Financial Market report for May 14, 2012
The tumble lower today in World Treasury Bonds, BWX, and, Emerging Market Bonds, EMB, reflects that the global government finance bubble has burst, and that the debt trade which has supported momentum investing is history.
US Corporate And US Government Debt rose as other debt traded lower on competitive currency devaluation.
US Government Debt rose strongly on a rising US Dollar, $USD, UUP, and safe haven investing, as competitive currency devaluation continued, as a result of monetization of debt by the worlds’ central banks. Debt deflation occurred in the South African Rand, SZR, the Brazilian Real, BZF, the Swedish Krona, FSX, the Indian Rupe, INR, the Euro, FXE, and Emerging Market Currencies, CEW. Gary of Between the Hedges relates “The chart of the CRB Commodities Index is gapping down below the trading range it has been in since Oct. 2010 having declined 21.7% since May 2nd of last year.” I comment that this is when world currencies started to sell off on fears that a debt union had formed in the Euro zone.
The Zeroes, ZROS, and the 30 year US Government Bond, EDV, rose the most of all bonds, BND, today. Build America Bonds, BAB, and Long Term Inflation Protections Bonds, LTPZ, Inflation Protected Bonds, TIP, rose to new highs. The US Ten Year Note, TLT, rose to its previous highs, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, reflected in the Flattner ETF, FLAT, rising and the Steepner ETF, STPP, falling.
The Interest rate on the 10 Year US Government Note, ^TNX, traded lower to 1.788%, causing the longer duration US Corporate Bonds, BLV, to rise more strongly than the Corporate Bonds, LQD. The high yielding Junk Bonds, JNK, trade lower with stocks, giving absolute confirmation to the end of momentum investing as well as to fixed income investing. Today May 12, 2012, marked the end of the era of successful growth and income investing as most every one of the high paying utilities, seen in this Finviz Screener, traded lower.
Risk on momentum investing is history
The seigniorage, that is the coinage, of the worlds’ central banks is exhausted on the awareness that there will be no QE 3, and that the ECB is unable to support fiscal spending in Greece, GREK, Italy, EWI, or Spain, EWP. Today’s fall in World Treasuries, BWX, and Emerging Market Bonds, EMB, presents the realization of the loss of debt sovereignty by the PIIGS.
The trade lower in dividend leaders Energy Partnerships, AMJ, Shipping Stocks, SEA, such as TK, and SSW, Leveraged Buyouts, PSP, Utilities, XLU, such as NEE, Residential REITS, REZ, Industrial and Office REITS, FNIO, such as AAT, BXP, Shopping Center REITS, such as SPG,PEI, Hotel REITS, such as FCH, SHO, Regional Banks, KRE, such as RF, and Dividend Paying Stocks, DVY, such as AVY, WSO, PKG, seen in this ongoing Yahoo Finance Chart, evidences also, the end of fixed income investing.
Insolvent sovereigns and insolvent banks cannot support world exports, growth and corporate profit.
Regional Governance as foretold by the prophet Daniel in Daniel 2:30-31, is coming to replace Capitalism and European Socialism.
The trade lower in sovereign debt globally gives confirmation to the death of fiat money and credit. Greece is going to default; Greece is going to default within the EU. Sovereign nation states will be replaced by sovereign leaders and sovereign institutions, such as the ECB, which will work in Regionalization to produce Daniel’s Ten Toed Kingdom with its ten toes, that is ten regions, of iron dikat and clay democracy.
Regional economic and tracking blocs will be the new global economic paradigm, as investment capital is restricted by capital controls, and is replaced by political capital, where leaders meet in summits to waive national sovereignty and pool regional sovereignty, to effect regional security, stability and sustainability. This is why one should dollar cost average into gold bullion and a very limited amount of silver bullion for bartering, and take physical possession of these or trade them in Internet vaults such as Bullion Vault.
The New Europe will see a new power structure of private public partnerships overseeing credit, production as well as human and natural resources. Sructural reforms of monetary cardinals and austerity measures of budget commisioners will replace Neoliberalism’s investors choice, bringing forth Neoauthoritarianism to govern the EU.
After a soon coming Financial Armageddon, that is a credit collapse, and global banking breakdown, the diktat money system will replace the fiat money system. The Libertarian hope for a free market money system, built upon something of sound value, whether it be gold or hazel nuts, or whatever, is a wild dream of people who perceive themselves to be sovereign individuals; such do not exist, as there only exists a Sovereign Lord God, Ephesians 3:1-21 and 2 Corinthians 5:17-18, who has appointed all things and determined all things from eternity past, and who does not base his decisions upon any meritocracy, but rather upon divine mercy, as presented in the doctrine of the election of grace.
The growing bonfire of the world’s financial institutions is at the center of a global stock sell off.
Risk off investing is seen in the trade lower in country shares, Philippines, EPHE, Thailand, THD, Malyasia, EWM, Indonesia, IDX, and Vietnam, VNM, and Japan, EWJ. Today, May 12, 2012, will go down as being the Asian Crush; it preceeds the Asia Crash.
Also, risk off investing is seen in the trade lower, in vice stocks, SHFL, MGM, in value stocks, ORLY, NOF. URI, SBAC, AAP, LQDT, in US infrastrucutre stocks, EXP, OC, USG, MAC, AVD, NX, in growth stocks, DXPE, SXI, in large cap stocks, NVO, INTC, SBUX, in real estate REITS, EXR, BXP, RLJ, PEI, RPT, in consumer discretionary stocks, HOG, RCL, and in technology stocks, OYOG, TRMB, PDFS.
The parabolic rise, and now trade lower seen in the chart of Liqudity Services, LQDT, evidences the rise and fall of neoliberal finance driven momentum investing.
The World Financial Institutions, IXG, Banks, KRE, the Emerging Market Mining Stocks, EMMT, such as URA, SIL, ALUM, COPX, Emerging Market infrastructure, EMIF, Small Cap Energy, PSCE, Smart Grid, GRID, Paper Producers, WOOD, Smartfone, FONE, Steel Producers, SLX, and two high paying dividend sectors, Leveraged Buyouts, PSP, and Shipping SEA, together with Commodities, DBC, SLV, GLD, CUT, DBA, DBB, led stocks lower again today as concerns arose over the failure of global growth, global trade as well as banking insolvency, and sovereign insolvency in the Euro zone.
The bonfire of the world’s major banks, IXG, grew more intense today as India’s Banks, IBN, and HDB, as Brazil’s ITUB, and BBD, Argentina’s BRF, BBVA, GGAL, the UK area banks, IRE, BCS, LYG, RBS, traded lower, which turned US Regional Banks, KBE, such as RF, STI, BBT, HBAN, NTRS, BK, USB, FITB, STT, ORIT, GBCI, and the Too Big To Fail Banks, RWW, such as C, lower.
It was the infrastructure stocks that led the BRICS, EEB, lower today; BRXX, RSX, CHXX, INXX all traded strongly today.
It was the small cap shares, VSS, and the emerging market small cap shares, EWX, that led the world stocks, VTI, lower. It was the trade lower in the Real Estate REITS, RWR, that turned Real Estate, IYR, finally, decisively and conclusively lower today.
Today’s financial events evidence the handiwork of God to introduce the Kingdom of His Son, Jesus The Christ.
John the Revelator wrote of a vision, that is a dream given to him by angels, where a head on a monster is wounded to death, Revelation 13:3. This head wound is an apparent mortal blow to the institution of finance, commerce and trade, that is going to occur very soon as banks implode over the failure of government in the European periphery, as well as the failure of the world central banks’ monetary authority to stimulate global growth and trade, particularly in India and Brazil as well as Argentina.
It was National Bank of Greece, NBG, that led the European Financials, EUFN, lower today; and Reuters reports Influential German magazine calls for Greek exit from euro. But this is not, repeat not going to happen, as God’s word reveals in Revelation 13:1-4, that regional global governance is going to rise up out of thr profligate Mediterranean nation state of Greece, GREK, to occupy in seven heads, that is mankind’s seven institutions, and in ten horns, that is in the world’s ten regions.
This monster of totalitarian collectivism, statism and debt servitude, will be equaled in power by the rise to power of a global leader, a European ruler, Revelation 13:12, perhaps Herman van Rompuy, who will be supported by a European banker, Revelation 13:11-18, perhaps Jens Weidman, who Bloomberg reports as relating More Aid for Greece as Possible, Sueddeutsche Says. European Central Bank council member Jens Weidmann said further financial support for Greece can be considered if the country sticks to its promises, Sueddeutsche Zeitung reported, citing an interview. “If Greece isn’t keeping its word then it is a democratic decision,” Weidmann, who also heads Germany’s Bundesbank, is quoted as saying. “Consequently, it misses the basis for further financial support.”
In today’s news
Fiona Govan in The Telegraph relates Spain’s Most Indebted Village Pays The Price Of Its Profligacy. In the Spanish country just East of Madrid stands the village of Pioz, popuation 3600, which has the dubious titled of most indebted place in the troubled country.