Financial Market Report for Monday, August 6, 2012, and Tuesday, August 7, 2012
1) … God has ordained five dispensations to rule mankind; a shift in global empires is taking place. The five dispensations, or arrangements, are 1) Sin and Death, 2) The Law, The Prophets, And the Nation of Israel, 3) Empires presented in Nebuchadnezzar’s Dream, 4) The Millennial Kingdom, and 5) the New Jerusalem. News reports communicate that a Coup D’Etat is underway in the Eurozone; this as the global hegemony of the UK and US is waning; it is all part of the shift in world power, as regional blocs rise in economic and political power to replace crony capitalism and European Socialism in the current dispensation of empires.
On Monday, Open Europe relates SPD signals it could be willing to accept eurozone debt pooling. In an interview with Berliner Zeitung, SPD Chairman Sigmar Gabriel announced that the SPD was prepared to change its eurozone policy by accepting collective debt liability in exchange for stricter budgetary oversight, claiming that the Merkel government’s current strategy – hitherto broadly supported by the SPD – had failed. Gabriel acknowledged that for such a move, the German constitution would need to be altered and put to the public in a referendum.
Separately, Reuters reports that Austrian Chancellor Werner Faymann has said that in his view, German Chancellor Angela Merkel will ultimately give up her resistance to giving the ESM a banking licence. FAZ reports that CSU MP Peter Gauweiler – who has lodged one of the complaints against the ESM treaty currently under consideration by the country’s constitutional court – has indicated that he will broaden his complaint to include the possibility of ESM obtaining a banking licence.
Berliner Zeitung FAZ: Habermas, Nida-Rümelin & Bofinger Süddeutsche Welt Irish Times Reuters FAZ
Open Europe relates Monti: Governments cannot be too tightly bound by national parliaments. In an interview with Spiegel, Italian Prime Minister Mario Monti warned of the “psychological break-up of Europe”, saying that he was “very worried” about resentment spreading in the Italy and the Italian parliament about the EU, the euro and also Germany. Monti also warned that “If governments allow themselves to be completely bound by the decisions of their parliaments without maintaining some room for manoeuvre in international negotiations, then a break up of Europe will be more likely than closer integration.” This comment was subsequently criticised by a number of German commentators and politicians, including the SPD’s deputy faction leader Joachim Poß, who argued that “the acceptance for the euro and its rescue are enforced and not weakened through the role of national parliaments”.
Spiegel Spiegel 2 City AM Sole 24 Ore Corriere della Sera Repubblica La Stampa EUobserver El Pais El Mundo
Bloomberg reports Bank License for ESM Illegal, Germany’s Westerwelle Tells Focus. German Foreign Minister Guido Westerwelle said it would be illegal in Germany to grant a banking license to the European Stability Mechanism, the future permanent euro-area bailout fund, Focus magazine reported, citing an interview. Shared liability for public debt in Europe would burden Germany with unlimited risks, a prospect that would violate the country’s constitution, Westerwelle said. Europe needs to boost its competitiveness and the entire euro region needs effective economic policy changes, he said.
Zero Hedge relates The German Press Responds To Draghi: “Vengeance Will Be Bitter”.
CNBC reports Greece’s New Pledges Will Take Epic Battle to Implement. Greece’s latest fiscal and reform pledges may be enough to convince international lenders weary after years of broken promises to keep Athens hooked to a 130 billion euro ($161 billion) lifeline, but the battle to implement it will be epic.
Ambrose Evans Pritchard writes Germany and Italy near blows over Euro. German politicians from across the spectrum have reacted furiously to warnings by Italy’s Mario Monti that Bundestag control over EU debt policies threatens to bring about the “disintegration” of the European project. Bundestag president Norbert Lammert said parliament’s integrity cannot be subordinated to the ups and downs of the markets. “The tone of the debate has turned dangerous. We must be careful that Europe does not rip itself apart,” said German foreign minister, Guido Westerwelle. He himself fanned the flames over the weekend, saying he was “categorically” against further expansion of the EU rescue machinery or bond purchases by the European Central Bank. “I can’t imagine that a majority of the Bundestag will back unlimited debt liabilities,” he said. The dispute comes as relations between Germany and Italy touch the lowest ebb since the Second World War, with Il Libero publishing a front-page picture of Chancellor Angela Merkel under the headline “Fourth Reich”.
Peter Schwarz writes in WSWS The euro bailouts and the crisis of democracy in Europe. Italian Prime Minister Mario Monti said Monday that Europe would fall apart “if governments are completely bound by the decisions of their parliaments.” Every government has “a duty to educate the parliament,” he added in an interview with the news magazine Der Spiegel.
Monti gave his interview after a week in which anti-worker austerity measures were intensified throughout Europe. The Greek government has decided on further cuts of €11.5 billion, which will deepen the suffering of already devastated workers and pensioners. The Spanish government has increased its previous deficit-reduction target by 60 percent and now aims to cut the massive sum of €102 billion from the budget, throwing the country back to the poverty of the Franco era. The European Central Bank has decided to support countries, hrough the purchase of government bonds—only if they have previously made an application to the European emergency aid fund and submitted to EU-dictated austerity measures.
Under these circumstances, Monti’s comment underscores the basic class agenda of the European bourgeoisie: to press ahead with the policies of the banks, whatever the outcome of elections or the size of street protests and strikes against austerity measures.
Monti knows well that the social counterrevolution demanded by the international financial markets is incompatible with democratic methods. He leads a government of technocrats that has no democratic legitimacy. Monti, an economics professor, advisor to Goldman Sachs and member of several conservative think tanks (Bruegel, Bilderberg Conference, Trilateral Commission), is a trusted representative of international finance capital. At its behest, he succeeded the Berlusconi government last November without the holding of an election because Berlusconi had failed to cut the budget quickly and deeply enough.
Since then, the Monti government has systematically attacked the social gains and rights won by Italian workers since the fall of the fascist dictatorship of Mussolini at the end of World War II. It has reduced pensions, increased consumption taxes and eliminated legal protections against dismissal and other social rights.
Political conclusions must be drawn from Monti’s statement that the break-up of Europe can be prevented only if governments repudiate democratic procedures. The working class cannot defend its rights and social gains within the reactionary framework of the European Union.
The views of Monti’s immediate opponents on European financial policy—German politicians who have criticized his remarks as an attempt to “weaken democratic legitimation,” in the words of Foreign Minister Guido Westerwelle—are equally hypocritical and reactionary. Berlin has consistently sought to impose devastating cuts, notably on the Greek government, in total defiance of popular opinion in Greece and other European countries. It has, moreover, led the campaign to establish a de facto EU dictatorship over the fiscal policies of euro zone governments.
This underscores that the EU, as a whole, is an instrument for the subjugation of Europe to the dictatorship of competing cliques of finance capital
Open Europe on Tuesday relates German FM: Tone of debate on Europe “is very dangerous”. Following the widespread criticisms of Italian Prime Minister Mario Monti’s remarks on the need for eurozone governments to allow themselves some “room for manoeuvre” from national parliaments, a spokesperson for German Chancellor Angela Merkel said that “every government action also has to be democratically legitimised”. Monti yesterday clarified in a statement that he is in favour of cooperation between governments and parliaments. Separately, German Foreign Minister Guido Westerwelle warned that “the tone of the debate is very dangerous. We have to be careful that we do not denigrate Europe.”
FAZ FAZ 2 Bild Welt Welt 2 Sole 24 Ore La Stampa Telegraph Repubblica 2 Sole 24 Ore Corriere della Sera 2 WSJ Repubblica 3
An EU official said yesterday that the European Commission plans to unveil its proposal for a single eurozone banking supervisor by 11 September, reports the WSJ.
WSJ EUobserver La Tribune
Reviewing Conservative MEP Dan Hannan’s recent book ‘A Doomed Marriage: Britain and Europe’ in the Telegraph, former editor Charles Moore argues, “The downfall of the EU, in its present form, is deserved, but it is also, unless there is something to replace it, to be feared.” Telegraph: Moore
Neoliberalism featured wildcat finance, a Doug Noland term. Neoauthoritarianism will feature wildcat governance, where only the most fierce leaders will rise to be the top dogs. The groundwork and foundation for a European Super State, has been laid by Mario Draghi, as well as by Angela Merkel, Francois Hollande and Mario Monti. These are heralds and antecedents of a greater sovereign experience, that being rule by Europe’s Sovereign, as foretold in Revelation 13:5-10, and Europe’s Seignior, Revelation 13:11-18. The all inclusive experience of totalitarian collectivism will be a unified experience of living under diktat, where the word, will, and way of these two will supercede all constitutional and historic law. The current fiat money system will be replaced by the diktat money system, where diktat serves as both money and credit. The scope and power of the Beast Regime, that is rising out of the profligate peripheral PIGS, to replace the Banker Regime, will be recognized as unconquerable; John The Revelator, writes that people will actually worship this monster, Revelation 13:1-4.
2) … An inflection point in fiat wealth has been reached. Bonds traded lower and stocks higher on Monday and Tuesday of the first week of August 2012, as bond vigilantes gained control of sovereign interest rates as the US fiscal cliff nears and rallied Eurozone Stocks. Bond vigilantes drove interest rates higher forcing a sell off of longer duration US Government Debt, ZROZ, EDV, TLT, forcing a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as reflected in the Steepner ETF, STPP, rising in value, and the Flattner ETF, FLAT, falling in value.
A see-saw destruction of fiat wealth is underway as Bonds, BND, and even now Junk Bonds, JNK, Emerging Market Bonds, EMB, and World Treasuries, BWX, are trading lower on currency deflation with the US Dollar, $USD, UUP, now trading lower on the month and the failure of sovereign authority in the Eurozone, and the Indian Rupe, ICN, the Brazilian Real, BZF, and the British Pound, FXB, having fallen sharply since March 2012.
The US Federal Reserve, and the world central banks have lost control of interest rates to the bond vigilantes who .have called interest rates higher globally, as reflected in the longer duration US Corporate bonds, BLV, falling sharply, and the shorter duration US Corporate bonds, LQD, trading lower. as well.
Tuesday August 7, 2012, is a day in financial infamy as the governments of the world lost debt sovereignty to the bond vigilantes as documented in International Treasury Bonds, BWX, trading flower. We are witnessing bible prophecy of Revelation 6:1-2, being fulfilled as the baton of sovereignty is being passed from sovereign nation states, such as the US, the UK, Spain, Italy, and Greece, to regional sovereign bodies and leaders. The economy of God, that is the dispensation of Christ, Ephesians 1:10, is at work to establish regional economic and political governance, as foretold in Daniel 2:30-33 and Revelation 13:1-4.
In the world stock markets, on Monday, August 6, 2012, The US Dollar, $USD, UUP, traded lower. Base Metals, DBB, Oil, USO, Timber, CUT, Gold, GLD, and Silver, SLV, rose. Spain, EWP, Italy, EWI, Greece, GREK, and Germany, EWG, led Europe, VGK, higher. China Real Estate, TAO, led Asia, EPP, higher. Japan, EWJ, Russia, RSX, and Brazil, EWZ, rose strongly. Steel, SLX, Gold miners, GDX, and GDXJ, and Silver Miners, SIL, the Nasdaq 100, QTEC, rose strongly. Dig and dirt moving stocks, such as JOYG, TEX, ALG, CNH, MTW, rose strongly as did Oil And Gas Refineries, PSX, VLO, HFC, TSO, DK, WNR. Utilities, XLU, such as NEE, and DTE, traded lower.
On Tuesday, August 7, 2012, The US Dollar, $USD, UUP traded lower again; and with it bonds, BND, traded parabolically lower as Spain, EWP, and Italy,EWI, rallied Europe, VGK, higher. Bespoke Investment Group writes A monster rally in Europe: “Since its late July low just two weeks ago, Spain is up nearly 22%, followed by Italy with a gain of 19.1%! Even France and Germany are both up more than 10%.” Argentina, ARGT, blasted higher. India, INDY, Brazil, EWZ, and Russia, RSX, led the BRICS, EEB, higher. Steel, SLX, continued higher. Energy Service, OIH, and IEZ, traded higher. Energy, XOP, and XLE, traded higher. China Minerals, CHIM, China Small Caps, HAO, and Japan, EWJ, led Asia, EPP, higher.Networking, IGN, Stockbrokers, AIA, and Nasdaq 100, QTEC, traded higher. With Mortgage Backed Bonds, MBB, trading lower on higher interest rates, Mortgage REITS, REM, and Estate, IYR, and its stellar performer, Residential REITS, REZ, have now turned lower.
The ongoing Yahoo five day chart of CAF, EWS, EWA, VTI, EWW, EWD, shows Monday’s and Tuesday’s stock market rally on the sale of Bonds, BND .Australia’s Westpac Banking WBK and Australia, EWA, have moved parabolically higher on a rising Australian Dollar, FXA. Hong Kong, EWH, and especially Singapore, EWS, and Sweden, EWD, have risen strongly on the sale of Bonds, BND.
Major Currencies, DBV, and Emerging Market Currencies, CEW, want to take stocks up; but the Euro, FXE, of course, has the potential to be a major drag for rising stocks. Energy Service Companies, PDS, NOV, DRQ, FTI, OII, GLF, FET, HLX, OIS, RES, NR, as well as SLB, TS, BHI, and HAL have performed quite well. Frankly, the overall picture is bearish as the rally in Railroad stocks, such as UNP, GWR, CP, KSU, CNI, NSC, and CSX, is getting long in the tooth, and Airlines, FAA, are a drag on Transports, IYT, which are lagging Industrials, IYJ. Market Trends Forecast relates S&P 500 has jumped to a cyclical high as seen in the chart of SPY.
In the age regional governance, physical ownership of gold in gold bullion or in Internet trading vaults, such as Gold Is Money, or Bullion Vault, is the the only means to preserve wealth.
3) … I live in Christ, yet reside in a poneros cesspool; covenant living requires I have amity not enmity. Hebrews 8:6-13, relates God has consummated a new covenant with His regenerated people who know the law of life in Christ Jesus. The attitude, behavior and speech of the saints bears testimony to being in the new creation. When one is born again, God puts the law of life within a person, enabling one to spontaneously know God. This knowing, this experience, comes from understanding his Word, as well as experiencing Him as life. Being of the new covenant, from a little one to an older one, none have need for anyone to teach him, as he is able to know God by himself. Those who have been saved by God’s life, have this life within as a law, providing a natural capacity for one to know God, and live through Him. This is a particular aspect of the new covenant.
Being of the new covenant, I must communicate peace to all, if faith is to genuine. I live in a multi story trailer-court. In this public housing apartment complex, most residents receive a $600 rent subsidy provided by taxpayers, in addition to a $200 food stamp allowance, as well as a $700 disability payment for a total monthly dole of $1,500; the equivalent of working a fulltime job at minimum wage. The worst of the DSM 4 antisocial individuals live here. One of my neighbors commented on the fact I carry a purse. Frankly, what I carry is none of his business; his comments were simply testing to see if he could upset me; I replied peacefully that “I find it helpful for carrying books, markers, and lights that I use when I go out walking at night.” One elderly woman, said to me, “I suppose, that it is best one say nothing harsh”. How true, if one were to say anything harsh, then one would become only a target of really mean and crazy behavior. Amity, not enmity, must characterize my life.
4) … A Global Eurasia War is coming soon; it is identified in scripture as the Ezekiel 38 War. Chris Madsen of WSWS relates Turkey attacks Kurds, threatens military action against Syria. On the eve of an expected offensive in Aleppo by the Syrian regime, Turkey has threatened to invade Syria.