Emerging Markets And Natural Resource Stocks Fall As Commodites And Currencies Crumble

Financial Market Report for May 11, 2011

1) … An Elliott Wave 2 Down has commenced in stocks, ACWI, as commodities, DJP, fell lower today, which induced world currencies, DBV, and emerging market currencies, CEW, and commodity currencies, CCX, lower. The US Dollar, $USD, rose to 75.31

World Stocks monthly, ACWI Monthly,

World stocks, ACWI, -1.4%
Small Cap Stock, VSS, -1.7%
Emerging Market Small Caps, EWX, -1.2%
Real Estate, IYR, -1.1%
Russell 2000 Growth, IWO, -1.8%
Russell 2000, IWM, -1.9%
Morningstar Mid Growth, JKH, -1.2
Small Cap Pure Growth, RZG, -1.6
New York Composite, NYC, -1.5
S&P, SPY, -1.0
Morgan Stanley Cyclicals Index, $CYC -1.6%

SIL, -6.5%
XME,  -4.0%
PSCE, -4.0%
COPX, -3.9%
OIH, -3.5%
IEZ, -3.3%
SLX, -3.3%
GDX, -3.2%
XLE, -2.9%
IYM, -2.8%
MOO, -2.6%
HAP, -2.7%
XLB, -2.7%
KOL, -2.4%

Carry trade investment failed in the king of speculation, Silver Standard Resources, Inc, SSRI.

Carry Trade investment fails in Turkey, TUR -5.0%

EEB, -1.8%
EEM, -2.2%

EWZ, -2.5%
INDY, -1.3%
YAO, -1.4%
RSX, -2.9%

BRF, -2.6%

Individual stocks falling lower today included

First Industrial Realty, FR, -4.6

Sonic Automotive, SAH, -4.6

Psychiatric Services: PHC Inc, PHC, -2.7%

Manufactured Housing, Cavco Industries, CVCO, -3.0%

Computer peripherals, Universal Display, PANL,  -6.2%

Processing Systems And Equipment: Polycom, PLCM -3.0%

Instruments, OYO Geospace, OYOG, -7.2%

Small Cap Energy: Clayton Williams Energy, CWEI, -6.0

Refining: Western Refining, WNR, -7.6%

Automobile Parts: Titan,  TWI, -5.9%

2) … Commodities, DJP, Base Metals, DBB, OIL, USO, Petroleum Products, DBC, Agricultural Commodities, JJA,and Timber, CUT, fell sharply lower today.

3) … The world is passing through Peak Credit as Bonds, BND, is below a double top that formed with announcement of Quantitative Easing 2 and a recent May 9, 2010 high. Junk bonds, JNK, and distressed investments, FAGIX, closed end debt funds, CEDF, turned lower and mortgage backed bonds, MBB,  traded basically even.   

The chart of Closed End Fund,. F&C Claymore Preferred Securities Income Fund, FFC, shows a topping out. FFC is invested in excess of 95% banks, insurance companies and utilities.

World government bonds, BWX, and international corporate bonds, PICB,  have turned parabolically lower on falling world currencies.  

4) … The Seigniorage of Neoliberalism has failed as is seen in four factors:

1) World Stocks relative to World Government Bonds, VT:BWX, turning lower.

2) The HUI Precious Metal Mining Stocks Relative To US Treasuries, GDX:EDV, turning lower.
3) The Developed Market Currencies Relative To Emerging Currencies, DBV:CEW, turning lower.
4) The Gold Mining shares Relative To Gold, GDX:GLD, turning lower.

World major currencies, DBV, and emerging market currencies, CEW, are now participating with the US Dollar, $USD, in competitive currency devaluation.This Finviz database report of FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, CYB, BZF, XRU, FXY, BNZ, DBV, CEW, CCX, UUP, shows competitive currency devaluation is underway as he US Dollar, $USD, rose in the last 5 trading days week from 73.0 to 75.30.

The world has passed through peak wealth — The world has passed from the Age of Leverage and into the Age of Deleveraging.

5) … EU Commissioner calls for single, more powerful EU President
Open Europe relates EurActiv France reports speaking in Berlin on the occasion of Europe Day, EU Internal Market Commissioner Michel Barnier said that “one day, [Europe] will need an EU President” cumulating the functions of European Council and Commission President, arguing that “Europe needs a strong face and a strong voice.” Barnier also called for the creation of a single representative allowed to speak on behalf of eurozone countries and for a common EU defence policy, reports the IHT.    
EurActiv France Les Echos IHT

6) … Regional economic governance based upon Framework Agreements nullifying national sovereignty will emerge from the chaos and failure of Quantitative Easing as well as the failure of currencies and World Government Treasury Bond, BWX, auctions.  This governance will be the first step to replace the seigniorage of Neoliberalism. Finally a world chancellor, the Sovereign, and a world Banker, the Seignior, will arise to provide, strong authoritarian rule and a new seigniorage, that is a new moneyness. Might Mario Draghi rise to be the Segnior … Stephen Castle and Jack Ewing of the New York Times report Merkel Clears Way For Italian To Lead ECB.

Chart of the Euro, FXE,

7) … Between The Hedges relates China Daily reports Guangzhou city in southern China will require dog owners to insert microchips in their pets by the end of July to help control the large number of the animals, citing an official from the public security bureau. Violations may be fined as much as 2,000 yuan.

Closed end debt funds, Peak Credit, Market Top, The Sovereign, The Seignior, Seigniorage, Regional Economic Governance, Age of Deleveraging, Failure of Neoliberalism, Neoliberalism, Quantitative Easing Exhaustion, Peak Wealth, Microchips


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