Stocks Fall Lower On Exhaustion Of Federal Reserve Monetary Authority … Sharply Higher EU Sovereign Yield Rates Herald The Age Of Sovereign Insolvency

Financial Market Report for April 4, 2012

1) … Introduction

World Stocks, ACWX, broke fractally lower, that is sharply lower, as Mining, MXI, and Growth Stocks, IXG, as well as Europe Financials, EUFN, tumbled, on exhaustion of neo liberal finance, with currencies, such as the Australian Dollar, FXA, the Euro, FXE, and the Swedish Krona, FXS, trading lower, as competitive currency devaluation erupted on the failure of US Federal Reserve to provide QE 3.

Tyler Durden writes in Two Types Of Credit Losses The last week or so has seen this situation deteriorate rather rapidly with Spanish yields now backed up all the way to mid-November levels (and notably Spanish equities below their November lows) removing all the LTRO-exuberance leaving all Spanish banks under-water on their carry trades (should they ever have to MtM). At the same time, the critical aspect of LTRO (that is reliquifying tha banks to avoid the credit contraction vicious cycle that was beginning) has also failed. LTRO-encumbered banks now trade with a credit spread on senior unsecured (but now hugely subordinated) paper of 305bps on average (compared to non-LTRO-encumbered banks trading at 180bps on average) – back up near January’s worst levels and almost entirely removing any of the tail-risk-reduction expectations that LTRO was supposed to provide. As Peter Tchir notes, there are two types of credit losses – default/restructuring (Greece and soon to be Portugal/Spain et al.) and bad positioning (or forced selling as risk becomes too much to bear – Spanish Govt/Financial credit) – these two sources of self-fulfilling pain are mounting once again. The simple truth is that without endless and infinite LTRO (or printing) funding for banks there is not enough demand for Europe’s peripheral junk (as the Spanish auction highlighted) and the lack of performing collateral means the next stage will be outright printing (as opposed to a veiled repo loan) and that fact is beginning to creep into US financials as systemic contagion spreads.

The sharply higher Spain sovereign yield rate suggests that Spain has lost its debt sovereignty and heralds the age of sovereign insolvency.

Credit and money have both died.  The fact that the world central banks monetary policies have failed means they no longer have monetary authority. Given the rise in sovereign interest rates, Spain, EWP, and Italy, EWI, have lost their debt sovereignty. Out of a soon coming Financial Armageddon, leaders will meet in summits and announce regional framework agreements that waive national sovereignty and pool sovereignty regionally. New regional monetary authority will rise to govern the world and new sovereign authority residing in regional leaders and regional bodies such as the EU ECB and IMF Troika, will rule the world.

In Europe, monetary cardinals, under the Monetary Pope, Mario Draghi, will work in public private partnerships to provide regional economic coordination and oversight of resources, production, and labor. And in Europe, a Fiscal Commissioner, will oversee regional technocratic government, imposing austerity and debt servitude on all.

2) … Monetization of debt by the world central banks has finally had its natural result of turning Mining Stocks, MXI, and World Financial Stocks, IXG,  decisively lower, on toxically overextended central bank monetary policies.  

Mining ETFs, trading lower included GDX, GDXJ, SIL, REMX, PSP, SLX, XBI, XSD, ITB, WOOD, SEA, IEZ, and EMMT.  Mining stocks trading lower included SLT, RIO, as well as HW, and MGP.

The bank shares, IXG, turned country, ACWI, shares lower. NBG turned GREK lower. DB turned EWG lower. GGAL, BBVA, BMA, led ARGT lower. IRE, STD, and EUFN, turned EWP and VGK lower.  BCS, RBS, LYG, turned EWU lower. IBN turned INP lower.  CS and UBS turned EWL lower.  C, BAC, and KRE turned VTI lower.

The failure of money is seen in the trade lower in Small Cap Value Shares, RZV, which traded lower on falling Major World Currencies, DBV, and Emerging Market Currencies, CEW.

The failure of credit is seen in World Government Bonds, BWX,  and International Corporate Bonds, PICB, trading lower.

The failure of money and credit is reflected in the end of profitable investing in the Apple Ecosystem, as Smartphone, FONE, traded lower as Apple, AAPL, fell strongly. Smartphone, FONE, being laden with Semiconductors, SYNA, XLNX, wireless communication equipment manufacturers, NTGR, JDSU, handset manufacturers, NOK, wireless network providers, MITL, and internet service providers INAP, led to the ETF’s strong decline.

Cloud Computing, SKYY, traded lower as N traded lower.

Small tools trading lower included Japan’s MKTAY.

Automobile, CARZ, and Vehicles, VROM, trading lower included SUP, MGA, WPRT, AXL, TRW, TEN, CVGI, SMP, WNC, MTOR, DAN, JCI, MOD, as well as Sweden’s VOLVY and ALV.

Sweden’s ATLKY, led Digging and Earth Moving Stocks, MTW, TEX, JOYG, GDI, MNTY, CR, SNHY, as well as Japan’s KMTUY, lower.

Industrial Equipment Manufacturers trading lower include ABB, and LUK.

Integrated Circuit Manufacturers, MU, DIOD, AMKR, BHE, JBL, MSCC, LSI traded lower.

Home Building, ITB, was led lower by HOV, and DHI.

Wood Processors, WOOD, were led lower by PATK, MERC, and LPX.

Steel SLX, was led lower by US Steel, X.

Metal Manufacturing, XME, traded lower as AP, SCHN, AKS, TLD, SCHN, TX, SID, traded lower.

US Infrastructure, PKB, traded lower as GIFI, BXC, BECN, IBI, and EXP, traded lower.

Consumer discretionary, IYC, trader lower as THO, WGO, PC, SNE, PII, IMAX, BUD, traded lower.

Gaming shares, BJK, traded lower as SHFL traded lower.

Small Cap Value, RZV, traded lower as Office Supply Company, ABB, traded lower.

Industrials, XLI, traded lower as Industrial Gases CFX, PNR, and GHM, and Ball Bearings, ROLL, and Industrial Suppliers, HEES, MSM, traded lower.

Diversified Equipment Manufacturers, CMI, traded lower.

Energy shares across the board traded strongly lower.

The safe haven trade in US Stocks, VTI, is history, as now Retail REITS, such as SPG, are trading lower.

The failure of carry trade investing is seen in Junk Bonds, JNK, trading lower.

The failure of growth is seen in China, CAF, China Industrials, CHXX, shares trading lower, as well as the shares in Sweden, EWD, Russia, RSX, South Africa, EZA, Thailand, THD, Indonesia, IDX, and Malaysia, EWM.

The trade lower in neo liberal finance’s poster nation’s of Austria, EWO, Greece, GREK, and Argentina, ARGT, marks the end of the era of choice. The new era of Neoauthoritarianism is powering up, and is based upon diktat.

Speculative commodities Silver, SLV, and growth dependent Copper, JJC, led Commodities, DBC, lower, with Oil, USO, Timber, CUT, Gold, GLD, and Base Metals, DBB, falling strongly.

The 200% bear market ETFs rising strongly lower included EEV 4%, BZQ, 4%, TWM, 3%, SSG 3%, SMN 3%,FXP 3%, DUG 3%, BIS, 2%.

3) … Fate, as foretold in Revelation 2:26-27, and in Revelation 6:1-2, is working to bring forth the Beast Regime of Neoauthoritarianism, out of the Banker Regime of Neoliberalism.

The global government debt trade, BWX, is now exhausted, and no longer stimulates global growth, JKE, and profitable corporate investing, DVY.

Tyler Durden writes in Two Types Of Credit Losses The last week or so has seen this situation deteriorate rather rapidly with Spanish yields now backed up all the way to mid-November levels (and notably Spanish equities below their November lows) removing all the LTRO-exuberance leaving all Spanish banks under-water on their carry trades (should they ever have to MtM). At the same time, the critical aspect of LTRO (that is reliquifying tha banks to avoid the credit contraction vicious cycle that was beginning) has also failed. LTRO-encumbered banks now trade with a credit spread on senior unsecured (but now hugely subordinated) paper of 305bps on average (compared to non-LTRO-encumbered banks trading at 180bps on average) – back up near January’s worst levels and almost entirely removing any of the tail-risk-reduction expectations that LTRO was supposed to provide. As Peter Tchir notes, there are two types of credit losses – default/restructuring (Greece and soon to be Portugal/Spain et al.) and bad positioning (or forced selling as risk becomes too much to bear – Spanish Govt/Financial credit) – these two sources of self-fulfilling pain are mounting once again. The simple truth is that without endless and infinite LTRO (or printing) funding for banks there is not enough demand for Europe’s peripheral junk (as the Spanish auction highlighted) and the lack of performing collateral means the next stage will be outright printing (as opposed to a veiled repo loan) and that fact is beginning to creep into US financials as systemic contagion spreads.

Mike Mish Shedlock writes Sovereign Bond Yields Sharply Higher in Spain, Italy, Portugal. The Spain 10 Year Yield is 5.69%. The sharply higher EU sovereign yield rates, suggest that Spain, Italy and Portugal have lost their debt sovereignty, and that the world has entered into the age of sovereign insolvency.   Alejandro Lopez of WSWS reports Spanish Government Unveils €27 Billion In Budget Cuts Spain’s Popular Party government has announced €27.3 billion in cuts to the 2012 budget, the most austere since the fascist dictatorship.  And Zero Hedge reports An Impossible 57% of Spain’s Budget Is Devoted To Pensions, Unemployment Benefits and Interest.

ECB liquidity has failed to resolve the issue of solvency; said another way, the ECB’s monetary policy has failed to address sovereign insolvency and banking insolvency. Spain, EWP, and Italy, EWI, are insolvent sovereigns; they have lost their debt sovereignty.

Insolvent sovereigns will soon be unable to raise money in the sovereign debt market place. It is reasonable to expect a massive government shutdown in Span and Italy. Many European Banks do not have Euros, as they are fully invested in sovereign debt.  A run on banks is coming soon. Yes, a bank holiday is coming in the Euro zone. Bank insolvency is going to be the basis of a soon coming Financial Armageddon, that is a credit bust and financial system breakdown.

Capitalism’s global trade paradigm is failing as credit and fiat money have died.  And now, Neoauthoritarianism’s paradigm of regional economic and trading blocs, will grow, as leaders meet in summits to waive national sovereignty, and as they work in regionalization, for regional security, stability, and sustainability.  Thus the ten toed kingdom of regional global government, as called for by the 300 elite of the Club of Rome in 1974, and as prophesied by the prophet Daniel in Daniel 2:31-33, is an emerging reality.

Yet these toes being mired in both the iron of diktat and the clay of democracy, will eventually crumble, and a more terrible monster, of a one world government, Daniel 7:7, will arise to provide global seigniorage, Revelation 13:17-18.

In reflecting over the last fourteen years since 1998, it was the repeal of the Glass Steagal Act, the announcement of the Euro, the provision of the Google Website, and the development of the iPhone, on going secularization of GSE debt, MBB, by mortgage REITS, REM, such as Annaly Capital Management, POMO activities of the Too Big To Fail Banks, RWW, and Investment Bankers, KCE, to securitize US Debt, TLT, that enabled global investment liquidity to expand to the pivotal point in history that we are at today, with peak fiat wealth, peak credit, and peak money, now manifesting.

New money, such as M-commerce and regional bartering and currency exchange, is coming to the forefront, as the diktat money system is being introduced to replace the fiat money system.

Out of Neoliberalism’s ponzi finance schemes, which provided profit from moral hazard, creative destruction is working to bring forth Neoauthoritarianism’s regional framework schemes, that will enforce debt servitude, such as is currently evidenced in the new property tax in Ireland, and a whole list of taxes in the PIGS, that is Portugal, Italy, Greece and Spain.

The failure of the world central banks’ monetary policies has finally caused the death of credit and fiat money. Fiat financial investments can no longer generate or preserve wealth.

Inflationism has turned to destructionism, and fiat assets are losing value. There is no longer any “money good”, fiat wealth.

The global government debt bubble, BWX, has burst. The trade lower in Stocks, VT, Commodities, DBC, Debt, BND, and Currencies, DBV, and CEW, documents that the world central banks have lost their sovereign authority.  The sovereign debt trade has failed with US Treasuries, ZROZ, EDV, and TLT, trading lower, as bond vigilantes have called the Interest Rate on the US Ten Year Note, above 2.0%, and as short sellers have forced European Financial EUFN, lower.

Out of soon coming Financial Armageddon, that is a credit bust and global financial collapse, new sovereign leaders and sovereign bodies, such as the EU ECB and IMF Troika, will establish new monetary authority, provide a new money system, and a new seigniorage, that is a new moneyness. The diktat money system will arise to provide diktat functioning as both money and credit.

Central bank monetary policies of ZIRP, Quantitative Easing, LTRO Financing, and Dollar FX Swaps, have reached their full expansion capability. Moneyness will no longer come from Mortgage REITS, REM, such as Annaly Capital Management, NLY, but rather from monetary cardinals, working under authority of the Monetary Pope, Mario Draghi, in public private partnerships, to oversee credit, production, natural resources, and labor, in new economic structuring for regional security, stability and sustainability.  These will be complimented by a fiscal commissioner who will provide diktat, that enforces austerity measures and fiscal spending. The New Europe, will be run much as a revived Roman Empire, with Germany being preeminent over the Euro zone.  And a New Charlemagne, as foretold in bible prophecy of Revelation 13:5-10, will be its Sovereign. He will be accompanied by an EU Banker, as foretold in Revelation 13:11-18.

The termination of the Milton Friedman Neoliberal regime, that is the Banker regime of capitalism, means the death of global trade and global investing. Please consider dollar cost averaging into the purchase and possession of the hard asset gold to preserve one’s wealth. Creative destruction is working through regionalism to bring about regional trading blocs. The death of capitalism means all people will participate in economic death, whether one be living in Sweden, EWD, Greece, GREK, or Argentina, ARGT. A global gulag of debt servitude, enforced through regional collectivism and regional global governance is mankind’s future as the Beast System of Neoauthoritarianism, seen in Revelation 13:1-4, rises to rule worldwide in all of mankind’s seven institutions and ten global regions.

4) … The self transcendent live either in virtues and become moral persons … or they live in ethical principles and become ethical persons. 

Some by nature and practice are self transcendent individuals. These have a higher moral IQ, or a higher ethical IQ, and as a result lead a moral life or an ethical life.

The self transcendent know something that others fail to realize, largely because others are trapped in the carnal self, that is the carnal nature, and are not aware of their calling, or not aware of a higher state.  Both the moral and the ethical know, and practice a good conscience, one that is alive, and objective, and not subjective.  The self transcendent seek reward in life principles, rather than simply material gain or status gain.

The self transcendent individuals seek experience out of virtues (moral excellencies), or out of ethical principles (right regard for others) to experience organic union in in higher life. These give no license to vice such as drugs, alcohol, promiscuous sex, or personal gain at the expense of others. These participate in and reference  a “blue zone”, that is an organic place known to support life. These practice character and thus experience genuine life. These do not reference subjective standards or human laws. These do not get involved in the affairs of others, they are not busy bodies in other people’s business; they are not community social sheriffs.  These are not involved in confrontation of any kind, and do not demonstrate, or support occupy movements. These seek rightful reward, the reward which comes from work, and from the use of their talents and abilities. These practice peace, and practice giving dignity to others, even when others manifest indignity. At all time, and in every way, these esteem dignity of others. These live in either the divine moment, or the ethical moment.

The self transcendent live in natural processes, whereas the self absorbed live in carnal experiences or seek experiences in fiat rule.  The self transcendent practice right regard for others, even when others show little or no regard. The self transcendent seek the meaning of life, pursue an ongoing education, use information resources such as a dictionary; and practice speaking or participating with others in bible study or book discussion. These differ from the most self-absorbed, who can relate what something says; but cannot correctly relate what something means! Or they know what something means, but will often put a condescending twist on their meaning. For example, the self-absorbed will relate that libertarianism means taking liberty to act, or libertarianism means to use freely; the most self absorbed are psychopaths, unreasonable individuals who have neither faith nor reference to ethical principles. Perhaps the self transcendent have the God gene, and activate as the elect in faith in God, or activate as ethical, as they trust in ethical principles.

Peter, writing in 2 Peter 1:1-10, was the greatest moral thinker of all time, as he communicates that the elect practice the additive process of virtue and love, so as to partake of the Divine nature, and be established in the exceeding great promises of God; such have moral life as they transcend self. In so doing one comes to the stature of the person of Christ, Ephesians, 4:13, and  stores up treasure in heaven, consisting of spiritual gold, silver and precious stones, 1 Corinthians 3:12.  These know that they will never be free in the fiat realm; they know that Christ has made them free, John 8:36. They know that as they continue to place their faith in Him, out of themselves, will flow rivers of living water, John 7:38.

Divine revelation and divine experience is needed for a complete account of everyday moral life.  In theosis, one transcends self to know moral life. One’s participation in the Divine nature is a moral participation, a grace empowered experience where one is imbued with the Divine’s moral attributes.

An inquiring mind asks, who be you?  The elect be redeemed, be established, be sanctified, and be alive in the Divine One, Jesus Christ, as they add to their faith, virtue and love.

Virtue gives one a clear vision of God because as St. Gregory of Nyssa wrote, “The goal of a virtuous life is to become like God”, and in so doing one comes to know the grandeur, wonder and fullness of life.

As one grows in partaking of the Divine nature, and in purity (being free from sin, that is doubt), and holiness (being set apart for the Divine’s purposes), then one becomes one of the many sons of God.  By entering into communion with the Word, one experiences Divine sonship.

Virtuous habits conform one to Christ, God’s perfect standard.

It is an arduous task to live out of the Divine nature, nevertheless, the endeavor leads to fruitfulness in moral awareness and attributes of the Divine.

Virtues help one resist temptations, and virtues help one rightly order one’s passions.

Those who add to the like precious faith of Jesus Christ, virtue and love, partake of the Divine nature, and experience Divine Sonship. The Word became man, the Son of God became the Son of Man, so that man, by entering into the process of adding virtue and love to faith, might experience moral life, as one of the Divine’s many sons. The Word reveals God to the sons, and these partake of the Divine nature, and in so doing participate in moral life.

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