Financial Market Report for April 19, 2012
Today April 19, 2010, was Capitalism’s Waterloo as the charts of Volatility ETF VIXY, TVIX, VIXM, all show a rise today, on a pivot lower in world stocks, VT, and US Stocks, VTI, as jobless claims, existing-home sales and manufacturing in the mid-Atlantic region all suggested that the robust start to 2012 seems to have lost momentum.
The declines also reflected significant drops in many European markets after an auction of Spanish bonds was oversubscribed but produced slightly higher-than-expected yields. CNBC reports investors’ fears about Spain eased for a while after the country sold 2.54 billion euros in two-year and 10-year bonds, more than the expected range of 1.5 billion to 2.5 billion euros set for the auction. The Spanish government sold 10-year bonds at an average yield of about 5.7%. The average yield for the two-year was about 3.5%. But the yield on the Spanish 10-year bond rose to 5.925%, up from Wednesday’s 5.82%.
Transports, IYT, and Industrials, IYJ, both traded lower today giving Dow Theory confirmation that the bear market that began this month is definitely underway. Transportation Shares, IYT, traded 1.5% lower, and Industrial Shares, IYJ, traded 1.1% lower.
Shares leading the way lower today included Steel, SLX, Housing, ITB, Small Cap Pure Value, RZV, US Infrastructure, PKB, and Large Cap Growth, JKE.
Large Cap Growth shares trading lower included QCOM, NEU, AAPL, CAT. Apple, AAPL, -3.2%; shares dropped below $600 after Verizon Wireless said it had sold 3.2 million iPhones in the first quarter, down from 4.2 million in the fourth. The Nasdaq 100, QTEC, Technology, XLK, and MTK, traded lower.
Spain’s BBVA and STD led European Financials, EUFN, Spain, EWP, Italy, EWI, Greece, GREK, France, EWQ, lower.
Emerging Markets, EEM, the BRICS, EEB, China Industrials, CHII, Steel, SLX, which turned lower in March, continued lower today.
Performance of Proshare 200% inverse ETFs this week include EEV 3.5%, TWM 2.1%, BZQ 6.5%, SSG 4.1%, SIJ, 1.5%, REW 5.7%, BIS -1.7%.
Today’s trade lower in world stocks, ACWI, evidences the death of fiat money and credit, as well as capitalism. Confirmation of such comes from yesterday’s trade lower in Commodities, DBC.
Debt deflation is seen in the Small Cap Pure Value Shares, RZV, Large Cap Growth, JKE, Agricultural Commodities, RJA, DBA, Base Metals, DBB, Oil, USO, all trading lower on the exhaustion of the world central banks’ monetary policies to sustain growth, and the failure of debt sovereignty of the peripheral European nations.
Insolvent sovereigns and insolvent banks can’t support either capitalism or European Socialism. The baton of sovereign authority is passing from sovereign nation states to sovereign bodies, such as the ECB and EU ECB IMF Troika. Both European socialism and capitalism are dying and regional global governance is rising in its place, as foretold in bible prophecy of Daniel 2:31-33, and Revelation 13:1-4.
The global investment tectonic plates have shifted, and an authoritarian tsunami is on the way. Investment capital that has governed capitalism is failing as the dynamos of growth and profit are winding down on the exhaustion of the world central banks’ monetary authority. Political capital is rising to govern regional global governance as the dynamos of regional security, stability and security are winding up, as investors derisk out of stocks and delever out of commodities. Regionalization, as foreseen by the Club of Rome in 1974 to 1976, is mankind’s future; regional blocs will form the basis of future political and economic activity.
After the soon coming Sovereign Armageddon, that is a credit bust and financial system breakdown, caused by the collapse of sovereign debt, that is Treasury Debt, traded by the ETF BWX, and especially Treasury debt of the PIIGS, leaders will meet in additional summits to waive national sovereignty, and pool sovereignty to integrate European financial institutions and regional government; this new entity will be known as the Government Bank or Gov Bank for short.
Money and credit as they have traditionally been known, are history. European socialism is no longer providing money and credit in the Euro zone; neo liberal credit has run its course. Previously floating currencies and the global government debt trade, that have been the backbone global growth, trade and profit for capitalism are exhausted.
The seigniorage, that is the moneyness, of European Socialism is history. The seigniorage, that is the moneyness of integrated banking and government, is rising. Neoliberal credit such as sovereign bonds is being replaced by Neoauthoritarian money and credit such as ECB LTROs.
The seigniorage of speculative choice is being replaced by the seigniorage of diktat.
The fiat money system is being replaced by the diktat money system. Capitalism is being replaced by regional global governance.
There is no longer any fiat wealth that is money good. As fiat wealth falls lower in to the pit of financial abandon, the investment demand for gold will arise; physical possession of gold will be the only money good. Soon the gold ETF, GLD, will be rising from its current price of 159.43.
The short URL for this article, Capitalism Meets Its Waterloo … Stocks Pivot Lower On Spanish Bond Auction Yield, As Well As On Job, Home Sales And Manufacturing Reports, is http://tinyurl.com/7cc5azq