Financial market report for Monday November 5, 2012
Finviz charts show Stocks, VT, and Commodities, DBC, trade lower on exhaustion of the world central banks’ monetary authority, and on inability to stimulate global trade and their inability to stimulate growth in global trade And CNN News reports Greek strike shuts down country for two day ahead of cliffhanger austerity vote. The Parliamentary vote on a third round of austerity measures is a pivotal one, as it decides if the demands of the Troika will replace the Greek constitution as the rule of law, and if national sovereignty will be replaced by the sovereignty of a Eurozone sovereign body, specifically the Troika ruling from Brussels and Berlin.
New governance is rising in the Eurozone as the rule of law is replaced by diktat. Michael Nevradakis, writes in Huffington Post, A renowned Greek constitutional scholar argues that the austerity measures are not only destructive but illegal. Giorgos Kasimatis, one of Greece’s foremost constitutional scholars, has been critical of the loan agreements ever since the first one was signed in 2010. In a recent interview, Kasimatis argued that these agreements violate not only the Greek constitution but also EU and international law.
“The Greek state has relinquished all of its sovereign rights,” according to Kasimatis. “This is unprecedented in an international agreement, particularly a loan agreement. A country has never given up all of its sovereign rights in such a way.”
Greece’s relinquishment of its sovereign rights goes further. As stated by Kasimatis, “the second unprecedented aspect of these agreements, which has not been seen in any loan agreement since at least World War II, is that all of Greece’s public assets have been collateralized.” This restricts Greece from making any financial agreements with other parties, even though Greece’s lenders retain the right to transfer the loan to a third party. Kasimatis accused the Greek media of censoring any discussion about the issue.
“Unfortunately, the mass media does not publicize viewpoints like mine,” said Kasimatis. “Nobody can share such viewpoints through the media, but solely through speeches and the like.”
According to Kasimatis, an appeal of the Council of State decision has been filed with the European Court of Human Rights, which is still pending. He also personally pledged to continue his own legal efforts against the agreements. He expressed his serious concern, however, with the policies that the European Union has been undertaking.
“My greatest concern is the danger which manifested itself in the 1930s, when human rights began to be violated by the fascistic regimes of Germany and Italy, ultimately leading to the outbreak of World War II,” said Kasimatis. “That’s why I am concerned today, because it is extremely dangerous for Europe to be proceeding with such a systematic process violating all principles of democracy and human rights, in conjunction with our government.” The podcast of the Dialogos Radio interview with Giorgos Kasimatis can be heard here.
Ambrose Evans Pritchard of the Telegraph writes Pritchard writes Over-taxed France risks slipping behind Italy and Spain; IMF tells France to take urgent measures to head off national economic decline; and writes Francois Hollande lurches Right in historic U-Turn to save French economy.
Global debt deflation, since September 14, 2012, is propelling stock values lower as competitive currency devaluation is underway as is seen in the ongoing Yahoo Finance Chart of UUP, FXY, FXS, FXC, FXS, FXA, FXE. Falling currency values worldwide are no longer able to leverage the small cap value shares, RZV, more than the small cap growth shares, RZG. as is seen in the ratio of RZV:RZG manifesting a dark cloud covering candlestick.
Stocks are falling lower on the exhaustion of the world central banks’ monetary authority. The onging Yahoo Finance chart of VT, EWJ, EPP, VGK, VTI, shows that Japan Shares, EWJ, have been leading stock shares lower since September 14, 2012. when the US Dollar, $USD, UUP, began to rise against the Yen, FXY, as is seen in this ongoing chart of UUP and FXY. US Infrastructure stocks, PKB, seen in this Finviz Screener, have likely topped out. The trade lower in Biotechnology, XBI, IBB, and the sell off in Silver Miners, SIL, SSRI, and gold miners, GDX, GDXJ, indicates that investing in precious metal mining stocks is no longer a profitable endeavor. The fall lower in Cloud Computing, SKYY, Smartfone, FONE, and Networking, IGN, heralds the end of the age of profitable investing in technology, The sell off in Steel Stocks, SLX, communicates that the age of infrastructure development and growth investing is history. Home building stocks, ITB, and China Industrials, CHII, and China Small Caps, and China Real Estate, TAO, have topped out. Charts show that carry trade investing in Hong Kong, EWH, and Turkey, TUR, is history.The recent rally in the risk on momentum stocks seen in this Finviz Screener is history.
The US dollar, $USD, UUP is rising and is no longer the world’s reserve currency as the US Federal Reserve, the ECB, and the other world central banks have lost monetary authority to the bond vigilantes who have been calling interest rates higher globally, as reflected in the Interest Rate on the US Ten Year Note, ^TNX, began rising since July 24, 2012, the Steepner ETF, STPP, rising reflecting a steeping 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, and the value of Mortgage Backed Bonds, MBB, International Treasury Bonds, BWX, Emerging Market Bonds, EMB, Junk Bonds, JNK, Leveraged Buyouts, PSP, as well as Total Bonds, BND, falling in value.
Bond values, BND, have been falling lower since October 1, 2012; and stock values, VT, have been falling lower since September 14, 2012; stocks are no longer able to leverage bond values higher. Fiat wealth is dying on the exhaustion of neoliberal finance as is seen in the combined ongoing Yahoo Finance chart of Calamos closed end equities, CSQ, and Pimco closed end debt, PFL, trading lower. The global debt trade that has underpinned expansion of corporate growth has failed, as is communicated in the ongoing Yahoo Finance chart of Distressed Investoments, FAGIX, and Large Cap Growth shares, JKE.
Outside of the Eurozone nations of Greece, Italy, and Spain, as well as outside of Argentina, Vietnam, South Africa, and Egypt, the countries of Brazil, Canada, Sweden, Russia, Nasdaq 100, Europe, and Japan have been strong fallers since September 14, 2012, as is seen in this ongoing MSN Finance chart of EWZ, EWC, EWD, RSX, QTEC, VGK, and EWJ.
Japan Banks, MFG, MTU, SMFG, NMR, have been leading Japan, EWJ, lower, as is seen in this ongoing Yahoo Finance chart … Argentina Banks, GGAL, BBVA, BFR, BMA, have been leading Argentina, ARGT, lower as is seen in this ongoing Yahoo Finance chart … Brazil Financials, BRAF, specifically, BSBR, ITUB, BBD, have been leading Brazil, EWZ, lower, as is seen in this ongoing Yahoo Finance chart.
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.
Currencies are dying and are being replaced by diktat. The Milton Friedman Free To Choose Floating Currency Regime is falling to the Beast Regime of Regionalism and Totalitarian Collectivism. Fiat assets, that is stocks, VT, and Bonds, BND, are depreciating in value, as inflationism has turned to destructionism.
The world has passed through peak wealth; the age of prosperity has pivoted to the age of fiat asset deflation. Investors are derisking out of stocks, VT, and deleveraging out of commodities, DBC, on the exhaustion of the world central banks’ monetary authority. Crony Capitalism, European Socialism, and Greek Socialism, are dying, and are being replaced by Regionalism on the failure of national sovereignty.
Insolvent sovereigns and their insolvent banks, IXG, are failing to provide seigniorage, that is moneyness, and hence neoliberalism is pivoting to neoauthoritarianism, where seigniorage, that is moneyness, comes from diktat. The fiat money system is being replaced by the diktat money system, where diktat serves as money, credit and currency. Diktat will be the new currency, that is the new money, as neoliberalism falls to neoauthoritarianism.
The dynamos of global growth and trade, that powered Capitalism, European Socialism, and the vehement and anticompetitive 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. 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.
As foretold by the Apostle John in bible prophecy of Revelation 13;1-4, The Beast Regime of Regional Governance and Totalitarian Collectivism is rising from the profligate Mediterranean nations of Greece, Spain, and Italy; and is manifesting as a nascent One Euro Government, that is a federal European Super State, where eventually Germany will come to rule the Eurozone as a type of revived Roman empire; this monster will eventually occupy in all of the world’s ten regions, and rule in all of mankind’s seven institutions.
In today’s news
Business Insider reports 20 US Cities That Are Getting Crushed By Foreclosures.