Financial Market Report for April 3, 2012
1) … Fiat Wealth, that is Bonds, BND, World Currencies, DBV, Emerging Market Currencies, CEW, and World Stocks, VT, died today, as the Fed Announcement communicated there will be no QE3.
The moneyness, that is the seigniorage, of the world central bank’s monetary policies have reached their full capability to stimulate capitalism’s dynamos of growth and profit, with the result that credit, fiat money, and capitalism died today April 3, 2012.
The world is passing through peak monetary expansion, peak credit, peak money, and peak fiat wealth. Inflationism is turning to destructionism. New dynamos of regional security, stability, and sustainability, will be powering up regional global government.
Tyler Durden writes, For those confused why the market is reacting like a stung bee to today’s announcement that contrary to Jan Hatzius’ expectations, Twist may not be extended (at least not before we get a 20% market correction), here is where all, repeat all, market “growth” has come from in the past three months. Hint: $2 trillion in central bank easy money. Because the ECB is now shooting blanks, the Fed will find it difficult to ease so close to the debt ceiling farce, and the BOJ is irrelevant. And if the spigot is shut off, watch out below.
Here are two reports of diminished growth from global trade leader Dow Chemical. First, Dow Shutters Plants On Three Continents, Cuts 900 Jobs, In Response To Economic Woes In Europe from The Associated Press. and Dow Chemical To Close Four Plants, Cut 900 Jobs from the The Wall Street Journal.
Open Europe and FT: Rachman report The Wolfson Economics Prizein which economists were asked to prepare a contingency plan for a break-up of the eurozone, today unveiled a shortlist of five finalists. In the FT, Gideon Rachman argues, “Spanish ministers, like their British counterparts, have been told that a euro break-up would lead to disaster. If the entrants to Lord Wolfson’s prize can show otherwise, they will have done the whole of Europe a service.”
Not by any human action, but rather by fate, the 1974 Clarion Call of the Club of Rome for regionalization will be the driving global economic force, as leaders meet in summits and announce framework agreements, that waive national sovereignty and pool regional sovereignty..
In Europe, monetary cardinals will be working in public private partnerships, under the monetary pope, Mario Draghi, to provide diktat as credit, for regional integration of industry, resources, and labor, to secure, strengthen, and sustain, regional economic activity.
And a fiscal commissioner will be working under the authority of Germany and the ECB, which will be empowered as a regional bank, to provide diktat as money for the residents of the Euro zone. Germany will rise to be preeminent in the EU, as it leads Europe, out of soon coming Financial Armageddon, to be a type of Revived Roman Empire.
The fiat of capitalism, which has been based upon the global government debt trade and spectacular global export trade, which has governed the world since the late 1700s; it came to an end today, April 3, 2012.
The new fiat of regional global governance featuring debt servitude and regionalization of trade, will soon be governing mankind’s economic activities, as investment capital is replaced by political capital, the former being choice, and now the latter being diktat.
2) …The Steepner ETF, STPP, rose, and the Flattner ETF, FLAT, traded lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened today, driving Bonds, BND, lower.
Credit was led lower by the 30 Year US Government Bonds, EDV, the Zeroes, ZROS, and the US Ten Year Notes, TLT, as the bond vigilantes called interest rates higher; the Interest Rate on the US Ten Year Note, ^TLT, traded higher today to 2.28%.
3) … Global debt deflation, that is competitive currency deflation, is underway
The South African Rand, SZR, and the Australian Dollar, FXA, leading World Currencies, DBV, and Emerging Market Currencies, CEW, lower. The US Dollar, traded by UUP, rose to the edge of a massive head and shoulders pattern, it will soon be trading lower as well as monetization of debt, that is debt monetization, calls all currencies lower into the Pit of Financial Abandon. PatrickNET asks, Dollar no longer world reserve currency?. The currency demand curve, that is the ratio of the small cap value shares to the small cap growth shares, RZV:RZG, communicates that that the demand for currencies and investment in value shares is waning on the impotence of the world central banks’ monetary policies.
The failure of growth and the failure of credit means that the bastion growth country stocks will be trading lower on declining currency values, these include IDX, EPU, EWM, and THD.
Gold is both a commodity and a currency; it got smacked down today, leading Oil, USO, and Timber, CUT, Commodities, DBC, and US Commodities, USCI, lower. The trade lower in Precious Metal Commodities, JPP, turned the Precious Metal Mining Shares, GDX, GDXJ, and Silver Mining Shares, SIL lower. The trade lower in Oil, turned the Energy Shares, IEZ, WCAT, XES, IEO, XOP, PSCE, ENY, and XLE lower. The trade lower in Timber, CUT, turned paper manufacturers, WOOD, lower. One may want to consider dollar cost averaging a buy of the 200% gold mining shares, NUGT, at this time. .
The failure of the moneyness of Neoliberalism turned Shanghai, CAF, Small Cap Pure Value, RZV, World Financial Institutions, IXG, Mining Shares, MXI, and Semiconductors, XSD, lower.
Apple, AAPL, rose taking Technology, IDK , higher. Pier One, PIR, rose taking Retail, XRT, higher, and Regions Financial, RF, rose taking Regional Banks, KRE, higher.
4) … Neoliberalism, the final stage of capitalism, died today.
The beast regime of Neoauthoritarianism is rising up out of the Latin European Shares, that is the peripheral nations known as the PIGS.
In as much as fiat wealth is passing away, I encourage one to dollar cost average an investment in the hard asset gold.
Zero Hedge writes On The Demise Of European Bank Debt. Tyler Durden relates While the LTROs were supposed to bring European banks back from the edge of insolvency with a warming blast of liquidity, the sad truth, now that the exuberance of fresh money-printing has faded, is that the unintended consequence has crammed down the senior unsecured bank debt holders to the lowest of the low. This realization, that we have discussed a number of times and most recently thought provided here that nothing has been solved as the LTRO Stigma unintended consequence, is starting to leak back into broader risk premia as now the contagion risks are back on the table and even non-LTRO-facing banks are seeing spreads increase as expectations of either broader forced cram-downs or interconnected vicious cycles rear their ugly head once again among European banks – and implicitly back onto European Sovereign balance sheets. Citigroup’s Hans Lorenzen highlights four key reasons for the increasingly binary bifurcation that senior unsecured bank debt has become.
Today, the European Shares, VGK, traded lower, led by Spain, EWP, -3.7%, Greece, GREK, -2.9%, Italy, EWI, -2.9%, European Financials, EUFN, -3.3%. Small Cap Countries, VSS, trading lower included South Korea, SKOR, Australia KROO, and Austria, EWO.
Transports, IYT, and Industrial, IYJ, both traded lower, giving Dow Theory announcement that a bear market is underway, specifically the Second Great Depression. An Elliott Wave 3 Down is underway in World Stocks, VT; the 3rd Wave is the most destructive of all economic waves as it wipes out practically all gains made on the prior five waves up.
The chart of the 200% Bear Market US Government Bond ETF, TBT, shows a 3% rise. And the 200% Bear Market Stock ETFs, seen in this Finviz Screener, SMN, EEV, FXP, IWM, DUG, SSG, BZQ, rose today.
Since their recent highs the mining stock have been trading lower, led by Copper, COPX, -15%, Coal, KOL, -10%, Aluminum, ALUM -5%.
Since their recent highs, Argentina, ARGT, -13%, and the BRICS, EEB, China Industrials, -13%, India, INP, -10%, Russia, RSX, -10%, Brazil, EWZ, -7%, Australia, EWZ, -4%, have been trading lower.
5) … They did not ring a bell at the top.
The safe haven rally in US stocks, VTI, Preferred Shares, PFF, Large Cap shares, JKE, ended today, as the large cap value shares, led by the gold mining stocks traded lower.
No amount of profits can drive stocks higher now as the seigniorage, that is the moneyness of the fiat money system failed today on the Fed Announcement of no QE 3. The diktat money system will be powering up as investors go short stocks, ACWI, VTI, and commodities, DBV, USCI.
Disinvesting out of stocks, and deleveraging out of commodities, will be the genesis of Financial Armageddon, out of which sovereign bodies and sovereign leaders will replace sovereign nation states. These new sovereigns will provide the seigniorage of diktat, that is the moneyness of diktat.
Notable fallers of the day included, TAP, COH, GM, MU, JBL, communicating that the Age of Recreation and Luxury, the Automobile Age, and the Silicon Age, are now history.
The short selling opportunity of a lifetime developed today; industry leading stocks are now good short selling opportunities. These include the following.
Utilities, D, NEE,
Mining Companies, VAMY, HW, MCP, CF, POT, ZINC,
Regional Banks, CBU, RF,
Restaurants, CMI, YUM, LUB
Retail Building Supplier, HD, LOW,
Cloud Computing Companies, N, CRM, FFIV, VMH, RHT,
Cigarette Manufacturers, PM, MO, LO,
Real Estate Companies, BLK, SPG,
Business Services, FISV, URI, ASGN, ERT
Consumer Services, XRAY, RCII,
Aerospace Manufacturers, LMT, HON,
Airplane Manufacturers, BA, BEAV,
Specialty Eats and Drinks, SBUX, MNST,
Consumer Discretionary, BUD, NKE, HLF, HOG,
Retailers, TJX, HIBB, ULTA, LIZ, ZUMZ, ARO, CHRS
Scientific Instruments, MISC, ROP,
Automobile Retailers, GPI, LAD, ABG,
Large Cap Growth, QCOM, ISRG,
Industrial Equipment Manufacturers, AME, ENS,
Tractor Implement Manufacturers, NC, TSCO
Credit Providers, GCA, COF, DFS, MA, AXP,
Automobile Parts Manufacturers, MGA, BWA,
Industrial Suppliers, DXPE, HEES,
Building Suppliers, TREX, MAS,
Internet Retailers, GOOG, PCLN,
Consumer Recreational Vehicles, ACAT, PII,
Gaming and Leisure, SHFL, FUN,
Hotels, LVS, BXG, WYN,
Containers, BLL, MYE,
Conglomerates, TXT, CMI,
Telecom providers, PTGI, AMT,
Chemical Companies, PX, ARG,
Paper Manufacturers, IP,
Health Care Providers, WLP, ESRX,
Pharmaceutical Companies, MCK, GSK, PHX, NVO, AMGN, CELG, RGEN, REGN,
Leveraged Buyouts, PSP
Waste Management, ECOL,
Truckers, JBHT, QLTY,
Personnel Services, HLG, TBI,
The Age of Diktat has already commenced with the Second Greece Bailout, and the establishment of the EU ECB and IMF Troika, providing technocratic government. Fiat mandates such as austerity orders are now de rigueur.
6) … A global credit bust and financial collapse is at hand.
John the Revelator wrote of his vision, a dream given to him by angels, where a head on this monster is wounded to death, Revelation 13:3. This head wound is a catastrophic global financial collapse. The head of finance, commerce and trade is going to suffer an apparent mortal wound. But through diktat, it will recover; and the people will be amazed, and give their allegiance to it; placing their trust and faith in the word, will and way of sovereign leaders, who rise to replace sovereign nation states, as foretold in bible prophecy of Revelation 13:3-4.
There is today, waiting in the wings of Europe’s stage, a seemingly one of little authority. This Little Horn, possibly Herman Van Rompuy, will rise through knowledge of framework agreements to rule the Eurozone. He will be the Sovereign, the Ruler, of Revelation 13:5-10. He will be accompanied by the Seignior, the Banker, of Revelation 13:11-18.
Eventually 10 kingdoms, each with their own king, will emerge as regional economic and political blocs, as foretold in Revelation 17:12; these will be the ten toes of iron and clay of Daniel 2:31-45, where iron is symbolic of diktat, and clay of democracy. Eventually this miry mixture will crumble and a totalitarian one world government will emerge, as foretold in Daniel 7:7.
7) … Who be you, and what be your realm?
There are only two realms, the fiat realm and the Divine realm. And there are only two types of people, fiat people, living out of their fiat mandate, such those in Greece, who are now residents of a region of global governance, or libertarians who live out of libertarianism and its ethics.
On the other hand, there are the elect, that is those of like precious faith, 2 Peter 1:1-10, who practice the additive process of affirming virtue, that is a set moral excellencies, and live in love for themselves and others, so as to experience the exceedingly great and precious promises of God.