Merkel Bends Announces Rescue Of Spanish Banks … Dollar And Bonds Fall Lower …. Currencies, Commodities And Stocks Soar
1) … Merkel Bends Announces Rescue Of Spanish Banks.
Mike Mish Shedlock writes German Chancellor Angela Merkel has worked out a deal with Spain to rescue its banks. Global equity markets and commodities, especially gold and silver, have cheered the news.
Reuters reports Germany finalizing face-saving aid deal for Spain.
Lending to Peter so Peter Can Lend to Paul. Got that? Germany is not willing to lend money directly to Spanish banks, but is willing to lend to the FROB so the FROB can lend to Spanish banks. Eurointelligence explains EFSF to lend directly to the FROB. Did this sleight-of-hand, shell-game proposal have any effect? Not to the bond market unless you count the small rally in yields from about 6.66% to 6.28% ahead of the news with almost no follow-through today.
Seeking Alpha writes A European banking union.
Bloomberg reports Commerzbank Cut as Moody’s Downgrades German, Austrian Banks. Commerzbank AG (CBK), Germany’s second- largest bank, had its credit rating cut one level as Europe’s deepening debt crisis prompted Moody’s Investors Service to downgrade seven lenders in the nation and three in Austria. Commerzbank, based in Frankfurt, was reduced to A3 from A2, Moody’s said in a statement today. A review of Deutsche Bank AG (DB), the nation’s largest lender, will be concluded later, Moody’s said. The Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil, which has tipped at least eight of the 17 euro-area economies into recession and damped European demand for foreign goods. Policy makers at the European Central Bank meeting today face increasing pressure to lower rates and introduce more liquidity support for banks. “Today’s rating actions are driven by the increased risk of further shocks emanating from the euro area debt crisis, in combination with the banks’ limited loss-absorption capacity,” Moody’s said of the German lenders. In addition to Commerzbank, five other lenders based in Germany were reduced, as was the local subsidiary of a company located outside the country. In Austria, UniCredit Bank Austria AG and Raiffeisen Bank International AG (RBI), Eastern Europe’s third-biggest lender, were lowered one level to A3 and A2 respectively, Moody’s said in a separate statement. Erste Group Bank AG (EBS), the region’s second- biggest lender after UniCredit’s Milan-based parent, was cut two grades to A3. The downgrades “reflect their vulnerability to the adverse operating conditions in some of their core markets,” Moody’s said. The Austrian lenders also face “increased risk of further shocks from the ongoing euro area debt crisis,” it said
2) … The See Saw Destruction Of Fiat Wealth Commences As The US Dollar And Bonds Fall Lower …. Currencies, Commodities And Stocks Soar.
The US Dollar, $USD, UUP, fell after having risen since April 2011 when the world major currencies, DBV, and emerging market currencies, CEW, fell lower on fears that a debt union had formed in the EU. Today, the world currencies, seen in this Finviz Screener, with the exception of the Yen, FXY, and the Brazilian Real, BZF, soared. Deflation has come to the US Dollar; this deft deflation will eventually mean price inflation after the soon coming Financial Armageddon, that is a credit bust and financial system breakdown.
The Steepner ETF, STPP, rose, and the Flattner ETF, fell, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, rose. The benchmark Interest Rate on the US Ten Year Note, $TNX, rose from its historic low of 1.44%. The bond vigilantes now have control over interest rates globally. Today’s, that is June 6, 2012, strong trade lower in US Ten Year Notes, TLT, marks the end of an era of US Sovereignty.
Total Bonds, BND, fell lower on falling US Debt, ZROZ, EDV, TLT, IEF, BAB, LTPZ. The fall lower in the longer duration US Corporate Bonds, BLV, commences the beginning end of US Corporate credit. The hot money flow into US Debt is history; the only safe haven and money good investment is some physical silver and primarily physical gold held in one’s possession in a home or business gun safe, and in Internet trading vaults such as Bullion Vault or Gold Is Money. Michigan Municipal Bonds, MIW, finally traded lower; it has been one of the best performing closed end debt funds over the last five years; it currently pays 5.6%. The 200% inverse of US Treasuries, TBT, rose from a spike down bottom.
Silver, SLV, led Commodities, DBC, higher.
Although Risk On Stocks, ONN, and High Beta, SPHB, rose sharply, all forms of fiat wealth are history. Now that bond wealth is losing value, wealth can only be preserved by dollar cost averaging into precious metals.
Despite today’s rise in world stocks, ACWI, the debt trade is history on the failure of neo liberal finance. Even though Spain’s banks are to be rescued. The ECB, and the US Federal Reserve, and the other world central banks are no longer able to provide seigniorage, that is moneyness, to stock and bond wealth. Though rescued, Banco Santander, STD, is still an insolvent bank, and Spain, EWP, is still an insolvent nation. Yes, despite today’s rise in World Treasury Bonds, BWX, and Emerging Market Bonds, EMB, on higher world major currencies, DBV, and higher emerging currencies, CEW. there are no stable sovereigns to support democracy. Hence, out of the soon coming Financial Armageddon, that is a credit bust and global financial breakdown, foretold by John The Revelator in Revelation 13:3-4, regional governance will coalesce to replace capitalism and European Socialism.
The PIIGS have lost their debt sovereignty, and are no longer genuine sovereigns. Angela Merkel’s and Herman van Rompuy’s New Europe is forming where sovereign bodies, and sovereign leaders will rule from Brussels and Berlin. Empire Germany is now forming a type of revived Roman Empire, which will be the first region of global governance, where the peripheral states will be clients existing in a totalitarian collective, where former citizens of sovereign nation states will be residents living in a region of economic and political governance. Spaniards cannot be Germans, yet all will be one living in debt servitude; yes bedfellows, yoked together in a global gulag of debt encumbrance.
CHIM, ALUM, SIL, GDXJ,COPX, URA, REMX, KOL, led mining stocks, MXI, higher.
Automobile parts manufacturers, seen in this Finviz Screener, led CARZ, higher.
Design Build, USG, MTRX, FLR, SHAW, Building Materials, MAX, NX, TREX, Cement Producers, EXP, TX, JHX, Appliances, LII, Retailer Lowes, LOW, Labor Providr, True Blue, TBI, led US Infrastructure PKB higher.
MU, INTC, TSM, led Semiconductors, XSD, higher.
LEN, PHM, MHO, HOV, RYL, AVH, SPF, led Homebuilding, ITB, higher.
Paper Producers, WOOD, seen in this Finviz Screener rose.
Education companies, such as APOL, DVI, BPI, rose strongly higher.
Railroads, such as GBX, took Transports, IYT, higher.
Energy Shares, PSCE, XOP, XLE, rose higher.
SNA, LECO, led Small Cap Industrials, PSCI, higher.
Steel Producers, MEA, ROCK, NWPX, X, STLD, led Steel, SLX, higher.
Gaming, BJK, Networking, IGN, Smartfone, FONE, Cloud Computing, SKYY, rose higher.
High Dividend Payers, Global Real Estate, DRW, International Dividend, DWX, Leveraged Buyouts, PSP, Shipping, SEA, Australia Dividend, AUSE, International Telecom, IST, rose higher.
World financial stocks, IXG, seen in this Finviz Screener, rose, led by US Banks, BAC, C, MS, BK, which in turn led US financial stocks, XLF, higher.
RF, led KRE higher.
BCS, LYG, RBS, HBC, led EWU higher.
CS, UBS, led EWL higher.
IRE, STD,DB, led EUFN and VGK higher.
IBN, HDB, led INP higher.
GGAL, GGVA, BFR, BBD, led ARGT higher.
WF, KB, SHG, led EWY higher.
The BRICS, EEB, rose with India Infrastructure, INXX, taking INP higher; China Minerals, taking YAO, higher, Brazil Financials, BRAF, taking EWZ higher, Russia Steel Producer, MTL, taking RSX higher.
Australia, EWA, and Australia Small Caps, KROO, blasted higher on a higher Australian Dollar, FXA; likewise, South Africa, moved higher on a higher South African Rand, SZR. Indonesia, IDX, blasted higher.
Robert Wenzel writes of Signs of China Crashing, despite today’s rise in China Stocks, FXI, CAF.
It was the world’s small cap country stocks, such as KROO, SCIF, LATM, ERUS, and EPOL, leading the World Small Cap, VSS, higher, which led world stocks, VT, higher.
Gold mining stocks, GDX, seen in this Finviz Screener, traded slightly higher, having risen now for sixteen trading days; the Junior gold mining stocks, GDXJ, rose, as well, on a slightly higher price of gold, GLD.
Today June 6, 2012, the world entered fully into the Age of Deleveraging. Today’s rally in stocks was simply a dead cat bounce that will not last as the twin spigots of neo liberal finance, ZIRP and carry trade investing have been turned off. Zero Hedge writes The pernicious dynamics of debt, deleveraging, and deflation. CNBC reports A depression is inevitable. Paul Craig Roberts writes Collapse at hand. Mike Mish Shedlock writes Oil tanker rates lowest since 1997. Bloomberg reports Euro-area manufacturing, services shrink as crisis worsen
3) … Angela Merkel and Herman van Rompuy lead the EU into regional governance as foretold in bible prophecy.
New Governance is coming for the New Age of Deleveraging. Daily Bell reports Merkel meets the world eye-to-eye & the world demands a political union.
Dr Worden writes in Leverage of the debt crisis. Nicholas Kulish of the NYT reports Germany is open to pooling debt, with conditions, “The world wants to know how we expect the political union to complement the currency union,” Ms. Merkel said at a news conference with José Manuel Barroso, the president of the European Commission. Instead, the world was probably confused by Merkel’s statement, for the E.U. is not a bunch of unions. The amendment to increase enforcement of the E.U.’s law on state deficit and debt limits was referred to as “fiscal union,” while the currency being used by 17 states was being called “monetary union,” with “political union” standing for “ever closer union” in the future. Perhaps the agricultural subsidies should be called “agricultural union” and the European Court of Justice and what had been called “Justice and Home Affairs” could be called “judicial union.”
“European officials took a small step in that direction by proposing a central authority for banking regulation, which would require [the E.U. states] to give up a bit of cherished sovereignty.”
“The worsening crisis has led to a sweeping effort to chart a new path forward for the union, one that encompasses fiscal integration, Europe-wide banking supervision, and tighter coordination of economic policies.” In addition to a central banking regulator similar to the Fed in the U.S., a plan was being considered by which much of the states’ bad debt (beyond the E.U. debt limit for states as a percent of GNP) would be combined into a single fund to be paid off by the E.U. over 25 years. As Angela Merkel has said, the transfer of additional sovereignty necessary for “an overhaul of the basic architecture” of governance in the E.U. would be a precondition for the union’s use of Germany’s cash and good credit-rating. Whereas the austerity-based plan had been ruinous for the PIGS as well as for the E.U. itself and the euro, using the crisis as leverage with which to get state officials past their conflict of interest in willingly giving up power may have been necessary to save the union.”
A One Euro Government, that is a Federal European Superstate, is forming in the EU under the leadership of Angela Merkel and Herman van Rompuy. Governance is changing from nation states to regional governance where sovereign leaders and sovereign bodies rule, as global regional blocs form to provide regional security, regional stability and regional sustainability. Regionalization of the Eurozone is underway as Angela Merkel has sacrificed national sovereignty for regional banking interests.
We are witnessing the fulfillment of bible prophecy where a Beast Regime of regional governance, Daniel 2:30-44, and Revelation 13:1-4, a European Leader, Revelation 13:5-10, a European Banker, Revelation 13:11-13, and ten regional kings, Revelation 17:17, come to replace the global hegemony of the US and UK, Daniel 2:30-44.
Robert Wenzel writes in Economic Policy Journal, Europe Unveils Continent-Wide Bank-Bailout Plan, “The PIGS, really don’t need a banking union they need money“. This is true, but the Sovereign Lord God, Ephesians 1:1-23, 2 Corinthians, 5:17-18, has unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, to effect a global financial, economic, and political coup d etat, with the announcement of the First and Second Greek Bailout, to destroy the fiat money system.
Money died in April 2011 on fears that a debt union had formed in the EU. And Credit died in April 2012 on fears of financial insolvency and banking insolvency in the EU, as well as on fears that global growth and global trade have failed on the inability of the world central banks’ monetary authority. Not by any human action, but rather by God’s hand of fate, Revelation 2:26-28, there will never ever be a sound commodity money system as envisioned by Austrian economists. The fiat money system will be replaced by the diktat money system where diktat serves as both money and credit.
4) … In today’s news
Robert Wenzel writes in jest, France Takes Big Step to Solve the Euro Crisis. I comment that President Hollande’s and Social Affairs Minister Marisol Touraine’s actions to lower the retirement age from 62 to 60 years old for certain workers are the last vestige of European Socialist action.