Poland Stocks Are Doing Better Than European Stocks

The Yahoo Finance chart of Poland, PLND, shows it Poland to be doing better than Europe, FEZ.

Dinner With Netanyahu

I … Joel Rosenberg in article Dinner With Netanyahu dated March 23, 2010, writes that Israeli Prime Minister Benjamin Netanyahu gave a powerful speech at the AIPAC gala dinner Monday night and received scores of standing ovations. The longest and most sustained came when he directly challenged the policy of President Obama and Secretary of State Clinton who seek to divide Jerusalem and stop Israel from building “settlements” in East Jerusalem. Netanyahu stated firmly, “Jerusalem is not a settlement. It is our capital.” Sen. Lindsey Graham (R-South Carolina) and Sen. Chuck Schumer (D-New York) were the evening’s other keynote speakers, and I have to say I was impressed with both

II … Chakham writes in article Following Up On The US Reaction To Israeli Construction, relates that Prime Minister Netanyahu has arrived in the United States and gave a speech before the Conference of AIPAC2010, noting that Jerusalem is the Israeli capital. Netanyahu also met with President Obama Tuesday, March 23rd for about three hours according to some reports

One can  view Prime Minister Netanyahu’s speech before AIPAC below via AIPAC at YouTube (in 4 parts); and find the text of the speech at the Prime Minister’s website:  “Address by PM Netanyahu at the AIPAC Policy Conference.”

Amb. Bolton also spoke with John Batchelor on March 23rd a bit about the US foreign policy in re: Israel in the radio program’s HOUR 4.  LISTEN TO MP3 (interview begins at 8:12 min).  For further, see AEI:  “Israel and the Crisis with Obama” & “Obama’s Global Failure” by John R. Bolton.  Earlier, Batchelor spoke with  Bret Stephens of the Wall Street Journal about Israel; the WH meeting bet President and Netanyahu; JERUSALEM construction; PA provocations in Jerusalem; IRAN  LISTEN TO MP3 (interview begins at 17:42 min) … see WSJ, The Global View  “The Netanyahu Diaries: What Israel’s prime minister really thinks” by Bret Stephens.

III …  Jim Arkedis writing in article ProgressiveFix article Biden, Israel, and the Aftermat relates the announcement (of the 1600 housing unit settlement in Jerusalem being approved) turned the trip on its ear — Biden delayed attending a dinner with Netanyahu and issued this uncomfortably harsh statement: ”I condemn the decision by the government of Israel to advance planning for new housing units.”

IV … One can follow Joel Rosenberg on his Weblog Flashtrafficblog,  his mother is Gentile and his father is from a Jewish background – previously worked with several U.S. and Israeli leaders, including Steve Forbes, former Israeli Deputy Prime Minister Natan Sharansky, and former Israeli Prime Minister Benjamin Netanyahu.

Turkey Aid Flotilla Intercepted By Israeli Navy And Paratroopers …. Ships Hauled Into Various Israeli Ports

 FoxNews reports Turkey’s Foreign Ministry says at least 2 people have been killed and more than 30 wounded in an Israeli raid on an aid ship in the Mediterranean.

FoxNews reports that Turkish police blocked dozens of stone-throwing protesters who tried to storm the Israeli Consulate in Istanbul over reports of an Israeli attack on at least one aid ship in international waters on Monday, news channels reported. CNN-Turk and NTV showed dozens of angry protesters scuffling with Turkish police guarding the consulate in downtown Istanbul.

Press.tr reports that the Gaza Freedom Flotilla came under fire early on Monday by Israeli navy forces in international waters more than 150km (90 miles) off the coast of Gaza. The six-ship aid fleet was soon stormed by commandos descending from helicopters.

Press.tr reports that a contingent of Turkish ships has set sail for the Gaza Strip in order to break the blockade of the region and deliver humanitarian aid to Gazans.

The three cargo vessels left Istanbul on Saturday to join an international fleet organized by the human rights organization, Free Gaza Movement.

The seaport was overwhelmed by thousands of well-wishers, who had come to show their support for the people of Gaza, Press TV correspondent Hassan Ghani reported.

Before departing, the organizers from different countries, including: Greece, Ireland and Sweden, outlined their reasons for joining the project and warned Israel not to interfere with the humanitarian act.

“Even if Israel stops us, if we have to swim, we will swim to Gaza,” said Noorazman Shamsuddin, one of the organizers.

The Israeli navy, which has prevented many ships from entering the coastal region, has told the aid vessels not to come to the Gaza Strip.

The Free Gaza Movement is coordinating with numerous pro-Palestinian groups in the Freedom Flotilla project. The nine-vessel flotilla is set to cast anchor at the docks of Gaza on Thursday.

The Freedom Flotilla convoy is carrying 5,000 tons of construction material, medical equipment, and school supplies, as well as around 600 people from 40 countries.

The Battle Of Financial Markets Is Over … The Battle Of State Finance Has Begun

Walter Russell Mead writes in the American Interest Online, Lesson #7 of the Top Ten Lessons Of The Global Economic Meltdown: The Battle Of Financial Markets Is Over  … The Battle Of State Finance Has Begun

The financial markets failed to withstand a series of speculative assaults.  The world’s governments rushed into the breach with large guarantees and bailouts.  Now the markets are testing the governments: will the Europeans really be able to bail out Club Med?  Beyond that, can the world’s governments armed with fiat currencies and facing enormous budget deficits provide enough credible stimulus to restart the world economy before fears of debt and default cause investors to lose faith in the ability of governments to manage the economic cycle?

The bad guys lost the Battle of Britain and we can hope that governments will survive the present downturn with their financial credibility intact.  However, it is now clear that governments do not have an unlimited power to bail out private firms or to stimulate the economy through deficit spending.  This is not only true of smaller governments like that of Greece; it may be true even of the United States.

This means that we have passed into a new economic environment, unlike anything we have seen since World War Two.  For the last sixty years, we have operated under the assumption that the world’s leading governments were ultimately sovereign when it came to the economy: that they could do whatever it took to fix economic problems.  In the future, we will be living in a world where this is no longer so obvious.  New, large and unpredictable risks now hang over the global economy.

The Globalization Strategy: America and Europe in the Crucible

I … The Globalization Strategy: America and Europe in the Crucible, by Carl Teichrib which is posted in Centurean2’s Weblog … is recommended reading. Mr. Teichrib details the global governance calling and references a number of documents including the following which document the established global order and global governance. I list a number of references he cites in his article as also recommended reading.

Brookings Institute report, Peace Plans and American Choices  … The Brookings Institute, according to SourceWatch, operates the Center for Public Policy Education and the Brookings Institution Press, which publishes about fifty books a year

The Commission on Global Governance, Our Global Neighborhood, A Summar by Henry Lamb

Mikhail Gorbachev, The Search for a New Beginning: Developing a New Civilization

Zbigniew Brzezinski, The Choice: Global Domination or Global Leadership

Trilateral Commission, Trilateral Papers #42 Regionalism in a Converging World

Nicholas Murray Butler, A World in Ferment: Interpretations of the War for a New World (Charles Scribner’s Sons, 1918), see the section entitled “The United States of Europe”

Derek W. Urwin, The Community of Europe: A History of European Integration Since 1945

The Club of Rome, Mankind at the Turning Point.

Institute for World Order, World Order Models Project, On the Creation of a Just World Order

Mihajlo Mesarovic and Eduard Pestel, Mankind at the Turning Point: The Second Report to the Club of Rome

Institute for World Order, World Order Model’s Project, Richard A. Falk, “Toward A New World Order,”

Institute for World Order, World Order Model’s Project, On the Creation of a Just World Order

Alvin and Heidi Toffler, Creating a New Civilization

Toshihiko Fukui, Governor of the Bank of Japan, “The Euro-Dollar Regime and the Role of the Yen – Their Impact on Asia,” speech given at the 13th International Monetary Symposium, 12 November 2004

Building A North American Community

Creating a North American Community, Chairman’s Statement, Council of Foreign Relations

Darryl McLeod and John H. Welch, North American Free Trade and the Paso: The Case for a North American Currency Area, Federal Reserve Bank of Dallas Research Paper #9115, August 1991

II … Supplemental … Other think tanks with a global/globalist agenda include the following

Hoover Institution

The Peterson Institute for International Economics

Pro-Palestinian Aid Flotilla Sets Sail For Gaza From Turkey

Tia Goldenberg of the Associated Press reports that hundreds of pro-Palestinian activists, including a Nobel laureate and a Holocaust survivor, set sail Sunday for the Gaza Strip, edging closer to an expected naval showdown with Israeli gunships determined to stop them.

Huwaida Arraf, one of the organizers, said the six-ship freedom flotilla began the journey from international waters off the coast of Cyprus in the afternoon after two days of delays. She said they expected to reach Gaza, about 250 miles (400 kilometers) away, on Monday afternoon, and that two more ships would follow in “a second wave.”

The flotilla was “fully prepared for the different scenarios” that might arise, and organizers were hopeful that Israeli authorities would “do what’s right” and not stop the convoy, she said.

“We fully intend to go to Gaza regardless of any intimidation or threats of violence against us,” she said. “They are going to have to forcefully stop us.”

After nightfall, three Israeli navy missile boats left their base in Haifa, steaming out to sea to confront the activists’ ships.

Two hours later, Israel Radio broadcast a recording of one of the missile boats warning the flotilla not to approach Gaza.

“If you ignore this order and enter the blockaded area, the Israeli navy will be forced to take all the necessary measures in order to enforce this blockade,” the radio message continued.

The flotilla, which includes three cargo ships and three passenger ships, is trying to draw attention to Israel’s three-year blockade of the Gaza Strip. The boats are carrying items that Israel bars from reaching Gaza, like cement and other building materials. The activists said they also were carrying hundreds of electric-powered wheelchairs, prefabricated homes and water purifiers.

Israeli Foreign Ministry spokesman Yigal Palmor said that after a security check, permitted humanitarian aid confiscated from the boats will be transferred to Gaza through authorized channels. However, Israel would not transfer items it has banned from Gaza under its blockade rules. Palmor said that for example, cement would be allowed only if it is tied to a specific project.

This is the ninth time that the Free Gaza movement has tried to ship in humanitarian aid to Gaza since August 2008.

Israel has let ships through five times, but has blocked them from entering Gaza waters since a three-week military offensive against Gaza’s Hamas rulers in January 2009. The flotilla bound for Gaza is the largest to date.

Some 700 pro-Palestinian activists are on the boats, including 1976 Nobel Peace Prize laureate Mairead Corrigan Maguire of Northern Ireland, European legislators and an elderly Holocaust survivor.

The mission has experienced repeated delays, both due to mechanical problems and a decision by Cyprus to bar any boat from sailing from its shore to Gaza. The ban forced a group of European lawmakers to depart from the breakaway Turkish Cypriot northern part of the island late Saturday.

Israel and Egypt imposed the blockade on Gaza after Hamas militants violently seized control of the seaside territory in June 2007.

Israel says the measures are needed to prevent Hamas, which has fired thousands of rockets at Israel, from building up its arsenal. But U.N. officials and international aid groups say the blockade has been counterproductive, failing to weaken the Islamic militant group while devastating the local economy.

In particular, the ban on building materials has prevented Gazans from repairing thousands of homes that were damaged or destroyed in an Israeli military offensive, meant to stop Hamas rocket attacks, early last year.

Israel rejects claims of a humanitarian crisis in Gaza, saying it allows more than enough food and medicine into the territory. The Israelis also point to the bustling smuggling industry along Gaza’s southern border with Egypt, which has managed to bring consumer goods, gasoline and livestock into the seaside strip.

Israel has condemned the flotilla as a provocation and vowed to block it from reaching Gaza.

Israeli military officials said they hope to resolve the situation peacefully but are prepared for all scenarios. Naval commandos have been training for days in anticipation of the standoff. Military officials, speaking on condition of anonymity under official guidelines, said the forces would likely take over the boats under the cover of darkness.

Palmor said foreigners on the ships would be “sent back to their countries.” Activists who did not willingly agree to be deported would be detained. A special detention facility has been set up in the southern Israeli city of Ashdod.

At Gaza’s tiny port, meant for small fishing boats, Hamas officials, activists and foreign nationals prepared to welcome the flotilla, sitting in some 40 small boats that were bobbing in the sea and decorated with the flags of the countries of the pro-Palestinian activists, including Turkey and Algeria.

In other boats, Gaza boy scouts played music, while on shore, other activists released balloons with the faces of Palestinian civilians and militants killed in battles with Israeli forces.

In Syria, eight Damascus-based Palestinian groups urged Arab and Muslim states to work to support the flotilla and warned Israel against committing any “foolishness to impede the vessels”

“This could create more tension and trigger unpredictable reactions,” said the groups, which included Hamas and the militant Islamic Jihad.

Europe Led The Stock Markets Down In May … Those Short The Markets Profited As Debt Deflation Commences

European Stocks, FEZ, were down 12% this month;  those short the market with ProShares 200% inverse ETFs saw profits ; the top bear performers for the month were SCO and BOM with 35% and 20% — 200% inverse of oil and, 200% inverse of basic material stocks, which came from an unwinding of yen carry trade investment in the more speculative investment of oil, and the growth sector of steel.  EPV gained 18% on falling European shares.

SCO +35% … 200% inverse of oil

BOM +20% … 200% inverse of basic materials

EPV +18% … 200% inverse of Europe 

BZQ +18% 200% inverse of Brazil — fell on unwinding carry trades in this hot natural resource and fast growing  country.

JPX +18% 200% inverse of Asia excluding Japan — these fell on unwinding carry trades in growth sectors and emerging countries.

The Finvz Screener of ProShares bear market ETFs SRS, SJH, SSG, EEV, SMN, SMK, BZQ, SIJ, EPV, FXP, SCO, JPX, BOM presents charts for these investments, which have produced a portfolio gain of 20% since 04-24-2010. Profits came to those who have foreseen the financial risks stemming from the risk of sovereign debt default spreading to financial stocks and causing an unwinding of yen carry trade in growth industries and in emerging markets.

The Euro, FXE, fell 7% this month; the question arises what will it take to stabilize the Euro as well as the European shares.

The President of the European Council Herman Van Rompuy proposed a “crisis cabinet” reports Honor Mahoney of the EUObserver on May 25, 2010 in article Van Rompuy Wants Clearer Hierarchy To Deal With Future Crises.  He said that “there is not much hierarchy or organic links between the main players and the main institutions”. European Commission President Jose Manuel Barroso, the head of the European Central Bank Jean-Claude Trichet and Mr Van Rompuy himself would be the triumvirate in this “crisis cabinet”.  And Honor Mahony again reports that at the same time the President of the European Commission, Barroso,  called Germany’s plans on improving economic governance in the eurozone as “naïve”. He believes that any treaty reform is not feasible in the moment.

It appears that a Crisis Cabinet is the Missing Link in the Eurozone Crisis debate.

The May 2010 EU Finance Ministers Summit announced the foundation of European Economic Governance and waived state sovereignty. I believe The EU Crisis Cabinet could very well emerge to provide European wide policy and mechanisms for unified economic, banking, monetary and seigniorage government without Treaty reform or State Parliament approval.

A currency crisis arose which took Europe out of the age of national independence into the age of mutual interdependence: the Euro Stability Pact was announced in early May 2010 at the EU Leaders Summit as a means of crisis resolution 

We are now living in age of global governance where leaders meet in summit and announce policy, that is rules of governance; national sovereignty is foregone for the common good of all; then task forces develope consensus, and make further policy recommendations for final committment by leaders, who announce a Framework Agreement, which sets forth the economic, political, monetary and seigniorage rules for the region. Because of crisis, the word, will and way of the leaders supersedes constitutional law and national parliaments.  A  hierarchy of leaders, workgroups, and stakeholders govern, and the people follow.

Can there be any doubt that the 27 member Eurozone area is headed for stronger governance? Herman van Rompuy said …. Being in the ‘Euro zone’ means, monetarily speaking, being part of one ‘Euroland’.” relates Forside blog which provides the following quote: “I have no doubt that monetary union can function very well without far-reaching political union. On the contrary, there could even be a risk that excessive centralisation or harmonisation of economic policies might stifle healthy competition and weaken economic efficiency”. – Then ECB Chief Economist, Otmar Issing, 2001.

For personal investors I recommend investment in gold coins, as I believe the chart of the gold shown by analyst Corey Rosenbloom, shows a cup and handle pattern, suggesting that prices will be heading much higher

I suggest a look Tim Knight’s Wrap-Up Video For May — It’s way cool because it integrates video, speech and data — nice use of technology Mr. Bear.

Spain Is The Worst Performing Country ETF So Far This Year — It Is The Poster Country For Debt Deflation

The Google Finance chart shows Spain, EWP, to be the worst performing country year to date; even worse than Italy, EWI with a 30% and 26% respective fall so far this year largely over concern of its sovereign debt, the fact it has guaranteed a number of CDOs, has intertwined debt with other ailing nations and has high unemployment.

Bradley Davis writing in the Wall Street Journal article Euro Falls After Spain Downgrade writes that the euro fell after Fitch Ratings announced a one-notch cut to Spain’s credit rating. This propelled US Stocks, VTI, 1.3%, European Stocks, FEZ, 2.2% and world stocks, VT, 1.7% lower. The chart of Spain, EWP, shows a close lower at 33.58 on Friday.

Europe, FEZ, comes in at a loss of 22% loss year to date.  Rising levels of credit default swaps on European sovereign and corporate debt, and falling value of the European Financials, EUFN, have been leading factors in driving the Euro, FXE, lower. In early January, 2010, yen carry traders began buying the yen and selling the euro, diving investment out of Europe; the Euro really took a tumble in early May 2010 when concern arose over the possibility of Greece defaulting on its sovereign debt, forcing the European Leaders of State to announce a seigniorage aid package for Greece and plans for the Economic Governance of Europe. The Euro Stability Pact has done nothing to stop the slide in the Euro: it closed Friday May 28, 2010 at 122.37, down 2.4% for the week.

Health Care Stocks Began To Turn Down April 16, 2010

Yahoo Finance Chart of  IYH, shows that health care stocks began to turn down April 16, 2010 roughly at the time when base metals, DBB, turned down as investors became concerned over credit tightening in China, and yen carry traders exited Brazil, EWZ, and investors forsook Europe, FEZ, on concerns over sovereign debt.

The Bespoke’s Sector Trading Range Charts Report for April 20, 2010 shows health care starting to fall while others were holding up.

IYH traded last at 59.64; the SeekingAlpha chart of IYH shows a broadening top pattern that goes back to mid-October 2009. 

The Bespoke S&P 500 and Sector Breadth Report as of May 27, 2010 indicates that the health care sector and the utility sector are leading the way down in a bear market, disinflationary economic collapse, which can more easily be seen in the Yahoo Finance chart of IYH, compared to SPY, DIA, QQQQ, IWM and RZV and Google Finance chart of IYH, compared to the same.

Gold Mining Stocks Have Turned Bearish Engulfing And Disconnected From The Price Of Gold

The gold mining stocks, GDX, have been outstanding performers returning 60% since October 2008; they have been the last to turn lower as they have traded up with the price of gold, GLD; but now, the weekly chart shows that they turned bearish engulfing May 14, 2010. It was at this time they disconnected from the price of gold as can be seen in the Stockcharts.com chart of GDX:GLD.

We have reached the end of the age of profitable investing in gold mining stocks. Yen carry traders are buying yen and selling the commodity currencies and abandoning their investment in gold mining stocks; the yen carry trade is unwinding on prospects of lower growth.  Fear, as seen in volatility and a rising Ted Spread, has grasped the market. Risk aversion is driving investors out of the gold stocks and into physical gold itself.

What is most interesting is that the HUI precious metal mining stocks, $HUI, and US Treasuries, $USB, ALWAYS make market turns together; a soon coming fall in US Government Bonds, caused by rising interest rates, will send mining stocks into the cellar. Keep watching the Stockcharts.com chart of $HUI:USB for this event.

Yes a market top appears to be in for US Treasuries: the Google Finance chart of US Government Bonds IEF, TLT and ZROZ, shows these to now be a failing investment with -.4%, -2.0% and -4.5% for the week. The daily Stockcharts.com chart shows TLT manifested a double top and turned parabolically lower; the weekly chart shows a bearish harami. The 10-Year Treasury Note Yield, ^TNX, rose to 3.30.

The BofA Merrill Lynch High Yield Spread Over Treasuries Chart provided by Bondsquawk in SeekingAlpha article Bond Market Recap For Friday shows that the High Yield Index widened 2 basis points to end the month at 690 spread over comparable maturity Treasuries. The spread has been extremely volatile, having soared 129 basis points since the Euro Stability Pact was announced and European Economic Governance commenced by the European Leaders in early May 2010, as investors sold out of risk in bonds, as concerns arose over repayment of sovereign debt, which sent yen carry traders out of high yield debt such as HYV which had returned 60% from October 2008 to April 2009 peak. 

It’s time to leave all gold mining stock investments such as GDX, USERX, AEM (with a PE of 170) and those listed on the Yahoo Finance Gold mining industry browser, http://biz.yahoo.com/p/134peed.html

Now, wealth can be preserved investing in physical gold and gold alone as rising fears over sovereign debt and growing global governance create an investment demand for gold.