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

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


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