Financial Market Report for Monday January 28, 2013
All forms of fiat wealth traded lower on Monday January 28, 2013.
World Stocks, VT, World Small Cap Stocks, VSS, IFSM, Foreign Investment, EFA, SCZ, Emerging Markets, EEM, Global Producers, FXR, Bonds, BND, Commodities, DBC, Major World Currencies, DBV, and Emering Market Currencies, CEW, traded lower, with Basic materials, XLB, and US Basic Materials, IYM, leading the way lower, on the exhaustion of the world central banks’ monetary authority.
An unwinding of currency carry trade investment that began in June 2012, has commenced. The Yen, FXY, traded slightly higher, while the Commodity Currencies, CCX, such as the Australian Dollar, FXA, traded strongly lower, inducing Global Natural Resources, GNR, and the Basic Materials, XLB, lower.
The British Pound Sterling, FXB, led Major World Currencies, DBV, lower. Emerging Market Currencies, CEW, traded lower, and the US Dollar, $USD, UUP, rose to 79.78, continuing a trend from its December 18, 2012, low of 79.25.
Iron Ore Producers, RIO, and CLF, led Global Miners, PICK, World Stocks, VT, and Foreign Investment, EFA, lower. And EMMT, DGS, EDIV, led the Emerging Markets, EEM, VWO, lower.
China Minerals, CHIM, led China, YAO, lower.
EXP, TXI, HW, GMO, CCJ, ZINC, UAMY, led US Basic Materials, IYM lower.
PPG, and LYB, led Specialty and Agricultural Chemical Producers, seen in this Finviz Screener lower.
CE, led the Chemical Manufactuers seen in this Finviz Screener lower.
MCP, led Rare Earth Miners, REMX, lower.
AA, CENX, and NOR, led Aluminum Producers lower.
BTU, and WLT, led Coal Miners, KOL, lower.
URZ and UEC, led Uranium Miners, URA, lower.
SCCO, led Copper Miners, COPX, lower.
WY, LPX, KS, BKI, FBR, and IP, led Timber Producers and Paper Manufacturers, WOOD, lower,
MOS, led Fertilizers, SOIL, lower.
TLR, led Gold Miners, GDX, lower
SSRI, led Silver Miners, SIL, lower. Silver Standard Resources, SSRI, has probably been the most yen carry traded stock of all time, and today risk off investment took the shares 3.5% lower to 11.75.
FLS, and ARG, and SNA, led Industrials, IYJ, lower.
ROLL, led Small Cap Industrials, PSCI, lower.
UNP, and UACL, traded lower, but Transportation, IYT, traded unchanged.
Other sectors trading lower included:
SCCO, MKTAY, WHR, EXP, PPG, LYB, and AA led Global Producers, FXR, lower.
TSL, led Solar Stocks, KWT, lower.
AMWD, USG, OC, MAS, and MIC, led US Infrastructure, PKB, lower.
PCP, led Metal Manufacturing, XME, lower.
PHM, KBH, SPF, RYL, LEN, and KBH, led Homebuilders, ITB, lower.
AKS, and PKX, led Steel, SLX, lower.
LMT, led Defense Contractors, PPA, lower.
GNTX, led Automobiles, CARZ, lower.
AMZN, NILE, EBAY, led Internet Retailers, FDN, lower.
JNPR, led Networking, IGN lower.
SBUX, and DIN, led Consumer Discretionary, IYC, lower.
FLT, and FIS, led Business Service Companies, seen in this Finviz Screener, lower.
REGN, led Biotechnology, IBB, lower.
FEIC, led Nanotechnology, PXN, lower.
UAL, and DAL, led Airlines, FAA, lower
DFS, MA, and V, led Credit Services, seen in this Finviz Screener lower.
SHW, LOW, HD, PIR, BBBY, led Home Improvement Stores lower.
Apparrel Retailers, JOSB, MW, ANN, CHS, ANF, and Pet Products, PETM, led Retail, XRT, lower.
JVA, and INGR, led Consumer Staples, KCI, lower.
TOPS, and PRGN, led Shipping, SEA, lower.
TAO, led Global Real Estate, DRW, lower.
Foreign Investment, EFA, SCZ, and Emerging Markets, EEM, VWO, trading lower included:
MKTAY, and ATE, led Japan, NKY, lower.
PXX, led South Korea, EWY lower.
AUO, HIMX, TSM led Taiwan, EWT lower.
PHG, led Netherlands, EWN lower.
South Africa, EZA
The UK, EWU
Natural Gas, UNG, Tin, JJT, Silver, SLV, and Gold, GLD, led Commodities, DBC, lower.
Closed end stocks, CSQ, traded off more than closed end debt, PFL, communicating that equities are no longer able to leverage higher on credit.
The S&P 500, ^SPX, SPY, traded 0.2% lower, to close at 1,500.18, while the Dow, DIA, the Russell 2000, IWM, and the Large Cap Nasdaq, QQQ, traded higher, as seen in their combined ongoing Yahoo Finance Chart. The weekly chart of the S&P 500, SPY, shows that the week ending January 27, 2013, was an Elliott Wave 5 High at 150. And the weekly chart of World Stocks, ACWI, shows that the week ending January 27, 2013, was an Elliott Wave 2 High at 50. An Elliott Wave 3 Down has commenced in World Stocks, ACWI, this wave is the most destructive of all waves, as it destroys practically all of the wealth invested in the stocks.
The Asset Managers, State Street, STT, and Blackrock, BLK, traded lower today. ETF Trends reported on December 11, 2013 The Vanguard Effect. Since the market bottomed in March 2009, equity mutual funds have experienced a cumulative net outflow of $242 billion, compared with a net inflow of $270 billion to equity ETFs,
Vanguard is neck-and-neck with BlackRock’s, BLK, iShares for the best-selling ETF family in 2012 as the fund company enjoys its best year ever. The $130.4 billion in deposits in mutual funds and exchange-traded funds that Vanguard has taken in through November is the most ever for the industry,” Bloomberg News reports. Vanguard is the third-largest ETF provider with $236 billion through the end of November, or about 18% market share, while iShares controls $539 billion and State Street, STT, manages $318 billion. Year to date, Vanguard has attracted ETF inflows of $46.9 billion and iShares has brought in $47.2 billion. Now the market is watching, with equal parts gratitude and trepidation, the rapid escalation of the Vanguard Effect. It’s asymmetric warfare, as Vanguard’s sole ownership and constituency is its fundholders, the savings it wrings from its buying power are passed on to them, not to shareholders or partners, Bloomberg reports.
In the U.S. marketplace, there are 1,442 exchange traded products from 50 fund managers, according to XTF. It is a $1.3 trillion industry. ETF assets have risen by $265.9 billion this year, or 25%, while net inflows have totaled $163.2 billion.
IPOs, FPX, traded parabolically higher, Jim Cramer is a Television Personality who acts as Wall Street’s Bull Horn. Wikipedia reports that on August 3, 2007, Cramer made a plea for Federal Reserve Chairman Ben Bernanke to cut interest rates supposedly because of comments he was getting from investment banks, and their concern about adjustable-rate mortgage borrowers increasing loan rates. CNBC reports Jim Cramer on IPOs, The best and the rest. If you’ve been looking for new ideas, chances are you’ve been looking at stocks about to go public. “So far, 2013 is turning out to be a real good year for IPOs,” Cramer said. We’ve seen seven deals since the new year began, and at this point all of them have made you money.” Four of them, Bright Horizons, LipoScience, CyrusOne, and Norwegian Cruise Lines all popped by double digits on their first day of trade. The other 3 were master limited partnership IPOs that were not so hot in their first day of trading, but have since bounced back. “That’s a darned good track record, especially when you consider that we’ve got five more IPOs coming next week, including Zoetis, which is the spin-off of Pfizer’s animal health division,” said Cramer.
The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened significantly, resulting in the Steepner ETF, STPP, breaking out as bond vigilantes gained control of the US Interest Rates forcing US Government Bonds, GOVT, and Total Bonds, BND, lower, as the interest rate on the US Ten Year Note, ^TNX, rose to close at 1.97%.
The most toxic of debt, Distressed Investments, FAGIX, which the US Fed took in under QE 1, and which had supported a seven month risk-on global debt, carry trade rally, on a falling Yen, FXY, traded lower.
Japan in its efforts to stimulate inflation, has sunk the Yen, FXY, and has succeeded in producing Liberalism’s last inflationary World Stock, ACWI, Major Currency, DBV, and Emerging Currency, CEW, rally.
Foreign Investment, EFA, SCZ, and Emerging Market Investment, EEM, VWO, and Global Producer Investment, FXR, came to an end on January 28, 2013, as the Yen Bomb went off starting Competitive Currency Deflation.
Reuters reports Japan approves $1.02T budget for 2013/14, Borrowing is at new highs.
Monetization of debt by the World Central Banks, specifically, the credit liquidity of the US Federal Reserve, the ECB, the BoJ, and the Chinese Central Bank, has crossed the rubicon of sound monetary policy, and has created Debt Deflation, that is Competitive Currency Deflation, as FX Currency Traders, sold the Yen, FXY, short, beginning in October 2013, which rose today January 28, 2013, introducing the Bear Market of all time. Great Depression II is on the way. The world has entered into Kondratieff Winter, the final part of the Business Cycle, on what constitutes global money printing.
Excessive Credit, in particular, the Fed’s QE4, the ECB’s LTROs, and OMT, and the BoJ’s Unlimited Easing, have turned “money good” investments bad, resulting in both the death of the fiat money system. Thee Japanification of the Global Economy is underway.
Regional Governance will rise to replace sovereign nation states. With the failure of monetary sovereignty, that is the exhaustion of the world central banks’ monetary authority, we will see the death of sovereign nation states, and the rise of regionalism, as foretold in Bible prophecy of Daniel 2:25-45, which foretells that the two iron legs of global hegemony of the UK and the US, will give way to a Ten Toed Kingdom of regional governance, where ten toes, that is ten regions, will serve as the basis for economic and political government, composed of a miry mixture of iron diktat and clay democracy.
Insolvent sovereigns, GREK, EWP, EWI, EIRL, EWU, EFA, and insolvent financial institutions, EUFN, RWW, cannot provide seigniorage, that is moneyness. The dynamos of global growth and trade are winding down on the exhaustion of the world central banks’ monetary authority. The dynamos of regional security, stability, and sustainability are winding up to provide regional governance. Soon regional sovereign bodies such as the ECB, and nannycrats, working in public private partnerships, such as Macquarie Infrastructure Company, MIC, will provide the seigniorage of diktat.
Liberalism was characterized by wildcat finance, a Doug Noland term. Asset Managers, such as STT and BLK, together with Investment Bankers such as JPMorgan, JPM, and Hedge Funds such as APO, seen in this Finviz Screener, coined prosperity, with credit investments such as Leveraged Buyouts, PSP, and Junk Bonds, JNK. But Authoritarianism, will be characterized by wildcat governance, where Sovereigns, such as Angela Merkel, and Seigniors, such as Mario Draghi, will enforce austerity and debt servitude.
And as communicated in Bible prophecy of Revelation 13:1-4, Liberalism’s Banker, Milton Free To Choose, Floating Currency Regime, which has underwritten Capitalism and European Socialism, and produced the age of prosperity, through credit liberality, is being pivoted by Jesus Christ, Ephesians 1:10, to Authoritarianism’s Beast, Diktat, Totalitarian Collectivism, and Regional Governance Regime, to produce the age of austerity, through debt servitude, where the debts of Liberalism, that is Aggregate Credit, AGG, will be applied to every man, woman, and child on planet earth.
Liberalism’s premier think tank, Brookings Institute, established by Robert S Brookings, promotes research to achieve a cooperative international system; it has received funding from Rockefeller Foundation, and as SourceWatch reports as well from John M. Olin Foundation, F. M. Kirby Foundation, Walton Family Foundation, and Smith Richardson Foundation.
Wikipedia relates Brookings traces its history back to 1916, and has contributed to the creation of the United Nations. It is ranked the number one think tank in the US in the annual think tank index published by the Council On Foreign Policy’s Foreign Policy Magazine.
Just as the vision of Milton Friedman served to provide the Free To Choose Floating Currency Regime as the bedrock for the edifice of Crony Capitalism and European Socialism, a new vision, that of true European economic governance, has been put forth in the December 12, 2013 report Brookings survey on Eurozone progress, written by Justin Vaïsse, Douglas J. Elliott, Domenico Lombardi and Thomas Wright. which envisions a New Europe based upon a new sovereignty scheme, which replaces the scheme of sovereign nation states. “There are many possible roads to Eurozone 2.0. Rather than choosing a path, we have drawn a list of six broad objectives where we think progress is needed in the coming years if the eurozone is to become self-sustaining and resilient: 1. creating a political union, 2. creating a fiscal union, 3. creating a banking union, 4. enhancing the role of the ECB in ensuring liquidity and market access, 5. creating sovereign crisis resolution tools, 6. improving competitiveness and economic adjustment”.
Dispensationalism is the key to understanding life.
Please consider that Christians are the preeminent ones of intellectual and spiritual life; and that Christians present dispensationalism as the key to understanding life.
John McArthur writes in pae 788 of the John McArthur Study Bible of the Davidic right to rule. The theocratic anointing was taken from Saul nd given to David, 1 Samuel 16:1-14. King David no doubt had had this special ministry of the spirit in mind in his prayer of repentance in Psalm 51. He was not afraid of losing his salvation, but rather was concerned that God would remove this spiritual wisdom and administrative skill from him. When the theocracy went out of existence as Judah was carried away into captivity, and the last davidic king was disempowered, the theocratic anointing was no longer given Ezekiel 8-11.
The Key of David is the Key of Sovereign Authority, it is held by Jesus Christ. Bible scripture gives two references to this Key. In Revelation 3:7-8, Jesus addresses the Church in Philadelphia with these words, “These are the words of him who is holy and true, who holds the key of David. What he opens no one can shut, and what he shuts no one can open. I know your deeds. See, I have placed before you an open door that no one can shut.” And in Isaiah 22:20-22, the Prophet states: “In that day I will summon my servant, Eliakim son of Hilkiah. I will clothe him with your robe and fasten your sash around him and hand your authority over to him. He will be a father to those who live in Jerusalem and to the house of Judah. I will place on his shoulder the key to the house of David; what he opens no one can shut, and what he shuts no one can open.”
Dispensationalism is the ideology that Jesus Christ is at the helm of God’s Sovereignty, Ephesians 1:1-15, working in covenant relationships with God’s chosen ones. Dispensationalism holds that in a former dispensation, that is in a previous epoch, God named the nation of Israel to be preeminent, that is sovereign. In the current dispensation, that is in the current age, it is the Church, that is the called out ones, that have inherited God’s blessings, through his Son, Jesus Christ. God has named these, the Israel of God, to be his presence and authority at this time. Being called Christians, they carry his name, that is His presence and authority. It is from this body of believers, the Prince of God, that all the blessings of God now flow. The Present Truth is that God’s elect, that is God’s chosen ones from Eternity Past, are God’s covenant people, experience Christ as their life, grow in His grace and truth, exist as intellectually superior, are seated with him in heaven’s throne room, sovereignly ruling with him, and are heralding His soon coming one thousand year reign over planet earth, where he will govern from a rebuilt Jerusalem, which will serve as the global city of peace, and be an undivided and sovereign headquarters of God’s world wide prosperity and peace.
In today’s news
Bellingham Herald reports Border traffic at pre 9/11 level. Last year 15.4 million people crossed the Canada/U.S. border into Whatcom County, an 8.5 percent increase compared to 2011. It’s the highest annual total since 1997, when 18.3 million came into Whatcom County, according to data collected by Western Washington University’s Center for Economics and Business Research. Border traffic is expected to increase in 2013, but not as fast as recent years because there’s been little change lately in key economic factors, such as the Canadian dollar, FXC, and product prices. Hart Hodges, director at Western’s CEBR, said the difference in price on a variety of items, including gasoline and dairy products, remains large enough to make the trip attractive, even if the Canadian dollar were to weaken slightly. The Canadian dollar has remained at around parity with the U.S. dollar for the past three years.
CNBC reports Irish bank debt is a Global Responsibility, former PM says. Ireland’s shortcomings in underwriting its troubled banks is now a global responsibility that should be addressed, the country’s former Prime Minister John Bruton told CNBC on Monday. The Irish government spends 3.1 billion euros ($4.2 billion) a year to help underwrite Anglo Irish Bank and Irish Nationwide, both of which were hit hard during the housing crash of 2008, and are now part of Irish Bank Resolution Corporation Limited.
Irish policymakers now wish to convert this annual liability into a long-term government bond to ease its debt burden but Reuters news agency reported on Saturday that the ECB have rejected the proposals.
“There is, we would contend in Ireland, EIRL, a Global and European Responsibility to help us now resolve this issue and get back into the markets,” Bruton told CNBC Monday, explaining that the current deal is “sucking money” out of the economy in the short term.
“Government did this in order to prevent a bank run, in a particular bank, which could have led to contagion all over Europe, so in a sense the Irish taxpayer put her resources on the line in order to protect the global economy.”
Directly refinancing banks is against the rules of the EU treaty. Under the current structure, the Irish government will spend 3.1 billion euros each year until 2023 to aid the two banks via a promissory note. The two banks then use the money to help pay-off the Irish central bank.
The European Central Bank wouldn’t be drawn on the news that it had dismissed Ireland’s proposals, telling CNBC.com that the talks are ongoing and any conclusions about the outcome are “premature”.
Ireland, the second country to receive a bailout after Greece, is currently fighting on two fronts. Policymakers traveled to Brussels last week to try to seek an extension on their EU/IMF bailout which granted the country 67 billion euros ($89 billion) in financial support till the end of 2013.
Speaking in Chile on Sunday, current Deputy Prime Minister Eamon Gilmore, called for solidarity and certainty in Europe and highlighted that a failure to conclude negotiations on the promissory notes would have a potentially “catastrophic effect”.
“The question is, is there some other way with dealing with this very big liquidity demand on the Irish taxpayer, spreading the burden more evenly over time,” former Irish Prime Minister Bruton said.
“I think the issue is in great measure a legal problem rather than a political problem at this stage.”
But Bruton added that a solution would be more likely after the German elections, alluding to the possibility that a German Chancellor would be more likely to push forward actions without the threat of upsetting the country’s taxpayers.
Stockbroker NCB has noticed that politicians are showing a softer line towards Ireland, but agreed that receiving the backing of the ECB for the promissory notes would be difficult to secure.
“We expect to see further twists in this tale as we move nearer to the next payment deadline,” it said in a morning note.
Robert Wenzel of Economic Policy Journal asks Will Stanley Fischer become the next Fed Chairman? Bank of Israel chief Stanley Fischer is stepping down in June as head of the central bank of Israel. Could he become the next Fed chairman? Current Fed chairman Ben Bernanke has indicated he is likely to leave the Fed after his term expires on January 31, 2014.
Fischer was appointed Governor of the Bank of Israel in January 2005 by the Israeli cabinet but did not renounce his American citizenship.
He previously served as Chief Economist at the World Bank. Fischer also served as a professor at the MIT Sloan School of Management from 1977 to 1988. He was Ph.D. thesis advisor to both Ben Bernanke and Greg Mankiw, while at MIT.
Fischer received his B.Sc. and M.Sc. from the London School of Economics. And his Ph.D. from MIT.
EPJ has previously reported on the strong M.I.T. influence at the Fed. Indeed, in many ways it could be considered the “Fischer influence.”