Combined financial market report for the month of October 2012 and the first week of November, ending November 2, 2012.
On Wednesday, October, 31, 2012, the National Bank of Greece, NBG, fell strongly, forcing Greece, GREK, sharply lower; and also, Argentine Banks, GGAL, BRF, and BMA, traded lower, forcing Argentina, ARGT, lower
The age of fiat asset deflation commenced in October 2012, as World Stocks, VT, ACWI, traded lower on the exhaustion of the world central banks’ monetary authority as evidence by Preferred Financials, PFF, and PIMCO Income Strategy, PFL, peaking out and trading lower. Stocks are unable to leverage debt higher as bond vigilantes have gained command of interest rates globally, as is evidence by distressed investment, traded by the mutual fund Fidelity Investments mutual fund FAGIX, trading lower from its October 17, 2012 high.
Stock sectors falling lower in October 2102 month included
IYC, 1.0, led lower by STB, RCII, CATM, TUC,
Stocks trading higher at the end of the October 2012, included the Too Big To Fail Banks, RWW, JPM, BK, STT, BAC, C. Countries trading higher included Turkey, TUR, as money flowed in from neighboring Iran. Since September 14, 2012, the financial shares, XLF, especially the Too Big To Fail Banks, have diverged upwardly from falling technology shares as the banks, being laden with distressed investments like those held by the US Federal Reserve and the ECB, have maintained their value, while technology shares, MTK, and PSCT, have fallen on the inability of neoliberal finance to stimulate global growth and trade as is seen in this ongoing Yahoo Finance chart of RWW, MTK, PSCT, and SPY. Bespoke Investment Blog writes Technology Falters in October. At the start of the October, Technology was sitting pretty as one of the top performing sectors of the market in 2012.
Countries falling lower in October 2012 included
Oil, USO, -7%, Copper, JJC, -7%, Base Metals, DBB, -10%, and Agricultural Commodities, RJA, JJA, -3%, led commodities, DBC, USCI, lower in October 2012.
Bonds, BND, traded lower in October 2012, as competitive currency devaluation took Emerging Market Currencies, CEW, 1.2%, the Indian Rupe, ICN, 1.5%, Canadian Dollar, FXC, 1.6%, the Swedish Krona, FXS, 2.1%, and the Japanese Yen, FXY, 2.3%, lower, as the US Dollar, $USD, UUP, traded unchanged,
Bond vigilantes called interest rate on the US Ten Year Note, ^TNX, higher, as the chart of the Steepner ETF, STPP, shows an Elliott Wave 3 Up Breakout. World Government Bond, BWX, traded lower; Emerging Market Bonds, EMB, and Junk Bonds, JNK, and Leverage Buyouts, PSP, peaked out; while, International Corporate Bonds, PICB, and US Corporate Bonds, LQD, traded higher.
The US Dollar, $USD, continued higher the first week of November 2012 … from a double bottom in September 2012 and October 2012 … as is seen in this chart of ongoigng Yahoo chart of UUP, on a falling Euro, FXE, Swedish Krona, FXS, South Africa Rand, SZR, Swiss Franc, FXF, Brazilian Real, BZF, Indian Rupe, ICN, Emerging Market Currencies, CEW, and most notably a Japanese Yen, FXY. We are witnessing the end of the US Dollar as the world’s reserve currency; diktat will be universally recognized as currency; regional blocs will arise based upon regional framework agreements; in Europe, the Euro will be that region’s basis of currency; and in Asia, the Renminbi, RMB, that is the Yuan, CYB, will be the basis supporting regional country currencies.
The rise in the US Dollar, $USD, DXY, pummeled Commodities, DBC, with Silver, SLV, Copper, JJC, Gold, GLD, Oil, USO, turning Silver Miners, SIL, SSRI, and Gold Miners, GDX, GDXJ, sharply lower. With global competitive currency devaluation underway, the world has definitively passed through peak credit as Total Bonds, BND, is now trading lower for the second month in a row. The turn lower in Distressed Investments, traded by Fidelity Mutual Fund FAGIX, and Closed End Debt Funds, traded by Pimco Income Strategy Fund, PFL, seen here in this combined ongoing Yahoo Finance chart, suggests the failure of the world central banks’ monetary authority. The US Federal Reserve and the ECB are longer able to provide seigniorage, that is moneyness, to the world wide debt trade.
Reuters reports Wall Street ends storm-shortened week with a selloff. Stocks ended an unusual storm-shortened trading week with a selloff on Friday, as major indexes erased early gains sparked by a stronger-than-expected payrolls report. Energy stocks were a drag on the markets. Homebuilders, ITB, Metal Manufacturing, XME, Steel, SLX, Energy Production, XOP, PSCE, Energy Service, OIH, IEZ, tumbled.
World stocks, VT, including Calamos Total Return, CSQ, Global Real Estate Excluding The US, DRW, Global Premier Properties, AWP, The Too Big To Fail Banks, RWW, C, BK, BAC, JPM, STT, CS, MS, and Preferred Financials, PFF, Water Utilities, PHO, are unable to leverage Aggregate Credit, AGG, as the world government bond bubble, that is the sovereign debt trade, has ended, as reflected in International Treasury Bonds, BWX, and Emerging Market Bonds, EMB, trading lower. Transports, IYT, such as KSU, TRN, ODFL, JBHT, and Industrials, IYJ, have topped out as is seen in this combined ongoing Yahoo Finance chart. Consumer Services, IYC, has turned lower with CMCSA, DISH, LMCA, TWC, DIS, THO, WGO, PII, HOG, DW, HRB, CSV, SCI, DIN, YUM, topping out. The chart of Homebuilders, ITB, manifested massively bearish on Friday of this week, suggesting an end their dramatic and enduring rise. Sin stocks, VICEX, topped out, including RCL, CCL ,WYNN, MTN, VAC, PNK, MGM; as did Specialty Chemicals, GRA, IFF, CYT, ECL, PPG.
The spigot of carry trade investing has failed on a rising US Dollar, as well as on the world speculative banking community, IXG, turning lower. Investment flows into the Philippines, EPHE, New Zealand, ENZL, and Thailand, THD, have ceased. Money flowing from Iran into Turkey, TUR, has failed to leverage this country higher. Greek, GREK, shares plummeted this week. Large cap creditors, SLM, COF, V, DFS, EFX, ADS, MA, FSC, have topped out. Carry trade darlings in Germany, SAP, SI, in Mexico, CX, ICA, PAC, ASR, OMAB, in Netherlands, PHG, CNH, UN, ENL, ASML, in Switzerland, SYT, in India, TTM, in Luxembourg, ASPS, in Ireland, CBE, JHX, ACN, IR, FLY, in South Korea, LPL,KT, SKM, DEP, in Chile, SCCO, in Brazil, FBR, in Australia, BHP, in UK, RUK, in Italy, LUX, in Taiwan, TSM, and Hong Kong, MPEL, KORS, have topped out and are trading lower.
Risk on momentum investing is history as US Asset Managers, BEN, AMP, FIG, BX, BLK, TCAP, FDUS, ARCC, THL, have topped out.
Doug Noland reports M2 (narrow) “money” supply was little changed at a record $10.212 TN. “Narrow money” has expanded 7.2% annualized year-to-date and was up 6.9% from a year ago; I comment that money, as it has been known, is no longer expanding, as neoliberal finance based upon floating currencies and a falling US Dollar has failed.
The world has through peak wealth, as the fiat money system has died on the trade lower in the world’s major currencies, as sovereign authority, even when supported through Mario Draghi’s, LTROs, and OMT program, is failing, as is seen in the European Financials, EUFN, and US Regional Banks, KRE, trading lower. Chinese Financials, CHIX, popped parabolically higher, on a higher Yuan, CYB, which have supported a strong rally in the China Industrials, CHII, and China Small Caps, HAO. US Homebuilders, ITB, and US Infrastructure, PKB, which encompasses stocks CR, IR, MTW, HD, LOW, PIR, WHR, LII, APOG, USG, MAS, OC, BECN, EXP, HW, VAL, ROP, AMWI, URI, MHK, GVA, NWL, LZB, CYG, TTSI, POWR, PKG, BLL, LPZ, BZ, LL, AOS, WIRE, ITW, manifested a bearish harami at the top of an ascending wedge after having risen for 13 months, largely supported by rising Mortgage Backed Bonds, MBB, which have turned lower signaling an end to growth in US Stocks, VTI, as well as Small Cap Industrials, PSCI, such as BEAV, SNA, TTC, MIDD, WTS, DXPE, PLL, BGG, THR, NDSN, FLS, WTS, VMI, TREX, TTC.
Diktat is rising to become the new money for the age of fiat asset deflation. Neoliberalism, with its wildcat finance, a Doug Noland term, based upon the Cat In The Hat social doctrine, and Free To Choose investment doctrine, is giving way to Neoauthoritarianism, with its wildcat governance, which is based upon the diktat of authoritarians, which will lead the entire world down The Road To Serfdom as described by Austrian Economist Friedrich von Hayek (1899–1992) as he wrote between 1940–1943.
The dynamos of global growth and trade, that powered Capitalism, European Socialism, and the vehement Greek Socialism, are winding down, and the dynamos of regional security, stability, and sustainability are powering up Regionalism, where the diktat money system will rise to replace the fiat money system, as leaders meet in summits to waive national sovereignty, and pool sovereignty regionally. Regional blocs will rise in power to replace sovereign nation states. Germany will rise in power to rule over peripheral profligate states. AP reports Greece Outlines new austerity as debt load rises And Peter Spiegel and Kerin Hope of Financial Times reports The magnitude of Greece’s fiscal challenge was painted in sharp relief on Wednesday as Athens unveiled new budget projections exceeding the worst-case scenarios envisioned by international lenders when they agreed a €174bn rescue eight months ago. Instead of Greece’s debt peaking at 167% of economic output next year, as predicted in the March bailout agreement, it will hit 189% and climb to 192% in 2014. The new projections all but dash hopes that Greek debt will come down to 120% of GDP by 2020 – once held out as the standard for a manageable debt load. The scale of the faltering has yet again put Germany and other eurozone creditors in a political quandary, forced to come up with as much as €30bn in new funding to meet Greece’s needs. The prophet Daniel in Daniel 2:30-33 foretells the iron rule of the twin legs global hegemony of UK and US, will give way to the rise of a iron diktat and clay democracy of a ten toed kingdom of regional governance, where ten toes of regional governance will dominate in all of the world’s ten regions.
The Milton Friedman floating currency scheme and the Wall Street investment banker seigniorage of securitization of debt, is being replaced by the Mario Draghi monetary diktat schemes and the Troika’s seigniorage schemes. The prophet Daniel foretold that a Eurozone leader, the little horn, that is one of seemingly little authority, Daniel 8:7, will rise to power through the schemes of regional framework agreements, Daniel 8:23, to rule Europe, thereby overthrowing the traditional rule of law. In Europe, seigniorage, that is moneyness, will no longer come the combination of bankers and the world central banks, but by the word, will and way, of the Sovereign, Revelation 13:5-10, and the Seignior, Revelation 13; 11-18. Diktat will serve as both money and credit.
As foretold by the Apostle John, in Revelation 13: 1-4, the Beast Regime of Totalitarian Collectivism is rising from the profligate Mediterranean nations; and will eventually occupy in all of the world’s ten regions and in all of mankind’s seven institutions. Greece is the lynchpin for the economy of God, Ephesians 1:10, as Jesus pivots the world from the fullness of prosperity to complete ruin, which is assured, as He has unleashing of the four horsemen of the Apocalypse, Revelation 6:1-8, to destroy all current forms of economic and political life, the goal of which is to institute His global kingdom, Revelation 11:15, and Revelation 20-4-5, which will last for a thousand years, with Him ruling from Jerusalem.