Archive for June, 2012

Bible Prophecy Reveals A Diktat Money System Is Rising To Replace The Fiat Money System

June 28, 2012

Financial market reports for Thursday June 28, 2012

1) … Oil, USO, Gold,, GLD, and Silver, SLV, traded sharply lower today, turning Commodities, DBC, lower,  as the US Dollar, $USD, UUP rose, and the commodity currencies, Brazilian Real, BZF, Canadian Dollar, FXC, and the Australian Dollar, FXA, fell in front of the European Leaders’ Summit.   

European Financials, EUFN, traded sharply lower, turied World Financials, IXG, lower. The UK Banks, BCS, RBS, LYG, HBC, fell very sharply, Germany’s DB, fell strongly, and Switzerland’s UBS and CS traded lower.

Silver Miners, SIl, Gold Miners, GDX, GDXJ, and Copper Miners, COPX, traded sharply lower on the lower precious metal commodity, JPP, prices. Of significant note, Jack Chan of JC’s Buy and Sell Signals, gave a sell signal on gold , GLD, exactly a week ago today on Thursday June 21, 2012.    

Bonds BND, rose, as US Stocks, VTI, led by Airlines, FAA, Biotechnology, XBI, Nasdaq 100 QTEC, Nasdaq, QQQ, Networking, IGN, Cloud Computing, IGN, traded lower, turning world stocks, VT, lower. .

2) … EU news in front of the June 2012 Summit Of European Leaders.

Open Europe relates Spanish Prime Minister Mariano Rajoy told MPs that he will continue to push for the Spanish bailout money to go directly to banks, so that the loan “does not undermine the rights of other holders of [our] public debt.” Meanwhile, El País reports that the deficit of the Spanish central government has reached 3.41% of GDP in the first five months of the year, with the ceiling agreed with the European Commission for 2012 set at 3.5%.  El País El País 2 Telegraph Expansión Expansión 2 El Mundo Repubblica

Open Europe relates Handelsblatt suggests that Luxembourg’s Prime Minister Jean-Claude Juncker is likely to be confirmed as Eurogroup Chairman.

Robert Wenzel of Economic Policy Journal relates Yannis Stournaras, a technocrat that was part of a team that negotiated Greece’s entry to the euro using bogus economic and financial data, has been appointed as new finance minister, the government announced. I relate that he is head of IOBE, an independent economic and business think-tank supported by the Greek federation of industrialists.

Euro Intelligence relates The Padoa-Schioppa report recommends a structural reforms, a monetary stabilization fund, the sacrifice of sovereignty with a European debt agency, and a banking union. Henrik Enderlein, and nine others, of the Tommaso Padoa-Schioppa Group, write Completing the Euro: A roadmap towards fiscal union.  25 years ago, a Study Group on the “Integration Strategy of the European Community” chaired by Tommaso Padoa-Schioppa published a Report that later became the basis for Economic and Monetary Union in Europe. That Report referred to a long-term “social contract” between the Community and its Member States, based on competitive markets, monetary stability, an equitable distribution of the gains in economic welfare, and actual growth performance. Today, this European social contract is at risk. A break-up of the euro area can no longer be excluded. We are concerned that a possible process of monetary disintegration, once started, could prove impossible to stop and would therefore run the risk of leading to process of political and economic disintegration in the euro area and the European Union. i

Policy actions in four areas are required.
The first element is the completion and fostering of the Single Market in order to allow the real exchange rate channel to work more effectively. The euro-area needs to become a truly integrated economic area. To achieve this goal, domestic institutional adjustments to increase the responsiveness of wages and prices are also required.
The second element is a cyclical stabilization insurance fund to counter some of the effects of the “one size fits none” monetary policy. Such an insurance fund, which should be created outside the EU budget and remain under direct control of national parliaments, would work in a largely automatic fashion and, if rightly devised, not lead to long-term transfers in only one direction.
The third element is a rebalancing of fiscal rights and fiscal duties in the common currency area. We argue that euro area countries should become subject to much stricter budgetary surveillance and be willing to give up some elements of their sovereignty when they are cut-off from the market. The core principle should be: sovereignty ends when solvency ends. But at the same time, the euro-area as a whole should ensure that adequately priced access to sovereign financing is generally possible, also in crisis times. To allow for the implementation of that third element, we suggest the creation of a European Debt Agency (EDA) that would allow a flexible refinancing possibility to countries in exchange for a stepwise transfer of sovereignty.
The fourth element is a euro-area banking union. To solve the paradoxical set-up of financial market integration and banking supervision, the creation of a euro-area banking supervision authority with micro-prudential supervision powers is required. This role could be conferred upon the ECB. In parallel, the creation of an agency administrating a European deposit insurance would be required.
EuroIntelligence relates the original report is found on the Notre Europe website, and we have a summary of the challenges and conclusions here.   

Curiosity Cat relates The new road map to the United States Of Europe. The latest document published in

Consilium Europa titled Towards a Genuine Economic and Monetary Union, was released by European Council President Herman Van Rompuy and was drawn up with the presidents of the EU Commission, the Eurogroup and the European Central Bank. Eurogroup president Mr Van Rompuy said it was “not meant to be a final blueprint”, but that he expected “to reach a common understanding amongst us on the way forward” at the EU summit.

John Mauldin asks What will Germany Do?

Telegraph relates Q&A: the Gang of Four’s euro plan. It is billed as the master plan to save the euro and has been grandly entitled “Towards a genuine Economic and Monetary Union”.

3) … In general news of the day

Jim Quinn of The Burning Platform  asks Who destroyed the middle class — Part 3
Martin Armstrong asks How do empires die?
Gary North relates Panic in the new world order
Bloomberg reports Congress said to delay automatic budget cuts until May
Reuters reports Moody’s downgrades 11 Brazilian banks. Moody’s Investors Service said it had downgraded the ratings of 11 Brazilian financial institutions in line with its review of global banks.
Telegraph reports Banks face billions of dollars of claims after Barclays settles. Damages claims running to billions of dollars against the world’s biggest banks have been given fresh “credibility” by Barclays £290m Libor settlement, lawyers said

4) … Bible prophecy reveals a diktat money system is rising to replace the fiat money system.

The seigniorage of Neoliberalism, that is the moneyness of the Milton Friedman Free To Choose floating currency regime is history. The seigniorage of Neoauthoritarianism, that is the Guido Westerwelle, ECB, and Troika diktat money system is rising to rule the Eurozone..

Through fate, Revelation 2:26-28, Revelation 1:1, and not any human action; the debt trade that underwrote capitalism, is the paradigm of a bygone era.  The new paradigm of debt servitude that is underwriting regional governance is coming to the forefront of a new era of human political and economic activity.

We are witnessing the fulfillment of bible prophecy with the establishment of the Guido Westerwelle’s Future Of Europe Group, The Manifesto for a New Europe will be announced in September.

Open Europe reported France to join Guido Westerwelle’s Future Of Europe group in July 2012. The Times reports that, from next month, France will join German Foreign Minister Guido Westerwelle’s ‘Future of Europe’ group – a group of ten EU member states, excluding the UK, that has been meeting to discuss the future political architecture of the EU, including the prospect of creating a European finance minister, a beefed up European border police force and a European army. In an interview with Le Figaro, Westerwelle said, “We need to discuss without taboos the ways to strengthen Europe and make it more effective and capable to act.”.

God’s word of prophecy, in Daniel 2;30-33, that a ten toed Kingdom of regional governance, of partial iron, that is diktat, and partial clay, that is democracy, will emerge from the UK and US iron hegemony, that has ruled the world since 1776. This will come through Financial Armageddon, seen in Revelation 13:3.

Then, the ten horned beast, that is the ten nation monster of the “Future of Europe Group” totalitarian economic rule, will rise from the debt crisis of the Mediterranean Sea nation of Greece, as foretold in Revelation 13:3-4.

The First Horseman of the Apocalypse, Revelation 6:1-2, is passing the baton of sovereignty from failed nation states to sovereign bodies and and sovereign leaders who will announce regional framework agreements, waive national sovereignty and pooling sovereignty regionally. The dynamos of Neoliberalism were global growth, global trade, and corporate profit and are now winding down crony capitalism and European Socialism. The dynamos of Neoauthoritarianism are regional security, regional stability, and regional sustainability and are now powering up regionalization.

There is waiting in the stage of Europe’s wings, the most capable of sovereigns. Soon the Sovereign Lord God, Ephesians, 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the EU’s Leader, Revelation 13:5-10; and he will be accompanied by the Seignior, the EU’s Finance Minister, Revelation 13:11-18.

Candidates for the Sovereign include Olli Rehn, Herman van Rompuy, Jean-Claude Juncker, and Guido Westerwelle; and candidates for the Seignior include Jens Weidmann and Mario Draghi.

National Bank Of Greece And Downgraded Banks Plummet Leading Stocks And Currencies Lower … Four EU Leaders Publish Draft Proposal For EU Banking Union … Soros Calls For A European Debt Union

June 25, 2012

Financial Market report for June 25, 2012

The National Bank of Greece, NBG, Banco Santander, SAN, Bank of America, BAC, Citigroup, C, Credit Suisse, CS, UBS AG, UBS, Barclays, BCS, Lloyds Banking Group, LYG, Nomura Holding, NMR, Itau, ITUB, Banco Bradesco, Deutsche Bank, DB, led European Financials, EUFN, Emerging Market Financials, EMFN, World Financials, IXG, and US Financials, XLF, lower.

The chart of Brazil’s Itau, ITUB, shows three black crows; this bank is severely decapitalized.  Forbes reports Harder times coming for Brazil, says Bank For International Settlements. Brazil is not going to escape the onrushing collapse of the developed economies, warns the Central Bank of Central Banks, known as the Bank for International Settlements. In its 214 page annual report released over the weekend, BIS said that Brazil, EWZ, and India, INP, would suffer an accentuated decline in economic growth due to the problems in the Western powers, most notably in Europe. (Hat Tip to Between The Hedges). I comment that over the last year the Brazilian Real, BZF, has lost 17% to competitive currency devaluation, the most of any currency.

China Minerals, CHIM, led Aluminum, ALUM, Copper, COPX, Coal, KOL, Uranium, URA, and Rare Earths, REMX, lower. Semiconductors, XSD, Shipping, SEA, Small Cap Energy, PSCE, Energy Service, IEZ, OIH, traded lower. Electric Utilities, SO, DTE, and XEL, led Utilities, XLU, lower.  Smartfone, FONE, Cloud Computing, SKYY, and Networking, IGN, traded lower.

Greece, GREK, Spain, EWP,  and Italy, EWI, led Sweden and South Korea lower. Brazil, EWZ, led the BRICS, EEB lower. Argentina, ARGT, traded lower on the trade lower in its banks, BBVA, BFR, BMA. Reuters reports Coeur d’Alene looking at options for Argentine mine.

The weekly chart of International Telecom, IST, shows the death of money in March of 2011; and weekly chart of Energy Service, IEZ, shows the death of credit, that is debt, in March of 2012.

The chart of the small cap pure value shares, RZV, shows a trade close at 36.17, which is just above the middle of a broadening top pattern going back to May 2006; as Street Authority relates when you see the broadening top, the market will eventually drop.

Through fate, Revelation 2:26-28, and Revelation 6:1-2; and not any human action; the debt trade that underwrote capitalism, is the paradigm of a bygone era.  The new paradigm of debt servitude that is underwriting regional governance is coming to the forefront of a new era of human political and economic activity.

The seigniorage of Neoliberalism, that is the moneyness of the Milton Friedman Free To Choose floating currency regime is history. The seigniorage of Neoauthoritarianism, that is the Guido Westerwelle, ECB, and Troika diktat money system is rising to rule the Eurozone.

China Infrastructure, CHII, and China Industrials, CHIX, traded lower as Marketwatch reports China steel sector slows, profits down. Growth of China’s crude-steel output slowed in the irst five months as demand dropped amid a cooling domestic economy, according to data from the country’s top economic planner. Crude-steel output increased by 2.2% year-on-year to 296.26 million tonnes during the January-May period, down from 8.5% growth during the same period last year, data with the National Development and Research Commission showed. In May, crude-steel output rose 2.5% from a year earlier, 5.3 percentage points lower than last year. Aside from output, the sector’s profits also slipped. Steel producers had profit drop 49.5% from a year earlier to 39.5 billion yuan (6.27 billion U.S. dollars) in the first four months. (Hat Tip to Between The Hedges)

Egypt, EGPT, jumped higher as Edmund Blair and Marwa Awad of Reuters relates Egypt’s new president starts building government.
Mohammed Mursi, Egypt’s first freely elected president whose powers have already been curbed by the army, began work on a coalition on Monday after touring his new palace, once home of Hosni Mubarak who banned his movement for three decades. Declared winner on Sunday a week after a tumultuous run-off vote that pitted him against a former air force chief, the Islamist faces the challenge of meeting sky-high expectations in a nation tired of turmoil while the economy is on the ropes. But his campaign pledge to complete the revolution that toppled Mubarak last year but left the pillars of his rule intact will come up against the entrenched interests of the generals who are in charge of the transition to democracy.

Shortly before the historic presidential vote, a newly elected Islamist-led parliament was dissolved by the army based on a court order, and the generals issued a decree setting limits on the president’s remit, which cuts into Mursi’s powers to act but exposes him to blame for any failures. Critics at home and in the West called it a “soft coup”. One pressing concern – on which many Egyptians are likely to judge his performance – will to be to revive the economy of the world’s most populous Arab nation. Monday’s stock market rally, at least partly fuelled by relief that the vote and result passed off without violence, may encourage the new president, but he still has to prove to wary longer-term investors that Egypt is on the road to recovery. Egyptian newspapers welcomed Mursi’s win over Ahmed Shafik, Mubarak’s last prime minister, as a victory for the people, although many more liberal-minded Egyptians worry his conservative group will slowly whittle away at social freedoms.

An aide said Mursi then went to the Defence Ministry for talks with the head of the ruling military council’s Field Marshal Hussein Tantawi and the army-appointed Prime Minister Kamal al-Ganzouri. They discussed forming a new government at the meetings, which Egyptians will see as a sign that real power still lies with the army. As president, Mursi can appoint the cabinet. His aides say he has already reached out to politicians from outside the Brotherhood such as reformist Mohamed ElBaradei, who has yet to publicly respond. But legislative powers remain with the army while the parliament is dissolved, restricting his power to act. Egypt’s army-appointed government, led by al-Ganzouri who also served in the 1990s as prime minister under Mubarak, submitted its resignation on Monday but was asked to stay on temporarily until Mursi, who has yet to take the oath of office, put a team together, Information Minister Ahmed Anis said “The revolution reaches the republican palace,” wrote Al-Shorouk newspaper. Another, Al-Akhbar, quoted from Mursi’s victory speech: “I am a servant of the people and an employee of the citizens”.

The US Dollar, $USD, and Bonds, BND, rose today, with margined bonds, BOND, and Mortgage Backed Bonds, MBB, rising to new highs. The Interest rate on the 10 Year US Government Note, ^TNX, traded lower to 1.60% as US Government Debt, ZROZ, EDV, TLT, rose … Commodities, DBC, rose as Oil, USO, Timber, CUT, and Base Metals, DBB, traded unchanged, and as the chart of Agricultural Commodities, RJA, JJA, shows their blast higher. Silver, SLV, and Gold, GLD, traded higher from last week’s sell off.

In today’s news

Open Europe relates Four EU leaders publish draft proposal for EU banking union; Greater EU control over spending and taxation demanded by Germany will require Treaty change.
Ahead of this week’s EU summit, EU Council President Herman Van Rompuy, European Commission president José Manuel Barroso, ECB President Mario Draghi, and Eurogroup head Jean-Claude Juncker, have published a draft proposal setting out plans for a banking union including the creation of a single supervisor and rulebook for banks in the EU, and a common deposit insurance and bank resolution fund. Britain and other non-eurozone countries would be free to opt out. The paper also included longer term plans for Eurobonds and a eurozone redemption fund, but admitted that greater EU control over taxation and spending – demanded by Germany before any steps for debt pooling can go ahead – are likely to require EU treaty changes. The draft also calls for the ESM – the eurozone’s permanent bailout fund – to be allowed to lend cash directly to banks.

In an interview with Der Spiegel, German Finance Minister Wolfgang Schäuble conceded that moves towards further political and economic integration would require amendments to the German constitution – which would have to be approved via a referendum – “much sooner than I had anticipated… a few months ago I would have said never in my lifetime, now I’m not so sure”. Schäuble argued that “To date member states have always had the last word on European issues. This cannot remain the case. In important policy areas we need to transfer more competencies to Brussels without every member state being able to block decisions”.

Open Europe’s Director Mats Persson was cited by Polish daily Rzeczpospolita discussing the potential for fiscal and banking union within the eurozone as well as Polish news website Wiadomosci24. Open Europe’s research was also cited by Spain’s Capital Bolsa. EUobserver FT CityAM Irish Times Irish Times 2 Spiegel WSJ WSJ 2 WSJ 3 IHT IHT Reuters FAZ SvD Näringsliv Kathimerini Bloomberg: Johnson Mail Rzeczpospolita

Open Europe relates Poll shows Europeans distrust Greeks; Documents show Greece violated agreements by hiring 70,0000 civil servants in 2010 to 2012.
An Ifop Institute poll of 4,000 people in Germany, France, Spain and Italy showed 78% of Germans and 65% of French people wanted Greece to leave the Eurozone, with 51% in Spain and 49% in Italy also backing a Greek exit. Large majorities in all countries surveyed expect Greece to never pay its debts. Schäuble suggested the poll showed “how much trust Greece has forfeited among Europeans.”

Separately, Greek daily To Vima reports that, according to two separate internal documents,  one from the EU-IMF-ECB Troika and another one from Greece’s interim Finance Minister George Zanias, Greece violated the agreements with its creditors as it hired a total 70,000 civil servants in 2010-2011.

Open Europe relates Bond deal with German länder paves way for approval of fiscal treaty.
At a meeting on Sunday with representatives of Germany’s 16 Bundesländer, German Chancellor Angela Merkel agreed to the introduction of bonds issued jointly by the regional administrations and the federal level government in exchange for their support for ratifying the fiscal treaty in the Bundesrat, the upper house of the German parliament. However the both the fiscal treaty and the ESM treaty will still have to be given the all-clear by the German Constitutional Court. Euobserver EUobserver 2 FAZ Handelsblatt

Open Europe relates In an interview with the BBC’s Andrew Marr show, Tony Blair said, “The only thing that will save the single currency now is a sort of grand plan in which Germany is prepared to commit its economy fully to the single currency”, adding, “If they sort it all out and Europe moves forward again then Britain is going to have a very interesting choice to make”. BBC: Andrew Marr Telegraph Guardian Times Mirror

Euro Intelligence relates El Pais reports Spain’s new toll road schemes face catastrophic losses as the economy goes  from boom to bust.
(I comment that crony capitalist infrastructure investment in Spain led to the construction of ghost roads, ghost cities, and ghost airports, via schemes of municipal lending. New schemes of debt servitude coming through announcement of regional framework agreements will apply debt to all residents of the Eurozone)

Euro Intelligence relates Simon Johnson in Bloomberg article says JP Morgan and US Banks may not survive the collapse of the euro.

Euro Intelligence relates Wolfgang Münchau in FT argues that Mario Monti should stand up to Angela Merkel and say that Italy cannot remain in the euro without joint debt.
It falls to the Italian prime minister to speak truth to power and stand up to Angela Merkel and tell her that the eurozone cannot continue with debt mutualisation. Munchau says the problem is that Germany’s internal debate has gone off in a wrong direction some time ago, and that it will be very difficult for Angela Merkel to do what needs to be done. But she is afraid of an Italian exit. Monti must stand up at the summit and say he cannot remain prime minister if this summit fails to agree a crisis resolution, and that Italy cannot remain a member of the eurozone.

Euro Intelligence relates George Soros in FT says Germany threatens European stability.
A lot is at stake in this week’s European summit. He says that even if a catastrophic accident can be avoided, there is a danger that the eurozone creates its permanent mezzogiorno as debtor countries cannot recover their competitiveness. He makes a concrete proposal to establish a fiscal authority that managers the banking and the fiscal union. This is how it would work: “There is a missing element in the current plans for the June summit: a European Fiscal Authority (EFA) which, in partnership with the ECB, can do what the ECB cannot do on its own. It could establish a debt reduction fund – a modified form of the European Debt Redemption Pact that was proposed by Chancellor Merkel’s Council of Economic Advisors and is endorsed by the Social Democrats and Greens. In return for Italy and Spain undertaking specified structural reforms, the fund would acquire and hold a significant portion of their outstanding stock of debt.”

Reuters relates Greek Finance Minister Vassils Rapano Resigns Over Poor Health, Deepening Debt Crisis.

Ambrose Evans Pritchard writes German Chancellor Angela Merkel has shot down calls for full mobilisation of the eurozone’s bail-out funds to halt the raging bond crisis in Spain and Italy, ignoring unprecedented pleas for action from the International Monetary Bloomberg reports Soros warns of Fatal Fiasco unless EU forms joint debt fund.

Bloomberg relates Merkel woos German States to back Fiscal Pact, Spiegel says. Chancellor Angela Merkel is offering federal aid to Germany’s states in a bid to win their parliamentary support for the European Union’s fiscal pact, Der Spiegel reported, without saying how it got the information. Merkel proposed this month that the federal government pick up all of any fine that’s due if Germany’s total public deficit exceeds limits set in the pact, the magazine said today. The federal government normally pays just 65 percent of such fines with the rest falling to the states. Merkel lacks a majority in the upper house of parliament, or Bundesrat, which groups delegates of Germany’s 16 states. Two-thirds majorities in both houses are needed for Germany to ratify the fiscal pact.

The Telegraph relates Germany tells Greece to stop asking for help and start cutting budgets. Germany has told Greece to stop asking for more help and get on with implementing the reforms it has already promised as tensions mount before this week’s crucial summit of European Union leaders.

Zero Hedge reports Wolfgang Schäuble tells Spiegel If a united Europe is to work, there must be an abdication of national sovereignty.  Spiegel asks, With all due respect to your vision, is there truly more willingness today among EU member states to give up sovereignty than there was in the 1990s? Schäuble responds, The recognition that this is necessary, and the willingness to do so, has certainly grown due to the crisis, and not just in Germany. I would much prefer that we not have so many crises, and particularly not such severe ones. But every crisis also includes the opportunity to recognize what is necessary [regarding European sovereignty]. That’s what led to the fiscal pact, in which 25 EU countries pledged to improve their fiscal discipline. And that’s also how the new Europe will come about.” Is it finally becoming clear to even the most inept financial journalists what the German endgame is?

Mike Mish Shedlock relates Capital controls hit Spain.

Lancaster Online relates Foreclosures leave empty eyesores.

IB Times asks Will curbing gold imports save India’s economy?

UK, US and Swiss Banks Downgraded … World Slides Into Depression … France To Join Guido Westerwelle’s Future Of Europe Group … Europe’s 27 Heads Of State Will Meet Next Thursday And Friday

June 23, 2012

Financial Market report for Friday June 22, 2012; this is the twelfth week of entry into the Second Great Depression.

1) … UK, US and Swiss banks were downgraded this week as the world slid into depression.  

UK banks downgraded included Royal Bank of Scotland, RBS, Barclays, BCS, and HSBC, HBC. US banks downgraded included Bank of America, BAC, Citigroup, C, Goldman Sachs, GS, and JPMorgan, JPM, Morgan Stanley, MS. Swiss Banks include UBS AG and Credit Suisse, CS,  Elaine Meinel Supkis writes The top 5 banks, all of which were degraded by Moody’s, hold by far and away, the lion’s share of the Derivatives Beast. This is both intolerable (any disaster with the sale of derivative contracts will instantly crash these stupid banks) and impossible to continue forwards; (These banks are JPM, C, BAC, GS, MS).

Andre Damon of WSWS rites A global slide into depression. The events of the past several months underscore two fundamental features of the crisis that emerged out of the 2008 financial collapse: 1) that it is systemic, not temporary; and 2) that it is global, effecting every country in the world

World stocks, VT, traded unchanged this week as Commodities, DBC, traded 1.9% lower as BNO, -8%, OIL, 7.5%, USO, 7.1%, SLV, -6.1%, GLD, -3.6%, DBB, -3.5%, and RJA, rose 2.9%. Of significant note Jack Chan of JC’s Buy and Sell Signals, gave a sell signal on gold , GLD, on Thursday June 21, 2012.

Mortgage REIT Annaly Capital Management, NLY, rose to new high as Mortgage rates hit new lows

2) … We are witnessing the fulfillment of bible prophecy with the establishment of the Guido Westerwelle’s Future Of Europe Group, The Manifesto for a New Europe will be announced in September.

Open Europe reported this week that France to join Guido Westerwelle’s Future Of Europe group next month. The Times reports that, from next month, France will join German Foreign Minister Guido Westerwelle’s ‘Future of Europe’ group – a group of ten EU member states, excluding the UK, that has been meeting to discuss the future political architecture of the EU, including the prospect of creating a European finance minister, a beefed up European border police force and a European army. In an interview with Le Figaro, Westerwelle said, “We need to discuss without taboos the ways to strengthen Europe and make it more effective and capable to act.”

On March 2, 2012, Valentine Pop of EUObserver reported German ‘future of Europe’ meeting irks partners. German foreign minister Guido Westerwelle has irked some of his EU colleagues by inviting only a select few to a dinner on Tuesday (20 March) to discuss the ‘future of Europe’ after the economic crisis.

The meeting does not appear on the official website of the German foreign ministry as it is meant to be an informal event at the Villa Borsig, north of Berlin. Invited were the foreign ministers of France, Italy, Belgium, Luxembourg, Netherlands, Austria, Denmark, Poland, Portugal and Spain. But by leaving out 17 of the EU’s 27 states, Westerwelle has stepped on the toes of some of his colleagues.

A diplomat from Sweden, one of the non-invitees, told Spiegel magazine that the German foreign minister was not contributing to EU co-operation by leaving some countries out.

The Danish foreign minister was invited, but refused to participate. “We have a government meeting that evening. Of course I am willing to discuss EU topics. But us ministers have to weigh which meetings are important and which are not,” Villy Sovndal said in Copenhagen last weekend when asked by German Radio about Westerwelle’s event.

The German minister also faces criticism in Ireland, another country not on his guest list

From Dublin’s perspective, Westerwelle’s debate on the future of Europe is seen as unhelpful at this moment in time, as the government is preparing a referendum on the Germany-inspired treaty on fiscal discipline, the Irish Times reports.

A recently ousted leader of the German Liberal Party, Westerwelle is struggling to maintain his credibility both internally and on the European stage. His idea to set up a “Future Group” to discuss issues ranging from the EU’s democratic deficit to immigration and Schengen is aimed at bolstering his status.

“We have to open a new chapter in EU politics. We cannot limit ourselves to crisis management, but we have to show that Europe can also offer political perspectives,” Westerwelle said last Friday when arriving in Copenhagen for an informal meeting of foreign affairs ministers.

There can be abandonment of the road to serfdom, God ordained a United States Of Europe in eternity past, and revealed it by the Prophet Daniel in Daniel 2:30-33, and the Apostle John in Revelation 13:1-4.

Today, June 22, 2012, Stephen Evans of The BBC reports More Europe, Germany’s battle-cry for the Euro zone.  Chancellor Angela Merkel and her Foreign Minister Guido Westerwelle say the crisis needs “more Europe”.

“More Europe means that we must give up more powers to Europe,” Mrs Merkel says. She said it again after meeting the leaders of Spain, France and Italy in Rome: “The lesson of this crisis is more Europe, not less Europe.”

But is Berlin’s ceding power to Brussels also the route to a United States of Europe?

A picture of the German conception of Europe’s future is emerging from the utterances of the German foreign minister, Guido Westerwelle, and through the newly published interim report of what is known as the Future Group, which he set up.

The proposals are:
• More European power to determine the economic and tax policies of the member states. There should be a “transfer of sovereignty” to the European centre
• A strengthening of the EU’s “foreign office”, with a common European foreign and security policy
• A smaller European Commission able to make decisions faster
• A bigger role for the European Parliament to make “stronger democratic legitimacy”
• A directly elected President of Europe
• A European army

Is it a United States of Europe?     There are certainly similarities with the USA – with its central power over economics and common foreign policy. Without saying United States of Europe, Mr Westerwelle justifies the move to “more Europe” by citing the current crisis in the eurozone.

Disconnect: Prime Minister Cameron sees too much integration as harmful. “It is the worst crisis that Europe has ever faced. We have to learn the right lessons from it. Decision-making in Europe is often too slow,” he says. “Unfortunately, a cold wind of repatriation is sweeping through the European Union. The grand idea of Europe is in danger.” He goes on: “But the truth is that we need more Europe, not less. Europe must stand up for itself, for the idea of cultural unity. Steps towards a genuine political union would make a tangible contribution to ending the crisis.”

Mr Westerwelle has some weight behind him. A Future of Europe Group that he set up is made up of fellow foreign ministers from Belgium, the Netherlands, Luxembourg, Austria, Spain, Portugal, Italy and Poland; 17 of the 27 countries in the European Union were left out, including Britain and Sweden which are both sceptical about more power going to Brussels.

More power for Europe or was it too far too fast?

One Swedish diplomat was quoted by Spiegel magazine as saying that the German foreign minister was not contributing to EU co-operation by leaving some countries out.

And it should be said that what Mr Westerwelle thinks is not always what Mrs Merkel thinks. He may be the foreign minister but he comes from a different party in the coalition. But “more Europe” is their shared desire.

In Britain there is a view, certainly within the Conservative Party which dominates the coalition government, that the lesson to be drawn from the crisis is that European integration went too fast and too far.

In the Eurosceptic view, European integration was ill-advised because the peoples of Europe were not ready for it. They would baulk, so the argument runs, at being pushed and jostled towards a single identity.
In the German view, pushing towards a unified identity is precisely what now needs to be done.

And today, June 23, 2012, Roger Boyes of The Australian reports Germany plans for beefed-up Europe.  Germany wants to propel Europe towards greater political union and has started to discuss with other EU states the prospect of creating a European finance minister, a beefed-up European border police force and a European army. Britain, it seems, is not part of the conversation.

German Foreign Minister Guido Westerwelle told London’s The Times newspaper he was not making demands but rather putting ideas on the table to boost international confidence in the future of Europe.
“The discussion about the future of the EU has to begin,” he said. “One of the consequences of the situation is that we have to accelerate integration in Europe. No investor in the world will invest in Europe if he doesn’t have the feeling that Europe believes in itself and is working on its future.”

Mr Westerwelle was speaking after the latest meeting of the so-called Future of Europe group, which pulls together his counterparts from Belgium, Denmark, Luxembourg, Austria, The Netherlands, Poland, Portugal, Spain and, from next month, France.

“Changing the treaty is not on today’s agenda, but many things can be done short of treaty change,” Mr Westerwelle said.

3) … Financial sovereignty is simply good common sense and moral stewardship of one’s financial assets.

The Sovereign Man asks Are You Sovereign?

I believe that the greatest risk we all face is sovereign risk, having everything in a single country (i.e. holding all your eggs in a single sovereign basket). Simply put, if you live, work, own property, store gold, bank, invest, structure a business, hold retirement funds, etc. in a single country, then all your assets and interests are at great risk when something happens in that country..

And the list of things that could go wrong is long: Your assets can be frozen or seized at the whim of any judge, bureaucrat, or police agency and you are “guilty until proven innocent.” Politicians routinely change laws effective immediately (or even worse retroactively) meaning capital gains taxes and income taxes can rise dramatically overnight or NEW taxes can be imposed. Considering the alarming rate at which local, state, and federal governments are going broke, these threats become more realistic every day and in fact are already happening.

Capital controls and currency debasement are also major issues. Desperate governments have historically tried to control their money supplies by restricting the free flow of capital across borders, preventing businesses and citizens from moving money out of the country, holding it captive to inflationary policies, senseless regulation, and higher taxes.

Sovereign risk threatens everyone’s livelihood, and not diversifying this risk is putting all of your eggs in one very frail little sovereign basket. Your livelihood depends on being able to properly diversify this risk. For those who are well prepared, this is a time not of fear, but of once in a century opportunity.
During this rough period, the die shall be cast for generations. Fortunately, we can clearly see this coming and there is still a bit of time to act…but diversifying Sovereign Risk requires a NEW, more global principle of diversification.

The new global principle of diversification.

The old principle of diversification is commonly applied to financial assets. You put some money in stocks, bonds, real estate, maybe even precious metals like gold and silver.

Holding all your assets in the US Dollar (or any single fiat currency) is financial suicide. Unless you take measures to protect yourself your dollar-denominated assets are going to collapse in value and your standard of living will be painfully lower.

So how do you diversify sovereign risk?

If this sounds like a hopeless situation, don’t worry because it’s entirely possible to manage all these risks. In fact, thousands of smart people just like you are already doing it. It goes back to the NEW Global Principal of Diversification and what I call planting multiple flags.

Simply put, if you don’t have all your assets under the control of a single government you have diversified your sovereign risk because no single government has control over your assets. It’s a simple concept and it’s perfectly legal.

Think about how things work under the old system – people are effectively given pre-packaged options for the major decisions in their lives. There are pre-defined career paths for becoming a doctor, a lawyer, a pilot, a nurse, and almost any other profession you can imagine.

When it comes to retirement planning, you just answer a menu of questions to define your risk profile and instantly you have a model portfolio to follow. There’s little thinking involved…and little choice either considering the limited number of mutual funds available in most retirement accounts.

Reject limiting choices

I call these “limiting choices” and they are deeply ingrained in our modern society. Our realities are defined not by us, but by people and regulations that govern our thinking, restrict our options, and constrain our creativity.

When you walk into a bank, for example, no one is going to sit down with you and say:
“Hey, I think you should protect yourself from a depreciating currency. Let’s talk about precious metals like gold and silver

4) …  Europe’s 27 heads of state will meet next Thursday and Friday.

5) … In Today’s News

Bloomberg reports Manufacturing slump deepens from euro area to China

Business Insider reports Why Russia is extremely protective of Syria

Anthony Torres  and Alex Lantier of WSWS report France’s New Anti-capitalist Party backs pro-imperialist guerrillas in Syria  The 15-month-long conflict in Syria between the Syrian army and the pro-imperialist “rebel” forces has intensified over the last weeks.

Paper Money Collapse The death of banks, and the future of money.

WSJ reports Europe finally learns about subordination: Bailouts’ creditor hierarchy scares private bondholders

US Dollar Rises As Silver, Gold, Oil, Base Metals, Agricultural Commodities, Timber, Cotton, Stocks, And Currencies Trade Lower … As Global Growth Falls, And As Fed Limits Stimulus To An Extension Of Operation Twist, And As Fears Of A European Political Union Emerge

June 22, 2012

Financial Market Report for Thursday June 21, 2012

The US Dollar, $USD, UUP, rose as Junior Gold Miners, GDXJ, Silver Miners, SIL, Gold Miners, GDX, Uranium Miners, URA, Rare Earth Miners, REMX, Copper Miners, COPX, Coal Miners, KOL, Small Cap Energy, PSCE, Energy Service, IEZ, OIH, Energy, XLE, Steel, SLX, Networking, IGN, Semiconductors, XSD, traded lower; and European Financials, EUFN, led Global Banks, IXG, lower, and World Stocks Outside Of The US, ACWX, lower ….. as silver, gold, oil, base metals, agricultural commodities, timber, cotton, and currencies traded lower, as global growth data came in lower once again, and as the US Federal Reserve limited stimulus to an extension of Operation Twist, and as fears of a European Political Union emerged ….. of significant note Jack Chan of JC’s Buy and Sell Signals, gave a sell signal on gold , GLD, today.

Bloomberg reports Commodities Fall to Lowest Since 2010 as Fed Cuts Outlook. Commodities, DBC, dropped to the lowest level in almost 19 months after the U.S. Federal Reserve cut its growth outlook for the world’s largest economy. Crude fell below $80 a barrel in New York for the first time since October. The Standard & Poor’s GSCI Spot Index of 24 commodities fell for a second day, losing as much as 1.5 percent to 566.85, the lowest since November 2010, and was at 568.91 at 9:49 a.m. in London. Raw materials will enter a bear market if they finish around 570.26, or 20.3 percent below their Feb. 24 closing high. I comment that the ratio of Stocks to Commodities, VT:DBC, has never been higher.

Strong US stock fallers included cement manufacturer, EXP, small tool manufacturer, LECO, paper manufacturer, NP, construction services, USG, FLR, MTRX, Auto Parts Manufacturers, AXL.

China Infrastructure, CHXX, Thailand, THD, Hong Kong, EWH, Singapore, EWS, China Small Caps, HAO, China, YAO, Brazil Small Caps, EWZS, Switzerland, EWL, Russsia Small Caps, ERUS, Russia, RSX, Australia Small Caps, KROO, Canada Small Caps, CNDA, Sweden, EWD, Germany, GERJ, South Africa, EZA, Australia, EWA, The UK, EWU, Brazil, EWZ, Egypt, EGPT, and the Emerging markets, EEM, all fell strongly on falling currencies. Competitive currency devaluation emerged once again today; the currency demand curve, RZV:RZG, manifested massively bearish harami.

Carry trade investment, came out of Brookfield Infrastructure Partners, BIP, a Bermuda based limited utility partnership, putting an end to the final bastion of neoliberal financed momentum investing. Risk on has turned to risk off in the defensive utility, XLU, shares.

In Today’s News

Bloomberg reports Italy, Spain Heading for Full Bailouts, Fidelity’s Stuttard Says; Italy and Spain, which account for more than a quarter of the euro-area economy, are heading for sovereign bailouts in the next 12 months that will send shockwaves through the global economy, Fidelity Investments’ Jamie Stuttard said. Both sovereigns will likely stumble over debt auctions in the next year, forcing European authorities to find official funding for them to hold the single-currency area together, Stuttard, Fidelity’s head of international bond portfolio management in London, said in a telephone interview on June 19

Bloomberg reports ECB’s Coeure Tells FT EU Fiscal Union Is A `Necessity’; European Central Bank executive board member Benoit Coeure sees increased economic integration in the European Union as an essential step toward stability, the Financial Times reported, citing an interview. Coeure, who is responsible for the ECB’s market operations, told the FT that his answer to people who are in doubt about “the necessity of fiscal union” is that “if they want to keep the euro and have the benefits that the euro has brought to their economies, they have to make steps towards a fiscal union.” Europe is in the third year of an economic crisis and reaching a point where “deeper questions are being asked,” the FT cited Coeure as saying. Central to those questions is the shape of a future banking and fiscal union to bolster the monetary union, Coeure said, according to the newspaper. Without such strengthening, “the system will not be stable and we will continue to experience crises,” Coeure told the FT. Couere said a cut in the ECB’s main interest rate — at 1 percent since December — was “discussed at the last governing council meeting,” and that he “would expect the next council to discuss it again,” the FT reported. While he supports using the EU’s bailout fund to intervene in government bond markets as a stopgap measure, he is not eager for the ECB to take on that role, saying that the Securities Markets Program isn’t considered “the best instrument to use at the current juncture” because it’s not advisable to “mix the central bank with the fiscal authorities,” he told the newspaper.

Bloomberg reports China’s Stocks Decline To 3-Month Low On Manufacturing Concern; China’s stocks fell, dragging the benchmark index to the lowest level in three months, after a report showed China’s manufacturing may shrink for an eighth month in June and the U.S. cut its economic growth estimates. Jiangxi Copper Co. and China Shenhua Energy Co. the biggest copper and coal producers, declined at least 2 percent on concern demand for commodities will slow. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. fell after the 21st Century Business Herald said the four biggest lenders saw net deposits decline by a combined 460 billion yuan ($72 billion) in the first two weeks of this month. The Shanghai Composite Index (SHCOMP) lost 35.5 points, or 1.6 percent, to 2,257.38 at the 11:30 a.m. local-time break, set for the lowest close since March 29 and a weekly decline as financial markets are closed tomorrow for a holiday.

Manufacturing Slump Deepens From Euro Area To China; Euro-area manufacturing output shrank at the fastest pace in three years in June and a Chinese output gauge indicated contraction as Europe’s worsening fiscal crisis clouded global economic-growth prospects. A gauge of euro-region manufacturing fell to 44.8 from 45.1 in May, London-based Markit Economics said today in an initial estimate. That’s the lowest in 36 months. The preliminary reading was 48.1 for a Chinese purchasing managers’ index from HSBC Holdings Plc and Markit. A reading below 50 indicates contraction. A gauge of German manufacturing output dropped to 44.7 in June from 45.2 in the previous month, Markit said today. The French indicator rose to 45.3 from 44.7. Euro-region gross domestic product probably dropped 0.6 percent in the second quarter, according to Chris Williamson, chief economist at Markit. In the year’s first three months, the area’s economy stalled. “The downturn is gathering pace and spreading across the region, with Germany on course for a marginal fall in GDP in the second quarter, though far steeper declines are likely elsewhere,” Williamson wrote in the statement. “Firms are preparing for conditions to worsen in the coming months, with the darker outlook often attributed to uncertainty caused by the region’s ongoing economic and political crises.”

Bloomberg reports In Europe, Idle Car Factories Live On Few places illustrate the troubles of the European auto industry better than Fiat SpA’s vast Mirafiori plant near Turin, Italy. The factory was churning out cars earlier this week but suddenly became a ghost town on Thursday and Friday, its production lines silent and the company’s adjacent headquarters offices almost entirely empty and darkened. The same thing happened on two day earlier this month and will again on four more days in July. Shutdowns similar to those at Mirafiori have become a regular occurrence all across Western Europe and reveal an auto industry crisis that is quietly reaching dire proportions. This as Dietmar Henning of WSWS reports  IG Metall union backs rationalization plans for Opel  The IG Metall union, together with Opel management and the works councils, has taken the lead in ensuring the success of “Strengthening the Opel brand” at the expense of the workforce.

Business Insider reports A Look At India’s Economic And Political Problems That Has Everyone Freaking Out

Businessweek reports Fed expands Operation Twist by $267 Billion through 2012.

Reuters reports Weak global data drags stocks lower

AP reports Fears about global economy push dollar higher

Chris Kahn, AP Energy Writerm reports Oil price drops below $80 for 1st time since Oct.

EuroNews reports Stonehenge summer solstice despite the rain; Grey skies could not darken the mood as hundreds turned out to celebrate the summer solstice at Britain’s ancient Stonehenge site.

Open Europe reports German ratification of ESM and fiscal treaty delayed following request from Constitutional Court;  FAZ: Merkel pressured German President to ignore request from Karlsruhe;
Following a request from the Constitutional Court, German President Joachim Gauck announced he would not sign off either the fiscal treaty or the ESM – the eurozone’s permanent bailout fund – after their expected ratification by the German Parliament next week. Following complaints that the treaties restrict the sovereign budgetary competence of the Bundestag, the Court said it wanted to examine their legality. A decision is expected within two to three weeks, meaning that the ESM is unlikely to be approved by Germany by 1 July, the date on which it is due to be launched.

German Finance Minister Wolfgang Schäuble criticised the decision, saying, “I do not think it is wise for constitutional bodies to communicate publicly with one another.” FAZ reports that the judges were “shocked” that German Chancellor Angela Merkel had allegedly urged Gauck to ignore their request, which they claim could have triggered a constitutional crisis. However, Merkel’s spokesperson denied that this had taken place. Meanwhile, the Finnish parliament ratified the ESM treaty yesterday, while the Slovak parliament did so this morning.
EUobserver FT Telegraph Welt FAZ FAZ 2 ARD Handelsblatt Bild Slovak Spectator Slovak Spectator 2

Zero Hedge comments The Euro Bailout Fund (Which Does Not Exist) Is Being Delayed, As Germany Fires Back Against Broke Europe

Monti: Delay in tackling the euro crisis risks backlash against EU integration;
In an interview with La Stampa and other European papers, Italian Prime Minister Mario Monti warned, “In order to get out well of the eurozone crisis, and the crisis of the European economy, there is an ever-growing need for greater integration. However, if the [EU leaders] fail to tackle the eurozone’s problems quickly, the will of national public opinions, governments and also parliaments would turn upon that greater integration, which is, nonetheless, necessary. This is a risk I can see even in our own parliament, which has been traditionally pro-EU integration and now is not anymore.” EUobserver El País: Monti Guardian Guardian: Monti La Stampa: Monti Le Figaro EUobserver 3 El País Times Mail FT CityAM Irish Times FT 2 WSJ Bloomberg View WSJ Review&Outlook Corriere della Sera

France to join Westerwelle’s ‘Future of Europe’ group next month;
The Times reports that, from next month, France will join German Foreign Minister Guido Westerwelle’s ‘Future of Europe’ group – a group of ten EU member states, excluding the UK, that has been meeting to discuss the future political architecture of the EU, including the prospect of creating a European finance minister, a beefed up European border police force and a European army. In an interview with Le Figaro, Westerwelle said, “We need to discuss without taboos the ways to strengthen Europe and make it more effective and capable to act.”

Separately, in an interview with several European papers, Italian Prime Minister Mario Monti said, “Look at the UK: from the economic point of view, the decision not to join the euro may have had some advantages in the short term, but the UK’s influence on determining the broad orientations of European policies has weakened.”

The Economist’s Bagehot writes that “the chances of Britain leaving the EU in the next few years are higher than they have ever been.” Times Le Figaro: Westerwelle La Stampa: Monti Economist: Bagehot

Ed Miliband to change Labour’s stance on EU migration;
In a speech today, Labour leader Ed Miliband will say, “It was a mistake not to impose transitional controls on accession from Eastern European countries. We severely underestimated the number of people who would come here. We were dazzled by globalisation and too sanguine about its price.” He will promise measures to help British workers, including setting up an early-warning system, run by the Migration Advisory Council, to highlight areas where the workforce is “dominated by low-wage labour from other countries” and forcing medium and large employers to declare if more than a quarter of their workforce is foreign.
Open Europe research BBC Guardian Telegraph Mail Independent

Euro Intelligence provides the best of news reporting and analysis in its for fee daily email briefing and relates Samaras presents his conservative government with Vassilis Rapanos as finance minister;
Prime Minister Antonis Samaras on Thursday unveiled a 39-member cabinet, centered around MPs from his New Democracy party, Kathimerini reports. The Cabinet is dominated by conservatives, who hold 30 of the 39 positions. Of these, 24 are ND deputies and the others are figures associated with the party. The new finance minister is Vassilis Rapanos, who is not linked to ND at all, but has worked with PASOK governments as a civil servant. The new government promised on Thursday to renegotiate the terms of the country’s bailout without endangering its future in the euro. At the first cabinet meeting, Samaras said his ministers would take a 30% pay cut and told them to use government cars as little as possible in an effort to lead the debt-laden nation by example. The government will also seek to extend the payment of unemployment benefits to two years from one, to offer benefits to the self-employed without work and to limit public sector lay-offs, the official told Reuters.And The FT describes him as a career public servant with close knowledge of Greek public finance and strong views on tax collection and how to combat tax evasion.

Bundesbank opposes Monti plan to let the ECB buy troubled Eurozone government bonds as an agent of the EFSF/ESM as such would constitute monetary financing and be a violation of EU Treaties;
According to Financial Times Deutschland the Bundesbank opposes plans by Mario Monti to cap spreads by tasking the ECB to buy government bonds as an agent of the EFSF/ESM. In return, according to the Italian prime minister’s plans, the funds would partially guarantee against potential losses from the bond purchases. “This would be monetary financing and thus a break with the EU treaties”, the paper quotes the Bundesbank. The German central bank argues that the motive for the bond purchases would not be monetary policy but rather fiscal policy because it would be about easing the burden of rising spreads for countries like Italy. At the G20 in Los Cabos, Monti had been understood to say that he wanted the EFSF/ESM to buy bonds of troubled Eurozone countries. But two high ranking Eurozone sources told FTD that the Italian prime minister pleaded for the ECB to do the job so that Italy or other beneficiaries of the operation would be burdened with the conditionality the EFSF/ESM would apply in such a case. “This will not fly”, the paper quotes one source. “This is the attempt to get the money without accepting a program and the conditions attached to it.” The proposal will be on the agenda today when Monti meets Angela Merkel, Francois Hollande and Mariano Rajoy today in Rome.

Joachim Gauck has bowed to pressure from the German Constitutional Court, and announced he will not sign off on the ESM and the fiscal pact for the time being;
After an intervention of the Constitutional Court, the German president Joachim Gauck will not sign the new law Bundestag passed to implement the ESM and the fiscal pact for the time being, Frankfurter Allgemeine Zeitung reports. As a consequence it is now impossible that the ESM starts to exist as of July 1st. According to the paper the Karlsruhe judges were outraged at attempts by Angela Merkel to pressure Gauck into signing the laws quickly. Had the president done so and thereby deprived the constitutional court of any chances to an in depth examination of the constitutionality of the laws this would have amounted to “constitutional crisis”, FAZ quotes the constitutional court. Merkel’s spokesman denied that the chancellor had attempted to exercice pressure on the president. Meanwhile Wolfgang Schäuble criticized the court for its intention to do an examination of the laws.

Reuters reports Christine Lagarde On Banking Union, Fiscal Union and Sharing of Funds; “As a priority, the principle of a banking union, which takes the form in our view of a common European supervision, which takes the form of bank resolution, which takes the form of deposit insurance of a euro area-wide nature. That is principle number one.
“Principle number two is a fiscal union, more integration in fiscal terms, with risk-sharing supported by stronger governance… It includes more resources at the centre, democratic controls and oversight and intermediate steps towards gradual, but limited, sharing of funds.
“You can call them project, you can call them bills, you can call them bonds, but the principle of it is the sharing between the member states.”

Christine Lagarde On Completing Eurozone Monetary Union; “We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area. And with that in mind, the IMF believes that a determined and forceful move towards a complete European monetary union should be reaffirmed in order to restore faith in the system because as we see it at the moment, the viability of the European monetary system is questioned.”

World Bank Stocks Trade Lower As The Fed Announces It Will Extend Operation Twist Through Year’s End … German Foreign Minister Sets Out Plans For European Political Union

June 20, 2012

Financial Market Report for June 20, 2012

Martin Crutsinger of AP reports The US central bank will continue a program called Operation Twist through year’s end. Under the program, the Fed has been selling $400 billion in short-term Treasurys since September and buying longer-term Treasurys. The Federal Reserve said it will extend the program through December using $267 billion in securities.

The National Bank of Greece, NBG, and Brazil’s ITUB, and BBD, led World Banks, IXG, lower today.

Stocks trading lower included XLU, -1.8%, with SO, -2.1%, DVY, -.5%, REM, -.4%, REZ, -2%, PSP, -.1%.

Commodities, DBC, traded lower. The ratio of US Stocks, VTI, relative to US Commodities, USCI, DBC:USCI, rose higher near an all time high,.

The 30 Year US Government Bond, EDV, fell lower towards support at 125.

The US Dollar, $USD, UUP, traded unchanged at support of $81.25.

In today’s news

Open Europe reports German Foreign Minister sets out plans for European political union. A group of ten EU Foreign Ministers, chaired by Germany’s Guido Westerwelle, have put forward proposals to use the eurozone crisis as a stepping stone towards establishing a ‘political union’ by transferring more power to the EU, including the creation of a European monetary fund, a European army and a European finance minister. The proposals were strongly criticised by Frank Schäffler, an MP with Westerwelle’s liberal FDP party, who argued that the plan was incompatible with liberal principles and that Europe “doesn’t need a centralised and planned economy.” FT Bloomberg Handelsblatt Welt

WSJ reports Farm Bill Holds Windfall for Foreign Insurers. Several foreign insurers stand to collect millions of dollars in new U.S. taxpayer-funded subsidies as part of a proposed shift in farm policy. A Senate bill would expand the federal crop-insurance program while eliminating direct subsidy payments to farmers. Such an expansion would benefit numerous U.S. insurance companies—as well as several based in Australia, Bermuda and Switzerland that in recent years acquired five of the nine largest U.S. crop-insurance companies. (Hat Tip to Gary of Between The Hedges)

Dollar Collapse reports

Abandon ship – Peak Prosperity
Gerald Celente: this thing (financial system) is coming down – ETF Daily News
Banking industry must reinvent itself — Whitney – Bloomberg
Fed gave $4 trillion in loans to its own institutions – Daily Bell
Banks’ borrowing at ECBS rises as Spanish stress grows – Reuters
Crisis barely begun, says GLG hedge fund manager – Reuters

Stocks Jump And The US Dollar Continues Lower As Goldman Rumors That QE 3 Is On The Way … The Unification Of The Eurozone Will Be The Defining Movement And Moment Of Our Times

June 19, 2012

Financial Market report for June 19, 2012

World Stocks, VT, rose, and the US Dollar, $USD, UUP, fell sharply as the Brazilian Real, BZF, and the Euro, FXE, rose strongly, as Zero Hedge Tweets Goldman Sachs tumors that QE 3 is on the way.

European Financials, EUFN, and the Too Big To Fail Banks, RWW, lead growth assets, SLX, and risk assets, COPX, higher. Greece, GREK, Argentina, ARGT, Italy, EWI, Spain, EWP, and the BRICS, EEB, rose strongly. High Beta Financial Shares, such as BAC, C, JPM, JPM, and LAZ, jumped higher.

US Infrastructure, PKB, rose, as Cement Manufacturers, EXP, and Building Materials, OC, NX, and Construction Services, MTRX, CBI, and Business Services, HMSY, WXS, LPSN, ABCO, TIS, TSS, TEAM, FISV, INWK, and Trucking Companies, CNW, SAIA, PATR, and Railroads, UNP, RAIL, RA, and Vehicle Part Manufacturers, seen in this Finviz Screener, and Farm And Agricultural Equipment, seen in this Finviz Screener, and Chemical Manufacturers, seen in this Finviz Screener, and Biotechnology Stocks, seen in this Finviz Screener, rose, taking US Stocks, VTI, higher.

CNBC reports Oracle’s (ORCL) shares surge on better than expected results. Oracle posted better-than-expected quarterly revenue and authorized an extra $10 billion in share buybacks after a 7 percent jump in sales of new software licenses, helping drive shares higher.

Gold mining stocks, GDX, rose to the top of a descending channel and silver mining stocks, SIL, rose to resistance.

Commodities, DBC, rose as agricultural commodities, RJA, blasted higher breaking out from being greatly oversold, ana as Timber, CUT, jumped higher, which took paper products, WOOD, seen in this Finviz Screener higher, these included NP, and IP.

The Steepner, STPP, rose as Bonds, BND, traded lower as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, rose, and the Interest Rate on then the Ten Year Note, ^TNX, rose above 2%.

In Today’s News

Yahoo reports Four-day wipe-out in VIX ETFs as fear recedes.

Daniela Pylypczak  of ETFdb reports U.S. housing starts fell 4.8% in the month of May, significantly lower than the 720,000 economists were predicting. Despite the slowdown, construction in April was revised higher, marking the fastest rate since 2008. U.S. permits, however, surged well above expectations, rising 7.9% compared to the predicted 1.0% increase.

CNBC reports Weak jobs market hits homebuilder confidence. A stall in job growth hit home builder confidence in June. A monthly confidence index from the National Association of Home Builders saw just a one point gain after posting a 4 point spike in May. The survey now sits at 29, with 50 the line between positive and negative sentiment. “While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports have shown some weakening in the pace of recovery likely factored into the marginal gain,” said NAHB chief economist David Crowe in a written release. “In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time

Zero Hedge reports Another surprising conversation with “Athens”

Bloomberg reports California’s bad bet makes JP Morgan’s look minor

Bloomberg reports India: steady interest rates, rising inflation

Automatic Earth asks Which side are you on?

Daily Reckoning reports Ideas on the US empire

Open Europe reports Spain calls for ECB intervention as borrowing costs stay at unsustainable levels; RBS; Spain will need a bailout of at least €300bn. Spanish Treasury Minister Cristóbal Montoro told the Senate yesterday that the ECB should act “firmly and with reliability” to stop the rise of eurozone peripheral countries’ borrowing costs. In an auction this morning, Spain had to pay interest rates above 5% on its twelve and 18-month debt, reports Expansión. The interest rate on ten-year bonds remains above 7% – a level widely deemed as unsustainable. City AM quotes RBS’s Alberto Gallo saying that Spain is expected to ask for a full bailout, which could be of at least €300bn. Separately, El País notes that Spain’s ruling Partido Popular and opposition Socialist Party have agreed to ratify the fiscal treaty on Thursday, ahead of a meeting of eurozone finance ministers. El País El País 2 El País 3 Expansión Expansión 2 Expansión 3 Expansión 4 Welt Independent Telegraph Telegraph 2 Guardian Le Figaro El Mundo WSJ City AM

Open Europe also reports German Constitutional Court rules Bundestag had not been sufficiently informed over ESM. The German Constitutional Court has this morning ruled that the government had not sufficiently informed or consulted parliament over the ESM – the eurozone’s new permanent bailout fund – and also the ‘Euro-Plus-Pact’. According to the verdict, the government will in future be obliged to inform the Bundestag about EU-related international treaties “at the earliest possible opportunity”. Separately, the Irish High Court will today begin proceedings in a constitutional challenge of the ESM brought by Independent MP Thomas Pringle who is seeking a referendum on the ESM Treaty as well as on the EU Treaty change enabling the ESM to come into existence. Süddeutsche Welt FAZ NewsTalk Irish Independent: Arnold

The Unification Of The Euro zone Will Be The Defining Movement And Moment Of Our Time

No country is getting out of the Euro, as there is coming a debt default, resulting in a global credit bust and financial system breakdown, as foretold in bible prophecy of Revelation 13:1-4, which will create a political union, a monetary union, a fiscal union, and a banking union, most likely in that order, as diktat will rise to replace both money and credit, as communicated in bible prophecy of Revelation 13:1-4, where the beast regime of Neoauthoritarianism rises to replace the banker regime of Neoliberalism, and as foretold in Daniel 2:30-33. Germany will rise to be preeminent in a type of revived Roman empire, where the PIIIGS exist as subservient client states to leaders in Berlin, Paris, and Brussels; these EU periphery countries are no longer sovereign nation states as they have lost their debt sovereignty, and currently receive seigniorage, that is moneyness through ECB facilities. Leaders will soon meet in summits to waive national sovereignty and pool sovereignty regionally, to effect regional security, stability and sustainability. New sovereign authority, such as public private partnerships, and a Eurozone Finance Minister, will provide the credit of diktat, for economic production and ongoing government operations, as the First Horseman of the  Apocalypse, the Rider on the White Horse, with a bow, but without any arrows passes the baton of sovereignty from nation states to sovereign bodies, as is seen in Revelation 6:1-2. All so that the Kingdom of Jesus The Christ come to fruition, Revelation 2:26-28. This will occur simultaneously with a global Eurasia war centered in Syria, Iran, Israel and Turkey as communicated in Ezekiel 38, as Donna Cassata of the AP reports U.S. plans significant military presence in Kuwait.

The See Saw Destruction Of Fiat Wealth Continues As Dollar Rises And European Shares Trade Lower After New Democracy Party Wins Greek Election

June 18, 2012

Financial Market report for June 18, 2012

The US Dollar,$USD, UUP, rose, as the Brazilian Real, BZF and the Euro, FXE, traded lower.  Banco Santander, STD, National Bank Of Greece, NBG, and European Financials, EUFN,  led European Shares, VGK, lower today. World Banks, IXG, and US Financial Shares, XLF, traded lower. India, INP, India Infrastructure, INXX, India Earnings, EPI, and India Small Caps, SCIF, traded lower. Of note UK area Banks, RBS, BCS, and LYG, traded lower; as did Swiss Banks, UBS, and CS. The chart of Agricultural Commodities, RJA, and JJA, appear to be rising from a bottom.  The chart of small cap value shares, RZV, such as World Fuel Services, INT, and Boyd Gaming, BYD, shows a trade lower from the middle of a broadening top pattern, suggesting that stocks, will be turning lower. The see saw destruction of fiat wealth is underway as world major currencies, DBV, is rising to the middle of a broadening top pattern that goes back to November 2010; and the trend of the dollar, UUP, is down from its recent high, where it has hit resistance and has turned lower.

The chart of Equnix, EQIX, shows it is topping out; the company is a mid cap, JKH, growth stock, with equity of $8.4 billion, operates Internet Business Exchange centers where Internet businesses place their equipment and their network facilities in order to interconnect with each other.

The Global Eurasia Ware Yahoo presented in bible prophecy of Ezekiel 38 is imminent as Yahoo reports Russia to send marines to Syria

In today’s news: a pro bail out Greek Coalition Government is likely; Alexis Tsipras conceded defeat and said he will go into opposition; declines to be part of any broad-based government.

Bible prophecy of Daniel 2:30-33, presents that regional governance will dominate in all of the world ten regions. Revelation 13:1-4, communicates A One Euro Government, will creep up of the profligate nation of Greece, to be a type of revived Roman Empire, where Germany will be preeminent over the peripheral PIIIGS. And God’s Word further reveals a king, Revelation, 13:5-10, perhaps Olli Rehn, Herman van Rompuy, Jean-Claude Juncker, or Guido Westerwelle,  and a banker Revelation 13:11-18,  perhaps Jens Weidmann or Mario Draghi, will rise to rule Europe.

Simon Black relates The Experiment Of The Euro Has Failed. The euro is merely a symptom of a much larger experiment, that of fiat currency. It wasn’t all that long ago that money was actually made of something scarce, a real asset that couldn’t be conjured at will by an appointed  bureaucrat. In time, money supplies grew to be controlled by governments and banking cartels in the form of worthless pieces of paper. Since then, it’s devolved further to strings of bits in a giant database; our money supply is nearly all digital. As my friend Tim Price characterizes it, what passes as ‘money’ today is merely an abstraction of an abstraction of the real thing.

John Redwood writes The political parties all want to stay in the Euro, so that means they all end up offering a variant of the same policy! The Euro is destroying democracy, as some of us predicted. No serious party in Greece has told the electors the truth, that the Euro is not right for them.  They are all trying to stay in a scheme which does not work

Euro Intelligence provides the best of news reporting and analysis in its for fee daily email briefing which I recommend that one purchase. It reports Der Spiegel reports that van Rompuy and his group are likely to propose Eurobills, a minimalist version of Euro Bonds, at the summit; Wolfgang Proissl endorses a bank supervisory role of ECB, but says this must go hand in hand with a political union.

EU works on euro bills, a minimalist version of Eurobonds. The EU institutions are working on a light version of Eurobonds, the Eurobills, Der Spiegel reports. The bills would have a very short duration and the issued amount would also be limited. According to the plans each state would be able to issue a certain percentage quota of its GDP. A state which would not abide by the rules would be excluded from issuing the bills the following year. Mario Draghi, Herman Van Rompuy, Jean-Claude Juncker and José Manuel Barroso want to submit their plan at next week’s summit. They hope that the limited scope of the bills would allow them to convince Angela Merkel, who so far rejects Eurobonds. Also they hope that the limitation make the proposal compatible with the Karlsruhe court’s interpretation of the German constitution in which they say unlimited liability in the context of Eurobonds would be unconstitutional. The idea of comes from Olivier Blanchard, the IMF’s chief economist.

Wolfgang Proissl says supervisory role of the ECB should be premised on political union. Writing in Financial Times Deutschland Wolfgang Proissl endorses plans to give the ECB a supervisory role for the eurozone banks. However Proissl points out that numerous crucial questions remain unresolved, among them the relationship with the EBA, the number and the size of banks the ECB would supervise, the ECB’s authority over a euro resolution authority and a deposit guarantee fund and potential conflicts with the central bank’s primary mandate of assuring price stability. For Proissl the biggest problem with the plans are that they would create an unparalleled concentration of power in the hand of unelected officials. “As long as the reinforcement of the ECB is not accompanied by a political transfer of power on the euro area level there is the danger that we will creepingly create an economic autocracy that would be incompatible with democratic principles”, he warns. What if there is no significant agreement June 28/29. In his FT column, Wolfgang Munchau argues that the EU clearly has a sequencing problem, whose failure to resolve may have unintended consequences. Bundesbank says no banking union without fiscal union. Merkel says no fiscal union without political union. Hollande says no political union without banking union. Merkel seems determined to hold her course – and focus on the long-term development of the eurozone, but to resolve the long-term without the short-term would mean that both Italy and Spain will not be able to remain in the eurozone. At current yields, and heading into a full depression, the two countries are not a position to maintain their position in the eurozone and pay interest on their debts. And they are too large for the umbrella.

Bloomberg reort Spanish yields surge as Greek vote fails to damp concerns

The Guardian Live Election Blog reports New Democracy leader Antonis Samaras “Will Honour Commitments to the EU”.    Samaras summarised his speech in English: His party would honour commitments to the EU. It was a victory for all Europe. A call for all political parties that share objectives to form government. Sacrifices of Greek people will be reflected. Determined to do what it takes and do it fast

Greek Crisis Net relates the Stephen King FT article Samaras’ victory offers relief but no answers. Greece’s New Democracy party, led by Antonis Samaras, managed in Sunday’s elections to head off growing support for the radical left wing Syriza alliance. Mr Samaras looks set to become Greece’s next Prime Minister. The Athens ATMs won’t run dry, there will be no sudden reintroduction of drachmas and Greece will happily be able to persuade itself that it remains firmly held in the bosom of Europe.

Greek Crisis Net relates the Matina Stevis WSJ article Profile Of Greece’s Next Finance Minister  It’s a tough job, but someone’s got to do it. Here’s three prominent New Democracy figures who are likely to play a role in the Greek finance ministry or hold a separate economics-related portfolio. Not to be premature, of course. New Democracy may have come first in Sunday’s elections, but it hasn’t yet started trying to form a government. We include a fourth profile wildcard: the current finance minister, Stavros Dimas. Former European Commissioner for the environment (and, prior to that briefly for Social Affairs), party vice president and former foreign minister in the short-lived Papademos government, Mr Dimas is a New Democracy heavyweight. The 71-year-old politician read law and economics at the University of Athens before moving to New York University for his masters. He worked on Wall Street as well as the World Bank.

Open Europe Election Briefing reports “Though a new compromise between Greece and its creditors is both desirable and likely, the country will probably continue to fail to meet the almost impossible conditions of its bailout programme. The eurozone will come under greater political pressure to withhold funding because of this. Once its banking sector is recapitalised and Greece can fund itself on a day to day basis, by running a primary surplus, a managed Greek exit from the eurozone will look possible and maybe even desirable. A fundamental decision on whether Greece can remain inside the eurozone could therefore well be taken at the start of next year.”
Open Europe press release.

Open Europe reports French Socialists win absolute majority in legislative election run-off. French President Francois Hollande’s Socialist party secured an absolute majority in the final round of the French legislative elections held yesterday. The Socialist parliamentary alliance won 315 of 577 seats in the National Assembly, followed by centre –right UMP party on 229 seats. Abstention reached record highs, as just 46% turned out to vote in the second round. For the first time since 1986, the far-right Front National party won 2 seats, although party leader Marine Le Pen lost the election run-off to her socialist rival. Finance minister Pierre Moscovici said “we needed a majority, and now President Hollande and the Prime Minister have the support to lead their project of important change”. Independent Independent 2 Irish Times IHT Le Monde Le Monde 2 Les Echos Les Echos 2 Telegraph Telegraph Guardian FT Le Monde Croix Le point City AM WSJ Times Times 2 Les Echos Le Monde 2 Times Le Monde Le Monde 2

The Guardian reports Election Results. The official projection figures for the election have now been announced by Greece’s interior ministry. Greek pollster, Marika Lambrou, said this: There will be seven parties in the next parliament, as was the case on 6 May. There will be no upset in the order of the parties but there has been a “considerable increase” in the number of votes for the two leading parties.

New Democracy will receive 29.53% of the vote, equivalent to 128 seats.
Syriza will receive 27.12% – 72 seats.
Pasok will receive 12.2% – 23 seats.
Independent Greeks will receive 7.56% – 20 seats.
Golden Dawn will receive 6.95% – 18 seats.
Democratic Left will receive 6.23% – 17 seats.
Greek Communist Party will receive 4.47% – 12 seats

The Death Of Fiat Wealth Introduces New Governance Where Wealth Will Consist Of Diktat And The Possession Of Gold

June 16, 2012

Financial Market report for Friday June 15, 2012; this is the eleventh week of entry into the Second Great Depression.

The Connecticut Gold Coast is a bastion of wealth. Wikipedia relates the distinction of being called the wealthiest town in Connecticut is difficult to pinpoint exactly. It probably lies with either Darien, Greenwich or New Canaan, depending on which statistic you use. The Higley 1000, reports on The Gold Coast of Long Island. Long Island has 53 Higley 1000 neighborhoods that I have divided into four distinct geographic clusters.

Folks who live here are passing through peak wealth, as the death of fiat wealth occurred on June 1, 2012, when Mario Draghi announced that the Euro is no longer sustainable in its current form; it was at this time that gold, GLD, started to rise in value, and bonds, BND, has continued higher, with stocks, VT, higher, and commodities, DBC, and commodities turned lower.

Volatility, TVIX, fell lower again this this week after having fallen last week. The ratio of US Shares relative to US Stocks, VTI:USCI, is near an all time high and illustrates how overvalued stocks are at this time.

Neoliberalism provided many forms of valuable investments which came by prudently exercising investing discernment; but under Neoauthoritarianism, the only money good investments will be diktat and physical possession and ownership of gold.   The price of gold is now trading above $1,600.  Bullion Vault reports Gold price jumps again as Spanish, Italian bonds undo €1.1 trn LTRO. The chart of the gold ETF, GLD, shows its rise since June 1, 2012; gold is on a buy signal.

Mike Mish Shedlock writes Institutional Advisor Bob Hoye Explains Why Gold Miners are Winners During Deflation. But I comment that the chart of the Gold Miner, GDX, unlike Gold, GLD, shows a rise in a descending channel; I cannot recommend that one buy the gold mining stocks.

Spiritual wealth consists of the exceedingly great precious promises of God and comes from knowing the Present Truth, that is from understanding and having identity and experience out of the like precious faith of Jesus Christ, and manifesting in virtue, the moral excellencies of God … 2 Peter 1:1-12.

In today’s news

24/7 Wall Street relates Flint and Detroit ranked as America’s Most Dangerous Cities

Chris Marsden of WSWS reports SYRIZA’s Tsipras pledges to save Greek and European capitalism.  SYRIZA head Alexis Tsipras chose a column in the Financial Times to pledge that his party will act as the saviour of the euro currency and a tax collector on behalf of the troika.

Patrick Martin of WSWS reports Crisis has thrown back US families 20 years.  Median net worth has declined to the level of 1992.

Open Europe reports Weidmann warns that a euro exit would be worse for Greece than the rest of Europe.  The FT reports that the EU is preparing to further ease the terms of the Greek bailout following Sunday’s election, although they may not offer the terms if the government is headed by SYRIZA. The plans include lower interest rates, extended repayment periods and EIB funds for Greece. The Greek stock market rallied yesterday amid expectations of a New Democracy victory. In a speech yesterday SYRIZA leader Alexis Tsipras continued his overt attacks on PASOK and New Democracy and hinted that he would not look to form a coalition with PASOK. Le Mondereports that Tsipras also said his first act would be to “exploit the ten days until the European summit on June 28 to lead a series of real negotiations” over Greece’s place in the euro.

In an interview conducted jointly with Corriere della Sera, El Pais, Publico and Kathimerini, Bundesbank President Jens Weidmann warned that any changes to the current programme in Greece would be “dangerous” and stressed that if it did exit the euro, although everyone would be affected, Greece would be “worse off than everybody else”. City AM reports that, according to a G20 aide, “The central banks are preparing for coordinated action to provide liquidity,” in case of a negative outcome from Greek elections. Eurozone finance ministers also stand ready to hold an emergency conference call on Sunday evening depending on the result.

Slovak Prime Minister Robert Fico told his country’s parliament yesterday that “If the Greeks do not meet the commitments they have made, do not meet their financial commitments, do not repay loans, Slovakia will demand that Greece leaves the eurozone.” Speaking in Bejing, Belgian Foreign Ministers Didier Reynders has warned that “the Greeks should no longer expect support if they decide to leave the euro after the elections”. FT Les Echos CityAM Kathimerini Reuters BBC Reuters 2 Kathimerini 2 Le Point Le Monde Trends WSJ EurActiv Telegraph Guardian IHT FT 2 Les Echos 2 CityAM 2 Welt Le Figaro WSJ 2 Süddeutsche  Kathimerini 3

Hollande and Monti present united front as Germany plays down moves towards fiscal union.  In a joint press conference following a meeting in Rome yesterday, French President Francois Hollande and Italian Prime Minister Mario Monti supported the creation of growth policies and debt mutualisation in order to tackle the eurozone crisis, despite German Chancellor Angela Merkel yesterday playing down the prospect of such measures. Bundesbank President Jens Weidmann said yesterday that Europe faced decisions “which can no longer be delayed”, but warned that a fiscal union could not be created without a “clear expression of willingness” from all populations involved. Weidmann also laid out his view of a possible fiscal union, stating that any countries which breached the budget rules would need to cede power to a central authority.

The FT reports that Italy will look to sell off some state assets to boost its reform plans with two funds being set up and managed by the state financing agency to purchase assets from the central government. Moody’s last night downgraded five Dutch banks and warned of a Greek exit from the eurozone and further fiscal consolidation in the Netherlands. Inflation in the eurozone fell to 2.4% in May, its lowest level for a year. FT WSJ FT 2 FT 3 FT 4 Le Figaro CityAM BBC Le Figaro Les Echos La Tribune WSJ 2 Irish Times Irish Independent Le Figaro 2 Les Echos 2 Le Monde Le Monde 2 Telegraph Telegraph 2 Welt

Handelsblatt: ECB set to be given supervisory powers over eurozone banksHandelsblatt reports that support is growing for the ECB to take over supervisory authority over eurozone banks, with German Chancellor Angela Merkel joining the French government and central bank in backing the move, although the Bundesbank reportedly has reservations. The decision could be made as soon as June 28 and 29 at the next summit of EU leaders. The decision could spell the end for the current EU banking regulator, the London based European Banking Authority, with an EU diplomat quoted as saying that “the EBA would no longer have a reason to exist”. The paper also cites UK Treasury Minister Mark Hoban as saying that “the ECB would be the appropriate supervisor of eurozone banks”, whereas expanding the role of the EBA would threaten conflicts between eurozone and non-eurozone members.
Handelsblatt Les Echos

Mats Persson: Will the UK use its veto over banking union to gain single market safeguards? … Osborne: we will not oppose greater eurozone political integration. Open Europe’s Director Mats Persson writes on his Telegraph blog that “the UK cannot take part in the banking union itself: politically, it would involve a massive transfer of powers to the EU, which no British government will go anywhere near [however] inherent in the creation of a full-scale banking union is the fragmentation of the EU single market… the political dilemma for the UK government is clear: is it prepared to use another veto to block a banking union absent UK-specific safeguards – risking being perceived as hampering efforts to save the euro? Or will it simply nod through potentially game-changing proposals, risking the wrath of its backbenchers?”

In an opinion piece for Le Figaro, UK Chancellor George Osborne writes that resolving the eurozone crisis will require “greater transfers between richer and poorer member states; pooling resources, potentially through the creation of eurobonds; a common safety net for banks, ensured by a banking union; greater oversight and restrictions on budgetary and financial policies”. He adds that “As an EU member outside of the euro zone, the UK considers that this process is of immense importance… We will not oppose greater political integration at a eurozone level”.  He argues that “it is reasonable for EU member states outside of the eurozone and the banking union seek to obtain safeguard clauses” as “the UK, which has an important financial sector, would be unable to take certain measures to protect its taxpayers and financial stability if it had to comply with regulation introduced by eurozone countries”. Osborne stresses “Far from seeking exemptions…we hope to further integrate the single market”.
Telegraph blogs: Persson Economist: Charlemagne FT Editorial FT: Stephens FT: Mallaby WSJ Review & Outlook WSJ: Pissarides et al. WSJ: Rallo IHT: Redwood Telegraph: Warner Telegraph: Blair Open Europe research

Date for German vote on fiscal treaty and ESM finally set.  The Bundestag is set to vote on whether to ratify both the fiscal treaty and the ESM treaty on the afternoon of June 29 after Chancellor Merkel returns from the EU leaders’ summit in Brussels. The Bundesrat, the upper house of the German parliament, will also hold a vote in a specially convened session later in the evening, allowing Germany to ratify the ESM two days before the eurozone’s new permanent bailout fund is supposed to officially come into force. However, the opposition and government are still holding talks over the concessions necessary for the opposition to lend its support to the measures.
Welt Reuters ARD Le Figaro Reuters 2 Le Figaro 2

Euro Intelligence provides the best on reporting and analysis in its daily email briefing, which I recommend that one purchase; it relates Spanish yields shoot through 7%. Spanish bond yields have continued to deteriorate, making a fully-fledged EFSF/ESM programme for Spain likely; Italian bond yields are also now well above 6%, as the markets are doubting Italy’s sustainability as well;
while southern Europe is burning, Angela Merkel gets in front of the Bundestag to list everything she does not want, including eurobonds and deposit insurance;ESM-banking licence, and the right to inject equity;but Hollande is opposed to Merkel’s designs for political union; of those proposals, Merkel indicated that she could support the principle of ECB bank supervision; Weidmann says his vision for a fiscal union consists of an automatic loss of sovereignty for countries that breach the fiscal rules; Alexis Tsipras said that if Spain can get €100bn without conditions, why can Greece not get the same, and stay in the euro; Antonis Samaras is portraying the political choice on Sunday as one between the euro and the drachma; France, meanwhile, is drawing up its own austerity programme.

Hollande propose a euro master plan to fellow governments. According to Le Monde, Francois Hollande is about to propose a euro masterplan in a letter to the fellow governments of the eurozone. Concerning the ECB the French president wants to go further than Angela Merkel. Hollande would like the ECB to become the euro area banking supervisor, but it would also be in charge of the deposit guarantee fund. Additionally the ESM should get unlimited financial firepower via a banking licence that would allow it to refinance itself at the ECB. Also the ESM should be able to recapitalize banks directly without going through governments. Hollande also wants to draw up a roadmap that would lead to the introduction of Eurobonds within ten years. In order to solve Europe’s short term debt problems the president is in favour of setting up a debt redemption fund as proposed by the German “wise men”. Hollande is open to Merkel’s idea of transferring sovereignty to the European level but he is eager to do so only if necessary and without any federal grandstanding. Therefore his advisors avoid talking about new euro institutions and merely say that France is ready to build the “appropriate institutions”.

Merkel warms up to the idea that the ECB should supervise euro area banks. Angela Merkel yesterday publicly endorsed the idea that the ECB should become the supervisor of euro area banks, Financial Times Deutschland and Handelsblatt report. “I would not have anything against the European Central Bank taking over a stronger role and getting supervisory competences”, the chancellor said in her speech in the  Bundestag. There appears to be the beginning of convergence between Germany and France on the issue because Francois Hollande also supports a supervisory role for the ECB and wants to make proposals in this sense at the EU summit. Vitor Constancio on Tuesday said the ECB was ready to become the supervisor of the 25 largest cross-border systemic banks.

Weidmann outlines his roadmap for a “stability oriented fiscal union” It is quite hard to say the following with a straight face, but here it goes. Jens Weidmann yesterday outlined the conditions for what he calls a “stability oriented fiscal union”, Frankfurter Allgemeine Zeitung reports. The countries need to agree to strict budgetary and fiscal rules that must be supervised and enforced by a European authority, the Bundesbank president said. “In case a country does not comply with the budgetary rules the national sovereignty would automatically be transferred to a European level so that meeting the targets can be guaranteed”, Weidmann told his audience. The European authority would then be able to impose either higher taxes or spending cuts that it would be able to enforce against the parliamentary majority of the concerned country. If this condition is fulfilled a fiscal union with common liability in the context of a banking union or commonly backed Eurobonds is a viable option for Weidmann. He insisted that such a development would need to be democratically legitimized by an “expression of the will” of all the populations of the countries concerned. Also EU treaties and national constitutions needed to be amended accordingly so that the new rules are firmly anchored and cannot be changed with simply majority votes, Weidmann said.

French government prepares measures to get the deficit under control. According to Les Echos, the French government is preparing a set of measures to be presented in July with the aim to contain the deficit, Les Echos reports. As was promised during the election campaign the wealth tax and the inheritance tax will be increased. Also the tax breakes on overtime work and other tax breaks are likely to be scrapped. Later in the year the government wants to propose legislation with the aim of taxing equally work revenues and capital gains. Jean-Marc Ayrault has repeatedly hinted that France’s dire budgetary situation required additional efforts but he has refused to spell out what he planned to do ahead of the crucial run-off parliamentary elections this Sunday.

Mariano Rajoy now wants a full eurozone federation with tax raising powers. El Pais reports, the volatile Mariano Rajoy, who seems to have returned from his football game, now supports a fully federal Europe, with banking and fiscal union, tax-raising powers, and the transfer of sovereignty to the centre. It is fair to assume that he did not coordinate this position with Hollande or anybody else.

Germany is on course to ratify the ESM and fiscal pact before the end of the month. According to Frankfurter Allgemeine Zeitung talks between the Angela Merkel’s coalition and the opposition SPD and Greens have progressed, which makes a ratification of the fiscal pact and the ESM by the end of June the most likely scenario. There were no agreements on details but Volker Kauder and Frank-Walter Steinmeier, respectively chief whip of the Christian democrats and the social democrats, lauded the progress in the talks. One important element is that the government supports a financial transaction tax that could be introduced within the EU framework of enhanced cooperation with nine or more EU countries participating. A scenario is now that Bundestag will ratify the fiscal pact and the ESM on June 28 just ahead of the EU summit which will start later that day. Süddeutsche Zeitung however reports that there is still resistance among some SPD governed federal states that have to ratify the fiscal pact and the ESM in Bundesrat, Germany’s second chamber. The states want to extract financial concessions from the federal government in exchange for their agreement with the pact, the paper reports.

Political Press EU reports Economic governance package explained.  In autumn 2010 the EU agreed to tighten financial supervision and Prague Leaders Magazine reports MEPs to pass economic governance ‘two-pack’  The two-pack builds on the ‘six-pack’, a group of economic governance regulations that entered into force on 13 December 2011.

Stocks Trade Higher As Spain Gets Rating Agency Downgrade

June 14, 2012

Financial Market report for June 14, 2012

Mike Mish Shedlock reports Spanish 10-Year Bond Yield Hits 6.96%, A New Euro-Era High; 2-Year Bond Yield Hits 5.19%  A big selloff in Spanish government bonds is underway this morning at 3:15AM central. Conditions can change by the US equity market open, but the results are currently very ugly. At the time of this writing, the yield on 2-Year Spanish Bonds is 5.12% (up 20 basis points) having soared as high as 5.19% (at that time up a whopping 27 basis points). The yield on 10-Year Spanish Bonds is 6.96% (up 20 basis points), having hit a euro-era high of 6.90%.

The BBC reports Closer Union Uurgent, EU Commission Chief Barroso Say. European governments need to agree urgently on steps to forge a closer union because of the eurozone’s “systemic problem”, the head of the European Commission says. DeutscheWelle reports Integration Is Answer To Eurozone Woes, Barroso Says

In surreal short sell covering fashion National Bank of Greece, NBG, led Greece, GREK, and Banco Santander, STD, led, European Financials, and Spain, EWP, led Europe, VGK, higher today, taking US Stocks, VTI, World Stocks, VT, World Small Cap Stocks, VSS, higher; this as India Infrastructure, INXX, and India Small Caps, SCIF, and India’s Banks, HDB, IBN, traded lower.  As Nokia, NOK, fell 16%, driving the Finland shares lower. And as Argentina, ARGT, fell strongly. The chart of Utilities, XLU, shows its rise to a new high; as DTE Energy, DTE, rose 1% on the day, with the stock almost tripling in value in the last three years.

In today’s news

Fed buys 30 year bonds two hours before Treasury sells 30 year bonds.

Tyler Durden writes in Zero Hedge Slovenia Is Spain: Is Another European Country’s Bank Bailout On The Way?  Has the Spanish bank bailout set a precedent for all other insolvent EMU member countries to follow? Of course. The only question is when is the stigmata of demanding a bailout (which Europe now has no choice but to grant courtesy of set precedent, be it via ESM or otherwise) less relevant than national pride, than preserving one’s banking sector, and preferably preempting the kinds of bank runs that pushed Spain to demand a bailout in the first place. For one small Eurozone member country the answer may be if not now, then very soon. Slovenia’s Dnevnik asks a simple question: “How serious is the situation of Slovenian Finance – are we on the way of Spain?” The answer, in not so many words: very likely yes

The End Of Labor Productivity Has Commenced ….. The Decline Of Labor Productivity Will Be Ongoing …. As Capital Died 6-1-2012 When Mario Draghi Announced The Euro Is Unsustainable

June 13, 2012

Financial market report for June 13, 2012


The end of labor productivity has commenced ….. The decline of labor productivity will be ongoing …. Mario Draghi gave the death sanction of capital on 6-1-2012, in announcing that the Euro is unsustainable  … Herman van Rompuy and Angela Merkel in June 2012 gave the protocol for Euro zone regional governance  to replace crony capitalism and European Socialism.

Stocks traded sharply lower today beginning at 2 PM

World stocks, VT,  -0.8%, and US Stocks, VTI, -0.9%, the Russell 2000 Growth, IWO, -1.5%, Retail, XRT, -2.9%, Italy, EWI, -1.3%, and Sweden, EWD, -1.5%, traded sharply lower at 2 PM Today, as Commodities, DBC, – 0.8%, traded lower, while Gold, GLD, and Silver, SLV, traded higher. Hat Tip to Gary of Between The Hedges for today’s news reports:

Bloomberg reports European Stocks Fall As Borrowing Costs Rise At Debt Sale. European stocks declined as borrowing costs increased at debt auctions in Germany and Italy and as Sweden’s SKF (SKFB) AB reported weakening demand for its products in the second quarter. SKF, the world’s largest maker of ball bearings, dropped 7.3 percent. Renault SA (RNO) led a selloff by carmakers, sliding 4.2 percent. Etablissements Maurel & Prom SA surged the most since 2003 amid takeover speculation. The Stoxx Europe 600 Index (SXXP) dropped 0.4 percent to 242.56 in London.

CNBC reports Germany Warns Italy Over Euro Zone Crisis. Germany told Italians on Wednesday they must keep taking Prime Minister Mario Monti’s tough economic medicine to avoid becoming the next victim of the euro zone debt crisis after a bailout for Spain’s banks failed to calm markets.

Retail stock investing died today as the retail ETF, XRT, traded 2.9% lower with M, -5.0%, ARO, -4.4%, CAB, -4.0%, FL, -3.8%, DKS, -3.4%, HBB, -3.0%, CAB, -3.0%. Bloomberg reports Retail Sales in U.S. Declined for a Second Month in May. Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed today in Washington. Sales excluding car dealerships slumped by the most in two years. The smallest wage gains in a year and unemployment exceeding 8 percent are taking a toll on the consumer spending that accounts for about 70 percent of the economy, leaving it more vulnerable to shocks from the European crisis. “The consumer is pulling back,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in sales. “There isn’t a lot of job creation. We will continue to see softer numbers.

Diktat is rising to replace capital … those with capital are wise to invest in and possess gold bullion as well as to invest in and maintain gold in Internet vaults.

Martin Hutchinson writes in Prudent Bear Baked In Inefficiency. With current policies in place, the productivity deficit is likely to get worse, especially in the U.S. Gigantic budget deficits are funded by the banking system, starving small businesses of resources and steering funding into the nation’s most unproductive sector. Ultra-low interest rates discourage saving, decapitalizing the economy further and producing declines in even labor productivity. Thus while current policies are in place, even labor productivity is likely to decline further, U.S. living standards will decline or at best stagnate and unemployment will remain very high.

I comment that we are witnessing the end of labor productivity … the decline in labor productivity will be ongoing as the end of product ingenuity, development, production and marketing  has been reached.

If capital was available, (it is not available as Money died in April 2011, on fears that a debt union had formed in the EU; and Credit died in April 2012, when investors sold out of stocks on awareness that the world central banks’ monetary authority is unable to stimulate global growth and global trade; and Capital died on 6-1-2012 when Mario Draghi announced that the Euro is unsustainable), to small businesses, there are not any products that small businesses can conceive of, develop, produce and market, as all the best of products, in every field, have been conceived, developed, produced, and marketed by large companies.

The chart of Skeechers,  SKX, reflects the gain that has come to the company as it has designed the best of walking shoes, and sells them through on-line partners at a price that competitors, large or small, cannot even come close to.

The chart of Navistar, NAV, illustrates the death of industry and enterprise.

The chart of   Ferrellgas Partners, L.P. FGP, shows its terminal rise in value as it enters fully into the age of deleveraging.

The chart of A123 Systems, AONE, and FCEL, illustrate the end of risk capital investing in new technology.

Neoliberalism was the regime of a prior age of leverage that was based upon a debt trade. Capital, enterprise, industry, and fiat wealth all died on 6-1-2012 when Mario Draghi announced that the Euro is unsustainable; the Euro currency union died on Greek Bailout 1 and Greek Bailout 2, and was buried when Spain requested a bank bailout.  Neoliberalism is being replaced with Neoauthoritarianism. Since then bonds, BND, and the US Dollar, $USD, UUP, have been trading lower. All fiat wealth is now slipping into the Pit of Financial Abandon. The chart of gold miners, GDX, is in a downtrend; the chart of junior gold miners, GDXJ, shows them slipping away; and the chart of silver miners, SIL, shows a topping out.  The weekly chart of Utilities, XLU, shows a bearish harami, at the top of an ascending wedge. The weekly chart of dividend payers, DVY, shows a topping out and cresting over. The chart of highly margined and thus high leveraged debt ETF, BOND, shows a topping out. The dynamos of Neoliberalism were global growth, global trade, and corporate profit; whereas, the dynamos of Neoauthoritarianism are regional security, regional stability, and regional sustainability. Neoauthoritarianism is a regime that will enforce debt servitude in the world’s ten regions, as foretold in bible prophecy of Revelation 13:1-4 and Daniel 2:30-33.

Mario Draghi in announcing on 6-1-2012, that the Euro is unsustainable, gave the death sanction on capital. Evidence of the death of capital and the death of fiat wealth is, first, that money supply, M2, is declining as reported by the US Federal Reserve,  and secondly, that an investment demand for gold has commenced as is seen in the chart of the gold ETF, GLD, rising.

Diktat is rising to replace choice. News media in reporting in early June 2012, that Herman van Rompuy is working on constructing a Eurozone fiscal union and banking union, and in reporting that Angela Merkel has called for a EU political union, communicates that these two European leaders have issued the protocol for European regional governance to replace crony capitalism and European Socialism.

Those with capital are wise to invest in and possess gold bullion, as well as to invest in and maintain gold in Internet vaults.

Four apostles for four purposes

God has appointed four apostles, that is sent ones; and each apostle has a special purpose. Paul established churches as the living places for the saints; Peter communicated the principle of living in virtue, James communicated the prayer of faith and need for deeds to evidence faith; and John, communicated the revelation of Jesus Christ.  All unified in communicating good conscience, grace and truth, so that the elect can experience the economy of God.