Financial Market Report for the week ending June 1, 2012; this is the ninth week of entry into the Second Great Depression, as reflected by the rise of volatility, TVIX, which accompanied the death of credit beginning in early April 2012.
1) … The bonfire of the World Banks, IXG, intensified with Deutsche Bank, DB, and Regions Financial, RF, trading strongly lower, as Financial Share, XLF, propelled World Stocks, VT, and US Stocks, VTI, lower today.
DB, -7.4% ….. Bloomberg reports Deutsche Bank(DB) Borrowed $11.1 Billion From ECB for Spain, Italy. Deutsche Bank AG borrowed 9 billion euros from the European Central Bank through its Spanish and Italian units after saying it took only “a small amount” in a second round of emergency funding. Deutsche Bank SA Espanola, the lender’s Spanish unit, took 5.5 billion euros and Deutsche Bank SpA, the Italian arm, borrowed 3.5 billion euros in the ECB’s second longer-term refinancing operation in February, according to annual reports filed by the 2 divisions.
US Regional Banks, KRE, -4.7%, ….. RF, SNV, HBHC, FHN, BKU, USB, FITB, NTRS, HBAN, ASBC, FMER, WTFC, MDFI, ONB, PUTB, FMBI, SBNY, FULT, VLY, STT, MTB, SVSQ, WBS, ZION, EWBC, CNY, SIVB, UMPQ, CATY, CUBF, CBSH, PB, IBOC. It was the sharp fall lower in these shares that caused the small cap shares to fall precipitously today.
Financial Shares, XLF, 3.7% ….. Banks STI, PNC, WFC, BAC, C, BBT, KEY, JPM ….. Property Insurers, AIG, ….. Asset Managers, TROW, PFG, BEN, IVZ, BK, AMP, AMG, BLK ….. Investment Brokers, MS, GS, GHL, ETFC, AMTD, SCHW, RJF, JEF, SF,
Japan Banks, NMR, -4.9%, SMFG, -3.1%, MTU, -2.8%,
Argentina Banks, BFR, -3.9%, BMA, -2.8%,
Ireland Bank, IRE, -4.2%
India Bank, ITUB, -3.6%
Country falling lower included
Greece, GREK, -5.0%
Thailand, THD, -3.7%
Argentina Small Caps, KROO, -3.7%
Taiwan, EWT, -3.9%
Germany, EWG, -3.4%
Japan, EWJ, Japan -3.0%, on a continuing rise in the Yen, FXY. Its rising currency has decimated exports but supported its Treasury Bonds.
Stocks falling lower included the following
Eric Pfeiffer of The Sideshow reports Today is National Doughnut Day; but Restaurants and Special Eateries, such as SBUX, EAT, MCD, DNKN, CMG, GTIM, DPZ, KKD, TAST, DAVE, YUM, JACK, CAKE, BOBS, BWLD, GCFB, RUTH, RRGB, DRI, RT, DIN, BH, DENN, JMBA, TXRH, BOBE, NATH, THI, CBRL, BJRI,SONC, FRS, JAX, PZZA, KONA, all fell sharply, yet WEN traded higher.
Cement Producers, CRH, EXP, CX, JHX, traded strongly lower.
Appliances, LII, WHR, SPB fell strongly.
Sporting Goods Stores, DKS, HIBB, CAB, traded strongly lower.
Electrical Equipment Manufacturers, seen in this Finviz Screener traded strongly lower.
Hotels, H, IHC, HOT, and WYN, traded strongly lower.
Retail, XRT, seen in this Finviz Screener, -3.2% with COH falling 6.4%.
Housing, ITB, -6.2%
Gaming, BJK, -4.7%
Small Cap Energy, PSCE, -5.1%
Small Cap Consumer Discretionary, PSCD, -4.0%
Small Cap Technology, PSCT, -3.4%,
Small Cap Industrial, PSCI, -3.0%
Global Agriculture, PAGG, -3.4%
Semiconductors, XSD, -4.3%
Shipping, SEA, -4.2%
Small Cap Pure Growth, RZG, -3.0%
Networking, IGN, -3.0%
Cloud Computing, SKYY -3.1%
Nasdaq 100, QTEC, -3.1%
Paper Producers, WOOD, -3.1%
Risk On Investments, ONN,-3.4%
Russell 2000 Growth, IWO, -3.4%
Morningstar Mid Cap Growth, JKH -3.9
Simon Property Group, SPG, -2.7%
Dividend Payers, DVY, -2.0%
Residential REITS, REZ, -2.1%
Staple, XLP, -1.8%
Mortgage REITS, REM, -1.4%
Utilities, XLU, -0.4%
Total Bonds, BND, rose, as US Government debt, ZROZ, EDV, TLT, rose vertically. The chart of the Interest Rate on the 10 Year US Government Note, ^TNX, shows a trade lower to 1.47%, which is likely the lowest rate ever in history, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, as reflected in the Flattner ETF, FLAT, rising and the Steepner, ETF, STPP, falling. Junk Bonds, JNK, and Senior Loans, BKLN, traded sharply lower, and Emerging Market Bond, EMB, finally broke loose and fell sharply lower as well.
Ben Bain and Boris Korby of Bloomberg report the terrible loss of investment value experienced by holders of emerging market bonds. “Mexican peso bonds are handing foreign investors the biggest losses in eight months as Europe’s escalating financial crisis triggers a plunge in emerging-market currencies. Government debt denominated in pesos lost 8.5% in dollar terms in May, the largest monthly slump since September. Local-currency debt from developing countries fell 3.7% on average during the same period. The peso sank 9.5% against the dollar in May, the most among major currencies. All 25 major emerging-market currencies tracked by Bloomberg fell last month.”
Over the last year, US Debt has risen in value as follows: ZROZ 62%, EDV 57%, TLT 34%, LTPZ 27%, BLV 20%, BAB 18%. The chart of the Zeroes, ZROZ, communicates that Operation Twist preserved US Treasuries, long enough so that a natural demand for perceived safe haven investing could kick in; which occurred in May 2012 as investors fled stocks for the longest duration bonds available.
Oil, USO, Timber, CUT, and Agricultural Commodities, RJA, led Commodities, DBC, sharply lower, while Gold, GLD, broke out today, but Silver, SLV, rose only strongly. Gold mining stocks, GDX, blasted higher, and silver mining stocks, SIL, traded higher. Jack Chan of JC’s Buy and Sell Signals, gave a buy signal on gold today, but not on silver.
Today, the US Dollar, $USD, traded unchanged.
2) … The Euro zone is at a turning point; it can no longer exist in its current form; Bible prophecy foretells that the Euro zone will emerge out of a financial, economic, banking and credit collapse, as one of ten regions of global governance.
EurActive reports EU core countries to hold crisis mini-summit The leaders of France, Germany, Spain and Italy will meet in Rome after the June Greek election to discuss the eurozone crisis, the Italian press reports, as talk of Greece leaving the single currency gain momentum.
EurActive reports Barroso prepares calendar for ‘more EU integration’
Jeremy Warner of The Telegraph reports Only The ECB Can Save The Euro Now … Jack Ewing, of the NYT writes “Central Banker Sees Structure of Euro Zone as Unsustainable’ … Open Europe reports ECB President Mario Draghi described the current set-up of the eurozone as “unsustainable” and urged leaders to quickly come up with a “banking union” to protect depositors and prevent failed banks from threatening the financial system. Draghi criticised the current handling of the banking crisis saying that when regulators are faced with banks needing more capital, they “underestimate the problem and then come out with a second or third or fourth assessment,” citing Franco-Belgian bank Dexia and Spain’s Bankia. He also signalled his support for using the ESM, the eurozone’s permanent bailout fund, to recapitalise banks.
Open Europe reports The last Public Issue survey published by Kathimerini before the two-week pre-election poll ban gives left-wing SYRIZA the lead with 31.5% of vote intentions, followed by centre-right New Democracy on 25.5% and Socialist PASOK party on 13.5%. Kathimerini Economist Handelsblatt FTD FTD 2
Open Europe reports In business weekly Heti Valasz, Hungarian Economy Minister Gyorgy Matolcsy accuses the EU of building a “European empire”, which he claims is “contrary to our interests, because it erodes the independence of the Hungarian state, necessary for the country’s economy development.” EUobserver
Euro Intelligence reports Draghi comes out in support for a big banking union. ECB President is fiercely critical of how member states have been handling domestic banking crises; he said the supervision of banks should be done centrally in the eurozone; and Jörg Asmussen said 25 systemically relevant banks should be subject to eurozone supervision.
The ECB’s Chairman’s remarks illustrate Eurozone sovereign insolvency and banking insolvency. The PIGS are insolvent sovereigns, and have no power to govern, as confidence has fled as economic depression has set in, and as the nations have lost their debt sovereignty. The PIGS have insolvent banks, which cannot provide credit or provide stable monetary functions; money is flowing out of Greece and Spain at a terrific rate.
The Apostle John provides a dream given to him by angels in his 90s, while on exile to the Isle of Patmos, this is known as the Revelation of Jesus Christ. And specifically in Revelation 13:1-4, he foretells of the formation of regional economic and political blocs, where the Beast regime of Neoauthoritarianism, with its seven heads symbolic of its domination mankind’s seven institutions, and ten horns symbolic of its rule in the world’s ten regions; this behemoth rises from the profligate nation-state of Greece to replace the Banker of Neoliberalism.
This monster of totalitarianism, statism, and debt servitude, is the ten toed kingdom prophesied in Daniel 2:30-33, where ten toes of regional governance coalesce from a miry mixture of iron diktat and clay democracy.
Friday, June 1, 2012, was an pivotal day in mankind’s political and economic history, as Mario Draghi communicated that the Euro zone is unsustainable in its current form.
Mario Draghi’s words shattered the two iron legs of global economic, political and financial rule by the UK and the US, that have governed the world from the late 1700s to 2012. Wall Street Financial seigniorage, that is ability to provide moneyness, was dealt a mortal wound, as Financial Shares, IXG, fell 3.7%, turning World Stocks, VT, and US Stocks, VTI, lower. Mario Draghi’s words have set in motion a global sell off of financial stocks that will result in Financial Armageddon, that is a global credit breakdown and economic collapse, this being foretold in Revelation 13:3, where one of the seven heads, that is the institution of ecomics, banking, finance, and trade suffers what appears to be a fatal wound; but nevertheless recovers.
Leaders will meet in summits and waive national sovereignty and pool sovereignty regionally. The Neoliberal schemes of ponzi finance, that underwrote corporate profit and global trade, will be replaced by the Neoauthoritarian schemes of regional framework agreements, which provide for regional security, stability, and sustainability, through appointment of public private partnerships, and regional banking, credit, monetary, trade, and fiscal authorities, which replace sovereign nation states.
Eventually, the ten toes of regional governance being non compatible building materials will eventually crumble, and a one world government, and a global dictator will arise, who will overthrow three global leaders, Daniel 7:7-8
3) … In today’s news
Rachael Rose Hartman writes in The Ticket Senate races to watch in 2012.
Bespoke Investment Group writes Worst Week Ever for US Economic Indicators.
Bloomberg reports ArcelorMittal Price Squeeze in $960 Billion Steelmaking Industry. Lakshmi Mittal, whose $46 billion takeover in 2006 created ArcelorMittal, MT, as the world’s largest steelmaker, is getting pushed around. The U.K.’s richest person can’t stop his iron-ore suppliers from raising prices and can’t pass on higher costs to customers share like Volkswagen AG (VOW), after the Luxembourg-based company’s market fell to its lowest since 2009. The company’s stock slid to a record today, and yields on debt issued this year are close to their highest relative to benchmark bonds. Even after years of consolidation, today’s five biggest steelmakers including ArcelorMittal and South Korea’s Posco, PKX, control no more than 19 percent of the $960 billion global market, too little to defend their prices.
CNBC reports Small Biz Lending Shrinks as Owners Grow Cautious.
NYT reports Greek Leftist Challenges Europe on Austerity.
Bloomberg reports India Growth Slows to 9-Year Low as Rupee Drops to Record. India’s economic growth weakened to a nine-year low last quarter, hurt by an investment slowdown that has undermined the rupee and jeopardized Prime Minister Manmohan Singh’s development agenda. Bonds climbed and stocks fell. Gross domestic product rose 5.3 percent in the three months ended March from a year earlier, compared with 6.1 percent in the previous quarter, the Central Statistical Office said in a statement in New Delhi today. The median of 31 estimates in a Bloomberg News survey was for a 6.1 percent gain
4) … DollarCollapse provides the following Real Estate News
6/01 Yeah! The housing bottom is here! – The Big Picture
6/01 Foreclosure wave arrives in judicial states – UPI.com
6/01 Foreclosure home sales rise in 1Q – USA Today
6/01 Booming short sales poised to overtake foreclosures – CS Monitor
6/01 Irvine housing market speeds up 9% – OC Register
5/31 Prepare for the coming housing collapse – Business Insider
5/31 Foreclosures and resulting blight infest once-safe neighborhoods – Los Angeles Times
5/31 Home prices hit post-boom lows – CS Monitor
5/31 Iceland property bubble grows with currency controls – Bloomberg
5) … A global Eurasia War is coming soon; it is known to Christians as the Ezekiel 38 War.
EurActive reports Russian Ambassador: ‘EU is like a crocodile’
EurActive reports EU steps up response to Syrian massacre