European Financials Fall Turning The Euro Lower … As Exhausting Quantitative Easing Turns The Nasdaq, Technology And World Shares Shares Lower

Financial Market Report for March 16, 2011

European shares, VGK, fell 3.1% lower on falling European Financials, EUFN, -3.6%. Falling European Financials turned the Euro, FXE, 1.8% lower. Germany, EWG, -3.6%, Italy, EWI, -4.3%
Spain, EWP, -4.1%

The United Kingdom, EWU, -3.2% and Sweden, EWD, -3.1%

Japan, EWJ, -3.7% and Japan Small Caps, JSC, -3.1%

Solar, KWT, -3.6%

Too Big To Fail Banks, RWW, -1.4%
Banks, KBE, -1.5
Technology, MTK, -2.5%
Semiconductors, XSD, -1.7%
Nasdaq 100, QTEC, -2.1%

World Stocks, ACWI, -2.4%

Gulf States, MES,  -2.9

South Africa,  EZA, -2.7

Australia, EWZ,  -2.7

Emerging Market Financials, EMFN, -2.0
Thailand, THD, -2.7
Indonesia, IDX, -3.2
Philippines, EPHE, -2.3
Turkey, TUR, -3.7%
China,  YAO, -2.0%
Brazil, EWZ, – 2.0%

Emerging Markets, EEM, -2.1%
Brics, EEB, -2.3%

Mexico, EWW, -2.2%

New Zealand, ENZL, -2.2%

Global Real Estate, WPS, -2.5

Major Currencies, DBV, -1.6
Emerging Market Currencies, CEW, -0.8%

South African Rand, SZR,  -1.5%
Swedish Krona, FXS, -1.5%
Mexico Peso, FXM, -1.3%
Russian Ruble, XRU, -1.2%
Australian Dollar, FXA, -0.8%
The Euro, FXE, -0.8%
Brazilian Real, BZF, -0.8%
Canadian Dollar, FXC, -0.7%
New Zealand Dollar, BNZ, -0.5
British Pound Sterling, FXB, -0.3

Indian Rupe, ICN, +0.5
Swiss Franc, FXF, +0.9
Japanese Yen, FXY, +1.2

Competitive currency devaluation is now underway as the US Dollar,$USD, is rising, and most all currencies except the Yen and the Franc are falling.

The failure of quantitative easing is specifically seen in the trading lower of the distressed Fidelity mutual fund FAGIX, which approximates the value of the US Federal Reserves’ assets taken in under TARP, and which together with Excess Reserves, served as the basis of Neoliberalism’s seigniorage.

Today’s rising Dollar is evidence of quantitative easing failure and also the end of neoliberalism.

Junk bonds, JNK, manifested massively bearish engulfing today providing even more evidence of the failure of neoliberalism’s seigniorage.

Failed neoliberalism means there will not be economic growth.

Failed neoliberalism also means the world is passing into The Age of Deleveraging which will be characterised by inflation destruction, debt deflation, credit ill-liquidity, instability, economic contraction and austerity.

The European Leaders Pact on Competitiveness, which will be formally announced, will be yet another Leader’s Announced Framework Agreement such as the Greek Debt Bail Out Agreement of May 2010, the vetting of national budgets before national legislatures meet, and the Ireland Bank Bailout.

Germany has all the strong cards and is playing its hand fully to its advantage; and from my perspective is even laying the groundwork for a future exit from the Euro if needed. In so doing Germany is further entering into a most dangerous embroglio, which will reach out and engulf and consume this fiercely strident country. 

The European Leaders are effecting a bloodless political economic coup which draws out an important concept that the rule of the sovereigns replaced neoliberalism and democracy in February and March of 2011.

The rule of the sovereigns is now the governing political and economic regime and construct. 

Neoliberalism was the political and economic regime that governed mankind from the time that the Free To Choose economic theory of Milton Friedman replaced the gold standard in the early 1970s, to the exhaustion of Ben Bernanke’s quantitative easing 1 and 2 on February 22, 2011, which was reflected in the fall in value of the distressed securities, which underwrote quantitative easing, and which are approximated by the Fidelity Mutual Fund FAGIX.

It was on February 22, 2011 that the value of FAGIX, and world stocks, ACWI, both fell lower.

Under the rule of the sovereigns, leaders meet in task groups such as the Pact for Euro, that is the Pact for Competitiveness, to develop Framework Agreements.

Then leaders meet in summits to formally announce Framework Agreements, which set forth regional political and economic governance which replace treaty, constitutional and historic rule of law. The Leaders’ Agreements waive national sovereignty.  One is no longer a resident of a sovereign nation state; rather one is a resident living in a region of global governance, as called fro the Club of Rome in 1974.

Government minsters and business leaders appoint stake holders who effect the mandate of the leaders which promotes global corporatism, that is combined state corporate rule. Policies are enacted which promote the security and prosperity of corporations, and enforce austerity for the people.

Neoliberalism and democracy are replaced by the rule of the sovereigns, where the word will and way of the leaders is law. 

The European sovereign crisis will intensify, and out of  Götterdämmerung, an investment flameout, a Sovereign, and a Seignior an Old English term for top dog banker who takes a cut, will emerge to establish a common EU Treasury with fiscal sovereignty, as well as a new seigniorage replacing the currently failing US Federal Reserve’s Quantitative Easing seigniorage; and the Bank of Japan’s failed Yen Carry Trade seigniorage.

These two will assure the security and prosperity for select corporations while providing austerity for all people. Global Corporatism and the Rule of the Sovereigns will replace Neoliberalism as the world’s economic and political regime.

Banks will become even more integrated with government; and leased property living like that presented in the 1973 movie Solyent Green will be the norm

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