The global crisis has impacted our economic growth… We need to take steps to improve the health of our economy.”
The move to cut one of the few government handouts in Indonesia has already sparked anger, with thousands fighting running battles with police outside parliament Monday as lawmakers voted on measures paving the way for an increase. In the hours leading up to the hike, long lines formed at petrol stations as car and motorbike owners sought to fill up with subsidised fuel before the price rocketed. Police were standing guard at many stations. Police were out in force in major cities across the country as the announcement was made, but protests were small and largely peaceful. The price of a litre of petrol will go up 44 per cent from 4,500 rupiah (US$0.46) a litre, one of the cheapest in Asia, to 6,500 rupiah. For a litre of diesel, the price will rise 22 per cent to 5,500 rupiah.
Following a marathon parliamentary session on Monday, lawmakers agreed on a revised budget that included a package of measures to compensate the millions of poor people likely to be hit hardest. Poor households will receive US$15 a month each for the next four months to offset the impact of the fuel hike, which is expected to cause the cost of everyday goods to go up as they will be more expensive to transport. President Susilo Bambang Yudhoyono had insisted on the measures before any fuel hike, which comes at a sensitive time as parties gear up for elections in 2014.
“The government is aware that the policy will result in inflation which will affect the purchasing power of those on low incomes,” Rajasa admitted on Friday, but added that the government was providing “social protection”. Yudhoyono has been seeking to lower the huge subsidies for some time and last year came close. But parliament rejected the measure in the face of huge protests, which were far bigger and more violent than this year’s.
Concern has been growing among international investors about the failure to cut the subsidies which are blamed for a widening current account deficit, as demand for fuel increases and the government is hit with ever bigger bills. The urgency for action increased last week after the rupiah, which had already lost value due to the ballooning deficit, plunged to four-year lows after a sell-off on emerging markets that hit Indonesia hard. However, the price hike could lead to economic pain in the short term, analysts have warned. Credit-Suisse said in note the hike “will likely hit already weakening investment growth, dragging down GDP growth further”. Indonesia’s economy grew at 6.02 per cent in the first quarter, the slowest pace in more than two years.
Testosterone Pit summarizes, When “QE Infinity” turns into a pipedream, hot money evaporates. Printing money and forcing interest rates to near zero, that’s how the Fed and other central banks papered over the Financial Crisis, duct-taped the bursting credit bubble back together, inflated new asset bubbles, and propped up TBTF banks. And in so doing, they accomplished a huge feat: a worldwide tsunami of hot money.
QE drove yield-seeking investors, whose livelihood was evaporating before their very eyes, to chase down yield wherever they could find it, no matter what the risks, and they found it in emerging markets and in junk. India, Indonesia, Thailand, Brazil, and other developing countries could suddenly borrow from the future at record low rates – much like developed countries – to goose growth. Companies, governments, and consumers ran up debts. Imports ballooned.
It had nefarious consequences. As the Fed was trying to devalue the dollar, other currencies rose. In September 2010, Brazilian Finance Minister Guido Mantega denounced the “international currency war” that the money-printers in Washington and elsewhere were waging against his and other emerging countries where the hot money had washed ashore. “This threatens us because it takes away our competitiveness,” he warned.
But in early May, when the Fed penciled “taper” on the calendar as something to consider, the hot money got antsy. That month, interest rates started to soar globally. Junk bonds got slammed, as did the debt of emerging markets, particularly of countries that had splurged on imports and had to fund large current-account deficits.
The selloff doused all sorts of hopes in India and has since contaminated Indonesia, Thailand, and other countries. As Dallas Fed President Richard Fisher explained so eloquently last Friday on Fox: “I think the market has come to realize there is no QE infinity.”
Since QE infinity turned into a pipedream in early May, the Indian rupee lost 20% of its value, hitting a historic low of 64.13 to the greenback early Tuesday, after a 2.3% swoon on Monday. The Indian stock market index Sensex has fallen over 11% since mid-July. Government debt, a hair above junk, got hammered, with the 10-year yield jumping 20 basis points on Tuesday to 9.43%, a Lehman-moment high. The stench of crisis was in the air, and investors who’d been holding their noses for years, finally smelled it and tried to yank their money out.
India, which is in dire need of foreign capital, is a sitting duck. It has to fund a large current-account deficit. It’s importing much of its energy, but the crashing rupee is turning that into a burden for the economy. Badly needed reforms haven’t happened, or only minimally so. A slew of issues, such as inadequate infrastructure and electricity supply, bedevil the country, but they’re not being dealt with. Instead, the government is ingeniously trying to tamp down on gold imports. And it limited the amount of money people and companies can send overseas.
To assuage his nervous countrymen, Economic Affairs Secretary Arvind Mayaram, a senior official at the Finance Ministry, announced on Tuesday, “There is no intention of government of India to put any capital controls as such.”
To prop up the rupee, the Reserve Bank of India had been raising interest rates, but the higher borrowing costs hit the corporate sector, and investors lost their appetite for bonds. It tightened liquidity to make it harder to short the rupee. Nothing worked. So on Tuesday, to save the day, it dumped dollars hand over fist. And to prop up the collapsing bond market, it announced that it would buy 80 billion rupees ($1.3 billion) worth of government bonds with long maturities on August 23. It would decide later how much more it would have to buy.
Alas, buying bonds to prop up the bond market and force down long-term interest rates contradicted its efforts to prop up the rupee by raising interest rates. QE with all its messes has arrived in India to stave off the crisis caused by the consequences of QE, or rather the end of QE, in the US. But it did stop the rupee’s slide on Tuesday, at least temporarily.
Similar selloffs are circulating around the developing world as the hot money is pulling out. In Indonesia, the rupiah dropped to a four-year low. The Jakarta Stock Exchange Composite index is down 20.5% since May 20. The government is in full prop-up mode. Its state-owned pension fund PT Jamsostek announced that it would buy equities to halt the four-day 11% slide. That deus ex machina caused the stock market to recover a little after having been down 5.8% intraday, to close down only 3.2%.
What QE giveth, the end of QE taketh away. And this is just the beginning. The Fed hasn’t even announced the end of QE; it is merely palavering about it. And it has affirmed that its zero-interest-rate policy would remain in place, possibly for years to come. The Bank of Japan is in all-out QE mode. Other central banks haven’t given up on it either – because just idle banter of ending QE has these kinds of consequences around the world.
The emerging markets were among the first destinations for the hot money. It’s logical that they would be among the first places the hot money is trying to get out of while it still can. As the end of “QE infinity” approaches, and if the Fed actually stops printing money for the first time in five years of drunken partying, the movie now playing in the emerging markets will likely start playing at theaters closer to home.
The new salvation religion being preached in Japan to a hardened and cynical bunch who’ve lived through one of the worst bubbles and busts in recent history is this: prodigious money-printing will devalue the yen, causing exports to skyrocket and imports to shrink. The resulting trade surplus will save Japan. But the opposite is happening. And it’s happening fast! Read…. Abenomics Utter Fail: Japan’s Crazy Exploding Trade Deficit.
We are witnessing the end of the era of mortgage finace employment and financialization of mortgage debt by mortgage REITS. Reuters reports Wells Fargo to cut 2,300 mortgage jobs as refinancing slows. And I relate that mortgage REITS, REM, have sold off terrifically since May 21, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%, as is seen in their ongoing Yahoo Finance chart.
On Friday, August 23, 2013, The chart of the EUR/JPY shows a close higher to end the week at 132.12, as the Euro, FXE, traded higher, and the Yen, FXY, traded lower, taking the Eurozone, EZU, to match its all time high. Mining sectors, GDX, GDXJ, SIL, SSRI, PICK, XME, REMX, COPX, rose.
Summary of financial market activity for the week ending August 23, 2013. Since the Interest Rate on the US Ten Year Note, ^TNX, began its rise to 2.01% on May 2013 to 2.82%, today, August 23, 2013, the EURJPY has rise 3%, EU Debt, EU, 2%, Eurozone Stock, EZU, 3%, US Stocks 4%, and European Financials, EUFN, 5%, while Aggregate Credit AGG, has fallen 3%, and the Emerging Markets, EEM, 8%, Emerging Market Financials, EMFN, 15%, and Emerging Market Bonds, EMB, 8%. Despite a 13% loss of value in the Argentine Peso, Argentina, ARGT, and its banks has been supported by related banks in the Eurozone.
Emerging Market Bonds in Latin America have always been fraught with great risk and nothing but trouble for investors. Boris Korby, Raymond Colitt and Francisco Marcelino of Bloomberg report “A year after it began, Brazil’s municipal bond market has been brought to a standstill by the federal government after Credit Suisse Group AG and Bank of America Corp. provoked a backlash by collecting $140 million in fees from the first two borrowings… Brazilian Treasury officials, who approve state financing requests and provide guarantees backing loans, are starting to demand terms to curb the profits, seeking to protect taxpayers from being exploited and to limit their own borrowing costs while alienating bankers in the process. State officials at Mato Grosso and Parana say the demands are imperiling loans they’re seeking from Credit Suisse, derailing a market the government had projected could grow to as big as $25 billion by 2014.”
Robert Wenzel of Economic Policy Journal posts Soaring interest rates. The very nature of money changed with the rise of the Interest Rate on the US Ten Year Note, ^TNX, beginning in May 2013.
Money, that is fiat money, was that which built wealth, such as World Stocks, VT, underwrote credit, such as World Treasury Bonds, BWX, and served as a means of currency exchange, such as the Australian Dollar, FXA, for economic production, commerce and trade.
In 1971, Milton Friedman convinced Richard Nixon to go off the gold standard and the US Dollar Hegemonic Empire was born, where the US Dollar served as the International Reserve Currency, and other currencies floated, that is inflated in value according to risk reward opportunities in democratic nation states.
Money, more specifically fiat money, passed away during May through August 2013. Fiat money be no more, as on May 24, 2013, Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, in Utility Stocks, XLU, and Real Estate Investment, IYR, such as ROOF, REZ, and REM. The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that terminated fiat money.
With the failure of credit on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism; fiat money inflationism has turned to fiat money destructionism.
From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else. It is ordained of God, that increasingly policies of diktat and schemes of debt servitude will increasingly govern mankind’s economic and political activity.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. And diktat money is seen in countries with high currenct account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.
Liberalism featured the Milton Friedman Free To Choose floating currency Banker Regime where trust in the monetary policies of the world central bankers and the speculative leveraged investment community, provided policies of investment choice and schemes of credit, producing a moral hazard based prosperity. Katy Burne of WSJ reports Investors have yanked $30.3 billion from U.S.-listed bond mutual funds and exchange-traded funds this month, marking the third-largest monthly outflow in records going back to 1984, according to estimates by TrimTabs… The August moves come on the heels of a record $69.1 billion monthly outflow in June and a $14.8 billion outflow in July. Before June, bond funds posted inflows for 21 consecutive months. Some $1.2 trillion of investor funds flowed into bond funds between 2009 and 2012.
Now Jesus Christ acting in dispensation, Ephesians 1:10, is completing Liberalism with a rally in the EUR/JPY, taking Eurozone Stocks, EZU, and EU Debt, EU, to their peak. And He is introducing Authoritarianism. With first, The Economist reporting capital controls in India. On August 14th the central bank clamped down on Indians’ ability to take money out of the country in two ways. The limit on personal remittances has been cut to $75,000 per year, from $200,000 per year; and companies are now barred from spending more than their own book value on direct investments abroad, unless they have specific approval from the central bank. And second, a credit bust in Emerging Market Bonds, EMB, a currency rout, in Emerging Market Currencies, a stock market crash in the Emerging Markets, EEM, and a collapse of Emerging Market Financials, EMFN, centering on those countries with current account deficits, who used Liberalism credit scheme of Dollarization to underwrite corporate and sovereign debt, especially Current Account Deficit Seven, that is Current Account Deficit, CAD, seven, Brazil, EWZ, India, INP, Chile, ECH, Philippines, EPHE, Thailand, THD, Indonesia, IDX, and Turkey, TUR.
Robin Wigglesworth of Financial Times writes of A great central bank reserve unwinding. Central banks in the developing world have lost $81bn of emergency reserves through capital outflows and currency market interventions since early May, even before the recent renewal of turmoil in emerging markets. The figure, which excludes China, is equal to roughly 2% of all developing country central bank reserves, according to Morgan Stanley analysts, who compiled the data from central bank filings for May, June and July. However some countries have suffered more precipitous drops. Indonesia has lost 13.6% of its central bank reserves between the end of April and the end of July, Turkey 12.7% and Ukraine burnt through almost 10%. India, another country that has seen its currency pummelled in recent months, has shed almost 5.5% of its reserves. ‘It’s a real regime change compared to what we have been used to for the past decade,’ said James Lord, a Morgan Stanley strategist. ‘We saw huge reserve accumulation as emerging markets tried to stem currency appreciation, but now we’re seeing the exact opposite.
In the age of Authoritarianism, the only two forms of sustainable wealth, will be diktat, and the physical possession of Gold; the chart of the Gold ETF, GLD, shows a 1.6% rise today Friday, August 23, 2013 constituting a continuing breakout, as is seen in Jack Chan’s Safehaven article This past week in gold
Doug Noland posts All the makings for a major top. Global markets have become keenly sensitive to Fed “tapering” risks. On the one hand, the unfolding EM crisis has sparked de-risking and de-leveraging dynamics. “Hot money” has begun to flee EM, in the process initiating the self-reinforcing downside of what has been a historic Credit boom. EM central banks have been forced to sell international reserves (Treasury, bund, etc.) to bolster their flagging currencies and vulnerable debt and securities markets. Resulting higher yields have forced de-risking and de-leveraging in (“safe haven”) Treasuries, which has worked to pressure U.S. MBS and muni debt, in particular.
On the other hand, Fed QE is fueling major market distortions. The Fed liquidity backstop has provided a magnetic pull for global “hot money,” giving a competitive advantage to U.S. risk assets, stocks, corporate debt and, ultimately, the U.S. economy. In a replay of the late-nineties, the “king dollar” dynamic has been exacerbating EM outflows and attendant fragilities. Meanwhile, the supposed inevitable winding down of QE provides an incentive for EM central banks and the speculator community to commence de-risking prior to the withdrawal of the Federal Reserve’s market liquidity backstop. If bonds trade this poorly in the face of the Fed’s $85bn monthly purchases, who is content to wait and see the marketplace liquidity profile when our central bank is no longer a huge buyer.
The upshot has been a late-cycle speculative melt-up in U.S. stocks, in particular. Popularly shorted stocks have been targeted for “squeezes” the most aggressively since 1999.
The excesses from 1999 set the backdrop for a major market Bubble top in early-2000. Yet the late-nineties Bubble was relatively contained, chiefly impacting a narrow group of stocks, the technology sector and only a segment of the U.S. and global economy. The now well-entrenched “global government finance Bubble” has become deeply systemic in the U.S. and abroad
The Bubble has spurred excessive issuance and mispricing in high-risk junk bonds, leveraged loans and risky municipal debt. It has also spurred massive over-issuance of perceived high-quality Treasury securities and “money-like” debt instruments. It has spurred a boom in perceived liquid and low-risk ETF products, funds that loaded up on illiquid securities as “money” flooded in. It has fueled record assets in hedge funds and sovereign wealth funds. It has spurred incredible concentration of assets in the hands of a group of sophisticated financial operators most adept at playing policy-driven speculative markets.
Zero Hedge reports Best and worst performing hedge funds of 2013.
Shaun Richards writes How rising US bond yields and US monetary policy is impacting on the rest of us. The Swiss National Bank build a Maginot Line type structure at 1.20 Euros to the Swiss Franc with promises of “unlimited intervention” followed later by the monetary expansionism of “Abenomics” in Japan with the objective of not only holding the line on the Yen but weakening it. Thus we note that the SNB has on its balance sheet some 445 billion Swiss Francs worth of other currencies in return for supplying the rest of the world’s demand for the Swissy. Whilst the Bank of Japan continues on a domestic monetary expansion of creating Yen as a way of reducing its external value. So around the world there are more Swiss Francs and Japanese Yen.
I comment that the monetary expansion of the SNB has supported a rally in nation investment in Switzerland, EWL. Soon there will be a great unwinding of Switzerland’s fiat asset wealth, as the value of the SNB suffers debt deflation.
The chart of the S&P 500, $SPX, shows a 0.4% rise for the week ending Friday August 23, 2013. This presents the short selling opportunity of a lifetime, with short selling potentials being the 30 ETFs, seen in this Finviz Screener … http://tinyurl.com/m7wbo8x … Those rising this week included, TAN, 7.3 … IBB, 2.8 … FPX, 2.4 … PBS, 2.1 … XTN, 2.0 … PJP, 1.7 … EIRL, 1.6 … PSCI, 1.5 … RZV, 1.4 … IGV 1.3 … PPA 1.2 … BJK, 1.1 … FXR, 1.0. The logic of short selling is that in a bear market one sells into pips, just as in a bull market one buys into dips.
Financial Market Report for the week ending August 17, 2013
1) … In this week’s financial market trading
On Monday, August 12, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.61%, causing Aggregate Credit, AGG, to trade lower.
Energy Partnerships, AMJ, seen in this Finviz Screener traded lower 1.0% lower. Tesla, TSLA, led the Automobile sector, CARZ, lower.
Silver Miners, SSRI, 10.2%, SILJ, 7.6%, SIL, 6.2%, as Silver, SLV, rose 4.4% Gold Miners, GDXJ, 8.7%, GDX, 5.7%, as Gold, GLD, rose 1.8%. China Financials, CHIX, rose, taking China, YAO, higher.
The US Dollar, USD, rose 0.4% from the edge of a head and shoulders pattern. I expect the US Dollar, $USD, to rise to about 84, before it once again falls through its broadening top chart pattern, seen in Corey Rosenbloom article August trendlines for the US Dollar Index. It’s as Street Authority relates, when you see a broadening top, the market will eventually drop. A higher dollar is not conducive with rising stocks, I believe that the seven week long rally in Nation Investment, EFA, Small Cap Nation Investment, IFSM, World Stocks, VT, and Global Producers, FXR, is over. With a stronger US Dollar, look for the Japanese Yen, FXY, to now trade lower; and look for significant deleveraging out of stocks once the EUR/JPY starts to trade lower.
Bloomberg reports Indian Banks to drop on record yield inversion. India’s banking stocks may extend their 26% plunge since mid-May as short-term bond yields exceed long-term rates for the longest period since 2008. The inversion of the bond gauge since May 22 is also the steepest since 2001, when Bloomberg began compiling the data. If the pattern from five years ago repeats, the share index will extend its retreat from the 2013 peak even after the yield curve’s inversion ends.
Daily Ticker repoerts Cheap corn means fat wallets for consumers A 40% decrease in in corn prices is hurting farmers who saw their incomes surge to their highest levels since the 1970s.
Robert Wenzel of Economic Policy Journal asks If Friedman is nothing but a Keynesian, why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?
I relate that the totality of evidence supports the concept that Friedman was a Keynesian. Milton Friedman was the very linchpin in the Economy of God. Seth Godin communicates that A linchpin is defined as one who invents, leads (regardless of title), connects others, make things happens, and create order out of chaos. They figure out what to do when there’s no rule book.
To answer Mr. Wenzel’s question “why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?” I answer that God was looking for one man, and developed that one man, Milton Friedman, to bring forth the most destructive economic and morally corrupt economic theories that could be developed.
Milton Friedman build on John Maynard Keynes concepts to become God’s point man, that is God’s appointed one from eternity past, to bring forth the Free to Choose, floating currency Banker Regime of democratic nation states, for which he received the Nobel Peace Prize.
This economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world.
Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life.
Furthermore, Milton Friedman was the Father of liberalism’s policy of investment choice, as well as the Father of its schemes of currency carry trade investing and debt trade investing.
Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as Blackrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU, EWUS, and its banks, LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.
May God be praised, for it has been Jesus Christ acting in the Economy of God, Ephesians 1:10, developing the most moral hazard based and the most monetary inflationary based economic theories, to build Crony Capitalism, European Socialism, and Greek Socialism, to blow the greatest false, degenerate, and oppressive, prosperity bubble possible, termed the Global Government Finance Bubble by Doug Noland.
Jesus Christ acting in dispensation, which is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, August 9, 2013. Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.
Please consider reading the Dispensation Economics Manifest for more details on the Economy of God, and the ideas of a Dispensationalist, on Dispensationalism.
Another Austrian Economist, Mike Mish Shedlock writes “Hope is an illusion provided by economists who think Greece should stay committed to the Euro”.
I reply, I’m a dispensationalist economist, which is one who studies, analyses, and presents the Economy of God, presented in Ephesians 1:10, that is the household operation of all things, spiritual, monetary, political, ethical, and virtuous by Jesus Christ. His dispensation, that is stewardship, assures the fulfillment of all things, completing every age.
Greek socialism is one of the most anticompetitive forms of economics ever developed, and it has been well known for decades that its oligarchs have abandoned the country, that its people simply do not pay taxes, and when forced to do so, they appeal and get their assessments reduced to thirty percent of the amount owing, and that it is a stunning example of clientelism, which the Economist Magazine describes as pork and patronage. Only disaster can come out of such a state of affairs.
In 95 AD, angels gave the Apostle John a dream, while he was living in exile on the Isle of Patmos, entitled the Revelation of Jesus Christ, which serves as the basis for the reality that the sovereign and banking insolvency of Greece, and the other Mediterranean Sea nations, will the beachead for the rise of Authoritarianism’s Beast regime of regional governance and totalitarian collectivism, to replace Liberalism’s Banker regime of Free To Choose floating currency nation state, global producer and financialized product investment, Revelation 13:1-4
Wikipedia relates that this scroll, with seven seals, is presented and it is declared that the Lion of the tribe of Judah, from the “Root of David,” is the only one worthy to open this scroll, Revelation 5:1-5.
When the “Lamb having seven horns and seven eyes” took the scroll, the creatures of heaven fell down before the Lamb to give him praise, joined by myriads of angels and the creatures of the earth, Revelation 5:6-14. Seven Seals are opened, and in the First Seal, A white horse appears, whose crowned rider has a bow with which to conquer, Revelation 6:1-2.
With the Greek Bailout I in May 2013, the First Horseman of the Apocalypse passed the baton of sovereignty from Greece to the Troika, and from that date Greece will forever more stay committed to the Euro. As it is now, Greece is no longer a sovereign nation state and receives seigniorage aid for its fiscal spending from the Troika. Its former citizens are now residents of a region of economic governance.
On Tuesday, August 13, 2013, Despite a rising US Dollar, $USD, UUP, it was on a rising Euro Yen Currency trade, the EUR/JPY, to close at 130.20, (the Euro, FXE, traded lower, and the Yen, FXY, even more strongly lower), that the UK, EWU, UK Small Caps, EWUS, Italy, EWI, Ireland, EIRL, The Eurozone, EZU, and Argentina, ARGT, rose strongly, rallying Small Cap Nation Investment, IFSM, and Nation Investment, EFA, to new highs.
The rally in the Eurozone ADRs, seen in this Finviz Screener, such as ALU, ICLR, TRNX, TOT, BUD, SI, and TS, gave seigniorage to Eurozone debt, as Zero Hedge reports Europe’s riskiest bonds rally most in 3 weeks to 2 year low spreads.
The National Bank of Greece, NBG, led Greece, GREK, lower; while Argentina Banks, BMA, GGAL, BFR, BBVA, rallied Argentina strongly higher.
South Korea Bank, SHG, WF, and KB, rose, taking South Korea, EWY, to a new rally high.
China Financials, CHIX, China Real Estate, TAO, China Industrials, CHII, and China Small Caps, ECNS, rose parabolically, taking China, YAO, vertically higher. The China Real Estate, TAO, to US Real Estate, IYR, difference seen in their combined ongoing Yahoo Finance Chart is quite stunning, as since July 1, 2013, China Real Estate has been rallying.
Sectors trading higher included Networking, IGN, Energy Service, OIH and IEZ, on higher Oil, USO, Design Build, FLM, Gaming, BJK, and Telecom, IST.
Industrial, XLI, rose; but Transportation, XTN, traded lower as Regional Airlines, RJET, JBLU, ALK, ALGT, LUV, SKYW, seen in this Finviz Screener traded lower, as Zero Hedge reports Airline stocks monkey hammered on news DOJ seeks to block American-US Airways merger. Of the Great Nine ETFs, Transportation Stocks, XTN, have been the best performers over the last year; but since August 1, 2013, they have been leading the way lower, as is seen in their combined ongoing Yahoo Finance Chart.
Brazil’s Bank, BSBR, BBDO, and BBD, led Brazil, EWZ, and Brazil Small Caps, EWZS, traded lower.
Reuters reports Zombie Banks in India. India’s banks,( IBN and HDB, seen in their combined ongoing Yahoo Finace Chart, having fallen 30% since the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013), are starring into an abyss. Loans are soaring rapidly as the economy stalls. Meanwhile, rising bond yields are making it harder for lenders to absorb credit losses from current earnings
Steel, SLX, and the Metal Manufacturing Stocks, XME, have been rallying of late; they manifested bearish engulfing today, suggesting a turn lower; these include STLD, RS, NUE, CRS, GTLS, WOR, SXC, MLI, GHM, CMC, ITW, SID, MT, PKX, CLF, VALE, GSM, ZINC, SLCA, seen in this Finviz Screener.
Gold, GLD, traded lower, on the higher US Dollar, turning Gold Miners, GDX, GDXJ, lower. And Silver, SLV, traded unchanged. MarketWatch reports Currency wars driving new gold rush.
The Interest Rate on the US Ten Year Note, ^TNX, traded strongly higher to 2.71%, turning Aggregate Credit, AGG, lower, and forcing International Treasury Bonds, BWX, European Debt, EU, and the following interest rate sectors lower: Solar, TAN, Homebuilding, ITB, Energy Partnerships, AMJ, Mortgage REITS, REM, Residential REITS, REZ, Premium REITS, KBWY, Small Cap Real Estate, ROOF, Real Estate, IYR, and Utility Stocks, XLU, seen in this Finviz Screener, lower.
What Doug Noland terms the Global Government Finance Bubble has finally and totally popped, on the rise in the US Ten Year Note, from 2.59% to 2.71% on Tuesday August 13, 2013, as is seen in the charts of Aggregate Credit, AGG, World Treasury Bonds, BWX, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT, International Corporate Bonds, PICB, Corporate Bonds, LQD, Mortgage Backed Bonds, MBB, Emerging Market Bonds, EMB, Junk Bonds, JNK, and Ultra Junk Bonds, UJB, trading lower. Credit broke down on Tuesday August 13, 2013, when the 30 Year US Government Bond, EDV, and the US Ten Year Note, TLT, led all of the world’s credit investments, seen in this Finviz Screener, parabolically lower.
Another word for credit is trust. Investors no longer trust in the world central bank’s monetary policies to support profitable investment choice, and to provide stimulus for credit and currency carry trade schemes enabling global growth and trade. Ben Bernanke’s, Haruhiko Kuroda’s and Mario Draghi’s monetary policies have crossed the Rubicon of sound monetary policy and have made “money good” investments bad.
While the closed end stock fund CSQ rose, its peers, PTY, AWP, PFL, RCS, and EIM, as seen in their combined ongoing Yahoo Finance Chart traded lower, communicating that the way is now down in all financial markets.
On May 24, 2013, Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that has terminated fiat money.
With the failure of credit on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism.
From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.
Diktat and physical possession of gold bullion will be the only trusted forms of wealth under Authoritarianism.
Lance Roberts of Street Talk Live blog, asks in Zero Hedge Are we re-tracing a market peak? I reply yes, the world has attained Peak Sovereignty, as is seen in Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Producers, FXR, and Small Cap Pure Value Stocks, topping out in value. And, the world has attained Peak Seigniorage, that is Peak Moneyness, as the hoped for end game with Quantitative Easing, read money printing, was done to achieve four purposes, and has proven to be extremely successful.
First, to increase the M2 Money Supply, and thereby goose the economy so much that tax reveunes would increase; this was achieved as Yahoo Finance reports US budget deficit down 37.6 percent through July.
Second, to stimulate the service economy; this was achieved as Steve Slifer of Number Nomics reports ISM Nonmanufacturing remains strong. The Institute for Supply Management not only publishes an index of manufacturing activity each month, they publish one day later a survey of non-manufacturing firms — which largely consists of services. The July index for business activity jumped 6.7 points from 51.7 to 60.4. That sounds impressive but in June the index inexplicably fell 4.8 points which did not square with anything else we knew about the economy. The 60.4 reading sounds more normal and roughly duplicates the high that was reached in the spring of last year, and is only a couple of points shy of the high for the cycle that was set in early 2011.
Third, to create a vast reservoir of safe assets, that would preserve the US Dollar as the world’s reserve currency, whereby there could be currency carry trades and debt trades galore. It’s a well known fact that most of the assets traded out under QE are being held today in the form of “excess reserves.” This points the way forward, as the Interest Rate on the US Ten Year Note, ^TNX, rises, and investors around the world sell out of US Ten Year Notes, TLT, banks of all types, the Too Big To Fail Banks, RWW, as well as Nasdaq Community Banks, QABA, and the Regional Banks, KRE, will be integrated into the US Federal Reserve, and be known as the Government Banks, or Gov Banks, for short. Evidence of a global selling of US Treasuries is undeway as Daniel Kruger of Bloomberg reports “Holdings of Treasuries in China, the largest foreign lender to the U.S., fell in June for the first time in five months amid discussion by Federal Reserve officials about slowing the pace their bond purchases. China’s stake dropped by $21.5 billion in June, or 1.7%, to $1.276 trillion. The pullback by China comes as overseas holdings of Treasuries have grown $26.8 billion, or 0.5% this year, the slowest pace since a 2.8% decline in the first six months of 2006. Treasuries have lost 3.1% this year, headed for the worst performance since 2009.”
Fourth, to provide a cornucopia of moral hazard based investment choices, for the Speculative Leverage Investment Community to trade, this was achieved as is seen in the topping out of the 30 ETFs, seen in this Finviz Screener, … http://tinyurl.com/kp4afty … XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last entry a life insurance company serving as proxy for the Life Insurance sector. If one is looking for short selling opportunities, these should be at the top of the list.
Bond yields are soaring because investors fear that the debtors cannot make good and repay their loans.
Zero Hedge reports US Treasury finally admits the truth: It’s all POMO. So, thanks to the US Treasury, we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was “only” 141 points, and when there was no POMO, the S&P gained… -51 points.
Ambrose Evans Pritchard of The Telegraph reports Investors euphoric as US margin debt reaches ‘danger’ levels. Fund managers are around the world are gripped by euphoria, convinced that America is in full recovery and Europe has overcome its debt crisis.
World Stocks, VT, are tremendously leveraged over Credit, AGG, as is seen in the chart of World Stocks, relative to Credit, AGG, VT:AGG. The Risk Off ETN, OFF, and Volatility, XVZ, have been rising since August 5, 2013, confirming that a blow off top in the stock market has been achieved.
Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Stocks, VT, The BRICs, EEB, Emerging Markets, EEM, European Stocks, VGK, Eurozone Stocks, EZU, US Stocks, VTI, China, YAO, Asia Excluding Japan, EEP, the Nikkei, NKY, have all topped out, as bond vigilantes have control of the bond markets, and are calling Interest Rates higher globally, and will enable currency traders to short sell Major World Currencies, DBV, such as the Euro, FXE, the Swiss Franc, FXF, the British Pound Sterling, FXB, the Swedish Krona, FXS, and the Canadian Dollar, FXC, as well as the Emerging Market Currencies, CEW, which will result in a tremendous fall lower in the currency and credit sensitive Small Cap Pure Value Stocks, RZV, the Vice Stocks, VICEX, such as the Gaming Stocks, BJK, and Liberalism’s great carry trade nation Ireland, EIRL. One can use this Finviz Screener of 50 Leading ETFs, … http://tinyurl.com/lgzgur8 … to follow stock wealth trade lower.
Look for an upward explosion in the 200% Proshares Bear Market ETFs, such as BIS, FXP, SQQQ, SDD, EEV, EFU, SMDD, SSG, DUG, EWV, SRS, SKF, SDP, JGBS, seen in this Finviz Screener … http://tinyurl.com/m9ovk7n …
Benson te of Prudent Investor Newsletter presents the concept that “ Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.”
The US reportedly posted a substantial 22% reduction in the deficits of her trade balance owing to record exports and to a shrinking oil import bill according to the Wall Street Journal .
Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.
Over 50% (right window) of the $12 trillion (left window ) of international debt securities has been denominated in US dollars.
The point of this exercise is to demonstrate of the world’s continuing dependence on the US dollar as medium of exchange and as reserve currency.
Yet the US dollar standard seems to operate on the principle of the Triffin Dilemma, formulated by the late Belgian American economist Robert Triffin.
The eponymous theory by Mr. Triffin elucidates of the economic conflict emanating from a world reserve currency particularly on meeting short term-domestic interests as against long term international objectives 
Under the Triffin dilemma, the issuing reserve currency makes it easy for a nation to consume more goods and services via an overvalued currency.
The same overvalued currency easily allows for financing of either budget deficits and or trade deficits, aside from having more latitude in “determining multilateral approaches to either diplomacy or military action” .
In short, a reserve currency provides the issuer the privilege of an interim “free lunch” or to quote the French economist Jacques Rueff “deficit without tears” 
One of the other side effects of the Triffin dilemma has been the intense deepening of the financialization of the US economy .
Instead of producing goods, the US economy evolved towards shuffling of financial papers partly required by foreigners to recycle their dollar holdings. As one would note, the gist of expansion of financialization came as the US dollar became unhinged from the Bretton Wood System in August 1971.
Of course the other side effect of the Triffin dilemma has been the growing frequency of global bubble cycles as evidenced by the greater incidences of global banking crises since the Nixon Shock of 1971
Aside from the massive accumulation of reserve currency by foreigners that would eventually undermine the reserve currency status, a dynamic which the world seems headed for, an equally detrimental factor to a reserve currency status is the proportional devaluation that would shrink these deficits.
Mr. Triffin actually articulated the problems of the Bretton Woods System where the failed system seemed to have validated his thesis.
In a testimony before the US congress in November 1960, Mr Triffin argued that “If the United States stopped running balance of payments deficits, the international community would lose its largest source of additions to reserves. The resulting shortage of liquidity could pull the world economy into a contractionary spiral, leading to instability. ”
Given the deep reliance by global markets and global economy on the US dollar system, improving US trade deficits are likely to extrapolate to reduced liquidity in the ex-US global system. Such dynamic will only provide more muscle or ammunition for bond vigilantes, and equally, would mean a tightening of a system deeply dependent on the largesse of US dollar steroids from US authorities.
In the recent past, a reduction in the deficits of US trade balance coincided with strains in the global ex-US equity markets as measured by the MSCI  (lower pane)
Diminishing trade deficits here functioned as symptoms to dot.com bubble bust and to the 2008 Lehman bankruptcy. When financial markets collapsed as consequence to a bubble, international trade grinded to a near halt. This led to a substantial reduction of US trade deficits. Thus the narrowing trade balance coincided with recessions.
The causal flow may or could be reversed today; perhaps reduced liquidity from US exports of her currency the dollar may incite instability in the global financial markets.
The effect of shrinking liquidity on the global system will likewise affect US corporations. With 34% of the revenues of US S&P 500 companies coming from non-US sales , the adverse effect is that shrinking global liquidity will eventually land on US shores.
And it’s not just trade deficits that has contracted, US budget deficits have also dwindled to 4.2% of the GDP from 7.7% a year ago . So this could be a one-two punch against the global markets and economy. And should the FED taper, such will exacerbate on the effects of the Triffin Paradox.
Will the European Central Bank, the Bank of Japan, the Bank of England and the People’s Bank of China fill in the vacuum from improving US twin deficits?
Or will Triffin’s ghost haunt the global financial markets?
Interesting times indeed.
 Wall Street Journal Oil Boom Helps to Shrink U.S. Trade Deficit by 22% August 6, 2013
 The European Central Bank THE INTERNATIONAL ROLE OF THE EURO July 2013 p.19
 The European Central Bank, op cit., p23
 Wikipedia.org Triffin dilemma
 See The Nonsense About Current Account Imbalances And Super-Sovereign Reserve Currency April 20, 2009
 Jacques Rueff, The Monetary Sin of the West, Mises.org
 Wikipedia.org Financialization
 IMF.org The Dollar Glut Money Matters: An IMF Exhibit—The Importance of Global Cooperation System in Crisis (1959-1991)
 MSCI.com World Ex-US MSCI Index Performance
 Businessinsider.com CHART: The S&P 500 Is Not The US Economy, May 10, 2013
 National Forex Calculated Risk; US Deficit is Shrinking August 10, 2013
On Wednesday, August 14, 2013, Yield bearing sectors such as those seen in this Finviz Screener, led World Stocks, VT, lower; these included Homebuilders, ITB, Utilities, XLU, Water Resources, PHO, Telecom, IST, and Dividend Growth, VIG. An ever increasing Interest Rate on the US Ten Year Note, ^TNX, is not conducive with sustaining or growing dividends. Sectors trading lower included Industrial Textile Manufacturers, seen in this Finviz Screener, Apparel Manufacturers, seen in this Finviz Screener, Regional Airlines, seen in this Finviz Screener, Staffing Services, seen in this Finviz Screener, Home Improvement Store, seen in this Finviz Screener, Media Companies, PBS, seen in this Finviz Screener, Printing Companies, seen in this Finviz Screener, Internet Retail, FDN, seen in this Finviz Screener, Semiconductors, SMH, seen in this Finviz Screener, Industrial Stocks, XLI, PSCI, seen in this Finviz Screener, and Consumer Services, IYC, seen in this Finviz Screener.
Gold, GLD, rose 1.0% and Silver, SLV, 1.8%, taking Miners GDX 2.1, GDXJ, 4.5, SIL, 3.7, SILJ, 6.9, SSRI, 5.0, higher.
Corey Rosenbloom, provides an excellent chart article Quick charting August 15 internals ahead of the open showing the topping out and downturn in the S&P 500, $SPX. The Market Vectors Egypt Index ETF, EGPT, fell 3.1% as Egypt’s death toll rose to 95; the country’s interim vice president resigned and a state of emergency was imposed following political clashes in the country. Eurozone Stocks, EZU, traded slightly higher, as the EUR/JPY traded slightly lower to 130.05. The iPath
JPY/USD, JYN, traded lower. US Stocks, VTI, traded, lower, and the Nikkei, NKY, traded lower.
I comment that the value of European Stocks, VGK, relative to German Bunds, BUND, are extremely overvalued, as is seen in the chart of VGK:BUND.
Likewise Eurozone Stocks, EZU, relative to Eurozone Debt, EU, are extremely overvalued, as is seen in the chart of EZU:EU. Mark Deen of Bloomberg reports “The bond-market calm that has descended on the euro area in the run-up to next month’s German election masks unresolved conflicts that have frustrated the region’s leaders for more than three years. Greece needs more debt relief, the International Monetary Fund says; Portugal is struggling to exit its support program; Spanish Prime Minister Mariano Rajoy is battling corruption allegations and calls to resign; France faces unrest as Socialist President Francois Hollande follows through on his promise to cut pension-system losses. ‘There is a European ability to turn down the volume on problems when elections are looming,’ said Ludovic Subran, chief economist at Euler Hermes, a Paris-based credit insurer. ‘You can feel that the tough questions have been postponed.’”
Zacks Investment Research reports TSS Grows Debit Processing in Ireland Expanding its debit card portfolio in Ireland, yesterday Total System Services Inc TSS, entered into a strategic alliance with KBC Bank Ireland, which is part of the Europe’s leading global financial services provider, KBC Group. KBC Bank has a history of operations of over 40 years in the fields of banking and business development. This bank is currently armed with over 700 employees across Ireland’s Dublin, Cork, Limerick, Belfast and Galway. As per the deal, Total System will now process KBC Bank’s debit card portfolio through its best-in-class TS2 platform. The partnership also complements the company’s strategy to bolster its relationship with bank’s customers as it plans to offer risk management, fraud avoidance and other support services on these cards. Overall, the alliance is expected to strengthen the card processor’s client base and payment processing network in Ireland. Moreover, the new contract should enhance Total System’s payment volumes and a number of processed transactions, thereby supporting the financials.
On Thursday, August 15, 2013, US Stocks, VTI, led World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, stock sectors and yield bearing stocks sectors lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.75%, which turned Aggregate Credit, AGG, lower again, and which sent Major World Currencies, DBV, of which the US Dollar, is a component, and Emerging Market Currencies, CEW, lower. The Brazilian Real, BZF, and The US Dollar, $USD, UUP, traded lower at strong support at 81.24; while the Swiss Franc, FXF, the British Pound Sterling, FXB, the Japanese Yen, FXY, and the Australian Dollar, FXE, traded higher. The Euro Yen Currency Carry trade, EUR/JPY, traded only slightly lower, which helped maintain the Eurozone, EZU, loss on the day.
Jesus Christ acting in the Economy of God, Ephesians, pivoted the world out of Liberalism and into Authoritarianism on Thursday, August 15, 2013, by enabling the bond vigilantes to call the Interest Rate higher on the US Ten Year Note, ^TNX, to 2.75%, which destroyed the sovereignty of the Banker Milton Friedman Free To Choose Floating Currency based regime of investment choice, with its credit and carry trade schemes. The Beast Regime of diktat and its schemes of debt servitude and austerity, is rising to rule the world, out of the collapse of democratic nation state seigniorage of credit. The world central bank’s monetary policies designed to support and stimulate global growth and trade, have exhausted. Ben Bernanke’s and The US Fed’s Quantitative Easing, Haruhiko Kuroda’s and the Bank of Japan’s Abenomics, Mervyn King’s and the Bank of England’s Forward Guidance, have not only failed, but have turned toxic, and have made “money good” investments bad.
A higher Interest Rate on the US Ten Year Note, ^TNX, has destroyed the sovereignty of democracy as is seen in World Government Treasury Debt, BWX, trading lower this week, and has destroyed the seigniorage of nation investment. Nations, EFA, trading lower included US, VTI, China Industrials, CHII, and Japan, EWJ. Small Cap Nations, IFSM, trading lower included Egypt, EGPT, US, IWM, China, ECNS, Brazil, EWZS, India, SCIN, Greece, GREK, Philippines, EPHE, Turkey, TUR, UK, EWUS, Ireland, EIRL, Mexico, EWW, Indonesia, IDXJ, Japan, JSC.
Out of the collapse of democratic nation states, new regional authoritarian, political, economic, monetary, fiscal authority, is rising to rule mankind. Leaders will meet in summits to waive national sovereignty and to announce regional framework agreements, which will pool sovereignty regionally, and which will feature nannycrats and public private partnership policies of diktat, and provide the seigniorage of diktat, where moneyness will come from the word, will and way of sovereign regional leaders. Along this line of thought comes the Zero Hedge report India bans all gold coin imports, increases capital controls
Sectors trading lower included
IGN, -2.6, such as CSCO, FNSR, JNPR,
PBJ, -2.5, such as KOF, DEO, JSDA, FIZZ, CCH, MNST, PEP, COKE, DPS, CCE,
PBS, -2.4, such as MDP, LVNTA, CMLS, JRN, NXST,
RZV, -2.3, such as UNTD, ECOL, TISI, ADUS, ABG, ANGI, ELI, MCRI, ASR, CSU, BBSI, TRAX
XRT, -2.0, such as PSUN, KIRK, ULTA, PLCE, HSNI, JNY, GES, ANF, ROST, EXPR, COST, M,
IGV, -2.0, such as PLUS, SPSC, IMPV, ADVS, ZIXI, SPLK, TYPE, CRM, SNCR, CTRX, CNQR
Foreign Airlines, seen in this Finviz Screener, traded lower.
Consumer Recreational Goods, seen in this Finviz Screener, traded lower.
Real Estate Development, seen in this Finviz Screener, traded lower.
Educational Services, seen in this Finviz Screener, traded lower.
Yield bearing sectors trading lower included
Financials trading lower included the following
Ireland Bank, IRE, led European Financials, EUFN, -.9
Argentina Banks, BRBR, BSBR, BMA, and GGAL, led Emerging Market Financials, EMFN, -.6
China Financials, CHIX, -.7
US Banks, BAC, and C, led Too Big To Fail Banks, RWW, -1.6
Asset Managers, seen in this Finviz Portfolio,
Regional Banks, KRE, -1.0
Investment Bankers, KCE, -1.9
Stockbrokers, IAI, -1.7
Business Insider provides 46 charts that every gold bull will love.
Jeff Mackie of Breakout reports that Google is planning to offer its O3b Internet Service, from medium orbit satellites, in Q4 of 2013.
As I’ve shared with you, I live in the downtown area of Bellingham, just off skid row, that is Holly Street, in the Sea Breeze Apartments, operated by a nonprofit corporation. It’s a licentiousness part of town. I was at home late in day, I had my door open, and noticed that the hallway light came on; yet strangely I didn’t hear any knocks or any speaking; so I stepped into the doorframe and looked down the hall. There outside the door of the apartment across the way stood two divas; you know, two young hot looking women; not anything like who most of the old and disabled who live here. The first was an enforcer and overlord; she stood supporting herself with her left arm on the hallway; and she gave me a look like she wanted to kill me; I’ve seen the big men here at Sea Breeze, that is the antisocial ones, have given me this look dozens of times. The second was a harlot; when I looked at her, she looked at the door. Well, the apartment across the way is transit station where people do sex and drugs; the landlord, how I hate that term, and the police, know this, and are working to remedy the situation; the only gripe I have, is that the apartment could be rented out to some poor disabled person like myself who really would treasure the place.
On Friday, August 16, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.83%, a two year high, causing Aggregate Credit, AGG, to trade strongly lower. Market Watch reports Treasurys tank; 10-year yield up 75% since May.
Yield bearing sectors trading lower included
Sectors trading lower included
Gold Miners, GDX- .2.1, GDXJ, -1.6, traded lower on a higher price of Gold, GLD, which closed in what may a breakout, in a questioning harami.
Metal Manufacturing, XME, -1.3
Uranium Miners, URA, -1.2
The EUR/JPY closed the week lower, slightly from last week’s close, at 103.01, sustaining and even enabling the Eurozone Stocks, EZU, to close the week in a questioning harmai. A number of European Nations rose to new rally highs on higher European Financials, EUFN, these included Italy, EWI, and Spain, EWP.
World stocks, VT, US Stocks, VTI, Nation Investment, EFA, and Small Cap Nation Investment, traded lower from their Wednesday August 14, 2013, highs.
A rising Interest Rate on the US Ten Year Note, ^TNX, since May 21, 2013, to 2.01%, has created debt deflation, that is currency deflation, striking the emerging market banks, emerging market currencies, and emerging market bonds hard. Business Standard reports Indian stocks plunge on falling rupee. India Banks, IBN, HDB, traded lower forcing India, INP, SCIN, lower. And Brazil Banks, ITUB, BBDO, BBD, traded lower forcing Brazil, EWZ, EWZS, lower. Chile Banks, BCH, BCA, BSAC, traded lower forcing Chile, ECH, lower. Mexico Bank BSMX traded lower, forcing Mexico, EWW, lower.
Liberalism’s credit scheme of Dollarization has failed as Rajesh Kumar Singh and Archana Chaudhary of Bloomberg report “Power company bonds are India’s worst performing this year as failures in fuel supply inflate coal-import bills and lengthen project delays. Dollar notes sold by electricity generators and distributors lost an average 5.1% through Aug. 12.”
Rogerio Jelmayer and Matthew Cowley of the WSJ report “Brazil’s government-run Banco do Brasil SA is pressing ahead with its rapid increase in lending, urged on by the government, even as the economy slows and its private-sector rivals hold back. President Dilma Rousseff and her administration have pressed government lenders including Banco do Brasil to lend more to help jump-start weak economic growth. Low unemployment, rising salaries and ample credit have fueled strong consumer demand, while industry has contracted. Some investors fear that Banco do Brasil, Latin America’s largest bank by assets, could be storing up trouble for the future. The economy is showing little sign of a strong recovery, and unemployment levels have started to lift off their recent historical lows. That could lead to more defaults on the new loans Banco do Brasil made during the slowdown.”
This week sectors leading lower included
Biotechnology, IBB, -3.7
Pharmaceuticals, PJP, -3.2
Consumer Discretionary, IYC, -3.1
Internet Retail, FDN, -2.9
Transportation, XTN, -2.6
Retail, XRT, -2.5; Major US retailers posted reduced quarterly sales this week
Small Cap Pure Value, RZV, -2.3
Solar, TAN, -2.3
And this week yield bearing sectors trading lower included
This week the chart of the S&P 500, $SPX, SPY, shows a 2.1%, trade lower.
The week ending August 16, 2013, saw all forms of fiat money die on the rise of the Interest Rate On The US Ten Year Note, ^TNX, to 2.83%. Major World Currencies, DBV, Emerging Market Currencies, CEW, Aggregate Credit, AGG, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, all traded lower on Friday August 16, 2013, on the exhaustion of the world central banks’ monetary authority.
Jesus Christ acting in dispensation, that is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, the week ending August 16, 2013. Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.
Liberalism’s sovereignty of democratic nation states and its seigniorage of credit and currency carry trades is failing. Bible prophecy of Revelation 13:1-4, communicates that out of Mediterranean Sea nation sovereign insolvency and banking insolvency, that Authoritarianism’s sovereignty of regional governance, producing nannycrat rule, and the seigniorage of ditkat, producing totalitarian collectivism, is rising to rule the world.
Wall Street Economist Steve Slifer says In our opinion, the current drop is nothing more than typical stock market volatility. Finally, the spread between long-term and short-term interest rates, known as the “yield curve”, is an important indicator of future economic activity. With the 10-year currently at 2.8% and the funds rate at 0.1% the yield curve currently is 2.7%. It is not going to slow the pace of economic activity. We do not have to worry about a recession (or a significant growth slowdown) until the yield curve flattens sharply – which will probably not occur until the Fed actually begins to raise the funds rate in mid-2015. We will not become alarmed until the stock market declines by at least 10%, and is confirmed by alarm bells from some of these other leading economic indicators.
John Redwood, MP, says US rates have risen on expectations that the Fed will soon end its large Quantitative Easing programme. They have risen despite various attempts to reassure people that the stimulus will not be withdrawn prematurely, to damage recovery. When the UK withdrew or temporarily suspended its QE programme there was no such impact. Central bankers have to try to guide market expectations in the way they wish, to keep enough confidence in an economy without letting inflation race away. So far in his short time as Governor Mr Carney has been lucky, that he arrived just as the UK economy was showing good signs of revival. He was less lucky with the background for launching forward guidance. The US pushing rates up has had more impact on the UK bond markets than the Bank’s statements. It has produced the irony that the Governor’s policy was designed to keep rates down, yet the markets have pushed borrowing rates up rapidly for the government.
Doug Noland writes Introducing “Government Finance Quasi-Capitalism”. After much contemplation, I’ve decided it’s again appropriate to update Minsky’s “Stages of development of Capitalist finance.”
I’m going to call the new “Minsky Stage” – “Government Finance Quasi-Capitalism” (GFQC). The government now essentially determines market yields throughout the entire Credit system. The government now basically insures system mortgage Credit and sets mortgage borrowing costs. Massive federal deficits and low Fed-dictated borrowing costs sustain inflated corporate earnings and cash-flows. The Fed has come to believe it is within its mandate to inflate securities and asset prices. It has crushed returns on saving instruments. Amazingly, the Fed believes it is within its mandate to dictate that savers flee the safety of deposits and other “money” for the risk markets.
“Government Finance Quasi-Capitalism” exacerbates fragilities. It fosters ongoing Credit excesses including a historic expansion of non-productive government debt. GFQC and the resulting flow of finance exacerbate imbalances and economic maladjustment. Accordingly, resulting financial and economic fragilities ensure an even bigger role for Washington in the real economy and for the Federal Reserve in the financial markets.
With securities markets near record highs, it has become popular to refer to “enlightened” policymaking. As a student of monetary history, I see the seductive workings of the monetary inflation expedient. Once commenced, it always assumes increasing control. The expansion of government finance ensures dependency on fiscal deficits and central bank “money printing.” Inflating securities prices, highly speculative and distorted financial markets, and economic maladjustment ensure ongoing fragilities. “Government Finance Quasi-Capitalism” ensures the over-issuance of mispriced finance, the misallocation of resources and a deficient real economy. The widening gulf between weak fundamentals and monetary inflation-induced market Bubbles creates a highly unstable, uncertain and precarious backdrop. All seem to ensure only greater government intrusion, control and stagnation.
I comment that the chart of Mortgage Backed Bonds, MBB, together with, US Stocks, VTI, Eurozone Stocks, EZU, the Nikkei, NKY, Chinese Stocks, YAO, and Small Cap Pure Value Stocks, RZV, reflects the movement of money to risk assets, and their topping out, that has come through “Government Finance Quasi Capitalism”
This Finviz Screener presents the top 30 Risk Assets of Liberalism’s “Government Finace Quasi Capitalism”; these are XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR ,IGN, BJK, PBJ, ING
John Rubino of Dollar Collapse provides this week’s Precious Metals Report
8/17 Hathaway – ‘Paper gold’ short squeeze underway – GotGoldReport
8/17 4 indicators that show gold prices are set to surge – ETF Daily News
8/17 Cannabis revealed: why marijuana is illegal? – Don’t Tread On Me
8/16 Casey’s Louis James warns: “Don’t try to time the market” – Casey Research
8/16 Gold’s new rally begins now – Daily Reckoning
Jack Chan of JC’s buy and sell signals, gave his Buy Signal to gold, as is seen in the chart of the Gold, ETF, GLD, this week; this as Mike Mish Shedlock writes Losing faith in gold at the wrong time.
2) … Is the stage being set for the rise of a King of the North? … And is the King of the South now rising to power?
Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming sovereign, that is the Prince who is to come, that being the Prince of the people.
Daniel 11:11 “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy.”
Daniel 11:40 “At the time of the end the king of the South shall attack him; and the king of the North shall come against him like a whirlwind, with chariots, horsemen, and with many ships; and he shall enter the countries, overwhelm them, and pass through.”
Scott at Prophecy Update writes EU convenes emergency meeting on Egypt: EEAS back in the news.
We know from Daniel 9:27 that the coming antichrist will “confirm” the covenant with the many, and part of any confirmation of a peace deal in the Middle East will include some kind of peace-keeping forces. It requires some degree of speculation, but it seems obvious that any plan will have to consider a combination of border control forces and forces on the streets to maintain peace. The EEAS was formed for this very purpose, and the fact that this group was born in the revived Roman Empire becomes a compelling story for a prophecy watcher. If the EEAS is considering involvement in Egypt it is very easy to see similar maneuvering whenever the covenant of Daniel 9:27 is confirmed. This story is worth watching closely,
Duane and Shelly Muir of Signposts of the Times write It’s official, military chief Sisi is new king of Egypt
Financial market report for the week ending May 9, 2013
1) Details of this week’s financial market trading
On Monday, August 5, 2013, Briefing.com reports Stocks slipped out of the gate after better-than-expected economic data from China and Great Britain was unable to spark an early bid. In China, the Non-Manufacturing PMI rose to 54.1 from 53.9 while Great Britain’s Services PMI posted its best reading since 2006, rising to 60.2 from 56.9. Equities climbed off their early lows before receiving an additional push following the release of the ISM Non-Manufacturing Index, which posted its best reading since February 2011. The index jumped to 56.0 from 52.2 as business activity and production levels spiked to 60.4 in July from 51.7 in June. Just like the manufacturing report, the jump in production came from a strong gain in new orders (57.7 from 50.8). Although today’s data provided stocks with a boost, the S&P never made it into the green as comments from Dallas Fed President Richard Fisher knocked the key indices off their highs. Mr. Fisher said the Fed’s bond buying program may lay the groundwork for misallocation of resources and fuel future inflation. In addition, he said the market could expect a slowdown in asset purchases later in the year if the economy continues to “improve along the lines envisioned by the Committee.”
The chart of the EUR/JPY shows a trade lower from Friday, August 2 2013, to close today at 130.35, with the Euro, FXE, trading lower and the Yen, FXY, trading higher.
The Interest Rate on the US Ten Year Note, ^TNX, rose strongly to close at 2.64%, driving interest rate sensitive Homebuilding, ITB, and Automobiles, CARZ lower; stocks tradng lower included F, JCI, SIRI, RAD, ITW, IP, UTX, GILD, AMGN, and KORS.
Today’s higher Interest Rate on the US Ten Year Note, ^TNX, drove the BRICS, EEB, such as Brazil, EWZ, EWZS, India, INP, SCIN, and China, YAO, lower. And drove the Emerging Markets, EEM, such as the Philippines, EPHE, Indonesia, IDX, Thailand, THD, Turkey, TUR, and Chile, ECH, lower as well.
The trade lower in the Andean 40, AND, Brazil Financials, BRAF, Thailand, THD, the Philippines, EPHE, and Indonesia, IDX, coincides with the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013, as is seen in their combined ongoing Yahoo Finance Chart, and docmuents the failure of liberalism’s credit scheme of Dollarization, as well as documents that the rally in nation investment in these countries, came via a credit induced inflationism, and constituted a crack up boom.
Philippine Austrian economist Benson te documents the tremendous amount of credit flowing in the Philippines stating In terms of debt, the rate of increases in Philippine debt outstanding  both from domestic and from foreign lenders over the past 17 years have been at CAGR 9.49% and 9.62% respectively; total debt has grown 9.59%. It is true that the current administration has reduced the rate of growth in total debt levels by almost half or 4.84% from 2010-2012, aside from changing the mix of the debt exposure in favor of domestic debt, where domestic debt grew by 8.46% while foreign debt contracted by .523%. Domestic debt now commands nearly 64% share of the total outstanding debt. The shift to tilt the balance of debt outstanding towards domestic debt from foreign debt deftly avoids external debt risks and at the same maximizes the Philippine government’s financial repression policies, through not only the stealth transfer of people’s savings in favor of the government (debtor) but importantly by keeping interest artificially rates low, such reduces the government’s interest expenditures which effectively operates as a covert deficit reduction mechanism.
Dividend yielding sectors trading lower on today’s higher interest rate included Brazil Financials, BRAF, Emerging Market Financials, EMFN, European Financials, EUFN, India Earnings, EPI, China Financials, CHIX, and Utility Stocks, XLU, such as those seen in this Finviz Screener, as well as Dividend Growth, VIG.
The trade lower in Utilities, XLU, and Dividend Growth, VIG, are strong indicators that the stock market is now once again turning lower, on the failure of credit. Bond vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad. Banks trading lower included the UK’s HDC, Brazil’s ITUB, BSBR, BBD, BBDO, and South Korea’s WF. Reuters reports Output in emerging market economies contract in July. Energy Partnerships, AMJ, seen in this Finviz Screener, traded lower on a lower price of Oil, USO.
The chart of Stocks, VT, relative to Aggregte Credit, AGG, VT:AGG, suggests that stocks are terrifically over leveraged, and that are soon going to experience strong investment derisking and deleveraging.
Bankers, under liberalism’s monetization of debt, have produced a moral hazard based peak prosperity. Nannycrats under authoritarianism will apply all of liberalism’s debts to every man, woman and child under planet earth, establishing global austerity. After selling off last Friday, Solar Energy Stocks, TAN, blasted to a new rally high. While Reuters reporting Dow, S&P slip from record highs on year’s lowest volume, the Dow, DIA, traded only 0.3% lower, and the S&P, SPY, traded only 0.2%, lower.
The Risk Off ETN, OFF, traded in a highly volatile manner, and then closed spiked down; and the 200% Volatility ETN, TVIX, traded lower as well; both suggesting that stock market place acceptance of higher interest rates without any real overall market trade lower, has reached the maximum level of credit and currency carry trade leverage possible. Along this line of thought, Tyler Durden of Zero Hedge writes Diapason Commodities Sean Corrigan’ Blue-Sky index is flashing red. And in news of a disconnect from the reality that bonds underwrite stocks, Reuters reports Japan $80 billion public fund may shift funds to stocks from bonds. The pension fund for Japan’s civil servants is considering changing its ultraconservative investment strategy to allow more of its $80 billion to go into stocks and less into domestic government bonds.
Gary of Between The Hedges relates that Zero Hedge reports the following:
Darryl Schoon wrote in Financial Sence on January 4, 2012, China, 2012 and Von Mises’ Crack-Up Boom Ludwig von Mises wrote in Human Action in 1949, The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.
The bankers’ artificial injection of credit into free markets ultimately overwhelms supply and demand fundamentals. This distortion, conveniently overlooked during expansions, becomes painfully apparent during contractions when demand disappears leaving behind excess capacity, defaulting debts and high levels of unemployment. Capitalism’s foundation of debt-based money was destabilized by America’s expansion of its monetary base after 1980; resulting in the eventual overcapacity of supply in the East, e.g. China. Japan, Korea, whose economies had expanded to satisfy the artificially inflated demands of the West, e.g. the US, the UK, Europe. Capitalism, an always uneasy imbalance between credit and debt, is now trying to regain its balance. It can’t. The present crisis, created by decades of excess credit, is being treated with even more credit; a dangerous palliative that will exacerbate, not solve, what is happening. Modern monetary debauchery is no longer a Western phenomenon. China has now joined the party and in a very big way.
Professor David Hackett Fisher in The Great Wave, Price Revolutions and the Rhythm of History writes that for the last eight hundred years, periods of economic and social stability have been intermittently interrupted by waves of rising prices. Each of these great waves according to Professor Fisher culminated in the economic and societal collapse of the existing order, bringing to an end the Middle Ages, the Renaissance, the Age of Enlightenment, etc. Finally, the great wave crested and broke with shattering force in a cultural crisis that included demographic contraction, economic collapse, political revolution, international war and social violence pp. 237-238, David Hackett Fisher, The Great Wave: Price Revolutions and the Rhythm of History, Oxford University Press, 1996.
Great waves take 80 to160 years before they end in the eventual decline and collapse of existing epochs. Today, another great wave is about to crest and break; and the changes could be even more extreme as the amplitude of change is greater than in any previous wave.
The crackup boom will end as von Mises predicts in monetary disarray, i.e. the debasement of currencies and possible hyperinflation where paper money loses all value. Today, money is no longer a store of value. It’s a trap for the unsuspecting that has already been sprung. The 300 year viral spread of the banker’s fraudulent paper money is best explained by Gresham’s Law wherein bad money drives out good. But the global success of the banker’s debt-based money has led to its own undoing; for when there’s no good money left, only bad remains. In 1971, after which gold no longer backed the bankers’ now fiat money, the growth of credit and debt became exponential. Today, they are reaching their limits. Tomorrow, those limits will be exceeded. Yes, Dr. Keynes, Dr. Friedman, Dr. Greenspan, Dr. Bernanke, et. al. while there are no limits to economic hubris, there are limits to monetary imbalances. Throughout history, time and time again monetary chaos has led to the explosive rise in the price of precious metals. It’s happening again today.
The price of Gold, $GOLD, fell immediately after Darryl Schoon wrote that article from $1,800 to $1,200; and has since risen to $1,300. An inquiring mind asks, has the S&P 500, SPY, the Russelll 2000, IWM, the Pure Value Small Caps, RZV, and Global Producers, FPX, seen in their combined ongoing Yahoo Finance Chart, all risen to Elliott Wave 5 Highs, and are they poised to awesomely and quickly lower? And an inquiring minds asks, is the price of gold bound to explode massively higher once again.
Buckminster Fuller wrote in his Book Critical Path and its chapter, Twilight of the World’s Power Structures, Humanity is moving ever deeper into crisis, a crisis without precedent. An inquiring mind asks, with fiat wealth peaking, that is with World Stocks, VT, trading at an all time high, is the world about to enter its Buckminster Fuller Moment?
Paul Craig Roberts writes in Shift Frequency article, Washington Signals Dollar Deep Concerns on the soon coming end of the US Dollar Hegemonic Empire, which is foretold in King Nebuchadnezzar’s Statue of Empires Dream in Daniel 2:25-45, where a Ten Toed Kingdom of Regional Governance, whose toes of iron diktat and clay democracy form regional zones of economic and political activity, when the iron like power of the British Empire and the US collapse.
Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.
One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars.
These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency.
To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment. This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money.
If the dollar were not the reserve currency, Washington would not be able to finance its wars or continue to run large trade and budget deficits. Therefore, protecting the exchange value of the dollar is Washington’s prime concern if it is to remain a superpower.
The threats to the dollar are alternative monies–currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency (or undollar regional bartering schemes).
The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.
Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.”
That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase.
The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates.
The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts.
Something had to be done about the rising price of gold and silver.
There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal–coin shops, bullion dealers, jewelry stores.
The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble.
This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press.
Previously, on Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.
The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.
Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.
Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.
Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.
Who can be unconcerned with losing money in this way? Only a central bank that can print it.
Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge, The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met.
While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand.
That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.
What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse. It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar?
If the consumption-based US economy deprived of consumer income by jobs offshoring takes a further dip down in the third or fourth quarter–a downturn that cannot be masked by phony statistical releases–the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?
A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.
When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?
And Cliff Kule writes Charles Hugh Smith notes Chapter 12 of David Stockman’s new book The Great Deformation describes the realities of the end of the gold standard .. “Richard Nixon soon found that meeting the nation’s obligation to pay its debts in gold and to uphold the Bretton Woods system were distinctly inconvenient to his own reason of state: reelection in 1972 .. Severing the link to gold paved the way for the T-bill standard and a vast multi-decade spree of central bank debt monetization and money printing. Since a régime of floating-rate paper money had never been tried before on a global basis, the Keynesian professors and their Friedmanite collaborators can perhaps be excused for not foreseeing its destructive consequence. The record of the next several decades, however, eliminated all doubt. Freely printed money gave rise to a toxic deformation; the vast financialization of the world economy and the rise of endless carry trades, massive arrangements of speculative hedging, and monumental daisy chains of debts, owned by debts, owned by still more debts.”
“Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention. Let’s pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival. Financialization is like the bubonic plague–it constantly needs new victims as it kills off its existing hosts .. What is financialization? Simply put, it is finance infecting and hollowing out all levels of an economy .. BUT you can’t create a new cycle of plague when the hosts are either dead or already infected. The world has run out of sectors that can be financialized; that plague has already killed or infected every corner of the global economy.”
On Tuesday, August 6, 2013, the world passed through peak prosperity, and peak stock wealth, as all forms of wealth, Gold, GLD, Silver, SLV, Commodities, DBC, World Stocks, VT, Major World Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%, on the exhaustion of the world central banks’ monetary authority.
Thus, an Elliott Wave 5 High was attained the week ending August 2, 2013, in World Stocks, VT, the S&P 500, SPY, the Russell 2000, IWM, Global Producers, FXR, Small Cap Pure Value Stocks, RZV, Dividend Growth, VIG, and a whole host of other ETFs, such as nation investment in Ireland, EIRL; and an Elliot Wave 2 High was attained in Utility Stocks, XLU, and Global Utilities, DBU.
Richard Evans, Investment Editor of The Telegraph, writes Rate rises threaten crash in every asset, relating that the value of almost all investments, including shares, bonds and property, could fall if investors believe that interest rates are about to return to normal, a senior fund manager has warned.
With the rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.64%, what Doug Noland of Prudent Bear terms the Global Government Finance Bubble, has burst. Hyman P. Minsky identified five stages of the Credit Cycle, displacement, boom, euphoria, profit taking and panic; the profit taking stage has been reached, and the panic stage is coming very soon. The collapse of fiat investments will be seen in what were Liberalism’s fastest rising ETFs, XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, seen in this Finviz Screener.
The Business Cycle, specifically the Austrian Business Cycle, and the Kondratieff Cycle, is complete as nation states are no longer sovereign governors of economic and political activity, and are unable to provide seigniorage, that is moneyness, to investor’s choice of investments, currencies and credit, which featured a moral hazard based prosperity.
The Milton Friedman Free to Choose banker regime is no longer able to support Liberalism’s policy of investment choice, and its credit schemes, such as the debt trade of junk bond investing, JNK, and the currency carry trade of Eurozone investing, EUR/JPY, and the safe haven trade in US Banks, KRE, and the credit responsive US Small Caps, IWM, as the monetary policies of the world central banks, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad, as evidenced by the failure of Treasury Bonds, BWX, at the hand of bond vigilantes, calling interest rates higher, as well as the failure of currencies, such as the Indian Rupe, ICN, and the Brazilian Real, BZF, in ongoing competitive currency devaluation, at the hands of currency traders, selling currencies short.
With the failure of all forms of fiat wealth on August 6, 2013, Jesus Christ, acting at the helm of the Economy of God, that is in Dispensation, seen in Ephesians 1:10, has pivoted the world from the paradigm of Liberalism into the paradigm of Authoritarianism.
The Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, is now rising as the sovereign governor of economic and political activity, and to provide seigniorage, that is moneyness, to nannycrats and their regional statist rule over the factors of production, enforcing Authoritarianism’s policies of diktat, and schemes of debt servitude, establishing austerity over all of mankind.
The world central bankers, together with The Too Big To Fail Bankers, RWW, The European Financials, EUFN, and the Far East Financials, FEFN, defined Libealism’s money; and the Asset Manager, BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, BX, FNGN, and BEN, seen in this Finviz Screener, coined Liberalism’s money.
With the August 6, 2013, financial marketplace trading, many are starting to distrust bankers and the institution of banking. Beginning with the announcment of QE 3 on On September 13, 2012, which provided for an open-ended commitment to purchase $40 billion agency mortgage-backed securities per month until the labor market improves “substantially”. The very nature of credit and money started to become not only inflated, but dangerously warped and distorted, so that now, the world central bankers and their policies no longer can serve as the basis for economic and political activity.
With the rise of the Interest Rate on the US Ten Year Note, ^TNX, on August 6, 2013, to 2.64%, Liberalism’s fiat money system died; and Authoritrianism’s diktat money system now serves as trust, medium of exchange, wealth and power.
With the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. The rise of the baseline interest rate on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Now the rise of the interest rate on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money.
From August 6, 2013, forward, nannycrats, will set the rules for the formation of the new money, that being diktat money, which will determine everything else.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Jeroen Dijsselbloem, and Michel Barnier, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.
Reuters reports Stocks Drop After Comments From Fed’s Evans, Lockhart. Stocks slid following comments from the presidents of the Atlanta and Chicago Federal Reserve Banks that the central bank could start reducing its bond-buying program as soon as September. Fed may cut bond buys as soon as next month, Evans says And Fed could taper in September but doesn’t have to, Lockhart says.
Yahoo Finance reports all forms of fiat wealth traded lower as Aggregate Credit, AGG, traded, lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%.
Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower.
The EUR/JPY closed lower again to close at 130.08, as the Yen, FXY, rose more than the Euro, FXE.
Commodities, DBC, such as Oil, USO, Natural Gas, UNG, Base Metals, DBB, Gold, GLD, and Silver, SLV, traded lower.
World Stocks, VT, traded 0.5% lower; stock sectors trading lower included the following:
US Infrastructure, PKB, 2.7%, traded lower on lower TREX, PGTI, EXP, USG, MAS,
Drug Stores, DRST, 2.2, traded lower on lower RAD, WAG, CVS,
Home Builders, ITB, 2.1,
Biotechnology, IBB, 2.1, on lower REGN, CELG, MNKD, BIIB,
Design Build, FLM, 1.5, traded lower on lower KBR, FLR, JEC, URS,
Global Producers, FXR, 1.5, traded lower on lower WHR, GM, IR, LYB, ERJ, SNE,
Transportation, XTN, 1.5, on lower, UNP, KSU, R,
Solar Stocks, TAN, 1.5,
Regional Airlines, REAI, seen in this Finviz Screener, traded lower 1.5% lower,
Small Cap Industrial, PSCI, 1.1, traded lower on lower HEES, WTS, JBT, KDN,
Retailers, XRT, 1.1, traded lower on lower BODY, PSUN.
Regional Banks, KRE, 1.0 on lower FFIN, FIBK, RF, NASB, CFFI, SUBK
Of note, the Russell 2000, IWM, traded 1.0% lower.
Metal and Mining sectors traded lower on prospects of diminished global growth.
Silver Miners, SIL, 7.0%
Junior Silver Miners, SILJ, 6.5, on lower SSRI
Gold Miners, GDX, 5.3 on South Africa’s, lower AU, GFI, HMY; as well as IAG, AUY, BRD, NEM, BVN, NEM, RGOLD, GOLD and GG
Junior Gold Miners, GDXJ, 5.2, on lower JAG, ANV, TGD, NV, VGZ, SRA
Metal Manufacturing, XME, 2.5
Copper Miners, COPX, 2.0
Global Industrial Miners, PICK, 1.6
Uranium Miners, URA, 1.5
Rare Earth Miners, REMX, 1.5
Steel, SLX, 1.5%
Energy shares traded lower on a lower price of Oil, USO.
Small Cap Energy, PSCE, 1.8%, on lower EPM, CIE, PDCE, EGN, BCEI, GPOR, MRO,
Energy Service, OIH, and IEZ, 1.2, on lower HLX, EXH, OII,
Taiwan, EWT, South Korea, EWY, South Africa, EZA, led Nation Investment, EFA, lower. India, INP, Russia, RSX, Brazil, EWZ, and China, YAO, led the BRICS, EEB, lower, as India Banks, HDB, and IBN, Brazil Banks, ITUB, BBD, BBDO, Chinese Financials, CHIX, and the Emerging Market Financials, EMFN, traded lower. The Philippines, EPHE, Chile, ECH, and Argentina, ARGT, led Small Cap Nation Investment, IFSM, and the Emerging Markets, EEM, lower.
Ambrose Evans Pritchard reports India’s financial prophet Raghuram Rajan to run central bank. India has picked Raghuram Rajan, the prophet of financial Armageddon, to take over the country’s central bank and avert a full-blown currency crisis as the economy hits the buffers
Yield Bearing sectors, Water Resources, PHO, Global Utilities, GBU, and Electric Utilities, XLU, traded lower.
On Wednesday, August 7, 2013, World Stocks, VT, traded lower for a third straight day, on the failure of the world central banks’ monetary policies to stimulate global growth and corporate profitability.
Japanese Banks, NMR, MTU, SMFG, MFG, led the Nikkei, NKY, 1.9% lower, documenting a failure of Kuroda Abenomics, and the UK’s bank HBC, led EWU, lower, documenting that the inability of the Bank of England’s monetary policy of Forward Guidance to provide investment stimulus. Australia Bank, WBK, led Australia, EWA, lower, establishing that the Reserve Bank of Australia’s rate cute has had a toxic effect, and has turned money good investment bad. Sectors trading lower included
Solar, TAN, -8.2,
Homebuilding, ITB, -2.2,
Retail, XRT, -1.4, on lower PSUN, EXPR, ANF, BKE, CBK, GCO,
Automobiles, CARZ, -1.2, on lower MGA, TEN, BWA, F, GM, DLPH, AXL, TRW
Semiconductors, SMH, -1.0, on lower ATML, TQNT, RMBS, TSM, MU,
Regional Banks, KRE, -1.0, on lower FFIN, STT, SNV, ORIT,
Small Cap Energy, PSCE, -1.5, and Energy, XOP,-1.5, on lower MRO, PDCE, GPOR, GDP, EPM, RRC, COG, BECI, KOG, ERF, all on a lower price of Oil, USO.
Asset Managers, such as BLK, seen in this Finviz Screener, traded 1.4% lower
Asia Excluding Japan, EPP, traded lower on lower Australia Dividends, AUSE, and China Financials, CHIX, which turned China, YAO, Australia, EWA, South Korea, Indonesia, and Malayasia, EWM, lower. Taiwan, EWT, traded lower on lower Semiconductors TSM, and HIMX, and Semiconductor Material Manufactuer, UMC,
India Banks, IBN, and HDB, led India, INP, lower, the BRICS, EEB, lower. And
Chile, ECH, led Emerging Markets, EEM, lower.
Canadian Banks, TD, RY, BMO, BNS, CM, led Canada, EWC, lower.
CNBC reports Tesla posts surprise profit; shares jump 15%. Tesla reported a surprise second-quarter operating profit, causing the premium electric carmaker’s shares to jump more than 15 percent after the closing bell.
Yield bearing sectors trading lower included the following: BRAF, on the trade lower yesterday in Brazil’s Banks. Australia Dividends, AUSE, China Financials, CHIX, and China Real Estate, TAO.
Of note, the Euro Yen Currecny Carry Trade, EUR/JPY, traded lower once again to close at 128.68, as even though the Euro, FXE, rose, the Yen, FXY, blasted strongly higher. The JYN has been trading higher ever since bond vigilantes gained control of the Interest Rate on the US Ten Year Note, ^TNX, calling it higher to 2.01% on May 24, 2013.
Gary of Between the Hedges relates the Bloomberg report Fragile five currencies unravel as developing economies suffer.. Emerging market currencies, CEW, are trailing their peers in advanced economies by the most since 2009 as a global recovery eludes countries from China, YAO, to Brazil, EWZ. The 20 most-traded developing nation currencies tracked by Bloomberg weakened an average 5.3% against the dollar in the past three months, compared with a 1.1 percent gain for the six comprising IntercontinentalExchange’s Dollar Index, DYX. That’s the biggest gap since the height of the banking crisis four years ago. Kitco remarks Currency markets: the next crisis has begun.
The chart of the 200% US Dollar ETF, UUP, shows that the Dollar is falling to strong support, after a seven week down, suggesting that the Euro, FXE, will soon be trading lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, are trading lower on competitive currency devaluation, causing debt deflation, in World Stocks, VT. Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being ditat, perhaps better said diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4.
Soon diktat will serve as trust, medium of exchange, wealth and power, as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, for regional security, stability, and security, and to appoint nannycrats to oversee the factors of production and oversee regional commerce, trade, banking and fiscal spending, as presented by the Prophet Daniel in Daniel 2:25-45, as a Ten Toed Kingdom, and John the Revelator, in Revelation 13:1-4, as the Beast Regime.
Three Beasts are rising to rule mankind. The First Beast, that is the monster of Regional Goverance and Totalitarian Collectivism, is presented in Revelation 13:1-4. It is rising from the sovereign and banking insolvency of Mediterranean Sea nations of Portugal, Italy, Greece and Spain. It will give the Second Beast, that is the Little Horn of Daniel 7:20-25, presented in Revelation 13:5-10, as the Sovereign, his power. This individual is described in 2nd Thessalonians 2:3, 2nd Thessalonians 2:8, Daniel 9:25, Daniel 11:21, and Daniel 11:36. And yet another beast, the Third Beast, the Seignior, is presented in Revelation 13:11-18. He will rise to accompany the Beast Regime, and the Sovereign, as the world’s banking and religious leader.
Tyler Durden of Zero Hedge reports Greek villagers chase tax collectors out of town.
Via Ekathermini.com A team of inspectors from the Financial Crimes Squad (SDOE), was on Tuesday heckled by locals at a village in Crete and coerced to leave, before a one-month closure order was issued against the owner of a taverna where the team was intimated, local media reported.
The SDOE team turned up at the village of Archanes in Iraklio as locals were celebrating their patron saint with a church fete. According to reports, local residents took offense that the tax inspectors chose that day to conduct raids on businesses for tax code violations. Their displeasure became more than apparent among a group of people at a large local taverna, who heckled the tax officers and threatened them with force if they did not leave the village. Last summer SDOE inspectors were prevented from leaving the Saronic island of Hydra by disgruntled locals. Police had to be sent from Athens to ensure their safe passage back to the mainland. Following Tuesday’s incident in Crete, the Finance Ministry issued orders for the taverna at which the intimidation was centered to be shut down for one month and for a complete audit to be conducted of its finances.
End Time Headlines reports Mexico and Canada declared part of US homeland by Senate maps. Senator Dianne Feinstein referred to the US, Canada and Mexico as “the Homeland” at an NSA Senate briefing on Wednesday, presenting a map that united the three nations as one. At a Senate Judiciary Committee meeting held to acquire details on the National Security Agency’s mass surveillance programs, Sen. Feinstein (D-Calif.) made a geographic mistake in which she united three large countries into one. The error went by without comment during the briefing, but generated a significant response upon closer examination of the map.
On Thursday, August 8, 2013 World Stocks, VT, World Small Cap Stocks, VSS, US Stocks, VTI, Global Producers, FXR, and Small Cap Pure Value Stocks, RZV, rose on higher European, VGK, Eurozone, EZU, and European Financials, EUFN, while Semiconductors, SMH, Biotechnology, IBB, Pharmaceuticals, PJP, and Energy Partnerships, AMJ, traded lower. The 9% rise in Internet Banks, that is Online Banks, First Internet Bancorp, INBK, and the 6% rise in BofI Federal Bank, BOFI, gives a Grand Finale Salute to the Liberalism’s age of investment choice. Liberalsim’s feartured Banker driven credit and carry trade investing schemes, producing a moral hazard based prosperity. Authoritarianism’s features Beast ruling debt servitude schemes, such as bank deposit bailins, new taxes, and capital controls, producing grining austerity.
Aggregate Credit, AGG, rose as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.59%.
The EUR/JPY rose to close at 129.4, as the Euro, FXE, closed higher at 132.34, and the Yen FXY, closed lower at 101.15. The Swedish Krona, FXS, blasted higher, taking Sweden, EWD, higher.
Gold, GLD, rose 2.1% higher, and Silver, SLV, blasted 4.2, higher.
Sectors trading higher included
Junior Gold Miners, GDXJ, 9.2%, such as IAG, Gold Miners, GDX, 8.6, such as EGO, as Gold, GLD, 1.8%
Silver Miners, SIL, 8.1, such as SLW, and SSRI, 14.6, as Silver, SLV, 7.6%.
Copper Miners, COPX 5.0, as Copper, JJC, 2.6%
Industrial Miners, PICK 4.6, as Base Metals, DBB, 4.1%
Metal Manufacturing, XME, 4.1
Steel, SLX 2.9
Global Financials, IXG 1.2
Gaming, BJK 1.1
Internet Retail, FDN 1.0
Liberalism’s final currency carry trade and debt trade, carried Liberalism’s most volatile banks and their countries to rally highs.
Australia’s EWA 2.9, WBK, 2.1%
South Korea EWY, 1.0, WF, 3.0, KB, 1.7, SHG 1.5
China’s YAO, 1.7, ECNS, 1.4, CHIX, 1.5
Germany Small Caps’ GERJ, 1.5, DB,1.8
Switzerland’s EWL, 0.4, UBS 1.6, CS, 1.5
Sweden EWD, 1.3
Taiwan EWT, 1.0
Emerging Markets, EEM, 2.0
Chile, ECH, 4.0
Poland, EPOL, 3.3
Peru, EPU, 2.8
Turkey, TUR, 2.5
Thailand, THD, 2.4
Mexico’s, EWW, 2.3, Financo Santander, BSMX, 3.2%
Argentina’s ARGT, 1.6, BBVA, 2.2, GGAL, 1.4, BMA, 0.1, BFR, 0.1
Philippines, EPHE, 1.1
The BRICS, EEB, 2.5
Brazil, EWZ, 3.2
India, INP, 3.0
China, YAO, 1.8
Russia, RSX, 1.0
Yield bearing sectors trading higher included
The Eurozone Stocks, EZU, rose 1.4, propelled higher by the European Financials, EUFN, 1.0; it was the Eurozone Countries, Spain, EWP, Italy, EWI, Netherlands, EWN, Greece, GREK, Ireland, EIRL, Germany, EWG, as well as Sweden, EWD, and their banks, SAN, NBG, IRE, DB, that drove Small Cap Nation Investment, IFSM, as well as Nation Investment, EFA, to rally highs, despite the fact that the Eurozone, EZU, is characterized by insolvent sovereigns and insolvent banks.
Ambrose Evans Pritchard communicates that Greece is a failed nation state Greece becoming new Kosovo as youth jobless hits 65pc. Greek youth unemployment has soared to a record 64.9pc as the country’s downward spiral continues almost unchecked. Everyday news reports communicate that God’s Word of prophecy in Revelation 13: 1-4, is proving true. Out of waves of Mediterranean Sea nation state chaos, He is bringing forth a Beast regime, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones. This monster is the same as the same as the Ten Toed Kingdom seen in the Statue of Empires in Daniel 2:25-45. Apocalypse Blog provides a summary of the rise of a New World Empire.
Tobias Adrian and Michael Fleming write in Federal Reserve Bank article The recent bond market selloff in historical perspective “What Explains the Bond Market Selloff? Are investors expecting higher short-term rates in the future than just a short time ago? Or can some, or all, of the rise in yields be explained by an increase in the term premium, so that investors are demanding greater compensation for the risk of holding longer-term Treasuries? To answer these questions, we use the ten-year, zero-coupon term premium estimates from Adrian, Crump, and Moench (2008) and, for each selloff, cumulate the returns that can be explained by changes in the term premium alone. Our findings, reported in the chart below, suggest that nearly all of the recent increase in yields can be explained by a rising term premium.”
I comment that I reject that expalanation, I believe that the bond market sell off beginning in May 2013, reflects that bnd vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad.
The authors continue “Lastly, we present a table listing attributes of the fifteen largest bond market selloffs since 1961. The three selloffs highlighted in this post—1994, 2003, and 2013—are ranked fifth, ninth, and thirteenth, respectively, and are highlighted in blue. Beyond reporting figures behind the earlier discussion, the table shows the change in the ten-year, zero-coupon yield and in the spread between the ten-year and three-month yields between the start of each selloff and the maximum selloff date. Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases. In contrast, the 1994 episode is one in which the yield spread rose little (that is, the three-month yield increased almost as much as the ten-year yield), explaining the importance of short-term rate expectations in that case.”
I comment that the authors are correct in relating “Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases.” The yield spread is seen in the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, steepeing, that is in the Steepner ETF, STPP, jumping sharply.
The significance of the bond market selloff is three fold. First, with the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. Secondly, the rise of the baseline interest rate, that is ^TNX, on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Thirdly, the rise of the interest rate on the US Treasury Note, ^TNX, on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money. The rise of JYN to strong resistance at 60, and its oppsite, the Japanese Yen, FXY, to strong resistance at 101, suggests that the rally in the Euro, FXE, is complete at 132.50, and that there will be a strong unwinding of Liberalism’s master currency carry, the EUR/JPY from its weekly close at 128.5
On Friday, August 9, 2013, the Financial Markets traded bascially unchanged from yesterday, with the exception of the metal manufacturiang and mining sectors which continued higher as follows
Industrial Miners, PICK 3.9
Copper Miners, COPX 3.8
Coal Miners, KOL 3.2
Steel Producers, SLX 3.4
Metal Manufacturing, XME 2.8
Gold Miners, GDX 1.8, Junior Gold Miners, GDXJ 1.9
Silver Miners, SIL 4.5, Junior Silver Miners, SILJ 9.8, Silver Standard Resources, SSRI 4.2
2) … US Stocks And World Stocks Trade Lower …. While European Stocks, Eurozone Stocks, Small Cap Nation Investment, And Nation Investment Rally To New Market Highs
This week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off ETN, OFF, rising
The interest rate on the US Ten Year Note, ^TNX, closed at 2.58%; Aggregate Credit, AGG, rose 0.3% for the week.
The chart of the S&P 500, $SPX, shows a 1.1% trade lower.
Sectors trading higher this week included:
Life Insurance, ING 8.4
Industrial Miners, PICK 5.6
Copper Miners, COPX 5.5
Steel Producers, SLX 5.4
Metal Manufacturing, XME 3.8
Coal Miners, KOL 3.6
The Eurozone. EZU 1.3
Europe, VGK 1.3
Shipping SEA, 1.2
Internet Retailing, FDN, 1.2
Mining sectors traded as follows: Silver Standard Resources Inc, SSRI, 12.0, Silver Miners, SIL 5.3, Junior Silver Miners, SILJ, 3.6, Junior Gold miners, DXJ 6.1, Gold Miners, GDX 3.4
Sectors trading lower this week included:
Homebuilding, ITB -5.2
US Infrastructure, PKB -3.0
Biotechnology, IBB -2.8
Small Cap Energy, PSCE -2.6
Inverse Volatility, XIV -2.6
Transportation, XTN, -2.5
Retail stocks, XRT, -2.2 as Market Watch reports Retailers’ July sales, warnings add to unease about consumers, back to school.
Too Big To Fail Banks, RWW -2.1
Regional Banks KRE -2.0
Semiconductors, SMH, -1.8
Investment Bankers, KCE -1.7
Stock Brokers, IAI -1.3
Pharmaceuticals, PJP -1.5
Global Producers, FXR -1.4
Media, PBS, -1.3
Small Cap Industrials, PSCI -1.2
Solar Energy, TAN, -1.2
Utilities, XLU, -1.1
Global sectors trading lower this week included
The Nikkei, NKY -2.8
US Stocks, VTI, -0.9,
Emerging Markets, EEM, -0.9
World Stocks, VT, -0.4
Small Cap Pure Value, RZV, -0.4
Global sectors trading higher this week included
European Stocks, VGK, 1.9
Eurozone Stocks, EZU, 1.2
Small Cap Nation Investment, IFSM, 1.2
The BRICS, EEB, 0.6
Asia Excluding Japan, EPP, 0.6
Nation Investment, EFA, 0.3
European Debt, EU, 4.4
Commodities traded as follows this week
Oil, USO -0.9 and Natural Gas, UNG -3.6
Gold, GLD 0.4 and Silver, SLV 3.3
Base Metals, DBB 4.0, and Copper, JJC, 4.7
Agriculture, RJA 0.2 and Agriculture, JJA -0.2
Commodities, DBC -0.7
Financial Survival Network report Hgher education and finance are getting the ax, Jim Rogers relates. And Finance My Money reports The bursting law school bubble: Cash cow law schools are facing 30 year lows in applications as applicants confront high tuition and low wages. And My Budget 360 reports The accelerating race to a student debt implosion: Federal student loans rose by $266 billion since 2011. 85 percent of consumer debt growth since 2011 because of student debt. This week Education Service Companies, such as DV, seen in this Finviz Screener, traded lower.
This week Real Estate Development Companies, such as JOE, seen in this Finviz Screener traded lower.
This week Major Airlines, such as DAL, seen in this Finviz Screener, traded lower.
This week Regional Airlines, such as RJET, seen in this Finviz Screener, traded lower.
This week Asset Managers, such as BLK, seen in this Finviz Screener, traded lower.
This week Staffing Services, such as KELYA, seen in this Finviz Screener, traded lower.
Marc Faber relates in CNBC interveiw It’s time to short sell stocks; yet I suggest that one take physical possession of gold bullion, as it and diktat, will be the only forms of sovereign wealth in the age of Authoritairanism.
If one is going to short sell, I suggest that one sell the 30 ETFs, seen in this Finviz Screener short; these include XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last suggestion being a proxy for life insurance companies.
In Surveillance State news, Antiwar reports Obama claims broad surveillance powers
Pete Carey writes in San Jose Mercury News, Bay Area real estate market is hot even in hardest-hit areas. With Bay Area home prices at levels not seen in nearly five years, the communities hit hardest by the housing crash are starting to boom again. From Oakley and Antioch to East Oakland, East Palo Alto and East San Jose, all-cash offers and free rent for a month for sellers are sweetening bids as a swarm of move-in buyers and investors compete for a relatively small number of homes for sale. And Oregon Live reports Portland’s accelerating real estate market stands out among major cities. And Charlotte Observer relates Charlotte home sales up 33%.
Robert Wenzel in Economic Policy Journal article Milton Friedman as nothing but an extended footnote writes Friedman’s key contributions to macroeconomics look hard to defend.
I comment that Milton Friedman was God’s point man, that is God’s appointed one from eternity past, who called forth the Free to Choose, floating currency Banker Regime of democratic nation states; this economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world. Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life. Milton Friedman was the Father of liberalism policy of investment choice, as well as the father of its schemes of currency carry trade investing and debt trade investing.
Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as BlackRrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU, EWUS, and its banks, LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.
Perhaps Mr. Wenzel’s criticism stems from liberalism’s moral hazard based prosperity and clientelism, which is devoid of genuine meritocracy and full of taxation of every type on personal property, govenment intervention and liberal intervention throughout the world.
Jason Ditz of Antiwar reports Israel rejects deal on EU grants over settlement opposition. I comment that the Bible in Daniel 9:26-27, tells of a time when the soon coming Eurozone’s leader, the Sovereign, will confirm a middle east peace treaty, in what will turn out to be a seven-year deal; the middle of which will see the Sovereign move his governmental headquarters to Jerusalem, where he will defile the then existing Jewish Temple, and demand that the whole world worship him.
CoG in article communicates that a type of revived Roman Empire is coming. There are several reasons that this “prince” is referring to the leader of the developing European empire (see King of the North and Europa, the Beast, and the Book of Revelation). One is that it was the people of the Roman Empire of the 1st century that fulfilled the portion of Daniel 9:26 as they destroyed the city (Jerusalem) in 70 A.D. The European Union includes much of the land and peoples that were part of the ancient Roman Empire. And it is the “prince” coming from that people that verse 27 is referring to. Thus, this prophecy tells us that a lower level European leader will officially start to rise up about 3 1/2 years before the great tribulation (and yes, according to Jesus, some “tribulation” does happen prior to the start of the Great Tribulation). Another is the fact that the “beast of the sea” (Revelation 13:1) fits with the beasts from the “great sea” (Daniel 7:2)–and that is the Mediterranean Sea according to the Old Testament–hence this is an empire like the old Roman one (for more details, please see Europa, the Beast, and the Book of Revelation).
The idea of this being a seven-year end-time deal was also understood by the Catholic theologian Hippolytus (died 235) in the third century: the iron and the clay shall be mingled together. Now Daniel will set forth this subject to us. For he says, “And one week will make a covenant with many, and it shall be that in the midst (half) of the week my sacrifice and oblation shall cease.” By one week, therefore, he meant the last week which is to be at the end of the whole world of which week the two prophets will take up the half. For they will preach 1,260 days clothed in sackcloth, proclaiming repentance to the people and to all the nations. (Hippolytus. On Christ and Antichrist, Chapter 43. Online edition Copyright © 2008 by Kevin Knight).
While the leader in Daniel 9:27 is only referred to as a prince when he confirms the one week covenant, he probably will not be known as the “King” until shortly before he breaks the covenant at the mid-week point (most likely he will be considered simply one of several leaders negotiating a treaty when this deal in Daniel 9:27 is initially made). The two witnesses (who are prophets) rise up around the mid-point of the week. The iron and clay mingled together refers to a power (like Europe) that is not totally cohesive.
Although he has several events out of sequence, even the famed Protestant theologian John Walvoord understood the importance of the deal in Daniel 9:27: The seven-year peace treaty with Israel; consummated seven years before the second coming of Christ (Dan. 9:27; Revelation 19:11-16). (Walvoord J. The Prophecy Knowledge Handbook. Victor Books, 1990, p. 551)
Why is this believed to be a peace deal? There are several reasons, but notice some other scriptures that discuss this leader:
25 And through his policy also he shall cause craft to prosper in his hand; and he shall magnify himself in his heart, and by peace shall destroy many: he shall also stand up against the Prince of princes; but he shall be broken without hand. (Daniel 8:25, KJV).
23 And after the league is made with him he shall act deceitfully, for he shall come up and become strong with a small number of people. 24 He shall enter peaceably, even into the richest places of the province; and he shall do what his fathers have not done, nor his forefathers: he shall disperse among them the plunder, spoil, and riches; and he shall devise his plans against the strongholds, but only for a time. (Daniel 11:23-24, NKJV)
So this leader gives people the impression that there will be “peace” and is involved in some type of deal. Term is translated as “peace” in Daniel 8:25 is from the Hebrew term shalvah and essentially means security. In other words, this leader will destroy “many” who are under the impression that they are secure because of some type of security arrangement. Such arrangements are now commonly referred to as peace deals. But as the prophesied one has not been confirmed, at least not publicly, the Great Tribulation would seem to be at least 3 1/2 years away (you may also wish to watch a YouTube video titled Can the Great Tribulation Begin in 2013?).
While the Israelis do not like what the Europeans are now proposing, the time will come that they will feel that they have no choice but to enter in a major deal involving the Europeans. A covenant that Bible prophecy teaches that the Europeans will break (Daniel 9:27; 11:31; Matthew 24:15) and that Israel will come to regret.
Some articles of possibly related interest may include the following; Jerusalem: Past, Present, and Future What does the Bible say about Jerusalem and its future? Is Jerusalem going to be divided and eliminated? Is Jesus returning to the area of Jerusalem? Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe? Here is a link to a video titled Can You Prove that the Beast to Come is European?
Jerusalem Post reports Germany will never be nutral on Israel, Merkel says. German chancellor criticizes settlements, but says crime of Holocaust will always be present, ensuring special relationship.
And also bible prophecy foretells that the Ezekiel 38 War is coming soon. Reuters reports US, Russia agree to prepare for Syria peace talks. And in comment, Sign Posts of the Times writes Today’s prophecy sign is The rise of Magog, (Russia), as an endtimes world power. We believe that God has yet to judge Russia for her role in past world affairs. This is why God will reel-in Russia with a hook to the jaw and drag her into a conflict in the Middle-East. He will judge the leadership of Russia and destroy much of her armies, however the land of Russia will be spared and we pray a great many Russian people will come to faith as they witness these events during this coming time of war. As presented in Ezekiel 28:14-15, “Therefore, son of man, prophesy and say to Gog: This is what the Sovereign Lord says: In that day, when my people Israel are living in safety, will you not take notice of it? You will come from your place in the far north, you and many nations with you, all of them riding on horses, a great horde, a mighty army.”
As the Economic Collapse Blog writes The rise of the Bear: 18 signs that Russia is rapidly catching up to the United States. The Russian Bear is stronger and more powerful than it has ever been before. Sadly, most Americans don’t understand this. They still think of Russia as an “ex-superpower” that was rendered almost irrelevant when the Cold War ended. And yes, when the Cold War ended Russia was in rough shape. I got the chance to go over there in the early nineties, and at the time Russia was an economic disaster zone. Russian currency was so worthless that I joked that I could go exchange a 20 dollar bill and buy the Kremlin. But since that time Russia has roared back to life. Once Vladimir Putin became president, the Russian economy started to grow very rapidly. Today, Russia is an economic powerhouse that is blessed with an abundance of natural resources. Their debt to GDP ratio is extremely small, they actually run a trade surplus every year, and they have the second most powerful military on the entire planet. Anyone that underestimates Russia at this point is making a huge mistake. The Russian Bear is back, and today it is a more formidable adversary than it ever was at any point during the Cold War.
Silver bulls believe that the futures market price is artificially determined and the recent upward price direction is pressing for price discovery. This is simply balone, silver is now and always will be an industrial metal used in the production of physical goods. The current futuress price of Silver, SLV, simply reflects what traders belive “buyers and sellers are willing to pay”; yet many silver mining companies such as Silver Wheaton, SLW, and Silver Silver Standard Resources Inc, SSRI, have contracts to produce at whatever the market price is, no matter what price the silver market is calling.
The chart of Silver Wheaton, SLW, suggests that it can comfortably produce silver at the current price, and as such, the price of Silver, SLV, and the producer will not be going up. As for Silver Standard Resources, SSRI, its chart shows no price earnings for next year, and as such, its stock price will not be going up; it’s production of silver will not be influencing market price. This means that the price of Silver Mining Stocks, SIL, and Silver, SLV, have seen their market tops as of August 9, 2013.
Emma Rowley of the Telegraph reports City economists say Eurozone recession is over. The eurozone has exited its longest recession since records began, official figures are expected to show this week.
Kevin O’Rourke posts in Irish Economy Cross of Euros. Alan Taylor and I have a new paper on the never-ending crisis in the Eurozone (and yes, the crisis is still with us, unless you regard mass unemployment as a matter of no concern, and has a way to run yet). It is available here.
Mike Mish Shedlock asks When will the Spanish banking system collapse, and cites the CFR article, Will Portugal bring down the Spanish banking sector? “Without an SMP to mutualize Spanish bank exposure to Portugal, the way it mutualized French bank exposure to Greece, delaying a Portuguese restructuring will also do nothing to help Spain weather the shock. The euro area has already lent Spain €41.3 billion to recapitalize its banks, finding a politically palatable way to convert that debt into mutualized eurozone equity may be a necessary cost of sustaining the European single currency.”
And Mr. Shedlock writes The problems in Europe are structural and many. The euro is a structural problem, the “one size fits Germany” interest rate policy by the ECB is a structural problem, trade deficit settlement via Target 2 mechanisms is a structural problem. Work rules, pensions, and unions are a structural problem of varying magnitude in various countries, with Greece, Italy, Spain, and France at the top of the list. Spending money countries do not have can hardly be a solution to those structural issues! Pray tell Ambrose, (writing in article article Defend Europe, if you still dare), what good would it do? What problems does it fix? The same applies to monetarist idiocy of printing more money and having all of it sit as excess reserves at banks. It is the Austrian-eurosceptics that have it right. The eurozone needs to break up. Greece, France, Italy, Spain, and Portugal are in serious need of work rule reform, pension reform, and public sector reforms of all sorts.
I comment that it was Thursday August 8, 2013, slight rise in the EURJPY, that gave the Eurozone Stocks, EZU, their 1.4 blast higher on the day, completing a Year to Date gain of 33%, and a seven week rally gain of 11%.
In the last month, Greece’s, GREK, National Bank of Greece, NBG, Ireland’s, EIRL, Bank of Ireland, IRE, and Spain’s, EWP, Banco Santender, SAN, as seen in their ongoing combined Yahoo Finance Chart, and the whole spectrum of Eurozone Banks, EUFN, took the Eurozone Stocks, EZU, such as DEG, MT, CCH, ING, VE, ST, TS, ENL, CRH, CNH, ALU, BUD, ENL, LUX, NOK, RYAAY, SNY, PHG, COVI, SI, IR, ELN, VPRT, ICLR, NVO, seen in this Finviz Screener, higher to new rally highs as is seen in their combined onongoing Yahoo Finance chart.
Philip Lane in The Irish Economy posts Journal of Economic Perspectives (Summer 2013). In addition to Kevin’s paper, there are several others on the euro crisis. In addition, there is a symposium on the “top one percent”. All papers free online (or download the whole issue free): here.
Liberalism’s final inflationism resulted in a crack up credit boom, that provided a safe haven rally in US Regional Banks, RWW, and a currency carry trade and debt trade rally in the Eurozone, EZU, Global Producers, FXR, European Financials, EUFN, and Emerging Market Financials, EMFN, as is seen in the ongoing Yahoo Finance Chart of KRE, RWW, EMFN, EUFN, FEFN, FXR, RZV, EZU, which gave seigniorage, that is moneyness to Small Cap Nation Investment, IFSM, as is seen in the ongoing Yahoo Finance Chart of Eurozone Countries, Greece, GREK, Spain, EWP, and Emerging Market Countires, Mexico, EWW, Argentina, ARGT, Mexico, EWW, Poland, EPOL, and China Small Caps, ECNS. Mexico, EWW, stocks rising strongy have included AMX, MXT, GMK, IBA, CX, TV, ASR, OMB, PAC, seen in their ongoing Yahoo Finance Chart.
Liberalism’s grand finale inflationism, coming from a rising Yen, FXY, and an even greater rising Euro, FXE, that is from a rising EURJPY, since May 21, 20123, to close August 9, 2013, at 128.34, seen here in this Action Forex chart report, when the Interest Rate on the US Ten Year Note, ^TNX, began to rise, which stimulated the Eurozone Stocks, EZU, to rise, and blasted European Debt traded by the Wisdom Tree ETF, EU, 4.4% higher for the week, as is seen in the ongoing Yahoo Finance Chart of FXY, FXE, EZU, and EU.
Usually it is debt, that is credit, gives seigniorage, that is moneyness to stocks; but not the week ending August 9, 2013, as just the opposite happened: investment demand for Eurozone Stocks, EZU, and especially European Banks, EUFN, was so strong that it drove Eurozone Debt, EU, up 5.0% over the last month.
Despite the rally in Greece, GREK, Ireland, EIRL, and Spain, EWP, all of the Eurozone southern periphery nations, that is the PIGS, are insolvent sovereigns, and their collective banks, the European Financials, EUFN, are insolvent sovereigns, which were given temporary seigniorage through the ECB, in a Risk On, ONN, currency carry trade rally, based upon the most toxic of liberalism’s Treasury Debt, BWX. Of note, this week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off ETN, OFF, rising.
Austrian Economist Robert Wenzel reports The Ron Paul Channel Launches.
Austrian Economists have always called for a sound money system, yet with Jesus Christ at the helm of the Economy of God, presented in Ephesians, 1:10, from Friday August 9, 2013, forward, nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.
Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.
One should consider expatriate internationalized living, and even becoming an international person, Munkee writes Here are the mny bnefits of hving a bank account in Hong Kong. Simon Black of SovereignMan writes Hong Kong is an excellent place to bank. One of the best in the world, in my opinion. Why? Because the banks are strong, stable, innovative, and well-capitalized [and account holders] are free to choose what currency to accept (and save), whether HK dollars, US dollars, Chinese Yuan, gold, or anything else. And Darren Kaiser writes in Doug Casey’s Sovereign Man Chile to join US Waive Program. Countries listed in the Visa Waiver Program are listed below. Successfully joining the Visa Waiver Program means Chile would become a better option for Americans seeking a second passport, if they are considering renouncing their US citizenship one day. After Chile has joined the program, an American could obtain Chilean citizenship, give up their US passport, and still return to the US visa-free for up to 90 days. There are plenty of people who would like to renounce US citizenship but still would like to have the option to travel to the US occasionally, without the headache of applying for a visa. Obtaining Chilean citizenship after Chile has joined the Visa Waiver Program would allow them to do just that. Bensos te writes Americans are diching citizenship in record numbers, Part 2
Benson te writes Quote of the Day: Why capitalism is awesome.
In response, an inquriig mind asks, has it been human ingenuity seeking financial reward and/or intellectual reward in market economy that has provided great innovations and success in human endeavors, or has there been a movement of God’s Spirit, specifically the Mystery of Christ, operating through providence and appointment, that is destiny, providing the genius for innovation and development, as presented in 2 Corinthians 5:17-18, all within the Economy of God, that is dispensation, as presented in Ephesians 1:10?
The Nikkei is terribly overleveraged investments. The New York Times writes Japan’s debt looks like this: 1,000,000,000,000,000 Yen. Booomberg writes Japan’s Debt exceeds 1 quadrillion Yen as Abe mulls tax rise. The Telegraph writes Just set fire to Japan’s quadrillion debt. And Benson te writes Japan’s ponzi finance: Public debt tops quadrillion Yen mark! And Zero Hedge reports A Japanese crisis nears.
Chris Rossini writes in Economic Policy Journal aricle The Ameican Democracy Pitch. The neocon Senators preach: “Our main message in Cairo was simple and straightforward: Democracy is the only viable path to lasting stability, national reconciliation, sustainable economic growth and the return of investment and tourism in Egypt. And democracy means more than elections. It means democratic governance: an inclusive political process in which all Egyptians are free and able to participate, so long as they do so nonviolently; the protection of basic human rights through the rule of law and the constitution; and a state that defends and fosters a vibrant civil society.” I have a different proposal for the Egyptian people, and it’s called Liberty …. more here … Only liberty, free markets, private property, and sound money will save you. And it’s the only thing that will save Americans as well.
I comment that Jesus Christ, operating in Dispensaion, that is the economic and political administration plan of God for both the fulfillment and completion of every Age, enabled the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to on May 21, 2013, to 2.41%, terminating Liberalism’s policy of political freedom and its schemes of investmen choice, and He is introducing Authoritarianism’s policy of diktat and schemes of debt servitude
The the only thing that will save anyone is the life of Jeusus Christ, which comes by faith in Him, and recognition that He is the Eternal King, possessing the Key of David, that is the rightful rule of Kindgom of God, and that He will be successful in introducing a Ten Toed Kingdom with toes of iron diktat and clay democracy, in each of the world’s ten regions, out of the hubris of the destruction of the iron rule of British Empire and the US Dollar Hegemonic Empire, as presented in Daniel 2:25-45.
This global monster is the same as the Beast Regime that is rising out of waves of Mediterranean Sea nation state chaos to replace the Banker Regime. He is bringing forth this monster to replace the Creature from Jekyll Island, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones, presented in Revelation 13:1-4.
Please consider that reality exists only in Christ, Colossians 2:17. And that He is Grace, that is Resource, and He is Truth, that which is reliable for believe, as well as that which is a trustworthy promise, John 1:17, and that the elect worship God’s will, John 4:23-24, while the fiat worship their own will in philosophy or religion, Colossians 2:23, and in so doing God sets one free indeed John 8:36. Thus choice is an illusion, and for the mature believer in Christ, one comes to see Christ as the his inclusive life experience, Colossians 3:11, the mature in Christ believe that God makes all of one’s decisions. 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. Inasmuch as Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and is pivoting the world from Liberalism’s age of investment choice and terminating it’s moral hazard based prosperity, to bring forth 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”.)
Financial Market Report for the week ending August 2, 2013
1) … Insolvent nation state sovereigns are unable to provide governance; new regional sovereigns are rising to provide regional governance.
Mike Mish Shedlock writes Former ECB Chief Economist warns “ECB will soon have to support France with fond purchases. Juergen Stark, former ECB chief economist (who resigned in 2011 over a dispute regarding bond purchases), says in an interview in Handelsblatt “The Euro crisis will worsen in late autumn”
Via Google Translate: A year ago, ECB chief Draghi announced plans to do anything to save the euro. The former ECB chief economist Juergen Stark considers this fatal. He fears that the ECB will soon have to support France with bond purchases.
“I think the crisis will come to a head in late autumn. We are entering a new phase of crisis management, “Stark told the Handelsblatt (Friday edition). After the parliamentary elections in late September that France would increase the pressure on the ECB and Germany. The government bond purchase program OMT should actually be used in Spain and Italy. “But the pressure will be enormous, use the instrument in France. And without that, the country must go to the rescue, “said Stark. A year ago the head of the ECB, Mario Draghi announced in London to do anything to save the euro. A little later, he presented the plans for the bond purchase program OMT. Draghi bought the governments in Europe time. “But this time was wasted,” Stark said.
And Mike Mish Shedlock writes Euro sucks Italian blood; Prime Minister blames tax evasion; Reflections on Italy’s shadow economy. This summer a private air plane has been flying over Italian beaches with a banner message Euro is sucking Italian blood. The article states “Italians have only one solutions to fight against this situation : leave Italy.”
No end in sight to Italy’s economic decline. Der Spiegel says No end in sight to Italy’s economic decline. The Italian economy may be the third largest in the euro zone, but it is also plagued by inefficiency and continues to shrink. The country’s political leadership has proven unable to implement badly needed reforms and the future looks grim.
Italy, despite being the third-largest economy in the euro zone after Germany and France, finds itself in dire straits, having been in decline for years. Its GDP has dropped by 7 percent since 2007. The last few years, says Gianni Toniolo, an economics professor in Rome, represent “the worst crisis in (the country’s) history,” even more devastating that the period between 1929 and 1934.
Some sectors have lost even more capacity, with the automobile industry having declined by 40 percent. According to Paolazzi, Italy is experiencing an “unprecedented process of deindustrialization.”
But why? Wages aren’t the problem. They are 15 percent lower than Belgian and French wages and 30 percent lower than wages in Germany, according to a current Bank of Italy comparison. But according to Confindustria, the Italian economy faces a tax burden that is 20 percent higher than in Germany. And unit labor costs are about 30 percent higher than German levels, say central bank officials.
The CGIA research institute in Mestre, near Venice, found that one in two small businesses was only able to pay its employees in installments. Three out of five companies are forced to take out loans to pay their high tax bills.
In addition to the tax burden, a bloated bureaucracy obstructs almost all economic activity, an inefficient judiciary deters potential investors with trials that can last for decades. Italy has a relatively low education level and a poor infrastructure characterized by potholed streets, an energy supply prone to failure, constantly delayed trains and outmoded communication networks.
As a result, Italy continues to fall behind internationally as a place to invest. It is now 44th in the World Competitiveness Center (WCC) ranking, below the Philippines, Latvia, Russia and Peru, and only slightly above Spain and Portugal.
Populists like Berlusconi and the founder of the “Five Star” protest movement, Beppe Grillo, are not the only ones advocating the most radical of all solutions for Italy’s problems. The country has “a lot of vitality and great potential,” says US economist and policy advisor Allen Sinai, but it can only benefit from these strengths “by withdrawing from the euro.”
Structural problems. The Euro is clearly a problem, but leaving the Euro without fixing the other structural problems will not fix anything.
Letta declares war on tax evasion. The Telegraph reports Italian Prime Minister Enrico Letta pledges war on tax evasion Italian prime minister Enrico Letta pledged Wednesday to “fight relentlessly” against tax evasion in the recession-hit country, as the government pushed new growth measures through the lower house of parliament. Letta blamed Italy’s underground economy – which ranges from simple tax evasion to organised crime and accounts for some 25 percent of the overall economy according to most studies – for damaging competitiveness.
Reflections on Italy’s Shadow Economy. Letta has things ass backwards. Tax evasion and the underground economy is not destroying Italy. Rather, Italy’s massive underground economy is a symptom of the dysfunctional nature of the real economy. The underground economy thrives because of high taxes, poor infrastructure, political favoritism, and inane labor rules. A crackdown on tax evasion (a symptom of the problem, not the problem) will only make matters worse.
Only hope is bankruptcy. For more on Italy, please note the opinion of Enrico Colombatto, Professor of Economics at the University of Turin who says “Only hope for Italy is bankruptcy”.
I comment that to say Italy’s only hope is bankruptcy, implies the idea of default on Italy’s national debt, and a day of human action where a movement of people will endorse a credible sovereign government providing a national currency, for example a New Lira, backed by a sound money system, underwritten by gold not debt. As Frederic Bastiat proposed, the government’s function would be restricted to protecting the lives, liberties and property of citizens from theft or aggression. And the government’s function would be the establishment of a free market economy along the lines presented by Ludwig von Mises and the Mises Institute, where those producing things and providing services, would be free from government intervention of national wage laws and other anti-competitive measures; the nation’s economy would be based purely upon meritocracy and be devoid of clientelsim and any social justice dependency. Yet there is no Murry Rothbard movement afoot in Italy or any of the periphery European nations for people to take action to remold economic circumstances and reshape their society for reward of individual merit and use of personal property.
The yenguy is a Dispensational Economist who believes that the business cycle, a central bank driven phenomenon, is the mature working of the Apostle Paul’s New Testament doctrine of Dispensation found in Ephesians 1:10, and Bible prophecy presented by the Prophet Daniel in Daniel 2:25 (Regional Governance), and John The Revelator in Revelation 13:1-4 (a global Beast regime), Revelation 13:5-10 (a New Pharaoh), and Revelation 13:11-18 (a New Prophet). I present the Dispensation Economics Manifest which holds that economics currently in Europe and increasingly throughout the world, is being shaped by the New Things of Christ, these include:
a New Paradigm, movement from liberalism to authoritarianism, Ephesians 1:10.
a New Sovereignty, movement from the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of statist regional governance, Revelation 13:1-4, where eventually there will be ten regional kings ruling in the world’s ten regions, Revelation 17:12.
New Dynamos, movement from the dynamos of corporate profit and global growth based upon investment opportunities in nation states, to the dynamos of regional security, stability and sustainability.
a New Age, movement from the age of investment choice, to the age of diktat.
New Policies and New Schemes, movement from a policy of investment choice, consisting of credit schemes, to a policy of diktat, consisting of debt servitude schemes. Gone are the days when liberalism’s bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and the legislators of economic life. Economic and political movement under Authoritarianism is based upon debt servitude which provides for punitive collectivism and crushing austerity.
a New Money System, movement from the fiat money system, to the diktat money system.
2) This week’s financial market trading
On Monday, July 29, 2013, Volatility, ^VIX, rose, and World Stocks, VT, the S&P 500, SPY, Nation Investment, EFA, SmallCap Nation Investment, IFSM, traded lower in fron of the Fed FOMC meeting.
Jesus Christ, acting at the helm of the economy of God, that is in dispensation, as presented in Ephesians 1:10, enable the vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.59%, and by enabling the currency traders to successfully sell major world currencies shor.
There was a massive deleveraging out of Natural Gas, UNG, today, all of this activity on the investors concern of Federal Reserve tapering, and the termination of its stimulus.
Reuters reports Japan June industrial output falls 3.3 pct mth/mth. The Nikkei, NKY, traded strongly lower again on another rise in the Japanese Yen, FXY, with its leading stocks, ATE, KUBTY, KYO, MKTAY, IX, MTU, SMFG, and NMR, all trading lower, as is seen in their combined ongoing Yahoo Finance Chart, documenting the failure of Kuroda Abenomics. Google Finance chart shows The Nikkei, NKY, is leading the way lower, having fallen 8% since July 19, 2013. Japanese Automobile Manufacturers, TTM, NSANY, and HMC, are trading lower.
Asia Excluding Japan, EPP, was led lower by countries outside of China, such as Australia, EWA, Thailand, THD, Vietnam, VNM, Indonesia, IDX, IDXJ, Malayasia, EWM, and the Philippines. EPHE.
Benson te writes China’s runaway credit financed property bubble will undergo scrutiny from Chinese national government, who will focus on reining debt levels of the local government; that’s according to the Bloomberg report China orders government debt audit as growth risks rise. China will start a nationwide audit of government debt this week as the new Communist Party leadership investigates the threats to growth and the financial system from a record credit boom. But so far this has failed to show up in a downturn in China Stocks, as they are rallying; these include China Shares, YAO, FXI, CHII, CHIX, ECNS, and TAO.
Brazil, EWZ, EWZS, and India, INP, SCIN, traded lower. And Chile, ECH, and Peru, EPU, traded lower, on lower Copper Miners, COPX.
Debt deflation recommenced in the the Emerging Market Financials, EMFN, specifically Brazil Financials, and India Earnings, EPI; the Emerging Markets, EEM, traded lower as Emerging Market Bonds, EMB, and Emerging Market Currencies, CEW, traded lower. Reuters reports Latam stocks wilt ahead of Fed meeting.
Small Cap Pure Value Stocks, RZV, traded lower on today’s trade lower in Major World Currencies, DBV, and the trade higher in the Japanese Yen, FXY, as well as the rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.59%.
On Tuesday, July 30, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.60%, and the Steepner ETF, STPP, steepened, reflecting a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX. The US Dollar, $USD, UUP, traded unchanged from yesterday at $81.81, as the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, traded lower, with the Indian Rupe, ICN, the Brazilian Real, BZF, and the Australian Dollar, FXA, trading strongly lower, taking India, INP, SCIN, India Earnings, EPI, Brazil, EWZ, EWZS, Brazil Financials, BRAF, and Australia, EWA, KROO, and Australian Dividends, AUSE, lower. Business Inside reports India is currently caught in a classic Impossible Trinity Trilemma, Reserve Bank of India Says. Chile, ECH, Peru, EPU, Israel, EIS, and Egypt, EGPT, traded lower.
India, Brazil, Australia, Chile and Peru are Nation Investment, EFA, loss leaders, as is seen in their ongoing combined Yahoo Finance Chart. The rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 1, 2013, on fears that the Fed Reserve monetary policy is unable to continue to stimulate global growth and trade, was Liberalism’s “extinction event”, which terminated investment choice in the Emerging Markets and Australia.
Copper Miners, COPX, Coal Miners, KOL, and Global Industrial Miners, PICK, traded lower on a plummeting price of Copper, JJC, and Base Metals, DBB. Health Care Providers, IHF, traded lower. Agribusiness MOO, plummeted on a continuing lower price of Agricultural Commodities, RJA, and as Briefing.com reports the largest potash producer, Russia’s OAO Uralkali, withdrew from a potash cartel; Potash companies traded lower: IPI -28%, POT, -17%, MOS, -17%; related company, Chile’s SQM, traded 17% lower as well.
And of note, Semiconductor Equipment And Material Provider, AMBA, fell 8%, after the Semiconductor Equipment and Material Providers, seen in this Finviz Screener, also broke down and traded lower lower as a group yesterday. Carl Cachia in Seeking Alpha article, relates AMBA has been moving strongly higher since May 2010, AMBA makes chips for smaller video cameras that are easy to use and offer high-definition video. The company can be described as a video processing specialist including software to enable portable camera innovations. AMBA’s high definition video focused products offer superior performance giving it a leading share in the space. The company sells chips to a number of different companies. This diversified market coupled with the diversified customer base makes AMBA an exciting play into 2013 and 2014.
The Small Cap Pure Value Shares, RZV, have been a safe haven investment from derisking out of Interest Rate Sensitive Sectors, Homebuilding, ITB, Coal, KOL, Industrial Mining, PICK, Copper Mining, COPX, and Emerging market Financials, EMFN, Small Cap Real Estate, ROOF, Mortgage REITS, REM, Industrial Office REITS, FNIO, and Residential REITS, REZ.
Discover The Book Ministries writes Prophetic map from Genesis to Revelation. The Lord has claimed that He alone can declare the future. “I am God, and there is none like me, declaring the end from the beginning, and from ancient times the things that are not yet done”, Isaiah 46:9-10. “We have also a more sure word of prophecy; whereunto ye do well that ye take heed”, 2 Peter 1:19.
Genesis and Revelation form the greatest testimony to the Sovereign hand of God in the entire Bible. Taken apart they give the clearest pictures possible of the beginning and ending of planet earth. Taken together, they form the greatest map of God’s Plan unfolding in this universe.
One of the strong evidences of divine inspiration of the Bible (not found in other religious books of either past or present) consists of its hundreds of fulfilled prophecies. These are not vague or ambiguous (as in various occult writings) but are specific and detailed, often made hundreds or thousands of years in advance of the event. Many are being fulfilled today, thereby indicating the probable soon return of the Lord Jesus Christ.
So, the most powerful evidence that God wrote the Bible is the phenomenon of fulfilled prophecy. The Bible is unique among all the religious books of mankind in this respect. Some of them contain a few vague forecasts, but nothing comparable to the vast number of specific prophecies found in the Bible.
There has never been any person, angel or demon who could predict specific events and personages that will appear scores or even hundreds of years in the future. Only God can do this, because it is He “who worketh all things after the counsel of His own will” (Ephesians 1:11). Consequently, it is in His Word, the Holy Scriptures, and only there, that prophecies of this sort are found.
The development of a European union of nations comparable to the ancient Roman empire is suggested in Daniel 7:19-24 and other passages.
Conflict in the economic and social realms in the last days is forecast in James 5:1-6. For ages, in all nations, the poor have been exploited by the rich, the working classes by the privileged classes. The uprising of the laborers in the latter days, leading to a “day of slaughter,” is not only specifically predicted by James, but also implied in Daniel 2:41-43, Revelation 18:1-19, and other passages. These prophecies have been fulfilled in part, first in the French revolution, later in the Russian revolution and other communist-led upheavals. More is undoubtedly yet to come, especially when the ill-fed, poorly housed masses of the world come to realize that even their own revolutionary movements are financed and controlled in large measure by those “kings and merchants of the earth” who traffic in the “souls of men.”
Moral conditions of the last days are prophesied to descend into the degradation of the “days of Noah” Luke 17:26. But perhaps the most striking prediction associated with moral conditions in the last days is that the characteristics of professing religious people, in the realm of Christendom, will be essentially the same as those of the heathen in the old pagan world. That is, the catalog of the sins of those in the last days who have “a form of godliness”, 2 Timothy 3:1-7, especially verse 5, is practically identical with that of the ancient godless rebels of Romans 1:28-31. Again, it seems impossible that Paul could have anticipated such a strange and sad development except by inspiration.
Murray Rothbard in his book Education: Free and Compulsory which reflects the rise of the state’s power in masterminding one’s virtues and one’s ethics. “The record of the development of compulsory education is a record of State usurpation of parental control over children on behalf of its own; an imposition of uniformity and equality to repress individual growth; and the development of techniques to hinder the growth of reasoning power and independent thought among the children.”
Christian households are to be patterned after Christ, who as presented in Ephesians 1:10, is the steward dispensing all things to all people; mercy and grace to the faithful, and judgement and advertsity to the disobedient; a family is to have a head, it’s called the head of the household, which dispenses training in virtue and ethics, with virtue patterned after Christ and ethics set forth as righteous conduct and speech.
An inquring mind asks, what makes for the variability in the moral quotient, that is, the moral reasoning and lifestyle amongst people?
First, the role of faith, as the Worl preached did not profit them; one’s response to the Word of God, determines the effect and impact that Word has upon one, “Therefore, since a promise remains of entering His rest, let us fear lest any of you seem to have come short of it. For indeed the Gospel was preached to us as well as to them; but the word which they heard did not profit them, not being mixed with faith in those who heard it”, Hebrews 4:1-2.
And secondly, some have greater receptiveness to the move of the Spirit in one’s vessel, and thus greater functioning of the Spirit in one’s life; it is God’s Sovereign Will, and its movement in one’s life, that alone determines the manifestation of the Spirit, “But one and the same Spirit works all these things, distributing to each one individually as He wills”, 1 Corinthians 12:11.
Policies and schemes of the Banker regime made the US Dollar Hegemonic Empire, that is the US a great nation as foretold in bible prophecy of Genesis 12:2-3, and a iron empire, foretold in Daniel 2:25-45. Beginning with Ben Bernanke’s QE, the last five years of Liberalism was a time of moral hazard based prosperity that came via the Global ZIRP monetary policies of the world central banks that produced great stock investment wealth, in risk on investment, ONN, Junk Bond, JNK, and Euro Yen, EUR/JPY, based schemes.
But now, Jesus Christ operating at the helm of the economy of God, Ephesians 1:10, specifically in dispensation, that is in the household administration of all things, including those things economic, monetary and political, as well as spiritual and material, through the rise in the US Interest Rate, ^TNX, on May 21, 2013, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, to begin to terminate Liberalism, and is introducing Authoritarianism, thereby bringing an end to the age of investment choice and introducing the age of diktat, which will be a time of debt servitude based austerity.
The fall lower in the India Rupe, ICN, the Brazilian Real, BZF, the Australian Dollar, FXA, and the Emerging Market Currences, CEW, through debt deflation, coming through debt monetization, are literaly destroying banking institutions worldwide, these include Brazil’s BBD, BBDO, ITUB, Chile’s, BCA, BCH, Peru’s BAP, India’s IBN, HDB, and Argentina’s BFR, GGAL, BMA.
Brazil Financials, BRAF, and India Earnings, EPI, are leading the Emerging Market Financials, EMFN, lower. Chile’s SQM, and Peru’s SCCO are leading the Emerging Market Mining, EMMT, lower. Liberalism’s credit schemes of Debt Monetizaton and Dollarization have caused the death of investment in the Emerging Markets, EEM, and Emerging Market Infrastructure, and have caused strong deleveraging out of Commodities such as Copper, JJC. .
Furthermore, Jesus Christ as foretold by John The Revelator, in Revelation 13:1-4, is introducing the Beast Regime of regional governance, through sovereign insolvency and banking insolvency of the southern Eurozone nations, such as Greece, where its ten horns, symbolizing the world’s ten regional zones, and totalitarian collectivism, where its seven heads, symbolizing mankind’s seven institutions, will rule in all mankind’s activities; there will be no human action as perceived by the Austrian economists, only Christ allowed Beast action for all people. Greek Crisis Net reports The International Monetary Fund, IMF, in Press Release No. 13/280 IMF completes fourth review under extended fund facility arrangement for Greece, and approves €1.72 billion disbursement. Look for the Beast Regime’s schemes of debt servitude, like Greek Bailout III, and the Cyprus Bank Deposit Bailin to increasingly govern economic matters.
In today’s news we see announcements of boondoggles at the end of the age of fiat wealth expansion that has come from US central bank expansionism. Ralph Schwartz of the Bellingham Herald reports Long-planned Bellingham condominium project gets green light. Developers are moving ahead with a 344-unit condominium development on June Road that has been in the works for 20 years. Public comment is now being taken for the design review of Phase 1, 75 detached, single family condominiums north of June Road. If the Aldrich and June Road improvements aren’t done by the end of the year, the developers lose all permits to develop the land. The developers’ Bellingham attorney, Chet Lackey, said these conditions were the strictest he had ever seen in a development agreement.
Lackey also told the City Council on May 20 that the condominium subdivisions, first approved by Whatcom County under a different plan in 1994, would get built. The developers had invested $12 million in property purchases and construction of roads, and sewer and water lines, he said.
The council approved the settlement in a 6 to 1 vote, with Jack Weiss opposed. He wasn’t the only council member who expressed regret over green-lighting the subdivisions. The county approved the current plan in 2000 under less strict rules. The properties were in county jurisdiction until they were annexed into the city in 2008. The developers were not required to meet stricter city requirements for wetland protection or street width after annexation. We have inherited a very bad situation,” council member Michael Lilliquist said. “We would never approve anything like this nowadays.”
And Erin Mulvaney of the Houston Chronicle reports High-rise condo project planned in Galleria area. A high-rise luxury condominium project planned in uptown Houston could be a sign of a more viable market than in previous years. The 26-story Belfiore will have 46 residences, including two penthouses, on 2 acres at the southeast corner of Post Oak Lane and South Wynden Drive. The project is led by developer Giorgio Borlenghi with the Interfin Cos., who has developed high-rise residential buildings since the early 1980s, including Four Leaf Towers, Villa d’Este Condominium and Montebello. Borlenghi said the new condo tower will be the “most luxurious place in town.”
“By keeping the building to only 46 units on such a large site, we will truly be able to provide our residents with a level of privacy, exclusivity and service unlike any other property in Houston,” he said. The units will be the largest available for condominiums in Houston, starting at 4,600 square feet, including 700 square feet of terraces, the developer said. The spaces will have 11-foot-high ceilings and views of downtown and Tanglewood. The property will feature a 24-hour manned guardhouse, a 24-hour concierge and valet service and underground parking. There also will be a recreational outdoor area with a swimming pool and manicured garden. Construction is expected to begin early next year with a targeted completion for the spring of 2016. The units are expected to have a starting sales price of $600 per square foot, or about $2.8 million. Borlenghi is partnering with Pierpoint Capital, the McNair Group and Hudson Brothers Real Estate for the project.
And Drew Harwell of the Tampa Bay Times resorts Developer plans condo project in downtown St. Petersburg A new 26-story condominum project, the Belfiore, is planned on a two-acre lot in uptown on Post Oak and Wynden Drive. Borlenghi said this is a good time to build condominiums because of the improved economy and a demand from empty nesters who want to downsize, but only to a certain point. He said 14 people have already purchased units. “The recent demand and real estate market is on the upswing,” he said. John Breeding, president of the Uptown Management District, said 12 residential projects are under construction in the immediate area. Borlenghi’s new project is encouraging for a condominium market that seems to be improving, Breeding said. During the downturn, condo development suffered because of difficulties in other parts of the country, like Florida, Nevada and California, he said. Breeding praised Borlenghi for quality architecture and attention to detail. He said the developer also has a unique sense of when to move early on projects. The Belfiore will feature a 24-hour manned guardhouse and a 24-hour concierge and valet service. Its developer says it will be the “most luxurious place in town.” “This is the first edge of the wave of perhaps additional condominium construction,” Breeding said. The development of a 262-unit apartment complex at 1900 Yorktown, the former home of the Art Institute, was announced earlier this week. And developer Randall Davis earlier this year completed a long-planned land purchase on Post Oak Boulevard, a significant step toward his goal of building a high-end residential tower there. He’s planning 70 condominiums in a 28-story building called Astoria.
And we also have the Dave Gallegher Bellingha Herals report Carpet Liquidators moving into former Good Guys building. I comment that Liberalism’s final credit driven crack up boom has brought yet another home improvement retailer to Bellingham.
On Wednesday, July 31, 2013, at opening the Interest Rate on the US Ten Year Note, ^TNX, blasted higher, but closed lower at 2.59%, sending Aggregate Credit, AGG, vigorously down then up, only to recover unchanged. Emerging Market Bonds, EMB, plummeted once again.
Yield bearing sectors traded lower, with Premium REITS, KBWY, -1.8%, REZ -1.4%, ROOF, -0.5, REM, -1.0%, FNIO, -1.5. Asia Excluding Japan, EPP, trade lower as EWM, IDX, EPHE, THD, EWA, and ENZL, traded lower.
Emerging Markets, EEM, such as Turkey, TUR, India, INP, Brazil, EWZ, and Peru, EPU,traded lower.
Norway, NORW, traded higher on a higher price of oil.
Transports, XTN, and Industrials, XLI, Global Industrial Producers, FXR, and the Eurozone, EZU, closed higher on the day, as the EUR/JPY rose from 130.0 to 130.2.
Global Industrial Producers, FXR, rose to a new high as ARG, PHG, WHR, ROK, ETN, SI, PPG, MMM, DD, EMN, FMC, WLK, DOW, IP, MHK, ALU, CNH, COV, ST, ASML, ADI, XLNX, GPK, PKG, FMC, EMR, MMM, LMT, GT, RTN, HON, GGG, PH, PCP, BA, MU, PHG, all made new highs, or rose near recent highs
Martin Crutsinger of AP reports Fed downgrades US economic growth to modest. The Federal Reserve says the U.S. economy is growing modestly, a downgrade from its June assessment. The Fed expects growth will pick up in the second half of the year, but the more cautious message may signal it’s not ready to slow its bond purchases soon. In a statement after a two-day policy meeting, the Fed says it will keep buying $85 billion a month in bonds to help lower long-term interest rates. And it says it plans to hold its key short term rate at a record low near zero at least as long as the unemployment rate stays above 6.5 percent and the inflation outlook remains mild. Stronger job growth has fueled speculation that the Fed could start reducing its purchases soon. But the economic growth remains sluggish and unemployment high at 7.6 percent.
John Rubino writes Why QE can never end. The Fed just made an announcement that the markets liked with Reuters reporting Fed stays on track with bond buying, for now. Why the cautious tone when just a few months ago “tapering” was a sure thing by yearend? Because this morning’s GDP report was, as usual, much weaker than it looked. Here’s a quick summary from Consumer Metrics Institute. Even if we accept all the fluff in today’s numbers, a chart of recent GDP growth shows a hard stall, not a take-off. The Fed knows all this and has now completely walked back its talk of lowering its asset purchases. QE will go on until the market, not government, puts a stop to it.
Cullen Roche of Pragmatic Capitalist communicates that The build up margin debt in the US stock markets has been pumping stocks higher and replicates the 2000 and 2007 market booms.
I relate that Jesus Christ operating at the helm of the economy of God, Ephesians, 1:10, specifically in dispensation, that is in the household administration of all things, including those things economic, monetary and political, as well as spiritual and material, through the rise in the US Interest Rate, ^TNX, on May 21, 2013, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, is in the process of terminating Liberalism and is introducing Authoritarianism, and will soon be turning risk on investment, ONN, to risk off investment, OFF, thereby ending Liberalism’s age of investment choice and introducing Authoritarianism’s age of diktat, which will be a time of debt servitude based austerity.
Soon, possibly this week, Christ will once again empower the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher, as well as enabling them to continue to steepen the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening; and He will recommence global debt deflation, by empowering the currency traders to sell the Major World Currencies, DBV, and the Emergning Market Currencies, and eventually the US Dollar, short.
Therefore, I recommend that one either take physical possession of gold bullion or that one be ready to go short the Sectors XIV, TAN, IBB, PJP, FDN, KCE, FPX, PPA, IGV, PSCI, XRT, RXI, PBS, CARZ, RZV, PSP, SPHB, FLM, IAI, UJB, SMH, seen in this Finviz Screener … this Finviz Screener… These performed as follows during July 2013 … XIV 35%, TAN 21%, IBB 14%, PJP 10%, FDN 9%, KCE 9%, FPX 9%, PPA 8%, IGV 8%, PSCI 8%, XRT 7%, RXI 6%, PBS 6%, CARZ 6%, RZV 6%, PSP 6%, SPHB 5%, FLM 5%, IAI 5%, UJB 5%, SMH 2%.
Clearly Jesus Christ, as foretold by John The Revelator, in Revelation 13:1-4, is introducing the Beast Regime of regional governance, through sovereign insolvency and banking insolvency of the southern Eurozone nations, such as Greece, where its ten horns, symbolizing the world’s ten regional zones, and totalitarian collectivism, where its seven heads, symbolizing mankind’s seven institutions, will rule in all mankind’s activities; there will be no human action as perceived by the Austrian economists, only Christ allowed Beast action for all people. The New York Times reports The Greek Bailout isn’t working … CNN Money reports The Greek bailout has 11 billion euro funding gap … The Telegraph reports Eurozone faces £9.6bn hole in Greek finances, warns IMF … Bloomberg reports IMF staff says Greece needs more money, potential debt relief … WSJ reports Greece is warned of new aid gap. Look for the Beast Regime’s schemes of debt servitude, like Greek Bailout III, and the Cyprus Bank Deposit Bailin to increasingly govern economic matters, both in the EU and globally.
Herbert W Armstrong was born a 130 years ago, that is on July 31, 1892. As a teen I remember watching the televangelist on his TV show The World Tomorrow, proclaiming that one day there would be a United States of Europe. That day is coming very soon, as out of Eurozone sovereign insolvency and banking insolvency, leaders will meet in summits and workgroups to renounce national sovereignty, and announce pooled regional sovereignty, thereby establishing a One Euro Govenment, that is a European Superstate.
World Watch Today writes In the 1930s Herbert W. Armstrong peered into the pages of his Bible and discovered a shocking prophecy. A political and military power, made up of a confederation of European nations, would one day arise to dominate the world prior to the return of Jesus Christ. What would Herbert Armstrong say today if he saw the forces at work in this global financial crisis pushing Europe towards greater unity, and leaders such as Verhofstadt standing up to now declare that the time has come for the United States of Europe? We can’t know for sure, but his legacy of television shows and writings gives a fair idea. Below is a full-length episode of the World Tomorrow (circa. 1984), the show he anchored for over forty years, dedicated to explaining the prophetic implications of the rise of the United States of Europe.
The Trumpet Magazine, and its columnists, such as Gerald Flury, publishes in the footsteps of the Plain Truth Magazine, founded in 1934 by Herbert W. Armstrong, and publishes a number of books for one’s edification, such as Germany and The Holy Roman Empire, …The United States And Britain In Prophecy, … The Wonderful World Tomorrow …
On Thursday, August 1, 2013 Volatility, ^VIX, collapsed, and Inverse Volatility, XIV, soared, as stocks soared. China, YAO, 2.8, US Stocks, VTI, 1.3 Eurozone, EZU 1.5, World Stocks, VT 1.3, Emerging Markets, EEM 1.8, Asia Excluding Japan, EPP 0.7, as on the other hand, Aggregate Credit, AGG, fell sharply lower, as the Interest Rate on the US Ten Year Note, ^TNX, blasted higher to 2.72%, and as the 10 30 US Treasury Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening.
It was the conviction of further debt monetization, specifically anticipation of further Federal Reserve purchases of debt that blasted World Stocks, VT, higher; but on the other hand, destroyed Aggregate Credit, AGG, with the rise of the Interest Rate on the US Ten Year Note, to 2.01%, on May 21, 2013. A see saw destruction of fiat wealth is underway with stocks reaching their zenith, while credit and currencies are being destroyed through the monetization of debt.
Yahoo Finance posts S&P 500 breaks 1,700 for the first time. 1,750 Soon to Come? Daily Ticker The S&P 500 crossed 1,700 Thursday morning for the first time ever. This is the kind of rally that may give some investors pause. We talked to Savita Subramanian, the head of U.S. equity strategy at Bank of America Merrill Lynch, who thinks the market will go higher from here. But Breakout posts Market top is in, brace for correction: Jeff Saut says
Inverse Volatility XIV rose 3.3%;sectors rising strongly included
Global Industrial Producers, FXR 2.3
US Infrastructure, PKB 1.9
Design Build, FLM 1.9
Transportation, XTN 1.9
Internet Retail, FDN 1.9
Media, PBS 1.9
Global Consumer Discretionary, RXI 1.8
Retail, XRT 1.6,
Aerospace, PPA 1.6
Automobiles, CARZ 1.5,
Pharmaceuicals, PJP 1.5
Software, IGV 1.5
Small Cap Industrials, PSCI 1.3,
IPOs, FPX 1.4,
Biotechnology, IBB 1.4
Small Cap Pure Value, RZV 1.3,
Consumer Services, IYC 1.3,
Life Insurance Companies, seen in this Finviz Screener, 2.1
Automobile Dealerships, seen in this Finviz Screener, 1.8
Credit Services, seen in this Finviz Screener, 1.7%
Education Services, seen in this Finviz Screener, 1.5
High Performance Utilities, such as MDU, seen in this Finviz Screener, 1.0
Vice Stocks, traded by the Mutual Fund VICEX, closed at 25.85, just shy of its May 20, 2013, high.
Financial Sectors rising included
The Too Big To Fal Banks, RWW 2.3
Far East Financials, FEFN 2.2, such as SHG, IX, SMFG, and NMR
Investment Bankers, KCE 2.2, such as JPM
Regional Banks, KRE 2.1
Stock Brokers, IAI 2.0, such as ITG
Chines Financials, CHIX 2.0, such as SHG
World Financials, IXG 1.9, led by LYG 8.4
Emerging Market Financials, EMFN 1.6
European Financials, EUFN 1.1, such as IRE
Energy sectors rose strongly on a blast higher in the price of oil, USO.
Energy Production, XOP 2.3
Small Cap Energy, PSCE 1.6
Energy Service, IEZ 1.8 and OIH 1.6
Yield bearing equity sectors rising included
China Real Estate, TAO 2.1
Telecom, IST 1.7
Shipping, SEA 1.1
Countries rising included
The Nikkei, NKY 3.2
Mexico, EWW 2.9
China, YAO 2.1, ECNS 2.0, CHII 1.5,
The Philippine, EPHE 2.0
Thailad, THD 1.7
Germany, EWG 1.5
Netherlands, EWN 1.3
Ireland, EIRL 1.0
The terrific leverage of the stock market, which has come through trading on margin credit, is seen in both the ratio of Junk Bonds, JNK, relative to US 10 Year Notes, TLT, JNK:TLT, and in World Stocks, VT, relative to Aggregagte Credit, AGG, VT:AGG, rising to an all time high.
On Thursday August 1, 2013, Jesus Christ, operating at the helm of the Economy of God, is working to pivot the world out of Liberalism’s age of investment choice and into Authoritarianism’s age of diktat.
He is working to put Liberalism’s Dollar Hegemonic Banker Regime in the grave. The monetary authority of the Creature From Jekyll Island is coming to an end, as US Stocks, VTI, traded higher to their zenith. Inflationism is reaching its end. And destructionism will be commencing, and no world banker can stop it, as God’s Son, is empowering the Beast Regime of Regional Governance and Totalitarian Collectivism, to rise from the sovereign insolvency and banking insolvency of the southern European nations, in particular Portugal, Italy, Greece, and Spain, as foretold in Bible prophecy of Revelation 13:1-4.
Benson te writes From 1995-2008, Greece had a series of upgrades and positive watches, in both the long and short term of foreign and local currency ratings. The Fitch began a string of downgrades on Greece only when the country’s debt crisis imploded in 2009 . Today Greece has been rated junk “substantial credit risk ”, four years after the unresolved crisis. The successions of credit upgrades basically helped motivate the Greek government to indulge in a borrowing spree which eventually unraveled.
I add that the acceptance of Greece into the Euro Common Currency Union was a banker driven phenomenon, where those in the know, bought Greek Treasury Debt as its Interest Rate fell lower on credit upgrades, thus making great gains; and then started to sell Greek Treasury Debt short, beginning in 2009 as downgrades loomed, making money as the value of the debt fell lower.
It is only through three successive bailouts and debt write offs, all prohibited by the Maastricht Treaty that Greece has money for its fiscal spending needs, provided for by the Troika. Despite this seigniorage aid, the WSJ reports in article Greek aid slice gets green light from Euro Zone that Greek Treasury Debt has risen from a recent low of 140% to 160% of gross domestic product. Greece stnds as a stunning example of clientelis, that is what the Economist Magazine terms pork and patronage, where most all of those working are employees of the Hellenic Republic. And of note, Stefan Setinberg of WSWS reports Euro zone debt burden continues to rise Figures from the Eurostat statistics agency show that the debt burden across the euro zone continues to rise after three years of austerity.
The introduction of the Euro in 1999 was one of Lilberalism’s policies of ever increasing investment choice which underwrote schemes of credit and carry trade investing, with the greatest of these being the Euro Yen currency carry trade. The EUR/JPY is reaching its zenith and will soon commence an unwinding of carry trade investment in the Eurozone ADRs, seen in this Finviz Screener.
The credit expansionary monetary policies of the world central banks is about to cross the Rubicon of sound monetary policy, and turned “money good” stock investments bad. Clearly bond vigilantes are able to call interest rates higher globally and force a steepening of yield curves, seen in the chart of the Steepener ETF, STPP, steepening, and currency traders are increasingly able to sell currencies short. Stocks will be turning parabolically lower soon.
Credit, that is trust in Liberalism’s leaders is beginning to fail. The days when liberalism’s governments, bankers, corporations, entrepreneurs, and citizens of democracies are the legislators of economic value and the legislators of economic life, will soon be over.
Soon conomic and political movement under Authoritarianism will be based upon policies of diktat and schemes of debt servitude, which will provide for punitive collectivism and crushing austerity, with the nation of Greece leading the way forward, very much a fulfillment of Bible Prophecy of Revelation 13:1-4, where the Beast Regime of Regioanl Governance and Debt Servitude is prophesied to rise out waves of economic and political crisis in the Mediterranean Sea nationos of Portugal, Italy, Greece and Spain, that is out of the profligacy of the PIGS.
Of note, Spain, EWP, its Utility IBDRY, Italy, EWI, Germany, EWG, France, EWQ, the Netherlands, EWN, the Eurozone, EZU, and European Financials, EUFN, traded to their likely zenith higher Thursday August 1, 2013, on a rise in the master carry trade, that is the EURJPY, as is seen in its three month combined ongoing three month Yahoo Finance chart, on an enduring carry trade rally.
Out of Eurozone, sovereign and banking insolvency, a European Super State, that is a one Euro Government will form, as leaders meet in summits establshing regional framework agreements which which renounce national sovereignty and announce pooled regional sovereignty. A precursor of such a regional authoritarian government comes from the Chris Marsden WSWS report, European Union seeks drone and spy satellite network. The European Union has proposed the creation of what amounts to a pan-European equivalent to the National Security Agency, armed with a European drone programme and a spy satellite network.
Of note, Iridium Communications, IRDM, fell 17% lower. Iridium NEXT, is the embodiment of Iridium’s bold vision for the future of global communications. Iridium NEXT is a fast-approaching, game-changing reality that will dramatically enhance Iridium’s ability to meet rapidly expanding demand for truly global mobile communications on land, at sea, and in the skies. Anticipated to begin launching in 2015, Iridium NEXT will recreate the existing Iridium constellation architecture of 66 cross-linked low-Earth orbiting (LEO) satellites covering 100 percent of the globe. Iridium NEXT will substantially enhance and extend Iridium mobile communications services,
Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, traded lower.
On Friday, Auguest 2, 2013, Volatility, ^VIX, plummeted as Biefing.com reports that the major averages began today’s session in the red after the July nonfarm payrolls report missed expectations, but have managed to trim most of their losses as action holds little changed.
Nonfarm payrolls added 162,000 jobs in July after adding a downwardly revised 188,000 (from 195,000) in June. The Briefing.com consensus expected 175,000 new payrolls. The report proved to be a disappointment as not only did payroll growth come in below expectations, but the average workweek dropped to 34.4 hours from 34.5 and average hourly earnings declined 0.1%.
Altogether, aggregate wages fell 0.3%, which will put substantial downside pressure on retail sales growth. Meanwhile, the unemployment rate dropped to 7.4% in July from 7.6% in June. The consensus expected the unemployment rate to fall to 7.5%. However, the labor participation rate fell to 63.4% from 63.5% in June, causing about a half of the decline in the unemployment rate.
Although stocks slipped in reaction to the data, participants fall back on the Federal Reserve’s pledge to provide support to the markets for as long as economic data continues to paint a lukewarm picture.
Treasuries responded to the data by jumping to their highest level of the day. The benchmark 10-yr yield, ^TNX, is lower by nine basis points at 2.62%, erasing almost the entire spike from yesterday.
Sectors trading higher on the day included Homebuilding, ITB, US Infrastructure, PKB, China Industrials, CHII.
The Nikkei, NKY, Switzerland, EWL, Poland, EPOL, Ireland, EIRL, and Argentina, ARGT, continued higher, today, while the Philippines, EPHE, and Thailand, THD, traded lower.
Of note it has been Brazil, EWZ, Chile, ECH, and Peru, EPU, that have been the Emerging Market loss leaders as is seen in their ongoing Yahoo combined chart with the Andean 40 ETF, AND.
MarketWatch reports U.S. home prices jump; Dallas, Denver at record
Townhall.com relates Five ways liberalism destroyed Detroit.
3) In news of the Surveillance State
CNet reports FBI Pressures ISPs to install survellance software
Deutsche Welle reports XKeyscore a God Terminal into the Internet
4) In libertarian news
Arnold King is Ask Blog, author of The Three Languages of Politics which presents a three axis model of analysis, that being conservatism, liberalism, and progressivism, writes I am reading The Servile Mind, by Kenneth Minogue, which takes the opposite point of view. Minogue argues that the welfare state substitutes political agency for moral agency. As citizens, we lose our moral compass and instead pick up a political one. I find the book rather heavy going, but I probably will review it somewhere down the road. If you are looking for someone who concedes nothing to the oppressor-oppressed axis and instead views it as undermining Western values completely, then Minogue is your champion.
And Arnold King in Ask Blog questions Why do we have three axes that we have and why do some people adopt one axis over another? Is it nature, nurture, free will or something else? Is it is more than just group identity and signalling?
I comment there is a fourth axis, that being dispensationalism. Isms are processes that produce states-of-beings from ideas.
Dispensationalism is the concept that Jesus Christ is exercising administrative management of all things in each of mankind’s epochs, eras, eras, and time periods, to make them full, Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25.
Dispensationalism comes from Strong’s Greek word oikonomia, #3622, dispensation, and means household dispensing, household stewardship, household management and economic oversight of property for the completion of every age, era, and epoch and time period. Dispensations are time of mercy and judgment.
Dispensationalism produces both the “saints” and the “aints”; both were predestinated in eternity past. And through the movement of God’s spirit there be moral agency and ethical agency, which works in nature, nurture, and a motivation to be one of two types of God’s vessel.
MB-Soft relates Dispensational theology grows out of a consistent use of the hermeneutical principle of normal, plain, or literal interpretation. This principle does not exclude the use of figures of speech, but insists that behind every figure is a literal meaning. Applying this hermeneutical principle leads dispensationalism to distinguish God’s program for Israel from his program for the church. Thus the church did not begin in the OT but on the day of Pentecost, and the church is not presently fulfilling promises made to Israel in the OT that have not yet been fulfilled.
The dispensationalist manifest is the foundation for a life of virtue and ethics, establishing the elect as separate from the fiat who live in carnality and iniquity; it comes from an understanding of dispensationalism, serves as the basis of dispensationalist economics, and is a creed for a dispensationalist economist.
As presented in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is movement establishing a new order consisting of fifteen New Things.
The New Things of Christ establish the Dispensationalist’s Manifest, is based upon Ephesians 1:10, the biblical revelation that Jesus Christ is operating in dispensation, that is the household management plan of God to complete and fulfill all things in every age, epoch, era and time period.
And Ask Blog continues I know, I know, it can be read in terms of freedom and coercion also, but it’s not as if the “happy ending” frees everyone.
I comment, Mr King has that right. Those down in Egypt, that is the dark nation, not those of Adam’s earthen tone, were predestined to be in the darkest of places, the land and people of God Ra, as not all tribes, and not all peoples entered into the Promised Land, only those led by Joshua entered.
And Mr King continues, I will predict that articulate, politically-engaged people in the U.S. will tend to gravitate toward one axis, and to use that axis for group-identity and signaling purposes.
I comment, those of the Reformed Church, (those like John McArthur) and those of the Recovery Church (those like Witness Lee and Wathman Nye) and those of the Jesus Movement, are all aligned along the axis of Dispensationalism thought.
5) Facts about Chicago
Fran Spielman of the Chicago Sun Times reports Chicago’s principal private employers are JPMorgan Chase (8,168 workers); United Airlines (7,521); Accenture (5,590) and Northern Trust (5,448).
6) Will TransCanada Corp’s Alberta to East Coast Pipeline be part of a soon emerging North American Union Energy Infrastructure?
Liberalism featured democratic nation states, each with their own currency. But Authoritarianism features regional governance, where diktat serves as trust, medium of exchange, wealth and power. Regioanlism is replacing Crony Capitalism, European Socialism, and Greek Socialism. An inquiring mind asks if the pipleline is constructed and is opeational by 2017 to 2018, it certainly will be a major part of what will be statist government overseen by regional nannycrats who manage the factors of production, and plan and operate an integrated North American economy where the dynamos of regional security, stability, and security replace corporate profitability, global growth and trade.
Sabina Zawadzki and David Sheppard of Reuters report TransCanada’s East Coast oil pipeline to change trade dynamics. TransCanada Corp’s (TRP.TO) plan to build one of the world’s longest oil pipelines has reverberations far beyond Canadian shores.
The planned 2,700 mile pipeline, which will bring crude from Canada’s energy capital of Alberta to refineries and ports on the East Coast, has the potential to upturn the dynamics of the North Atlantic oil trade squeezing out some imported crude to North America and revitalizing once-ailing refineries.
The Energy East line could also reinforce North Sea Brent crude as the world’s oil benchmark against which giants such as Saudi Arabia price their western-bound exports, analysts say, while opening up the option of more Canadian heavy crude flowing to the U.S. Gulf Coast.
The scale of the $12 billion, 1.1-million barrel per day (bpd) pipeline, which will extend part of an old natural gas line, is hard to understate. Were it to start in London, it would stretch all the way to Tehran. In the United States, it could pump crude oil from Beverly Hills to New York City.
And its capacity is greater than the entire oil production of Azerbaijan, could provide 6 percent of daily U.S. oil consumption or, put another way, has the ability to carry 30 percent of Canada’s total daily oil production.
“In the short and medium term, this isn’t a project focused on exporting heavier Canadian oil to the U.S. Gulf Coast,” said Mark Routt, a senior energy consultant at KBC in Houston, who has a number of clients interested in the project.
“The initial stage of this project will be primarily about sending light sweet crude to Canadian refineries.”
That could effectively wipe out Canada’s need to import crude for its eastern refineries. They now import around 700,000 bpd from North and West Africa and Latin America because Canada’s own supplies lie across a vast wilderness in the far West. Africa and Latin America will have to find a new home for their barrels by 2017 or 2018, if the pipeline is completed on time. The twinning of the project with a plan to build and operate a new deepwater export port in Saint John, New Brunswick will give oil producers an outlet for the 400,000 bpd or so of leftover, after Canada’s eastern refineries consume their share. “The next stage would be to potentially expand the project to ship light sweet crude to refineries on the U.S. East Coast,” Routt said.
Several refineries on the U.S. East Coast have shut down in recent years due to poor economic performance. Access to Canadian sweet crude, cheaper than European and African imports due to transportation costs and the lower U.S. benchmark price, could support the plants that remain.
7) Many poor people live squezed into inner city ghettos such as the Tenderloin neighborhood of San Francisco.
Economic Policy Journal posts The Lefty, government regulated, Bottle City of Squalor, San Francisco’s Tenderloin, reposting Gary Kamiya from Cool Gray City of Love: 49 Views of San Francisco (via Salon).
In the universe of San Francisco, the Tenderloin is the black hole, the six-block-by-six-block area where the city’s urban matter is most intensely concentrated. It is the only part of San Francisco that remains untamed, its last human wilderness. Without the Tenderloin and its radioactive core of junkies, drunks, transvestites, dealers, thugs, madmen, hustlers, derelicts, prostitutes and lowlifes.
Many cities used to have “bad” neighborhoods in the heart of downtown, zones of misrule where the primal human urges – to get laid, to get high, and to get money – were allowed to bloom furtively in the night. But most of them are gone now, victims of gentrification.
Bellingham Washington, known also as the City of Subdued Excitement, has the Downtown Neighborhood, which has a very bad side, stabilized by a major software employer, and its “campus” of offices spread across several city blocks, and which serves as night life entertainment and restaurants. and which serves as basis for a number of law offices.
Squeezed into Bellingham’s Downtown Neighborhood are five of liberalism’s resources, that is social service organizatons, which are the basis for Liberalism’s clientelism, and which provide monetary life and survival for the poor, who live devoid of any meritocracy.
The first resource is Interfaith Clinic, that is the Department of Social and Human Services Community Health Clinic, which provides Medicaid medical and dental care. The second is Opportunity Council, which provides Energy Assistance Grants, Community Voice Mail, a Soup Kitchen located in the suburbs at Faith Lutheran Church, Early Learning and Family Assistance, Home Weatherization Assistance, and Low Income Housing Assistance. The third is Law Advocates which provides service bureaus of local attorneys, who volunteer their time to provide free low cost civil legal advice and help, such as obtaining Washington State IDs. The fourth is The Lighthouse Mission and The Agape Home For Women And Children , which provides three hots and a cot, for those coming from jail or who are homeless. The fifth is a number of subsidized low income apartment buildings, like the one I live in, providing a SRO, so that I am able to survive, pay my bills, have a nutritious diet, maintain mental health, and have a physically clean life.
I live in the Sea Breeze Apartments, right in the center of Downtonw Bellingham, near Holly and Railroad. I am not bothered by those who are in my neighood who live to get laid, to get high, and to get money. Yet my life is a constant moral, that is virtuous, and ethical challenge, largely because of the antisocial people, that is psychopaths, who “live free” on a social security disability award of $730 a month, plus housing assistance, plus SNAP Food Stamps, for their inherent mental disorder of busybodyness, which Ask.com relates is “the act of interfering or meddling into other people affairs; it is also the act of touching or handling other people’s properties without their permission or consent which may result into conflicts” .
Libertarians most likely would say shame of you for your dependency. I say thanks to Jesus Christ, who provides, for now, through His dispensation, Ephesians 1:10, resources so that I can maintain a spiritual life in Him.
8) A see saw destruction of fiat wealth is underway with stocks reaching their zenith the week ending August 2, 2013, while credit and currencies are being destroyed by bond vigilantes calling the Interest Rate on the US Ten Year Government Note higher beginning May 21, 2013.
The chart of the S&P 500, $SPX, SPY, shows a close at $1,709, up 1.1% for the week. Bespoke Investment blog presents Long term stock market charts. The S&P 500 going back 15 year, as shown, shows the recent move higher has put quite a bit of distance between current levels and the prior all-time highs reached back in 2000 and 2007. And the Russell 2,000, is well above its prior all-time highs at this point. I comment that beginning in June 2012, that the small cap stocks, received great stimulus, as is sen in the combined ongoing Google Finance Chart of SPY, RZV, EEM, an AGG, to arrive at Peak Stock Wealth on August 2, 2013. An Elliott Wave 5 High has been achieved in both the Large Cap Stocks, SPY, and the Small Cap Stocks, IWM, with the Small Cap Pure Value Stocks, RZV, having the greatest fall potential, that is the most rapid rate of disinvestment, deleveraging and derisking. The 28 most inflationary ETFs presented in this Finviz Screener, for the week ending August 2, 2013, communicates Liberalism’s grand finale credit and carry trade driven rally
1) XIV 8.5
2) ITB 4.0
3) FXR 3.6
4) PPA 3.0
5) SPHB 2.9
6) IGV 2.6
7) IGN 2.5
8) BJK 2.5
9) FPX 2.4
10) XRT 2.2
11) IBB 2.2
12) CARZ 2.1
13) PBS 2.1
14) PJP 2.1
15) RXI. 2.1
16) EIRL 2.1
17) IAI 2.0
18) FDN 1.9
19) SMH 1.8
20) FLM 1.6
21) RWW 1.5
22) IYC 1.5
23) PSCI 1.5
24) EUFN 0.9
25) PSP 0.3
26) RZV 0.2
27) UJB 0.1
28) TAN -1.1
Financial Market report for the week ending July 28, 2013
1) … Steeling oneself is the virtue of growing in endurance and not denying Christ’s Name, that is His presence and authority, as presented in Revelation 3:8
John Rubino writes Bombs going off one level down. In response, I relate that I am preparing myself for anomic breakdown.
The Free Dictionary defines an·o·mie or an·o·my (n-m) n.
1. Social instability caused by erosion of standards and values.
2. Alienation and purposelessness experienced by a person or a class as a result of a lack of standards, values, or ideals: “We must now brace ourselves for disquisitions on peer pressure, adolescent anomie and rage” (Charles Krauthammer).
[French, from Greek anomi, lawlessness, from anomos, lawless : a-, without; see a-1 + nomos, law; see nem- in Indo-European roots.]
Reading of lawless abandon in today’s news, I’m starting to focus on virtue, which I define as the admirable qualities of Christ, and on ethics, which I define as economic, that is oikonomia, which is regard for the property and person of others, whether it be spiritual or philosophic or material, political or monetary.
Living Stream Mininstry and Google Books recommend Wtness Lee on the Economy of God. The central lane of the entire Bible is God’s economy, which is His household administration to dispense Himself in Christ into His chosen people that He may have a house, a household, to express Himself, which household is the church, the Body of Christ (1 Tim. 3:15). The word for economy, oikonomia, is used in the book of Ephesians three times. In 1:10 and 3:9 it is translated as “dispensation,” whereas in 3:2 it is translated as “stewardship.” God’s dispensation is His arrangement, which is His plan or purpose, His household administration.
Elaine Meinel Supkis writes Obama talks only about Trayvon being himself. The right will blame people and the left will ignore people. I comment, yes, this is true. To the left of right, is where most of society exists, and it has no virtue or ethics. Most want to enjoy their moral hazard, debt based prosperity and be left alone; those who reside downtown with me are either libertine or psychopathic.
Ms Supkis relates “When I walk around and spot someone aping the gangsta culture no matter what skin color, I am on full alert. I expect some criminal action to occur.”
As for me, when I walk around I am alert for psychopaths. For the last thirteen years, I have resided with psychopaths or had psychopathic neighbors; this is a God thing; He continually places me in dens of psychopaths, that I might come to know His virtue and His ethics.
Yesterday I went to the Bellingham’ Farmer’s Market, which is hosted in a modern block long structure whose central building is surrounded by covered market stalls for use during weekend community events, doubling as covered parking during for businesses during the week.
I found a vendor with tree ripend fruit such as cherries and peaches; and waited in line behind a babushka with special summertime food coupons making slow payment for her purchase, it was like she was trying to haggle with the vendor. While waiting, I was watching that no nut case would come along and purposefully bump into me, causing a disruption.
On leaving, I had my psychotathic radar on all the way, scoping for trouble makers to avoid. And sure enough when walking by Rumors, the gay and lesbian disco, and Boundary Bay Bistro, the major beer garden, there on the sidewalk dead ahead was a man known to me as a psychopath. He had on a white t-shirt and a green military style baseball cap; appearing very much the exmilitary type.
So what was he doing? He was sitting in a chair that was not his; he didn’t bring a chair; no he doesn’t own one; he sits in chairs that belong to others; this is typical predator animal behavior; simply taking over the property that belongs to another and using it as a perch. He was salivating; watching the whole group of people at market. I simply passed on by; terrified all the time.
An inquiring mind asks “Like whoabe Obama’s Father? Obama could not have been Trayvon Martin, as he was raised to be a neoconservative by Jewish Chicago rabbis and Jewish Chicago mentors who fathered him and nurtured him in neoconservativism life.
As for me, I have many fathers of faith in God; these be Noah, Abraham, Moses, and most importantly Jesus, Wonderful, Counselor, Mighty God, Everlasting Father, Prince of Peace.
Benson te writes US part time jobs: Obamacare and regime uncertainty While US government sponsored surveys or the US Federal Reserve of Philadelphia and Minneapolis says that only a small portion has been affected by Obamacare, circumstantial developments (part time jobs and high cash by non-financial corporations due to reluctance to invest) says otherwise.
Nonetheless, Big firms producing most of the GDP growth with little help from small business” has been a common feature in today’s QE-ZIRP based global financial economy where monetary policies have been engineered to buoy asset markets (stocks, real estate) via credit fueled destabilizing speculations (bubbles).
The reality is that the Dr. Bernanke’s policies has substantially been responsible for these. FED easing policies combined with Obamacare and the increased regulatory mandates (the Federal Register is now over 81,000 pages long. Obamacare has 906 pages, Dodd Frank has 849 pages) and aside from a surge in taxes (US tax code now 72,000 pages) all contributes to the uncertainty over the investor’s property rights, hence the lack of commitment to invest and the corresponding changes in the hiring and employment dynamic.
I relate that Liberalism was the epoch of investment choice; authoritarianism is the age of diktat. The bubbles Benson te writes of came via the world central banks’ moral hazard based monetary policies of investment choice, and all varities of credit schemes. Christoph Dreier writes in WSWS Greek government bans demonstrations in central Athens. The latest ban on demonstrations is a further step towards authoritarian forms of rule in Europe. Jesus Christ, operating in the Economy of God, Ephesians, 1:10, is now overseeing that Liberalism’s bubbles are resolved via regional governance policies of diktat, and all types of debt servitude schemes.
Sound bible doctrine presents that The Messiah will return before the millennial period (2:31-3; 44-45; 7:13-14). God’s kingdom will literally be established on the earth with the Messiah-King as ruler (2:44-45 -45; 7:26-27). The four metals of Nebuchadnezzar’s dream image symbolize four empires: Babylonian, Medo-Persian, Macedonian-Greek, and Roman (2:37-40); the fourth kingdom, a revived Roman Empire, that is an authoritarian Super State will arise out of the profligacy of European Socialism and Greek Socialism, and their sovereign insolvency and failure of banking seigniorage. After the establishment of the Euro, Antonio Guterres, Portuguese Prime Minister, stated, “As Peter was the rock on which the church was built, so the Euro is the rock on which the European Union will be built.” This fourth kingdom, will exist with the PIGS being hollow moons, revolving about planet Brussels and planet Berlin. It is well on its way to maturity, now that “Woldgang Schäuble rejected proposals for a second restructuring of Greece’s debts. Instead he made clear that austerity policies must continue unabated and expanded via the implementation of structural reforms.”
“The night before Schäuble’s arrival, the Greek Parliament approved the austerity package, the seventh since 2010, to secure payment of its next tranche of credit of €2.5 billion. The package calls for firing 15,000 public employees, with 150,000 to be sacked by the end of 2014. The package was dictated to the Greek government by Schäuble and his European colleagues”.
“The package won the support of 153 of 300 deputies. After the withdrawal of the Democratic Left (DIMAR) from the coalition in June, the Greek government was left with a majority of just 5 seats. All of the opposition parties voted against the law, but DIMAR chairman Fotis Kouvelis stressed that his party agreed in principle to the cuts”
I relate that Dispensationalism presents the concept that National Israel is God’s prophetic time clock for last-day events. CoG writer posts Israel releasing prisoners in order to resume peace talks. Israel has decided to release prisoners, that it has considered to be a threat to its security, as a ‘good faith’ gesture so that ‘peace talks’ with the Palestinians can resume. Israel has agreed to release a “limited” number of Palestinian prisoners, a day after the two governments agreed to head back to negotiations in hopes of settling long-standing differences. Israeli government minister Yuval Steinitz made the announcement Saturday, without giving specific details about the number of prisoners or their identities.
Late Friday, U.S. Secretary of State John Kerry…praised both Israeli Prime Minister Benjamin Netanyahu and Palestinian President Abbas for making some difficult choices.
Peace talks between Israel and the Palestinians collapsed in 2010. White House officials said President Barack Obama called Israeli Prime Minister Benjamin Netanyahu on Thursday to ask him to work with Kerry to “resume negotiations with the Palestinians as soon as possible.”
Earlier this week, in Jordan, Kerry met with representatives of Arab states that support a comprehensive peace plan. He said many of the Arab League ministers told him “the core issue of instability in this region and in many other parts of the world is the Palestinian-Israeli conflict.”
Israel has said it will release “heavyweight” Palestinian prisoners as part of an agreement to enter preliminary talks in Washington, with the aim of an eventual resumption of long-stalled peace negotiations.
Hours after the US secretary of state, John Kerry, announced that the two sides in the conflict had agreed to discuss terms for negotiations, Yuval Steiniz, Israel’s minister for international relations, said a prisoner release would be carried out in stages.
“I don’t want to give numbers but there will be heavyweight prisoners who have been in jail for tens of years,” he told Israel Radio. The release of long-serving prisoners has been a key Palestinian demand.
But Steinitz said Israel would balk at agreeing on the pre-1967 border as the parameter for territorial negotiations. “There is no chance we will agree to enter any negotiations that begin with defining territorial borders or concessions by Israel, nor a [settlement] construction freeze,” he said.
Interesting developments the past few days. On Wednesday, the EU announced that it would pressure Israel and again indicated that wants Israel to basically go back to its pre-1967 borders (see EU to put more pressure on Israel: A prelude to Daniel 9:27?). On Thursday, US President Obama pressures Israel to do something to get the talks resumed. On Friday, US Secretary of State says the talks will resume. On Saturday (today), Israel says it will release prisoners.
It appears that Israel is responding to international pressure, not from the Palestinians, but from its biggest trading partners and military suppliers (Israel, not only trades with both, but also buys certain military items from both the USA and EU).
It has long been my view that Israel will not agree to the type of seven-year covenant what the Bible mentions in Daniel 9:27 without pressure. Though, in my view, Israel will require more pressure than this for that specific deal–but it could make various ‘peace deals’ prior to the prophesied one.
The ‘one week’ has generally been understood by prophecy watchers to mean a seven year deal, that is broken in the middle of it (after 3 1/2 years). More on this deal can be found in the article When Will the Great Tribulation Begin?
As it turns out, because of concerns that Israel has about it own safety and survival, Israel will not likely to agree to this type of deal without additional pressure. This pressure likely will include military and/or economic pressures.
However, there will also likely need to be pressure affecting the Arab/Palestinian side, and this very well may come as the result of a regional war or conflict (likely involving Israel), including possibly a conflict that will result in the prophesied destruction of Damascus, Syria (Isaiah 17:1).
The result of the deal in Daniel 9:27 is that 3 1/2 years after it is confirmed, a military force from Europe will enter Israel (Daniel 11:31). Notice what Jesus said about that: 15 “Therefore when you see the ‘abomination of desolation,’ spoken of by Daniel the prophet, standing in the holy place” (whoever reads, let him understand), 16 “then let those who are in Judea flee to the mountains. 17 Let him who is on the housetop not go down to take anything out of his house. 18 And let him who is in the field not go back to get his clothes. 19 But woe to those who are pregnant and to those who are nursing babies in those days! 20 And pray that your flight may not be in winter or on the Sabbath. 21 For then there will be great tribulation, such as has not been since the beginning of the world until this time, no, nor ever shall be. 22 And unless those days were shortened, no flesh would be saved; but for the elect’s sake those days will be shortened. (Matthew 24:15-22)
A deal that is ‘confirmed’ for seven years by the Europeans is a key event that will result in destruction ultimately coming. The situation is tense in the Middle East, and while peace is good, the coming ‘peace deal’ will disappoint and result in destruction (though there could be, and probably will be, other deals first that are not the deal in Daniel 9:27). Some articles of possibly related interest may include:
When Will the Great Tribulation Begin? 2013, 2014, or 2015? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? Why do many think that Daniel 9:27 is referring to a peace deal? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? See also the video The Great Tribulation Will Not Begin Before 2017.
Jerusalem: Past, Present, and Future What does the Bible say about Jerusalem and its future? Is Jerusalem going to be divided and eliminated? Is Jesus returning to the area of Jerusalem?
The Future King of the South is Rising Does the Bible teach that there will be a future King of the South in Daniel 11? Is this kingdom rising up now? Did the old Worldwide Church of God (WCG) teach that there would be another one? And who is the King of the South? How will this involve Egypt? Is the final King of the South some type of Arab-Muslim confederation? Can Iran be involved? Is there a group that seems to be supporting the goals of the King of the South? Has the Obama Administration supported the rise of this power? This sermon video answers those questions.
The Muslim Brotherhood and the Rise of the King of the South The Bible tells of the formation of a power of nations that are in the Middle East and North Africa that are part of the final “King of the South” (Daniel 11:40-43) The Muslim Brotherhood wishes to have an Islamic empire with basically the same nations. This YouTube video explains what to expect from such a confederation.
Is There A Future King of the South? Some no longer believe there needs to be. Might Egypt, Islam, Iran, Arabs, or Ethiopia be involved? Might this King be called the Mahdi? What does the Bible say?
The Arab and Islamic World In the Bible, History, and Prophecy The Bible discusses the origins of the Arab world and discusses the Middle East in prophecy. What is ahead for the Middle East and those who follow Islam? What about the Imam Mahdi? What lies ahead for Turkey, Iran, and the other non-Arabic Muslims?
Damascus and Syria in Prophecy Will Bashar Assad hold power as he has it? Does the Bible show that Damascus, the capital of Syria, will be destroyed? What will happen to Syria? Will the Syrians support the final King of the South that the Bible tells will rise up? Which scriptures discuss the rise and fall of an Arabic confederation? Does Islamic prophecy predict the destruction of Syria. This is a YouTube video.
I am a Christian Citizen, I am by birth living in the heavenlies. Revelation by Jesus Christ posts Summary of Daniel 9: The Seventy Weeks. Jack Kelley relates The 70 Weeks Of Daniel. Pastor Jim writes 3065 – 70 Weeks – An Introduction to the 70 Weeks of Daniel. And CalvinistGuy writes Examining the dispensational parenthesis theory of Daniel’s Seventy Weeks prophecy.
Englewood, Chicago, IL, is inhabited by the Spirit of Murder as Wikipedia relates Englewood was the home of Dr. H. H. Holmes, one of the first publicized serial murderers in America. I know of such things, because I reside in the Sea Breeze Apartments, in Bellingham; one of the apartments here at one time was a morgue. The Spirit of Morbidity pervades: that is why so many antisocial people live in my building and in “the hood “. Yet, I like it here because I have a nice ocean view and goda low rent. Wikiepedia further relates Englewood is noted for Rappers Chief Keef, Lil Durk, and Lil Reese. And also relates Englewood has a poverty rate of 44%, which is substantially higher than the overall poverty rate in Chicago of 20%. Natalie Moore reports in WBEZ 91.5 Chicago’s highest murder rate in Englewood. Harvey, a young black male, relates The Englewood police district clocked in more murders in 2011 than any other district. The area’s crime problem is amplified because of other urban ills afflicting the neighborhood. Unemployment in and around Englewood is a whopping 35 percent. The article concludes It’s like what 16-year-old Harvey, the teenager who has had five friends die, says: He’s tired of going to funerals.
2) … Ambrose Evans Pritchard calls for a stop to austerity measures, a defacto debt jubilee, as well a periphery European government union.
Ambrose Evans Pritchard proposes that Europe’s crisis states should fight back with a ‘debtors’ cartel‘. The former head of the IMF’s team in Ireland, Professor Ashoka Mody, has called for “a complete rethinking” of the austerity strategy. He confirmed what the Irish trade unions and others have said along: that fiscal overkill is self-defeating, especially if compounded by tight money. “Given the debt dynamics, if debt levels remain where they are and growth remains where it is, there is never going to be a reduction in the debt ratio the foreseeable future. Moving away from austerity at this stage is a sensible course of action,” he said. Ireland is certainly not a basket case. It has a fat trade surplus. Exports are 105pc of GDP, compared to 30pc or less most for Club Med. It is well able to compete at the current exchange rate. Ireland’s policy of austerity cuts and “internal devaluation” has done wonders for the trade account, but only at the cost of an even deeper debt-deflation crisis. This is the fundamental contradiction of EMU crisis strategy in every high-debt country. The more these economies deflate wages, the more they raise the real cost of debt.
“These countries are walking a very fine line,” said Marchel Alexandrovich from Jeffereies Fixed Income. “Once debt gets to the 130pc level there is a risk that markets will start to wake up. The moment truth could come as soon as political stability is called into question in any one of these countries.” Portugal has been flirting with just such a crisis ever since the finance minister and austerity chief, Vitor Gaspar, stormed out three weeks ago.
Having now imposed the “Cyprus template” of losses on bank depositors above €100,000 as was all bond-holders if lenders get into trouble, how can they hope to contain systemic banking crisis in Portugal if investors start to fear that the situation is getting out of hand again.
The North still refuse to accept its joint responsibility for capital and trade imbalances that lie behind the EMU debacle, and still refuse to recognize that excess northern savings flooded Club Med, with the complicity of the European Central Bank.
(I comment that this is a pejorative statement coming from a liberal talking head, that is Europe’s version of politically incorrect Paul Krugman, its like Wikipedia which refers to the renaming of French-fried potatoes to “Freedom fries”. Furthermore such a political line denies the Nordic Latin Divide that is the EMU North South Chasm which has its origins in cultural and natural differences and denies the meritocracy of the industrious North as contrasted with the profligate south. Germany traveled along a line of industry, thrift and Capitalism, while the periphery nations traveled along a line of moral hazard European Socialsm; and worse yet patronage, pork, anticompetitiveness, and clientelsism Greek Socialism. It seems Mr Pritchard doesn’want to pay Liberalism’s EU pied pipers such as Nigel Farage)
There is condign retort to the creditor cartel. The peoples of southern Europe could at any time choose to form their own debtors cartel and turn the tables. They could confront the creditors with a stern ultimatum. Either you change the entire structure of EMU crisis policy, agree to a reflation strategy, and accept your share of the clean-up costs for this collective disaster, or we repudiate our debts. Either you meet us half way, or we take long overdue steps to protect our societies against mass unemployment, and to prevent our industrial base. It is time for Southern Europe to look after its own interest once again
(I comment that the fallout of the abandonment of the terms of the Maastricht Treaty means a change in governance is coming, that being national democracies will fall to the governance of regional tyranny.
Bloomberg reports Spanish pension raids spell bad news for bond sales. Spain’s Treasury may find one of its best customers less eager to buy its bonds as budget woes lead Prime Minister Mariano Rajoy to raid a government piggy-bank for a second year. “The fund isn’t in a position to accumulate assets anymore, it may even have to sell,” said Jose Antonio Herce, a partner at consultancy firm Analistas Financieros Internacionales in Madrid. “There are more and more pensions to pay and less and less money coming into the Social Security, the fund will melt quickly no that we’ve started taking money out of it. And Tyler Durden of Zero Hedge writes Euro area government debt rises to new record high.
The EMU’s debts both sovereign and banking reflect the failure of European socialism and Greek Socialism, and the creation of insolvent soeverigns and insolvent financial institutions, whose seigniorage, that is moneyness comes from the diktat of the monetary authority of the ECB, and not from the marketplace trust of investors. While indeed the debt are one day going to be repudiated, they can never be disannulled, they will be applied to every man woman and child in the Eurozone by nannycrats whose soveignty will come from EU leaders who meet in summits, to renounce national sovereignty and pool soveregnty regionally to establish statist regional governance and totalitarian collectivism for regional security, stability, and sustainability.
The collective disaster was planned in eternity past by God, and announced by the prophet Daniel in Nebuchadnezzar’s Statue of Empires dream of Daniel 2:25-45, where the Eurozone will be the first toe of iron diktat and clay democracy coming out of the failure of iron impression of a company of nations, that being the British Empire, and the US Dollar hegemony of the great nation, the US. And was foretold by the aposlte John in Revelaton 13:1-4, where the Beast Regime of regional governance and totalitarian collectivism will arise out of the profiligacy of the Mediterranean Sea nations of Portugal, Italy Greece and Spain.)
3) … Financial market activity for this week
On Monday, July 22, 2013, Gold, $GOLD, rose so strongly that it drove the US Dollar, $USD, to trade lower at $82.32. Zero Hedge reported over the weekend that Gold breaks above $1300 as shorts cover most in 4 months. Gold, $GOLD, closed higher at its 50 day moving average at $1,334. The Gold ETF, GLD, closed up 3.0% at 128.84. And the Silver ETF, SLV, closed up 4.7% at 19.77.
Any presentation of the traditional measure of wealth, that being the S&P 500, SPY, should now be presented with a presentation of Gold, GLD, as the very basis of wealth is transitioning from fiat to physical. Bond vigilantes gained control of the credit market calling the Interest Rate on the Ten Year Note, ^TNX, rising to 2.01% on May 24, 2013, and that this was an “extermination event” which terminated Liberalism, ending both its policy of investment choice and its credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, dollarization, financialization of stocks and ETFs, such as corporate bonds which convert into stocks, all of which created capital for corporations to operate and revenue for governments to operate. Debt deflation is underway as currency traders are selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, short. In the age of Authoritarianism, wealth can only be preserved by investing in and taking possession of gold bullion either in physical form or by trading on an Internet Platform such as Bullion Vault or Gold is Money.
Swiss Banks, UBS, CS, rose strongly driving European Financials, EUFN, higher.
Bank of America, BAC, and Citigroup, C, rose strongly driving the too Big To Fail Banks, RWW, higher.
Regions Financial, RF, rose strongly, taking Regional Banks, KRE, higher, and the Small Cap Pure Value Stocks, RZV, higher.
Brazil Banks rose strongly taking Brazil, EWZ, EWZS, higher.
Argentina Banks rose strongly taking Argentina, ARGT, higher.
Celgene, CELG, rose strongly taking Biotechnology, IBB, higher.
A number of stocks are greatly ovevalued. These include Electric Utilities, ITC, BKH, UNS, OGE, NEE, IDA, LNT, seen in this Finviz Screener. And these include Small Cap Pure Growth Companies, RZG, such as the following. Homebuiling supply company PGTI which engages in the manufacture of residential impact resistant windows and doors. US Infrastructure company MWA which engages in the manufacture of products used in the transmission, distribution, and measurement of water. Industrial equipment manufacturer TRS. And industrial equiment rental company HEES which rents aerial work platforms, cranes, earthmoving equipment, and industrial lift trucks. The companies, PGTI, MWA, TRS, HEES, are seen together in this ongoing Yahoo Finance chart.
Zero Hedge reports 25 facts about the fall of Detroit that will leave you shaking your head.
On Tuesday, July 23, 2013, Regional Banks, KRE, Emerging Market Financials, EMFN, Far East Financials, FEFN, and Chinese Financials, CHIX, rallied, to produce what is likely a grand finale completion of liberalism’s fiat wealth seen in the charts ofWorld Stocks, VT, US Stocks, VTI, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and as is seen in the combined on going Yahoo Finance Chart of KRE, EMFN, FEFN, CHIX, and EUFN. Banks, BPOP, SMFG, LYG, all rose to a new rally highs today. Investment Banker, JPM, and Stockbrokers, IAI, rose to a new rally high.
The slight trade lower seen in the chart of the S&P 500, $SPX, SPY, to $1,692, very likely reflects a market high yesterday Monday, July 22, 2013, at 1696, as an Elliott Wave 5 High, as S&P High Beta, SPBH, traded, 0.3%, lower today, and, S&P Transports, XTN, traded 1.2% lower, today. Large Cap Financials, JKF, including Life Insurance companies, such as, PRU, seen in this Finviz Screener, rose to new rally highs, suggesting that a market top in the S&P 500 has been attained. S&P overweight Exxon Mobil, XOM, traded to an all time new high of 95.
Today’s financial rally took the fifty leading Eurozone ADR’s, seen in this Finviz Screener, to a new rally highs. Netherlands’ Life Insurance companies, ING, and AEG, rallied the Netherlands, EWN, to a new all time high. Banco Santander, SAN, rallied Spain, EWP, strongly today. Ireland’s, COV, and IR, traded lower, suggesting that the rally in Ireland, EIRL, to a new high, is now complete.
The Small Cap Countries which have recovered the most in the last month include EPHE, THD, KROO, EWW, EZA, and EGPT, seen in their combined ongoing Yahoo Finance Chart. The Major Countries which have recovered the most in the last month include, NORW, EWD, EWL, EWT, and EWY, seen in their combined ongoing Yahoo Finance Chart.
The 200% ETF of the US Dollar, $USD, UUP, traded to middle of a massive broadening top pattern at 22.19, suggesting a soon rise once again, before the US Dollar, $USD, falls lower with all of the world currencies into the Pit of Financial Abandon. Action Forex reports the EUR/JPY closed at 131.59; and Yahoo Finance Chart shows the EURJPY ralling higher at market close, taking the Eurozone, EZU, higher.
Aerospace, PPA, and Automobiles, CARZ, rose to new highs.
In yield bearing equities, International Telecom, IST, and Leveraged Buyouts, PSP, rose to new rally highs. Global Utilities, DBU, and Electric Utilities, XLU, rose strongly
China recovery, FXI, recovey over the last month is seen in the rallying of the following, CHXX, 9.1, CHII, 6.5, CHIX, 6.4.
Emerging Market, EEM, recovery over the last month is seen in the rallying of the following:
Emerging Markets, EEM, 8.6%, with EWW, 14.0, EPHE, 13.5, EZA, 11.0, THD, 11.0, KROO, 9.0.
Far East Financials, FEFN, 11.9 %, such as WF, and SHG.
Emergning Market Financials, EMFN, 7.9
Brazil Financials, BRAF, 7.9
China Financials, CHIX, 6.4
Emerging Market Small Cap Dividend, DGS, 6.1
India Earnings, EPI, 5.9; of note IBN traded 1.7, and HDB, traded 2.2, lower today; the latter is a train wreck waiting to hasppen.
Emerging Market Technical Leaders, PIE, 9.2%
Emerging Market Infrastrcture, EMIF, 9.1
Steel, SLX, 8.8, which has taken practically all of the following US Metal Manufacturing companies, STLD, RS, NUE, CRS, GTLS, WOR, NWPX, VMI, MLI, GHM, CMC, PCP, ITW, PKOH, seen in this Finviz Screener to rally highs; giving zombie life to BUT, WLT, CLF, as well as SLC..
Industrial Mining, PICK, 7.3
Emerging Market Mining EMMT, 7.1
A recovery from debt deflation, reflecting somewhat of a recovery in sovereignty, is seen in the rallying of the seigniorage of democratic country governance over the last month.
World Treasury Bonds, BWX, 2.5
Emerging Market Bonds, EMB, 6.7
Emerging Market Currencies, CEW, 2.8
Aggregate Credit, AGG, 1.2
And a recovery from debt deflation is seen in the Inverse of the Japanese Bonds, JGBS, trading to a two month low, with Business Week reporting Japan bonds rise to 2-month high after elections, BOJ purchases.
A recovery from interest rate increase shock, specifically the sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, on a Steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, is seen in the rallying of the following over the last month,
Small Cap Real Estate, ROOF, 8.4
Residential REITS, REZ, 9.1
Commercial Office REITS, FNIO, 12.1
The short selling opportunity of a lifetime has developed. Look for strong derisking to come out of fiat asset invesment leaders, such as these forty, XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, PBD, PPA, IAI, SPHB, SMH, XRT, PJP, EWN, PSP, UJB, KRE, TAN, RXI, WOOD, FLM, LNKD, LYG, ,MFG, BPOP, SLM, JPM, NNI, UBS, BLK, NMR, MKTAY, PSUN, DORM, GE, IP, CHTR, and ING, seen in this Finviz Screener. The days of risk on investing, ONN, are over, though, done, and finished. Small Cap Pure Value, RZV, and Biotechnology, IBB, both traded lower today from market highs. And Banks and Creditors such as NMR and SLM are disasters waitning to happen.
Jesus Christ, operating in the economy of God, Ephesians 1:10, that is the political and financial administration plan of completing every age, epoch, era and time period, bringing forth its total fufillment, likely pivoted the world fully out of the era of investment choice and into the age of ditkat, today July 23, 2013; a process which He began on May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose strongly to 2.01%, serving as an “extermination event” which terminated Liberalism and introduced Authoritarianism; this rate rose again today from its recent low of 2.49% to 2.52%.
Volatility, ^VIX, finally rose. The walking dead market, that is the zombie market is likely over. Liberalism’s schemes of credit liquidity, AGG, FLAT, and carry trade, ICI, funded safehaven investing probably came to an end today, Tuesday, July 23, 2013. The safe haven rally in US Based stocks appears to be over, as the premium of Biotechnoloy over Emerging Markets, seen in the chart of IBB:EEM, has exhausted. And the safehaven rally in the Netherlands, EWN, appears over as its Electronic Equipment Manufacturer, PHG, and its Scientific Instrument Manufacturer, ST, traded lower. And the safehaven rally in Design Build Companies, FLM, appears over as its leader, JEC, traded lower. And the safe haven rally in Leveraged Buyouts, PSP, appears over as two of its leaders, IP, and GE, traded lower. There now be no more safe haven investments from the terror of bond vigilantes calling interest rates higher globally and the currency traders following suit with competitive currency devaluation, and as Zero Hedge reports SEC warns: prepare for repo defaults.
The rise of Authoritarianism’s schemes of debt servitude, such as Greek Bailout III, and the Cyprus Bank Deposit Bailin, mean that wealth can only be preserved in the physical possession of gold bullion, or in Internet trading vaults such as Gold Is Money or Bullion Vault, which reports Gold prices “driven by short covering”.
Jim Sinclair writes in JS Mineset Comex must change its delivery mechanism soon The cause of today’s spectacular rise in the gold price is the reality that with Friday continues large drops in the Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continued fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism. With manipulation coming to an end the true value of gold will be discovered by the cash exchanges that are now taking birth. The advent of the cash spot exchanges around the world is the natural demise of the Comex set up as convertible and now being converted. As long as one can buy spot, pay insurance, transportation and re-casted by Rand Refinery to Asian products sold profitably, the demands for real gold are ending the hay days or even existence of the futures exchanges. Gold is headed back to be traded as it was before 1973.
A genuine statement is that Gold is not Gold Mining Stocks, and Silver is not Silver Mining Stocks. Junior Gold Stocks, GJXJ, such as TRX, Gold Mining Stocks, such as EGO, Junior Silver Mining Stocks, SILJ, such as, SSRI, and Silver Mining Stocks, such as SLW, continued rising strongly, as is seen in their combined ongoing Yahoo Finance Chart. I have never recommended these types of stocks. and never will; I have always advocated ownership of gold bullion.
On Wednesday, July 24, 2013, With the Interest Rate on the US Ten Year Note, ^TNX, rising to 2.59%, debt deflation recommenced, turning Aggregate Credit, AGG, lower, as The Zeroes, ZROZ, 30 Year Government Bonds, EDV, The 10 Year Notes, TLT, World Government Bonds, BWX, Emerging Market Bonds, EMB, and Junk bonds, JNK, traded sharply lower.
Inverse Volatility, XIV, traded lower as Volatility, ^VIX, TVIX, VIXY, rose as World Stocks, VT, the S&P 500, SPY, and Global Industrial Producers, FXR, traded lower. All of these forms of fiat wealth traded lower from an Elliott Wave 5 high, as the monetary policies of the world central banks, are no longer able to support global growth, corporate profitability, and economic trade; and have actually turned “money good” investments bad.
Today, the divergence between economic data and investment experience began to narrow as Tyler Durden writes Stocks had their worst day in a month and Treasuries their worst day in 3 weeks. Via Markit: The pace of manufacturing growth nevertheless remains well below that seen at the start of the year, in part reflecting weaker demand from many export markets, notably China and other emerging economies. Employment growth is disappointingly weak as a result, as firm focus on cost-cutting to boost competitiveness.
The Business Insider writes Caterpillar just downgraded the whole world.
And The Business Insider writes China Manufacturing weakens further as slowdown deepens.
Bond vigilantes will increaingly be calling the Interest Rate on the US Ten Year Note, ^TNX, higher, as well as Steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, causing debt deflation, that is bond, stock, and competitive currency deflation.
Yield bearing investments trading lower included, Brazil Financials, BRAF, Utilities, XLU, India Earnings, EPI, and Global Utilities, DBU, as well as Residential RETIS, REZ, Mortgage REITS, REM, Industrial Office REITS, and Small Cap Real Estate, ROOF.
Sectors trading lower included, Solar, TAN, Metal Manufacturing, XME, Coal, KOL, Metal Mining, PICK, Steel, SLX, Home Building, ITB, and Semiconductors, SMH. Energy sectors trading lower included Small Cap Energy, PSCE, Energy Production, XOP, Energy Service, OIH, IEZ. Gold Miners, GDX, and Silver Miners, SIL, gave back yesterday’s gains.
Banks trading lower included, Chinese Financials, CHIX, Japanese Banks, MTU, SMFG, Bank of America, BAC, and Regions Financial, RF.
The Emerging Markets, EEM, traded lower, being led so by Turkey, TUR, Egypt, EGPT, Vietnam, VNM, Thailand, THD, Indonesia, IDX, Peru, EPU, Brazil, EWZ, India, INP, and China, FXI.
Emerging Market Currencies, CEW, and Major Currencies, DBV, such as the Australian Dollar, FXA, and the Brazilian Real, BZF, traded lower.
Robert Wenzel posts The best introduction to Austro Libertarianism ever given. Walter Block writes writes in Lew Rockwell that Tom Woods gave the opening address for Mises University July 21 -27 2013 where he spoke on the subject of “A life changing event”, and conveyed the resource of Mises University as a school of Austrian Economics, providing a cornucopia of material free of charge.
The video helped me to sharpen my understanding that true liberalism is the conviction that Jesus Christ is at the helm of the economy of God, and that He is acting in dispensation, that is the household administration of things, to terminate all empires outside of His Kingdom.
In May 2010, God started replacing credit with debt servitude with Greek Bailout I, and then more so with the Cyprus Bank Bailin, in May 2013, with the ultimate aim of eliminating the double entry accounting system with the soon coming Advent of Christ, and the establishment of His 1000 year rule and reign of humanity from Jerusalem. Thus there will never ever be any free market economy as conceived of the Austrian economists. The rise of the Interest Rate on the US Ten Year Note, ^TNX, to 2.1% on May 21, 2013, was an extinction event that terminated Liberalism and introduced Liberalism.
And the video helped me to sharpen my thinking that ethics is defined as economic regard for the person and property of another, where there is a process of the household administration of things monetary, political, spiritual and physical, involving stewardship and responsibility of action, which is free from intervention and preemince of nonhouse hold parties. A dispensation based definition of ethics comes from the development of spiritual understanding, and evolution of wisdom, where a person is increasingly receptive to the movement of God’s Spirit in his life, and is based upon the restoration ideas of John Calvin, and the recovery ideas of Witness Lee, whereby one becomes a person of God’s grace, and experiences Christ as one’s all inclusive life experience.
The WSJ reports Bond investors turn to cash. Investors are cashing out of bonds but remain hesitant to plunge into stocks. An inquiring mind asks, will this show up in inflating M2 Money?
Mike Mish Shedlock writes General Obligation bondholders beware: Detroit bankruptcy affirmed, Governor shielded from lawsuits; Triumph of math over unions. So, pensioners and bondholders both should take it on the chin. Expect a lot of municipal bond downgrades before too long. I hope to be able to find news sources reporting on the hardships experienced by residents of Detroit as they deal with municipal service cuts.
On Thursday, July 25, 2013, Risk-On, ONN, turned to Risk-Off, OFF, as is seen in the former trading lower, and the latter trading higher, as Japanese Banks, MFG, SMFG, NMR, and Far East Financials, FEFN, traded lower, turning the Nikkei, NKY, and Sony, SNE, Tool Manufacturer, MKTAY, Semiconductor Equipment and Material Provider, ATE, lower, as Japanese Bonds traded lower, as their inverse, JGBS, traded higher, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening, thus documenting the failure of Kuroda Abenomics.
It is Jesus Christ working in The Economy of God, specifically Dispensation, Ephesians, 1:10, to pivot the world out of Liberalism’s Age of Investment Choice, and into Authoritarianism’s Age of Diktat, by enabling bond vigilantes to call interest rates higher globally, brining forth debt deflation, terminating Inflationism, and starting Destructionism.
US Homebuilders, ITB, fell 3.2%, as Home Improvement Stores, HD, LL, LOW, traded lower. And US Infrastructure, PKB, traded 1.0% lower, as the following traded lower,
Industrial Textile Manufacturer, MHK,
Packaging and Container Manufacturer, GPK
Lumber Producer, LPX
Cement Manufacturer, EXP
Building Material Providers, MAS, USG
Appliance Manufacturers, WHR, LII
Home Furninshing And Fixture Provider, FBHS
Specialty Retailer, TSCO
Business Services, CTAS
Producers MHK, GPK, LPX, EXP, EME, MAS, and USG, have been US Infrastructure, PKB, leaders.
Appliance Manufacturers, WHR, and LII, have been Global Industrial, FXR, leaders.
Home Furnishing and Fixture Provider, FBHS, and Specialty Retailer, TSCO, have been Small Cap Pure Value, RZV, leaders.
Workplace Uniform Provider, CTAS, has been a Business Services, BUSE, leader.
On the upside, Biotechnology, IBB, seen in this Finviz Screener, traded higher, as well as those in this Finviz Screener, traded higher. And of note, Netherlands’, EWN, ASMI, fell 15%, while most its Semiconductor Materials And Equipment Manufacturers seen in this Finviz Screener, rose, and while most of the Semiconductors, SMH, led by TNQT, seen in this Finviz Screener rose, after Broadcom’s great fall lower earlier this week. And Netherlands, EWN, Publisher, ENL, and UK, EWU, Publisher, RUK, blasted higher, taking Media, PBS, higher.
The disconnect between Eurozone stock values and economic conditions grew even greater today. Despite Charles Gave of GaveKal writing in Zero Hedge, Southern Europe walks on thin air, European Banks, SAN, IRE, DB, continued rallying, taking Emerging Market Financials, EMFN, European Financials, EUFN, Netherlands, EWN, Ireland, EIRL, France, EWQ, Germany, EWG, Spain, EWP, Italy, EWI, and Eurozone, EZU, with its ADRs, seen in this Finviz Screener, to new rally highs. Sweden, EWD, rose to a new rally high, Norway, NORW, and Poland, EPOL, rose strongly.
The strong rally in all of the Euro, FXE, centric Nation Investments, EWN, EIRL, EWG, EWQ, EWP, EWI, seen in their combined ongoing Yahoo Finance Chart, and the trade lower in the US Dollar, $USD, UUP, establishes the crack up boom nature of Liberalism’s grand finale boom-bust business cycle that comes via leveraged speculative investment choices under the interventionist world central banks’ monetary policies of easing, in front of next week’s US Federal Reserve policy meeting.
It has been Jesus Christ, operating at the helm of the Economy of God, specifically Dispensation, presented in Ephesians 1:10, producing a moral hazard based prosperity, that has created Liberalism’s Peak Wealth, seen in World Stocks, VT, the S&P 500, SPY, and Global Industrial Producers, FXR, Automobiles, CARZ, and Small Cap Pure Value Stocks, RZV, to name just a few, trading up to and then lower from their recent highs.
It is the interest rate sensitive stocks, ITB, XLU, DBU, REM, ROOF, REZ, FNIO, IYR, and DRW, and the Emerging Markets, EEM, EMFN, EMIF, EMMT, and Mining Stocks, PICK, REMX, KOL, COPX, and Growth Stocks, SLX, that have traded lower since May 21, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%, which literally destroyed Nation Investment, EFA, and IFSM, in countries such as ARGT, EPU, ECH, EWZ, INP, EZA, TUR, EWW, CHII, seen in their combined ongoing Yahoo Finance Chart, as well as in Asia Excluding Japan, EPP, FXI, EWA, THD, IDX, EPHE, ENZL, seen in their combined ongoing Yahoo Finance Chart.
Jesus Christ has commenced the termination of Liberalism beginning with the announcement of Greek Bailout I in May 2013, with the provision of Christ’s “extinction protocol” whereby He released the Four Horsemen of the Apocalypse. And He intensified His judgment upon mankind’s Banker centric, US Dollar Hegemonic Empire, with His “extinction event” of enabling the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher on May 21, 2013, to 2.1%, and then again higher today July 25, 2013, to 2.6%.
For more details of how Jesus Christ is in dispensation, terminating the moral hazard based prosperity of Liberalism and introducing the austerity of Authoritarianism, one can read the Dispensation Economics Manifest presented here http://theyenguy.wordpress.com/about/
Facebook, FB, blasted higher, taking IPOS, FPX, to a new rally high.
Juniper Networks, JNPR, Amazon, AMZN, and Priceline, PCLN, traded higher, taking Internet Retail, FDN, to a new high.
International Paper, IP, rose, taking Paper Producers, WOOD, seen in this Finviz Screener, to a new rally high.
ETrade, ETFC, rose strongly taking, Stockbrokers, IAI, seen in this Finviz Screener, to a new rally high.
Life Insurance companies, seen in this Finviz Screener, rose to new rally highs.
Delphi, DLPH, and others rose, taking Automobiles, CARZ, seen in this Finviz Screener, to a new rally high.
Visa, V, traded to a new rally high.
On Friday, July 26, 2013,
Volatility, ^VIX, XVZ, TVIX, VIXM, rose during the morning, but closed lower, as the Yen, FXY, continued rising in overnight and day trading, stimulating the Nikkei, NKY, led by the Japanese Small Caps, JSC, such as the Makita, MAKTY, to trade lower, and causing investor angst, stimulating the most currency and carry traded of all investments, the Small Cap Pure Value Stocks, RZV, to manifest massively bearish engulfing, to trade 1.3% lower on the day. Gary of Between The Hedges relates Bloomberg reports VIX contracts retreat to five year low. The cost of options protecting against U.S. stock swings fell to a five-year low, a sign to Russell Investments and Credit Suisse Group AG that investors are too confident in more equity gains after this year’s rally. Implied volatility for options on the Chicago Board Options Exchange Volatility Index has dropped 37% to 48.4 from a peak on June 20, according to data complied by Bloomberg on three-month contracts with an exercise price near the gauge. It reached 44.8 last week, the lowest since May 2008.
Far East Financials, FEFN, and India Earnings, EPI, as well as Brazil Financials, and European Financials, EUFN, and Regional Banks, KRE, led Global Financials, IXG, lower.
Semiconductors, SMH, led by MU, TSM, FSL, SMTC, RFMD, ONNN, Semiconductor Materials, ATE, SEMA, TSRA, BRKS, Networking, IGN, Dig And Dirt Moving Stocks, DIDI, led by DRC, HEES, MTW, CR, Aerospace and Defense, PPA, led by BA, Automobiles, CARZ, led by GM, PCP, Design Build, FLM, led by JEC, URS, Paper Producers, WOOD, led by IP, Education Services, EDSE, led by LINC, and Credit Services, CRSE, led by DFS, traded lower.
Japan, EWJ, led Nation Investment, EFA, and Small Cap Naiton Investmetn, IFSM lower; countries trading lower included TUR, EPHE, RSX, EZA, EGPT, EPOL, NORW, ECH, and INP.
Switzerland’s CS and UBS, and Ireland’s IRE, led European Financials, EUFN, the Eurozone, EZU, and the Eurozone ADRs, seen in this Finviz Screener, lower.
Life Insurance Companies, such as PUK, seen in this Finviz Screener, traded lower
The all time master carry trade, the Euro Yen currency carry trade, traded lower from yesterday’s rally high, as is seen in the chart of the EUR/JPY to close at 130.4; it has given the greatest seigniorage that is the greatest moneyness to the riskiest of assets, these being the Small Cap Pure Value Stocks, RZV, with, US Stocks, VTI, Eurozone Stocks, EZU, the Emerging Markets, EEM, and lastly, Asia Excluding Japan, EPP, since the collapse of credit beginning in May 2013, as is seen in the combined ongoing chart of EURJPY, EZU, EEM, EPP, VTI, RZV, and AGG.
Major Airlines, MAAI, seen in this Finviz Screener, rose on a lower price of Oil, USO.
Washington Post writes Detroit: Liberalism can’t go on forever.
4) Financial Commentary for the week
Benson te writes governments in the US, Europe, Japan, England, etc. are all too broke to bail out their central banks. These governments are already insolvent. So if the central bank becomes insolvent, there won’t be anyone to bail them out..
I respond that insolvent central banks are unable to maintain control over interest rates (bond vigilantes are now in control of the interest rates, and thus currency treaders, through debt deflation, are in control of currencies), and that the traditional monetary policies of the central banks can no longer be maintained, and as a result corporate profitability, gloal growth and trade are disintegrating.
Inflationism is turning into Destructionism. Furthermore the democracies of the Eurozone, Japan, the UK, Canada, and the US, being insolvent can no longer provide traditional governance. The very nature of governance and money is changing, all on the rise of the Interest Rate on the US Ten Year Note, ^TNX, as it soared past 2.1% on May 21, 2013, to today’s rate of 2.5% . Through a soon coming global credit bust and financial system breakdown, leaders will meet in summits and workgroups to annul tradtional sovereignty and pool sovereignty regionally to establish regional governance, where nannycrats will form public private partnerships with leaders from banking, industry, commerce and trade to establish regional security, stability, and sustainability.
Benson te continues For a central bank, assets are typically securities or commodities which have value in the international marketplace, such as gold or US Treasuries. Central bank liabilities are all the trillions of currency units floating around… dollars, euros, yen, etc.
I respond that the Assets owned by the Fed are the Distressed Investments taken in under QE1, and trade in value like the Fidelity Mutual Fund FAGIX, which has decreased 5% in value since the beginning of May, thus putting a bind on the balance sheet worth of the US Fed.
And Benson te writes This is one of the strongest indicators of all that the financial system as we know it is finished. When central banks can no longer credibly issue liabilities, and their home government are too broke to bail them out, this paper currency standard can no longer function.
I respond that out of soon coming credit and financial crisis, the fiat money system will be replaced by the diktat money system wherewhere diktat serves as trust, medium of exchange, wealth and power. Liberalism was characterized by full faith and credit in the world central bankers. Revelation 13:3-4, foretells that Authoritaritarianism will characterised by worship of the Beast Regime and its nannycrats. And Revelation 13:5-18, communicates that it will also be characterized by worship of a New Pharaoh and a New Prohpet.
And Benson te writes As been repeatedly noted here, QEs by major central banks have been meant to shore up asset markets which underpins the assets on the balance sheets of crony banks, and their guardians, the central banks.
I respond the asset markets that have experienced the greatest inflation under QE have been the following ETFs: XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, EWN, PSP, UJB, KRE, TAN, RXI, WOOD, and FLM. And debt in the form of Ultra Junk Bonds, UJB. And individual stocks such as LNKD, LYG, SMFG, BPOP, SLM, JPM, NNI, UBS, BLK, NMR, MKTAY, PSUN, FB, GE, IP, CHTR, and ING, all seen in this Finviz Screener
The rise of the Interest Rate on the US Ten Year Note, ^TNX, while rewarding investment choice in the above assets has decimated those exericing choice to remain in the interest rate sensitive stocks, ITB, XLU, DBU, REM, ROOF, REZ, FNIO, IYR, and DRW, and the Emerging Markets, EEM, EMFN, EMIF, EMMT, and Mining Stocks, PICK, REMX, KOL, COPX, and Growth Stocks, SLX, that have traded lower since May 21, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%, which literally destroyed Nation Investment, EFA, and IFSM, in countries such as ARGT, EPU, ECH, EWZ, INP, EZA, TUR, EWW, CHII, seen in their combined ongoing Yahoo Finance Chart, as well as in Asia Excluding Japan, EPP, FXI, EWA, THD, IDX, EPHE, ENZL, seen in their combined ongoing Yahoo Finance Chart.
And Benson te writes Of course QEs has fostered a low interest rate environment, which in effect, subsidizes debt financed government spending and the welfare warfare bureaucracy that the banking system, by virtue of Basel regulations, holds mainly as ‘risk free’ collateral.
I respond that the greatest welfare has been to those receiving Social Security Disability, SSD/SSI, as well as free health care, surgery, prescriptions, Section 8 Housing Benefits, or Public Housing Assistance, with of course energy subsidies, and food stamps. Millions of Americans live in dependency and clientelism, even though I believe they could work, after having going through the disability process of ajudication, and have “worked the system”, rather than work in any meritocracy. The worst offenders from my viewpoint are veterans with antisocial diagnosis as well as time spent in prison and now live as predators with all kinds of preeminent and mischevious behavior and even “make my day” killings.
And Benson te writes So all these ‘merry-go-around” or ‘cul-de-sac’ or ‘loop-a-loop’ arrangement has been designed to eliminate the threat of insolvencies of the cartelized unsustainable centralized debt-based political economic system.
I respond that I see the day coming when, banks by edict, will be intergrated into the govrnment and be known as the government banks, or gov banks for short.
Doug Noland writes The yen rallied 2.6% this week. The big “macro” players are short the yen and long Japanese equities. The Nikkei was hit for 3.0% Friday. Yen strength seemed to play an important role in what was at the brink of developing into a bout of global market de-risking/de-leveraging back in June. Markets reversed sharply on assurances from the Fed, along with support from global central Banks and Chinese officials. Short covering and the reversal of hedges helped fuel a speculative run in stocks, especially U.S. and Japanese markets favored by the global speculators.
As a whole, the global hedge fund community continues to struggle for performance. The volatile and policy-dominated “risk on, risk off” dynamic is tough on many trading strategies. Global risk markets – currencies, commodities, EM, bonds and equities – remain minefields, particularly for multi-asset class approaches. I believe enormous leverage has been employed by myriad strategies, certainly including global “carry trade,” corporate, MBS and municipal debt. I’ll assume there’s no egregious LTCM-like leveraging, but I still worry a lot about global derivatives markets. I believe the world of speculative finance is full of problematic “crowded trades.”
A few weeks back the markets were again indicating fragility – and the Fed once again demonstrated its market-pleasing low tolerance for market weakness. The flaw in aggressive QE is the notion that the Fed will be able to back away from market intervention without major consequences. Fed stimulus can spur debt issuance, market risk embracement and speculation. But if that debt is mispriced and predominantly non-productive, the system faces unavoidable debt problems. If speculative leverage is playing a prominent role in inflating securities and asset markets, the system face unavoidable de-leveraging problems. If the already vulnerable household sector continues to load up on mispriced stocks and bonds, there will be negative consequences.
If there are major risk misperceptions endemic in the global marketplace – including with ETFs, the hedge funds, derivatives and perceived low-risk strategies – then there is latent market fragility that is only exacerbated by central bank liquidity injections and backstop assurances. I fully expect history to look back at the past year’s Draghi Plan, Fed open-ended QE, and Bank of Japan “Hail Mary” monetary inflation as misguided market interventions that set loose historic market Bubble excess. I will posit that global systemic risk is significantly higher today than it was a year ago. And if the current trajectory of global central bank market intervention continues, systemic risk will be even more problematic one year from now.
The U.S. dollar index declined 1.2% to 81.66 (up 2.4% y-t-d). For the week on the upside, the Japanese yen increased 2.5%, the New Zealand dollar 2.1%, the Swiss franc 1.1%, the Danish krone 1.1%, the South African rand 1.1%, the euro 1.0%, the Australian dollar 1.0%, the South Korean won 0.9%. the Canadian dollar 0.9%, the Swedish krona 0.8%, the British pound 0.8%, the Norwegian krone 0.7%, the Singapore dollar 0.2% and the Taiwanese dollar 0.2%. For the week on the downside, the Mexican peso declined 1.1% and the Brazilian real 0.4%.
Dave Ramsey writes 20 things the rich do every day. So what do the rich do every day that the poor don’t do? Tom Corley, on his website RichHabits.net, outlines a few of the differences between the habits of the rich and the poor. Of note, 63% of wealthy parents make their children read 2 or more non-fiction books a month vs. 3% for poor, 6% of wealthy say what’s on their mind vs. 69% for poor. And 86% of wealthy love to read vs. 26% for poor. (Hat Tip to AskBlog)
Thank God for what amounts to free bus service here in Bellingham WA. I purchase a disability pass good for 3 months for $45; it enables me to ride the local bus system, which has all the new busses, courtesy of Patty Murray Earmarks; they are hybrid, energy efficient, and have the new comfort-ride braking and suspension system. The bus system is supported by sales tax approved of by the voters. The wealthy of Bellilngham have gifted the poor with transportation. Not many ride the bus, only the poorest of the poor like me, the disabled, elderly, and Western Washington University students.
Today I was on the 331 bus, coming back from Bellis Fair Mall, and as it went through Taco Flats, the poorest part of town, where the single moms living on TANF, Section 8 vouchers and Food Stamps reside. One physically fit young Hispanic man, with a tub full of dirty clothes dashed across the street to make the bus driver wait at the bus stop. In tow, was an obese, Hispanic single mom, with a gaggle of two children, who made the traffic stop in both ways. He put cash bus fair in for all. And they slipped into seating at the front of the bus. From my seat in the back, I saw two university coeds, shiver in dread at the sight enfolding in front of all. They both had the cosmetic look, you know, tanned, and oiled bodies, looking like the Liberalism’s Queen of Sheba, fit, trim and all things young and beautiful, adorned with Pacific Sunwear togs. What a cultural contrast between those at the bottom, and those at the top. I see Liberalism’s upper crust children here in Bellingham, as generally one must have scholastic apptitude to attend WWU with both a high grade point average, high SAT scores, and some outstanding attributes on one’s application. Bellingham’s economy has been one largely of an ocean tide of students coming to attend WWU; there is a fresh inflow of residents to the Sehome and York neighbors where there is a sea of homes rented out to students, where the upper crust students live; yet only 28% of the students go on to graduate! Well back to the laundry crew on the bus; they got off at the new laundry, that is Q Laundry,which is near Trader Joe’s, located at 810 Alabama Street in Sunnyland Square, which was formerly the Bank of America lending branch office, which underwrote much of the rental property development and improvement here in Bellingham.
I’ve been poor since 1998, and have economic life, largely by the charity of others; in fact my John McArthur Study Bible, and my Witness Lee Recovery Version of the Bible, the only two forms of physical wealth I own, were both gifted to me! I have no vehicle and have gotten around by bike and bus; but now I am too old to bicycle, so I have only the bus left. Yes, thank God, for what amounts to Liberalim’s charity: the bus fare comes out to be about $0.50 a day; and a dollar a day is all the resource I have for transportation.
I appreciate those who have read my blog; I am giving serious thought to stop writing, as the chart of the S&P 500, $SPX, traded by SPY, topped out this week, losing 0.04%, World Stocks, VT, traded 0.26%, lower; the Small Cap Pure Value Stocks, RZV, traded 1.32% lower, and the Nikkei, NKY 2.2%, lower, documenting that the seigniorage, that is the moneyness of Liberalism, that being investment choice has failed. News reports communicate that both the seigniorage of Authoritarianism, that being diktat, and sovereignty of Authoritarianism, that being regional governance is increasing. Robert Wenzel of Economic Policy Journal reports The EU is planning to ‘own and operate’ spy drones as part of a New Security Agency
Jesus Christ operating in the Economy of God, Ephesians, 1:10, terminating the sovereignty of the US Dollar Hegemonic Banker regime of democratic nation states and introducing the sovereignty of the Beast regime of regional governance where ten horns, that is ten world zones of nannycrat rule will emerge, and totalitarian collectivism will come to occupy in each of mankind’s seven institutions, as foretold by John the Revelator in Revelation 13:1-4.