Financial market report for the week July 8, 2013 to July 13, 2013
1) … Financial trading for the week.
1A) Monday July 8, 2013
The Interest Rate on the 10 Year US Note, ^TNX, traded lower to 2.65%. Aggregate Credit, AGG, led by Junk Bonds, JNK, rose, giving impetus to the Interest Rate Sensitive Sectors, Electric Utilities, XLU, Mortgage REITS, REM, and Energy Partnerships, AMJ, to lead the Big Nine, seen in this Finviz Screener, and US Stocks, VTI, and World Stocks, VT, higher. Europe, VGK, and the European Financials, EUFN, rose strongly reflecting overnight trading.
Yield bearing sectors trading higher included AUSE, BRAF, EUFN, and RWW, the latter to a new high, which gave impetus to the Russell 2000, IWM, and the Russell 2000 Growth, IWO, to swell to new highs.
Stocks rose on the Briefing.com report “According to the Federal Reserve, consumer credit increased by $19.6 billion in May. This followed the prior month’s increase of $10.9 billion, and was higher than the $13.2 billion that had been broadly expected among economists polled by Briefing.com”. Sectors trading higher included PSCE, XRT, PPA, IHF, RZV, FDN, PBS, IAI, FPX, PJP, PJB, RXI, IYC, VCR, IGV, IBB, and KRE, all to new rally highs. The Washinton Post Blogs relates. “Anyone who lived through the financial crisis and recession, in which excessive household debt was a major contributing factor, has to feel a little squeamish about how quickly consumer credit is rising”
Aerospace Companies, NOC, LMT, GD, BA, Specialty Retailers, LOW, HD, AZO, RH, BBBY, BID, BBBY, and Internet Retailing, FDN, components, AMZN, PCLN, GOOG, traded higher.
Briefing.com reports the largest tech component, Apple, AAPL, shed 0.6% amid reports suggesting the company is reducing its smartphone production. Major Apple suppliers also registered losses as Broadcom, BRCM, and Qualcomm, CCOM, both fell near 1.4%.
Intel, INTC, and Taiwan Semiconductors, TSM, led Semiconductors, SMH, lower, and Micron, MU, led Semiconductor Chip Manufacturers, SCMA, lower. Home Builders, ITB, traded lower. Thailand, THD, Philippines, EPHE, Turkey, TUR, and Indonesia, IDX, traded lower.
Gold, GLD, Silver, SLV, and Base Metals, DBB. rose. Butt heir mining companions did not. It was a most excellent day to invest in Gold Miners, GDX, such as ABX, ANV, NEM, KCG, and RGLD, as is suggesgted in their bottomin gout seen in ongoing Yahoo Finance Chart and in as much as the Gold Mining Stocks have reached a bottom of seigniorage relative to the US Ten Year Government Note, GDX:TLT.
Robert Stevens of WSWS writes Greece is billions of euros behind in funds it agreed to hand over to its creditors through a troika agreed privatisation programme. After failing to find a buyer for its natural gas company DEPA, due to Russian firm Gazprom pulling out, and ongoing problems with the €700 million sale of the OPAP state gaming monopoly, the government reportedly asked the troika to reduce its privatisation target of €2.6 billion this year. DEPA and OPAP were selected as the two flagship privatisations, with their revenues expected to raise half of the €2.6 billion. Privatisation income has not even reached €1 billion this year and the target has already been revised downwards twice. A June review by the IMF warned that due to the “slippage” in the privatisation programme, a deep hole would appear in the government’s budget and “additional financing will need to be identified.”
The three news reports presented below, illustrate that Eurozone leaders are only kicking “the can” that is the “Greek fiscal budget crisis” down the road. Greece is an insolvent nation and thus a failed sovereign nation state that relies upon seigniorage aid for its fiscal spending. Greek socialism is the most extreme form of all socialism as its constitution forbids firing of any state workers; and there are very few private workers in Greece because of massive anticompetitive rules in place. The economy of Greece is the definition of clientelism, which the Economist Magazine described as pork and patronage. In all of the Greek Bailouts, that is in I, II, and III, Greece promised to annul its constitution and dismiss employees from the right to lifetime jobs; but this has not happened. The only reform presented currently is one of administrative leave and possible dismissal, which is coming up for likely Parliament approval, which is being met with a general strike set for next week, the WSJ reports.
The WSJ reports Greece’s economic future uncertain, creditors say. And The Miami Herald presents the AP report Greek creditors say agreement on reforms reached. The Troika said “Policy implementation is behind in some areas” and that the Greek authorities have said they will do more to ensure delivery of the fiscal targets for 2013-14, noting in particular efforts to restrict overspending in the health sector.
The government has also “committed to take steps to bring public administration reforms back on track,” including pushing through plans to reduce the number of civil servants, one of the required measures that has been among the most contentious, and delayed, in Greece’s reform program.
The government must put 12,500 civil servants on administrative leave by the end of 2013, with the possibility of dismissal. Those targeted include 2,200 school security personnel, 3,500 members of the Athens municipal police, which will be disbanded and most of its members absorbed into Greece’s police force, at least 2,000 local government employees, 1,500 teachers and several employees of various ministries. They will be paid 75 percent of their normal salary and if they aren’t transferred to other state agencies within eight months of being put on leave, they will be subject to dismissal.
The WSJ writes, The coming Greek write off: The EU will never get its money back. Greece’s debt-to-GDP ratio stood at 157% of GDP at the end of last year, even after a restructuring that drastically reduced the value of its privately held sovereign debt. The budget deficit in 2012 was 10% of GDP. And that’s on top of a 26.8% jobless rate, five years of shrinking GDP, and further anticipated shrinking of 4.4% this year.
All this underscores what is slowly becoming clear even in Brussels and Frankfurt: Greece will never repay the money it’s been lent to “save” it. The current debate over whether Greece has done enough by way of reform, tax hikes and spending cuts to have earned the next tranche of bailout funds is largely beside the point. Greece’s external debt position is far worse than when the bailouts began, when its debt stood at a mere 129% of GDP. Any talk of debt sustainability in Greece has become a joke.
Not only in Greece, but in every one of the Eurozone’s periphery states, treasury debt is unsustainable. With the meteoric rise in the Interest Rate on the US 10 Year Government Note, ^TNX, beginning in May 2013, the PIGS Treasury Rate has been skyrocketing, resulting in a boiling over credit crisis.
And it is not only the PIGS Treasury Debt that is undermining democracy in Europe, it is leadership instability and soaring unit labour costs in Italy which rose by 35 percentage points between 2000 and 2012. In Germany, the equivalent figure was three percentage points. Over the same period, Italian labour productivity gains were 14 points lower than Germany’s. No wonder Italian industrial production is collapsing, to Germany’s benefit writes the Globe and Mail. “It’s currently very trendy in Italy to blame Angela Merkel, Mario Monti, the euro and austerity measures for the current recession. … [But its persistence] is the legacy of more than a decade of a lack of reforms in credit, product and labour markets, which suffocated innovation and productivity growth and resulted in wage dynamics that were completely decoupled from labour productivity.”
There is waiting in the stage of Europe’s wings, the most capable of sovereigns. Soon, Jesus Christ as presented in Ephesians 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the Eurozone’s Leader as foretold in Revelation 13:5-10. He will be accompanied by the Seignior, the EU’s Finance and Economic Minister, Revelation 13:11-18. Out of Eurozone sovereign insolvency and banking insolvency, the word, will, and way of these two will provide the way forward as public private partnerships form to manage the economy of a Eurozone Super State. While Italians and Greeks cannot be Germans, all will be one, living in a regional gulag of debt servitude and totalitarian collectivism. According to bible prophecy of Daniel 2:25-45 and Revelation 13:1-4, Regionalism will replace European Socialism and Greek Socialism as the engine of economic and political life.
Candidates for the Sovereign include Guido Westerwelle; and candidates for the Seignior include Jens Weidmann and Mario Draghi.
Liberalism’s Banker regime (which was based upon democratic nation states) had a policy of investment choice. The dynamo was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth … and came with credit schemes, such as free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, dollarization, and financialization of stocks and ETFs, such as corporate bonds which convert into stocks … where Milton Friedman’s Free To Choose concept of floating currencies and abandonment of the gold standard, established the rule underlying all investing, providing for the fiat money system.
Authoritarianism’s Beast regime (is based upon statist regional governance) has a policy of diktat. The dynamo is one totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability … and comes with debt servitude schemes, such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, central bank rulings for capital adequacy consisting of national treasuries, and austerity measures … where Nannycrats establish the rule underlying all diktat, providing for the diktat money system.
Reuters reports Hot money exodus sends currency wars into reverse.
MyBudget 360 in article The consequences of bubblenomics: Fed balance sheet increases to $3.5 trillion, negative interest rates since 2009, and part-time employment at record high, presents a chart of the Fed’s Balance Sheet, which is found here each Thursday. In as much as the Fed’s Balance Sheeet consists of Motbage Backed Bonds, MBB, US Treasuries, TLT, and Distressed Investments, FAGIX, it will be trending down, much like the combined down in their ngoing Yahoo Finance chart.
Benson te writes US Stock Markets: The incompatibility of rising stocks and rising bond yields. The lessons of history are that rising yields have largely been incompatible with sustained stock market booms. Both may concomitantly rise but the eventual outcome has been a bear market cycle (2007-2008, dotcom bubble), stock market crash (1987) or a quasi-bear markets (1983-1984 or 1981-1982).
The relationship has hardly been statistical but causal—rising rates eventually prick unsustainable debt financed bubbles.
Yet a stock market boom can be engineered by governments that could destroy historical precedents. Venezuela should be an example. Venezuela’s stock market has been up a stratospheric 160% year to date. This translates to star bound 460% in one and a half years. But Venezuela’s deceiving outperformance comes at a heavy toll: the collapse of her currency the Bolivar which means rising stocks are symptoms of hyperinflation.
Again rioting bond markets as expressed through rising yields (which are indicative of higher policy rates) seems like the proverbial ‘sword of Damocles’ which hangs over the heads of the stock markets.
Differently put, unless bond markets stabilize, rising stock markets in the US or elsewhere, looks like an accident waiting to happen. I call rising stock markets, in the face of mounting systemic leverage and rising yields as the Wile E. Coyote moment. When stock markets become objects of rampant and excessive speculation fueled by bubble policies, and whose boom has been financed by leverage, stock markets undergo or endure boom-bust cycles.
1B) Tuesday July 9, 2013
The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.63%; Aggregate Credit traded unchanged.
It was a bullish day as XTN, and XLI and PSCI, as well as Global Industrial Producers, FXR, traded strongly higher. Other sectors trading strongly higher included ITB, PKB, IEZ, OIH, and RZV. Story stocks trading included Cerner, CERN, Micron, MU, Intuitive Surgical, ISRG, LabCorp, LH, traded sharply lower. Yield bearing sectors trading higher include DRW, IYR, FNIO, and REZ, as well as DBU and XLU.
The Russell 2000, IWM, led World Stocks, VT, US Stocks, VTI, higher, as wll as the Too BigTo Fail Banks. RWW, Stockbrodkers, IAI, and RegionalBanks, KRE, higher. Bespoke investment Blog reports that the chart of the S&P 500, SPX, shows a rise to strong resistance at 1,654; this is seen in also its ETF, SPY.
Commodigties, DBC, traded higher, on higher Oil, USO, Gold, GLD, Silver, SLV, and Agricultural Collodities, RJA. The correction in the price of gold is over as the chart of Spot Gold, $GOLD, shows a 0.9% rise to strong resistance 1245; this as the chart of the US Dollar, $USD, shows a 0.5% rise to a frim close at $84.85.
Tyler Durden of Zero Hedge posts Presenting China’s first too big to fail “lack of liquidity” casualty. China’s biggest private shipbuilder, China Rongsheng Heavy Industries Group, last week filed for a profit warning as it expects a loss in the first half of 2013. That was the good news. The bad news is that Rongsheng appealed for government aid last Friday and said it was cutting staff as it was delaying payments to suppliers to deal with tightened cash flows. It also called on its shareholders for financial help and said it was in talks with banks and other financial institutions to renew existing credit lines. In other words a complete liquidity collapse.
Tyler Durden of Zero Hedge writes The Washington Examiner reports The second largest employer in America is Kelly Services – a temporary work provider. The company, started in 1946, serves 99% of the Fortune 100 and had revenues of $5.5bn in 2012. As The Examiner concludes Echoing our and Mr. Stockman’s previous thoughts, it’s a sad state of affairs for our country that the recovery, or lack thereof, is being fueled by a shift from full-time to part-time work
Benson te reports Turkey will use foreign currency reserves to defend against bond vigilantes. And provide the Ludwig von Mises quote “the credit expansion … ends in a ‘crack-up boom’, and in a collapse of the money and credit system”.
The collapse of the money system began with the jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, which constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism.
The fiat money system has died, as evidenced by Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, and the US Dollar, $USD, UUP, rising strongly higher.
The credit system has collapsed, as evidenced by Aggregate Credit, AGG, falling sharply lower.
The diktat money system is rising to replace the fiat money system. And debt servitude is rising to replace credit.
There will be no debt jubilee, as under Authoritarianism, the debts of Liberalism will be applied to every man, woman, and child on planet earth, as the Banker Regime, is replaced by the Beast Regime of Revelation 13:1-4, and by its leader The Sovereign, Revelation 13:5-10, and by its Prophet, the Seignior, Revelation 13:11-18.
The emerging market policymakers tapping of foreign currency reserves as a means of stopping the bond vigilantes attack on their Treasury Debt, BWX, and EMB, can only last so long.
Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life.
Fiat money died, and diktat money has been coming to life.
The “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, terminated all of the authority of Liberalism’s policies and schemes, thereby ending Liberalism’s life experience.
Now, Authoritarianism’s policies and schemes, have authority, and ever increasing power, providing monetary and political life experience.
Yes, new policies and new schemes for the new age of Authoritarianism: policies of diktat and schemes of debt servitude schemes, such as, regional framework agreements, bank deposits bailins, privatizations, capital controls, new taxes and austerity measures.
1C) Wednesday July 10, 2013
Zero Hedge reports Monoderailed: Spain’s train station to nowhere. Tyler Durden writes From exaggerated passenger traffic expectations 40% higher than the current slower route’s traffic to the massive billion-euro debts that have already been accumulated, nothing says epic fail like the City of Villena’s 4,500 square meter gleaming new train station – the only access to thisb building in the middle of nowhere is a dirt track used by local farmers. The reason, simple: while the central government financed the building, the local Valencia regional government was responsible for funding the connection to the local city and freeways – it ran out of money, leaving the station high-and-dry. As Reuters adds Spain’s obsession with high-speed trains runs into budget reality. The disconnect says a lot about both Spain and its current finances, about a love affair with grand projects to showcase its modernity and a diminishing ability to pay for them.
The WSJ reports European Commission seeks sole authority to wind down banks. The European Commission will propose itself as the single authority for winding down banks in the euro zone, a step that will set the European Union’s executive on a collision course with the bloc’s most powerful member, Germany.
Berlin insists that such an authority, whose actions could force national governments to spend money to help rescue failed banks, would breach EU treaties. That, it says, could lead to legal challenges over bank restructurings and create uncertainty for financial markets at a sensitive time.
Michel Barnier, the EU commissioner responsible for financial-market regulation, was to lay out his final proposal Wednesday for a so-called single resolution mechanism, giving it the authority to restructure or close any of the 6,000 banks in the 17-nation euro zone that hit financial problems.
Bank restructurings currently take place under a patchwork of national rules, which also hinder the winding down of cross-border banks.The euro-zone’s ambitious banking union project, cornerstone of efforts to end the three-year-old debt crisis, aims to break the vicious link between struggling euro-zone banks and their governments.
The WSJ reports Plan reins in biggest banks. Proposal Requiring Extra Capital Would Force Firms to Be More Conservative or Shrink. U.S. regulators took their first big swing at addressing fears that Wall Street’s largest firms remain too risky five years after the financial crisis, unveiling plans to require them to set aside far more capital as protection against future disaster. The Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are effectively trying to force big banks to become more conservative or to shrink. The first step, proposed Tuesday, would require banks to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books, not just the risky ones.
Small Cap Pure Value Stocks, RZV, traded higher. Micron, MU, traded lower. Oil, USO, traded strongly higher; Base Metals, DBB, and Gold, GLD, traded higher, while Silver, SLV, traded lower.
At day’s end Reuters reports About half of the Federal Reserve’s policymakers felt the U.S. central bank’s bond-buying stimulus should be brought to a halt by year end when they met in June, but many wanted reassurance the U.S. jobs recovery was on solid ground before any policy retreat. In the end, most of the U.S. central bank’s 19 policymakers felt it was a good idea to have Fed Chairman Ben Bernanke lay out a road map at a post-meeting news conference on how they likely would wind down the so-called quantitative easing program, minutes from the meeting released on Wednesday showed.
Ben Bernanke spoke today Wednesday July, 10, 2013. The ongoing Yahoo Finance Chart … http://tinyurl.com/m2ue7lg … of EMFN, RWW, FEFN, EUFN, CHIX, EPI, BRAF, AUSE, shows that the Federal Reserve monetary policiy has enabled the Too Big To Fail Banks, RWW to sustained the world’s Banking Regime, as well as World Stocks, VT, especially US Stocks, VTI.
An inquiring mind asks, will investors continue to trust in Ben Bernanke’s and the US Federal Reserve’s liberal monetary policies and credit schemes which have stimulated corporte growth and trade, achieved investment gain, democratic rule, and a moral hazard based prosperity?
Breakout reports worried analysts have cut their earnings growth expectations for the S&P 500 by a stunning 83%. As FactSet earnings analyst John Butters explains in the attached video, the expectations for profits has been lowered to just 0.7%, down from 4.2% on April 1, 2013, and Peak Prosperity relate Global slowdown.
The words trust and credit are used interchangeably. Could it be that out of further failure of Credit, AGG, as well as the World Major Currencies, DBV, and Emerging Market Currencies, CEW, that people will come to trust in regional nannycrats, and authoritarian policies of diktat and schemes of debt servitude, such as, regional framework agreements, bank deposits bailins, privatizations, capital controls, new taxes and austerity measures, which establish regional governance and totalitarian collectivism as life experience?
Ambrose Evans Pritchard of the Telegraph relates The wheels are coming off the whole of southern Europe. Europe’s debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating pace. Political consent for extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure.
None of Euroland’s key actors seems willing to admit that the current strategy is untenable. They hope to paper over the cracks until the German elections in September, as if that is going to make any difference. A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the “willingness and capacity” to collect taxes. In fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill.
(I comment that the economy is in free fall because it is amongst the most anticompetitive in the world, it is defined by clientelism, that is what the Economist Magazine says is pork and patronage, has oligarchs who live outside of the nation and contribute nothing to business in the country, and by a culture of tax non payment)
The Greek think-tank IOBE expects GDP to fall 5pc this year. It has told journalists privately that the final figure may be -7pc. The Greek stabilisation is a mirage. Italy’s slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. The country’s €2.1 trillion (£1.8 trillion) debt – 129pc of GDP – may already be beyond the point of no return for a country without its own currency.
Standard & Poor’s did not say this outright when it downgraded the country to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is up for Italy.
Spain’s crisis has a new twist. The ruling Partido Popular is caught in a slush-fund scandal of such gravity that it cannot plausibly brazen out the allegations any longer, let alone rally the nation behind another year of scorched-earth cuts. El Mundo says a “pre-revolutionary” mood is taking hold.
A magistrate has obtained the original “smoking gun” alleging that Premier Mariano Rajoy accepted illegal payments as a minister. The Left is calling for his head but so are members of the Consejo General del Poder Judicial, the justice watchdog.
“Citizens cannot tolerate a situation where the prime minister has received undeclared payments,” said José Manuel Gómez, a Consejo member. Much of the ruling party appears tainted by a network of covert funding. If proved, said Mr Gomez, it poses a “very grave” threat to Spanish democracy.
What is new is that Vitor Gaspar, the high priest of Portugal’s shock therapy, has thrown in the towel. He blames the fainthearted for refusing to slash with greater vigour. Needless to say, he still refuses to accept that a strategy of wage cuts and deflation in a country with total debt of 370pc of GDP was always likely to fail. If Portugal does pull off an “internal devaluation” within EMU it will shrink the economic base. Yet the debt burden remains. This is the dreaded denominator effect. Public debt has jumped from 93pc to 123pc since 2010 alone. The Gaspar exit has closed a chapter. The junior coalition partners are demanding a change of course. I write before knowing whether President Anibal Cavaco Silva will call a snap election, opening the way for a Left-leaning anti-austerity government.
The Portuguese press is already reporting that the European Commission is working secretly on a second bail-out, an admission that the wheels are coming off the original €78bn EU-IMF troika rescue.
This is a political minefield. Any fresh rescue would require a vote in the German Bundestag, certain to demand ferocious conditions if this occurs before the elections.
Europe’s leaders have given a solemn pledge that they will never repeat the error made in Greece of forcing an EMU state into default, with haircuts for banks and pension funds. If Portugal needs debt relief, these leaders will face an ugly choice.
Do they violate this pledge, and shatter market confidence? Or do they admit for the first time that taxpayers will have to foot the bill for holding EMU together? All rescue packages have been loans so far. German, Dutch, Finnish and other creditor parliaments have never yet had to crystallize a single euro in losses.
(I comment that the closest friend of Christ, the Apostle John, was exiled to the Isle of Patmos, and while in his 90s, was given a dream by angels in Revelation 13:1-4, which foretold of the times in which we live, where a Beast Regime would arise out of Mediterranean Sea waves of turmoil to govern in the world’s ten regions and rule in all of mankind’s seven institutions, replacing all nation state rule and economic experience.)
1D) Thursday July 11, 2013
Gold, GLD, Silver, SLV, Base Metals, DBB, Emerging Markets, EEM, Asia Excluding Japan, EPP, Europe, VGK, The Nikkei, NKY, Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Stocks, VT, US Stocks, VTI, Global Producers, FXR, rallied, with the US Dollar, $USD, droping, as Reuters reports Ben Bernanke saying at NBER Conference Highly accommodative monetary policy for the foreseeable future is what’s needed. Bernanke’s Comment provided a green light for yet another risk-on margin, ONN, fueled day of speculative investing, a case in point is seen in the chart of Florida real estate developer, St. Joe Corporation, JOE.
The chart of the Dollar’s 200% ETF, UUP, manifested in the middle of a broadening top pattern, of which Street Authority relates, “when you see the broadening top, the market will eventually drop”; in this case meaning, that all currencies, including the US Dollar, will collapse into the Pit of Financial Abandon. The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.57%.
The power of this week’s rally is seen in the chart of World Stocks, VT, in relation to Aggregate Credit, AGG, that is VT:AGG, rallying to its highest ever value, suggests that Peak Stock Wealth, VT, was achieved today July 11, 2013, as investors used margin credit to take stocks to their likely peak achievement, on the leverage of the world central banks’ monetary policies of investment choice, and schemes of credit expansion, such as quantitative easing. CBS Money Watch reports the investors enthusiam relating Stocks hit new high after Bernanke speech buoys investors
In as much as sovereignty begets seigniorage, that is moneyness, this week’s surge of seigniorage likely marks Liberalism peak sovereignty: World Stocks, VT, are at full leverage over Aggegate Credit, AGG, as is seen in VT:AGG. And Nation Investment, EFA, is at full leverage over World Treasury
Bonds, BWX, as is seen in EFA:BWX. The Milton Friedman, Free To Choose, Floating Currency, Banker Regime of democratic nation states has achieved its zenith in terms of political, economic and monetary power.
It is Jesus Christ, working in the economic and political administrative plan of God, Ephesians 1:10, who has produced Liberalism’s greatest, that is most complete, economic and political experience. Through “extinction protocol”, He released the Four Horsemen of the Apocalypse beginning in May of 2010 with Greek Bailout I. As presented in bible prophecy of Revelation 6:1-8, the Rider on the White Horse, who has a bow without any arrows, is transferring the baton of sovereignty, from democratic nation states to regional nannycrats, with a goal of terminating democracy throughout the world, first in Greece, with the provision of Three Greek Bailouts, second, in Cyprus with a Bailin of Cyprus bank depositors, and third in Egypt with a military coup.
When the Bretton Woods system, synonymous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of mililtary bases, will collapse, and the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy.
The Ten Toed Kingdom is synomous with its Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, which presents ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism, where the seven heads symbolize mankind’s seven institutions: 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.
John Rubino of Dollar Collapse writes Variable rate world, part 3: This horror show is just the beginning The big banks own a ton of securities that will plunge in value if interest rates rise.
As the Interest Rate on the US Ten Year Note, ^TNX, rises, and as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepens, seen in the Steepner ETF, STPP, steepening, then both the Too Big To Fail Banks, RWW, and the Regional Banks, KRE, will be be integrated into the Government and be known as “Government Banks” or “Gov Banks” for short. The banks will be part and parcel of government; their purpose will not be lending as it has been known, but rather check cashing, monetary control, and provisioning of diktat by statist public private partnerships, where regional nannycrats exericse oversight of the factors of production, commerce and trade.
The “extinction event” of debt deflation, that is destruction of credit via competitive currency devaluation, coming at the hands of the bond vigilantes calling the Interest Rate on the US Treasury Note, ^TNX, higher to 2.01% on May 24, 2013, as well as currency traders successfully selling currencies short, produced Peak Credit, AGG, and Peak Money, that is Peak World Major Currencies, DBV, and Peak Emerging Market Currencies, CEW, in May 2013.
Authoritarianism is marked by policies of diktat and schemes of debt servitude, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, and austerity measures.
The chart of the S&P 500, $SPX, SPY, rose 1.4%, achieving a new rally high of $1.675.
The equity sectors that had traded off most sharply higher, rose the most strongly today:
Homebuilders, ITB, 5.6%
Industrial Metal Miners, PICK, 5.4
Copper Mining, COPX, 5.2
China Industrials, CHII, 4.5
Design Build, FLM, 3.6, ie JEC, CBI
Metal Manufacturing, XME, 3.1, ie WOR, VMI, CRS, GTLS, MLI, GHM, PCP, ITW
Paper Producers, WOOD, 2.9, ie IP, LPX, NP, SEE, GPK
Leveraged Buyouts, PSP, 2.7
Clean Energy, PBD, 2.6
Semiconductors, SMH, 2.6, ie ASML, CREE, AMD, INTC, MU, TSM, TXN, AMAT
US Infrastructure, PKB, 2.5, ie WHR, USG, EXP,
Gaming, BJK, 2.2 ie MCRI, MCS,ISLE, LAKO, TRAX, PNK, BYI,
Biotechnology, IBB, 2.1
Networking, IGN, 2.1, ie CSCO, JNPR, JDSU
Software, IGV, 2.1, ie MSFT, BKLB, CA, ADBE, N,
Global Discretionary, RXI, 2.1
Automobiles, CARZ, 1.6 ie DLPH
Industrial, XLI, 1.6, ie MMM, GE, HON, ITW, KUB, CNH, GNRC
Food and Beverage, PBJ, 1.6
Internet Retail, FDN, 1.6 ie AMZN, GOOG, PCLN,
Aerospace, PPA, 1.6, ie BA, UTX, GT, GD, NOC, RTN,
Small Cap Industrial, PSCI, 1.4 ie GNRC, BWC, WTC, LECO, ATU, IEX, B, HEES, CIR, TRS, KAI,
Small Cap Pure Value, RZV, 1.4 ie NLS, BGFV, WOOF, ACRM, EPAM, MDCA, SCOR, III, Z, HCSG, HGR, FNGN, UNTD, CKEC, ENV, LOV, TAXI, ECOL, EEFT,
Media, PBS, 1.4 ie AHC, SIRI, WPO, JRN, NYT, AHC, GCI, GTN
Consumer Services, IYC, 1.4 ie DIS, CMCSA, TWX, DISH, AMCX, CHTR,VIAB, DISCA, DTV, LBTYA, CMCSA, TWC, STRZA, WWE, LVNTA
Pharmaceuticals, PJP 1.4, ie JNJ,
Media, PBS, 1.4
IPOs, FPX, 1.4
Spin Offs, CSD, 1.3 ie FBHS, HII, POST, LMOS, MCG,
Retail, XRT, 0.8, ie COST, BODY, DEST, DSW, DXLG, EXPR, GES, GAP, JWN, KIRK, KR, M, NWY, MW, PSUN, TGT, TJX, TLYS, ULTA, TUES, WTSL
Advertising Agencies, seen in this Finviz Screener, ie LAMB, IPG, OMC, WPPGY
Industrial Electrical Equipment, seen in this Finviz Screener, ie ETN, MEI, LFUS, APH, SPA, AME,
Credit Services, seen in this Finviz Screener, ie COF, AXP, DFS, CIT, V, MA, PHH
Automobile Dealerships, seen in this Finviz Screener, ie LAD, ABG
Specialty Retail, seen in this Finviz Screener, ie ODC, LYB, FTK, MTX, ADFC, IFF, ACET,
Apparel Manufacturers, seen in this Finviz Screener, ie OXM, PVH, HBI, VFC,
Education Services, seen in this Finviz Screener, ie CPLA, ESI, LOPE, DV, EDU,
Specialized Health Care Services, seen in this Finviz Screener, ie BEAT, PFSC, HWAy, IPCM
Diversified Communication Services, seen in this Finviz Screener, ie IDT, HCOM, PGI, CCOI, IRDM
Advertising Companies, seen in this Finviz Screener, ie IPG, OMC, LAMR, WPPGY
Stockbrokers, seen in this Finviz Screener, ie FXCM, AMTD, LPLA, SCHW, MKTX, GFIG,
Restaurants, seen in this Finviz Screener, ie FRGI, KKD, BAGR, CHVY, DAVE, RUTH, NATH,
Industrial Textile Manufactuers, seen in this Finviz Screener, ie DXYN, UFI, AIN, MHK
Consumer Recreational Good Manufacturers, seen in this Finviz Screener, ie JOUT, NLS, POOL,
Medical Device Manufacturers, seen in this Finviz Screener, ie MDT, CFN, OPK, ST
Polution Control Equipment, seen in this Finviz Screener, ie CCC, ADES, MFRI, CECE, ERII
Business Services, seen in this Finviz Screener, ie PAYX, NCR, FIS
Nations rising strongly included:
Poland, EPOL, 5.1%
Rusia, RSX, 5.0
Emerging Markets, EEM, 4.9
South Africa, EZA, 4.6
Singapore, EWS, 4.4
India, INP, 3.8
Turkey, TUR, 3.3
Peru, EPU, 3.1
Nikkei, NKY 3.0
Asia Excluding Japan, EPP, traded 3.2% higher; nations trading strongly higher included:
Thailand, THD, 8.2%
Indonesia, IDX 7.5
South Korea, EWY 5.4
Philippines, EPHE 5.2
China, YAO 5.2
China Small Caps, ECNS 4.2
Taiwan, EWT 4.1
World Financials, IXG, rose 2.0% higher; financial sectors ralling strongly included:
Yield bearing equity sectors, seen in this Finviz Screener, rising strongly included:
Chinese Real Estate, TAO, 4.5%
Mortgage REITS, REM, 4.5
Global Real Estate, DRW, 3.1
Small Cap Real Estate, ROOF, 2.3
Energy Partnerships, AMJ, 2.7
Shipping, SEA, 2.6
Global Utilities, DBU, 2.0
Electric Utilities, XLU, 1.6
Aggregate Credit, AGG, rallied with Ultra High Yield Junk Bonds, UJB, Junk Bonds, International Corporate Bonds, PICB, Zeroes, ZROZ, Emeging Market Bonds, EMB, and World Treasury Bonds, BWX, rose strongly, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.57%.
The Swiss Franc, FXS, the British Pound Sterling, FXB, and the Euro, FXE, led Individual Currencies higher.
Gold, GLD, 2.7, Silver, SLV, 5.4, Base Metals, DBB, 1.6, Commodities, DBC, 0.5
Gold Miners, GDX, 7.7%, GDXJ, 8.1, Silver Miners, SIL, 7.4%, SILJ, 11.4, SSRI, 8.5
Catherine Long of WSWS writes Wisconsin budget imposes austerity cuts, clears way for privatizations. Wisconsin governor Scott Walker signed into law a biennial budget last month that includes deep cuts to social services and public education, and plans for the selloff of prisons, public lands, infrastructure and university buildings.
Jesse Columbo presented The Bubble Bubble article Visualizing the Emerging Market currencies selloff, in early June. At that time, he wrote, “I have not been calling for an immediate popping of the emerging markets bubble yet; on the contrary, I wrote a report in April 2012 in which I discussed why ex-BRIC emerging market equities would likely rise sharply as the global “bubblecovery” or bubble-driven economic recovery continued to progress.” … “With talk of the Fed starting to withdraw from its more aggressive QE program, the U.S. Dollar has rallied (as I foresaw in early February), while emerging market currencies and bonds, as well as commodities prices have experienced sharp declines in recent months. The health of emerging market economies is tied very closely to commodities prices, and the commodities boom/bubble of the past twelve years is one of the main reasons why emerging market economies have been growing so rapidly. If commodities prices continue to drop, as I expect to happen when China’s resource-hungry bubble eventually pops, emerging market economies will get hit very hard. Citi economist, Ed Morse, has recently declared the end of the “commodities supercycle”, saying “China has reached a new phase, less focused on infrastructure and urbanization, both of which are highly commodity intensive.” Furthermore, $2.94 billion worth of capital has been pulled from emerging market equities in the week ending May 29, according to analysts at Barclays. Kit Juckes, a macroeconomic strategist at Societe Generale, said “As Fed policy reaches the mildest of turning points, emerging market assets are vulnerable across the board, the [South African] rand being the first of what I suspect will be a series of dominoes to fall.””
The combined ongoing Yahoo Finance Chart of Emerging Market Bonds, EMB, Emerging Market Currencies, CEW, and the Interest Rate on the US Ten Year Note, ^TNX, illustrates debt deflation, that is currency deflation, causing derisking and deleveraging out of fiat assets, such as Copper Mining Stocks, COPX, and nation investment, such Peru, EPU; which commence at the hand of the bond vigilantes calling interest rates higher; with currency traders following selling currencies short.
A number of ex-BRIC market sectors have risen, most surprisingly of all, given the fall in Major World Currencies, DBV, and Emerging Market Currencies, CEW, has been the usually currency sensitive Small Cap Pure Value Stocks, RZV; other significant risers have been PSCE, XRT, PPA, IHF, FDN, PBS, IAI, FPX, PJP, PJB, RXI, IYC, VCR, IGV, IBB, and KRE, all to new rally highs; these are nothing more that zombie investment sectors; equities presenting in “death rattle”.
The jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism. Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life. Fiat money died, and diktat money has been coming to life.
Jesus Christ did what Ron Paul could not do; He terminated the Fed, and not only that, He terminated fiat money, fiat wealth, and democratic nation state governance in one fell swoop .Acting in dispensation as steward of God’s household of all things political and economic, he fully completed Liberalisms’ crack up boom, which established a moral hazard based prosperity. And is now introducing Authoritarianism’s credit collapse and financial system bust, which will fully provide a debt servitude based austerity.
Paul Mitchell of WSWS writes Portuguese government continues austerity following ministerial resignations. The governing coalition faced crisis last week with the resignation of the Finance Minister and Foreign Minister.
Tyler Durden of Zero Hedge reports Portugal socialists call for early elections If Portugal had hoped that as a result of this weekend’s political manoeuvering, which preserved the tenuous majority of the Coelho coalition cabinet by granting the previously resigned CDS-PP leader Paulo Portas the vice-premiership, thus “forcing” him to rescind his resignation and prevent a government collapse, it would project a vision of political stability, it may need to reevaluate as moments ago the leader of the Socialist Party (the biggest opposition party) Antonio Jose Seguro reaffirmed a call for Portugal to have early elections. Quote Seguro: “Our country is faced with the need to negotiate a new program, which may be called a precautionary program or anything else. Only a new government would have the democratic legitimacy to negotiate a new aid program for our country.” Seguro spoke to reporters in Lisbon after meeting Portuguese President Anibal Cavaco Silva.
The Financial Times reports Portugal president’s call for national unity backfires President Aníbal Cavaco Silva’s call for a “national salvation” agreement between the ruling coalition and the main opposition party, leading to early elections in June 2014, was intended to restore calm following a government crisis triggered by the resignation of two senior ministers.
But the president’s appeal for a cross-party deal in support of the country’s €78bn bailout programme prompted a fresh increase in bond yields on Thursday. “Portugal is in a deeper crisis than it was a week ago,” said Ricardo Santos, an analyst with BNP Paribas. “The president sought to ease volatility, but he has almost certainly increased it.” Silva ruled out holding an immediate snap election, saying this would significantly increase the risk of Portugal needing a second bailout. But he called on the three parties to agree on holding an early ballot next June, a year ahead of schedule.
Agreeing to Mr Cavaco Silva’s proposal would require António José Seguro, the opposition PS leader, to support €4.7bn in planned spending cuts and the potential laying off of tens of thousands of state workers, measures that he vehemently rejected until now. “It’s difficult to see how the president’s proposal can work given that the concessions involved could end the political careers of both the opposition leader and the prime minister,” said Mr Santos. Portugal was plunged into crisis last week after Paulo Portas, leader of the junior coalition party, resigned as foreign minister less than 24 hours after Vítor Gaspar also quit as finance minister amid tensions caused by government austerity policies.
Ambrose Evans Pritchard writes Constitutional crisis pushes Portugal closer to the brink. Yields on 10-year Portuguese bonds jumped more than 100 basis points to 7.85pc in a day of turmoil, kicked off by a government request to delay the next review of the country’s EU-IMF Troika bail-out until August.
President Anibal Cavaco Silva set off a constitutional crisis on Thursday when he vetoed a reshuffle by the two conservative coalition parties, insisting on a red-blue national unity government with greater legitimacy to see through austerity cuts until mid-2014.
Socialist leader Antonio José Seguro has so far refused to take part, demanding fresh elections to clear the air. “We must abandon the politics of austerity, and renegotiate the terms of our adjustment programme. The prime minister must accept that his austerity policies have failed,” he said.
Some Socialist leaders have threatened debt repudiation as a way of fighting back at Germany and the creditor powers, though that is not the party position.
Standard & Poor’s downgraded Banco Comercial, and placed a string of banks on negative watch. The agency appeared to endorse warnings that austerity overkill was making matters worse, saying continued fiscal cuts “are eroding the resilience of the private sector”. It said banks were building up a “high volume of problem assets”.
Ricardo Santos from BNP Paribas said it was unclear whether Portugal could withstand a further €5bn of cuts ordered by the Troika. “The bottom line is that the policy is not reducing the debt ratio. We think public debt will reach 130pc of GDP in 2014. The country is near the tipping point,” he said.
“Everybody has been saying that Portugal is so different from Greece but if this political crisis goes on for long, that won’t be so clear anymore.”
President Cavaco Silva has limited powers to force a deal on recalcitrant parties, but experts say it is hard to see how the current government can soldier on after such a blow to its authority. He may have to resort to the “nuclear option” of snap elections, opening the way for a fragmented parliament.
Sovereign bond strategist Nicholas Spiro said the events of the past 10 days had left premier Pedro Passos Coelho a “political cripple”, and brought reforms to a “screeching halt”. The crisis was prompted by the exit of finance minister Vitor Gaspar, the chief architect of Portugal’s crisis strategy, who stormed out complaining that he had been undercut by the junior CDS party in the coalition.
“Gaspar did make strenuous efforts to curb the budget deficit, but Portugal’s debt ratio kept on rising. There has to be a risk of another macroeconomic calamity on the scale of Greece and Cyprus,” said Tim Congdon from International Monetary Research.
Portugal has until now been held up as a poster-child of EMU austerity, praised for sticking to its bail-out terms. Failure at this stage would be a grave indictment of EU strategy itself. It would also force the eurozone to clarify its own crisis policies, exposing deep rifts. Europe’s leaders have vowed never again to force a sovereign debt haircut on banks and pension funds, deeming the experiment in Greece to have been calamitous.
This means they may have to violate the pledge or impose losses on their own taxpayers for the first time if Portugal needs debt relief. A study by Eric Dor from IESEG business school in Lille says an orderly debt restructuring by Portugal would cost taxpayers €16bn in Germany, €13bn in France, €11bn in Italy and €7bn in Spain, and twice as much in an EMU exit crisis. “There is a big probability that Portugal will need debt relief, unless you believe in fairytales,” he said.
The sheer scale of public and private debt leaves the country acutely vulnerable to deflation. Nominal GDP has fallen in each of the past two years. This has pushed net external debt to a record 230pc of GDP
1E) Friday July 12, 2013
Sectors rising today were limited to just three, Biotechnology, IBB, 2.5%, Internet Retailing, FDEN, 1.2% and Networking, IGN, 1.0%. Today, the Australian Dollar, FXA, the Brazilian Real, BZF, and the British Pound Sterling, FXB, traded lower, which drove Australia, 1.3%, lower, and Brazil, EWZ, 1.5% lower. European Financials, EUFN, trade 1.1% lower as Spain, EWP, and Italy, EWI, both traded 3.0% lower. Gold Miners, GDX, traded 2.9% lower and Silver Miners, SIL, 2.1%, lower.
Trading this week was awesomely bullish. The chart of the S&P 500, $SPX, SPY, shows a 2.9% rise to close at 1.680.00; it was the best week in the last six weeks; it stands at an Elliott Wave 5 High.
US Stocks, VTI, rose 2.9% to a new high; Germany, EWG, recovered 6.1%. Since May 1, 2013, it has been Peru, EPU, Chile, ECH, Turkey, TUR, Indonesia, IDX, Thailand, THD, and Brazil, EWZ, and the Emerging Market Mining, EMMT, leading the Emerging Markets, EEM, lower as is seen in their combine ongoing Yahoo Finance chart.
In the yield bearing equity sectors, Utilities, XLU, recovered 4.7%. Of the yield bearing sectors, Mortgage REITS, REM, together with Emerging Market Financials, EMFN, remain sold off since the “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 24, 2013, as is seen in their combined ongoing Yahoo Finance Chart.
Equity sectors recovering included
Home Builders, ITB, 7.3%
US Infrastructure, PKB, 5.2%
Leveraged Buyouts, PSP, 3.8%
Equity sectors rising to new highs included
Biotechnolgy, IBB, 6.0%
Design Build, FLM, 5.2
Internet Retail, FDN, 4.9
Media, PBS, 4.3
Pharmaceutical, PJP, 4.3
Spinoffs, CSD, 4.2
Small Cap Pure Value, RZV, 4.1
IPOs, FPX, 3.8
Software, IGV, 3.8
Networkding, IGN, 3.7
Aerospace, PPA 3.7
Global Consumer Discretionary, RXI, 3.7
Consumer Discretionary, IYC, 3.6
Small Cap Industrial, PSCI, 3.4
Global Industrial Producers, FXR, 3.3
Automobiles, CARZ, 3.2
Food and Beverage, PBJ, 3.2
Semiconductors, SMH, 2.9
Retail, XRT, 2.8
Industrial, XLI, 2.7
The Interest Rate on the US 10 Year Note, $TNX, closed lower at 2.60%, enabling Aggregate Credit, AGG, to rise 0.92% this week.
Doug Noland reports The U.S. dollar index dropped 1.7% to 82.99 (up 4.0% y-t-d). For the week on the upside, the Norwegian krone increased 3.1%, the South African rand 2.2%, the Swedish krona 2.1%, the Mexican peso 2.0%, the Japanese yen 2.0%, the Danish krone 1.9%, the euro 1.9%, the Swiss franc 1.9%, the Canadian dollar 1.8%, the South Korean won 1.6%, the Singapore dollar 1.5%, the British pound 1.5%, the New Zealand dollar 0.9% and the Taiwanese dollar 0.4%. For the week on the downside, the Brazilian real declined 0.7% and the Australian dollar dipped 0.2%.
This week Commodities, DBC, rose 2.3%; the chart of Unleaded Gasoline, UGA, rose 7.7% and its daily chart shows that it has risen parabolically during July, suggesting that its rally is now complete; the chart of West Texas Intermediate Crude, $WTIC, rose 2.5%, to close at 106.24; the chart of Spot Gold, $GOLD, rose 5.8%, to close at $1,285, its best week in eight months, as the US Dollar, $USD, traded 1.8% lower to close at $83.12.
In the age of Authoritarianism, wealth can only be preserved by investing in and taking possession of gold bullion either in physical form or by trading on an Internet Platform such as Bullion Vault.
2) … How the Emerging Markets bubble inflated
Jesse Columbo writes in Bubble Bubble How the Emerging Markets bubble inflated. Though emerging market economies and assets had slightly deflated during the most acute phase of the Global Financial Crisis in 2008 and early 2009, they quickly rebounded due to the incredibly stimulative monetary policies of global central banks. China’s $586 billion stimulus program , an economic defense measure, led to a sharp surge in economic activity as the country built massive infrastructure “mega projects,” opulent government buildings and scores of entirely empty cities to create economic growth [2, 3, 4].
The combination of stimulative global monetary policies and China’s construction-intensive (and thus natural resource-intensive) economic stimulus program caused commodities prices to roughly double from early-2009 until early-2011.
Soaring commodities prices helped to boost the fortunes of resource-rich emerging market economies and cushioned them from a good portion of the West’s economic suffering. (Note: not all emerging market economies that are currently experiencing bubbles are commodities exporters.)
In 2009 and 2010, emerging market asset bubbles began to strongly reinflate due to global carry trades in which investors borrowed capital from deflation-prone countries with low interest rates (like the U.S. and Japan) and deployed it into higher-yielding investments in non-deflation-prone economies such as those in emerging markets . By late-2010, capital flows to emerging markets had risen to $825 billion – a level that exceeded the last peak in 2006-2007, while inflows to Asian economies rose 60% above their prior peak . Dilma Rousseff, the President of Brazil and a trained economist, has frequently decried the large pool of speculative capital that has sought returns in emerging market assets, calling it a “liquidity tsunami” due to its ability to cause inflation, overheating and asset bubbles in emerging market economies . The economic bubbles in Canada and Australia have inflated for similar reasons (rising commodities prices & carry trades) as the emerging markets bubble.
The U.S. Federal Reserve’s $600 billion Quantitative Easing 2 (QE2) program that began in the fall of 2010 caused commodities prices to surge and resulted in a new wave of fears over emerging market asset bubbles and economic overheating. In early 2011, the Bank of England’s Andrew Haldane warned of emerging market asset bubbles due to capital inflows from advanced economies  and the IMF warned of “signs of overheating” in emerging market economies . By the summer of 2011, emerging market economies were red-hot and The Economist magazine published a “temperature gauge” to show which emerging market economies were most overheated, with Argentina, Brazil, Hong Kong and India at the top of the list . Around the same time, Joachim Fels, a top Morgan Stanley economist, warned that the BRIC nations faced an “elevated risk of credit bubbles and rising defaults”  and BRIC banks began to show the signs of a credit crisis .
Emerging market economies and their equity markets have cooled somewhat since the summer of 2011 due to another flare-up of the Eurozone crisis, the ending of the U.S.’ QE2 program in June 2011, the U.S. debt ceiling debate and credit rating downgrade and China’s ongoing economic slowdown. Despite the slowdown in emerging market economies, their bonds and fixed income assets are still booming (along with their property markets) and attracting massive capital inflows , which is helping to fuel their explosive credit growth .
And there is an epidemic of Emerging Market property bubbles. The tsunami of global “hot money” has created an epidemic of international emerging market property bubbles in hubristic defiance of the lessons that should have been learned from the calamitous American and European real estate crashes. Naive emerging market property investors are most likely justifying their investments with the famous last words, “this time is different!”
The Emerging Markets Property Bubble is just one part of the “Post-2009 global housing bubble” or “Housing Bubble 2.0” that I have identified. Other regions with major property bubbles are Australia, Canada and Northern & Western Europe. Please click on the links to learn more about this very important global housing bubble.)
Cheap credit and soaring real estate prices have led to rampant “bubble drunk” behavior in emerging market countries. Singapore seems hell-bent on repeating the mistakes  made by Dubai during its mid-2000s bubble as it builds extraordinarily opulent vanity projects such as the Marina Bay Sands, the world’s most expensive standalone resort that looks like a cruise ship (and has a massive pool on top of it) , and an artificial forest comprised of 150-foot tall biometric “supertrees.” 
Singapore’s bubble economy is fueled by interest rates that are linked to the U.S.’ ultra-low interest rates, which are far too low for Singapore’s fast-growing and inflation-prone economy . South Korea, whose citizens were among the best savers in world as recently as the late-1990s, now has the lowest savings rate in OCED as its consumers have been bringing on debt and spending so much money that they are beating notoriously profligate Americans at their own game. The average South Korean adult has nearly five credit cards and the country’s household debt burden exceeds that of the U.S. before the Global Financial Crisis [19, 20].
Brazilians have recently been on debt-fueled international shopping spree for luxury-goods that has boosted the fortunes of Florida and New York City  (which is one of the many reasons why our post-2009 economic recovery is actually a “bubblecovery.”) In India, where nearly 95% of the population lives on less than $2 per day, brand-addicted consumers are causing the luxury sector to boom  and Ferrari picked it as the country of choice to unveil its $687,000 FF four-seater . While the West is mired in its worst economic crisis since the Great Depression, the luxury sector has the emerging markets bubble to thank for its exploding sales, including a vigorous start in 2012 . Very few people realize that Europe’s economic situation would be far worse than it already is if it were not for the saving grace of booming luxury goods exports to emerging markets (another “bubblecovery” datapoint). When the emerging markets luxury bubble pops, the severity of Europe’s economic crisis will greatly increase. Emerging market economies and investment assets are experiencing a bubble of enormous proportions as their investors and consumers make the very same mistakes that the West made just a few short years ago. The Emerging Markets Bubble will pop when the bubbles in China and commodities prices pop and may lead to a crisis like the 1997 Asian financial crisis in the best-case scenario and a global depression in the worst-case, but highly likely scenario. Singapore and Hong Kong, with their finance and real estate-heavy island economies, may experience a similar fate to Iceland and Ireland in the 2008 financial meltdown. This time isn’t different.
3) … News of the rise of the King of the South as foretold in Daniel 11:11 and Daniel 11:40.
Egypt names New Premier amid disarray. Ex-Finance Minister Is Chosen to Lead Interim Government as Arab Nations Pledge Billions, While Divisions Widen. A former finance minister was chosen as Egypt’s interim premier under a six-month timetable for elections, as the country’s emerging post-coup government drew pledges of $8 billion in assistance from Arab supporters, in new attempts to bolster a democratic transition marked so far by divisions and violence.
Mr. Beblawi’s appointment, by the political alliance that supported the Egyptian military coup that forced Mr. Morsi from office on July 3, followed three days of negotiations and the Islamic Al Nour party’s withdrawal from the group. Mr. ElBaradei was given the post of vice president, to manage foreign affairs.
The appointment of Mr. Beblawi, who served as finance minister from July 2011 until December, shifted the emphasis away from political discord and toward the country’s pressing economic concerns.
Later Tuesday, the United Arab Emirates pledged $3 billion for Egypt’s new government, while Saudi Arabia pledged $5 billion in grants and loans “to help the Egyptian economy meet the challenges it currently faces.” Both wealthy Gulf nations were antagonistic to Mr. Morsi and publicly welcomed his downfall. They saw the rise to power of Mr. Morsi’s Muslim Brotherhood as a threat that could empower Islamist political movements at home, and were alarmed by Mr. Morsi’s overtures to Iran.
Egypt orders arrest of Muslim Brotherhood leader as group rejects cabinet offer. Egypt ordered the arrest of the Muslim Brotherhood’s spiritual leader and nine others for allegedly instigating violent clashes with the military this week that left more than 50 Brotherhood supporters dead, hours after the group rejected a plan to be part of the government’s new cabinet. The general prosecutor’s office said in a statement Wednesday that it issued arrest warrants for the general guide of the Muslim Brotherhood, Mohammed Badie, as well as his deputy and strongman, Mahmoud Ezzat. Eight other leading Islamists also were ordered to be taken into custody. The prosecutor’s office says the Islamist leaders are suspected of inciting the violence outside the Republican Guard building in Cairo on Monday that left 54 people dead.
4) … The rise of Global Security State within the Beast Regime
The secret war
5) An inquiring mind asks, Will excess reserves, now renamed Balances Maintained that exceed the top of the penalty free band, increase or decrease in value?
Robert Wenzel The excess reserve column is gone and replaced with Balances maintained that exceed the top of the penalty-free band. Notice that the new data point has just one data point, all the historical data about excess reserves is gone from the current release. Poof! Fifty four years of history, that show how Bernanke has created an insane excess reserves problem, is now relegated to the dust bins. From here on out, Balances maintained that exceed the top of the penalty- free band (formerly known as excess reserves) will show a starting number of $1.977 trillion, rather than the decades under $1 billion.
As posted earlier in this report, John Rubino of Dollar Collapse writes Variable rate world, part 3: This horror show is just the beginning The big banks own a ton of securities that will plunge in value if interest rates rise.
The Too Big To Fail Banks obtained these “securities” as part of POMO, and as part of QE, which were placed in Excess Reserves with the Fed.
One thing that might make the Balances Maintained increase in value, is more banks transferring their securities to the Fed; yet one thing that will make Balances Maintained decrease in value, is the Interest Rate on the US Ten Year Note , ^TNX, soaring in value as bond vigilantes call the Interest Rate higher, and as foreigners sell US securities to support their own currencies.
Candice Zachariahs of Bloomberg reports U.S. Treasury sales by Japanese investors exceeded purchases by a record in May amid the biggest monthly drop for the securities in more than three years. Money managers in the Asian nation unloaded a net 3 trillion yen ($30bn) of U.S. government bonds in a fifth straight month of overall sales that was the largest in data from 2005… In June, Japanese investors were net sellers of overseas debt valued at a record 2.96 trillion yen, taking the total to 10.6 trillion yen this year. That’s on track for the first net annual sales ever”
As the Interest Rate on the US Ten Year Note, ^TNX, rises, and as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepens, seen in the Steepner ETF, STPP, steepening, then both the Too Big To Fail Banks, RWW, and the Regional Banks, KRE, will be be integrated either by diktat or by legislation, into the Government and be known as “Government Banks”. The banks will be part and parcel of government; their purpose will not be lending as it has been known, but rather check cashing, monetary control, and provisioning of diktat by statist public private partnerships, where regional nannycrats exericse oversight of the factors of production, commerce and trade.
6) Ben Bernanke, the King Of Credit, draws Defense, Aerospace, Consumer, and US Stocks, higher, with call for ongoing accomodative monetary policy.
This week, the chart of the S&P 500, $SPX, SPY, shows a 2.9% rise, to close at 1.680, manifesting an Elliott Wave 2 Up, on July 12, 2013, after having achieved a recent Elliott Wave 5 Up High, on May 21, 2013, as presented in Daneric’s post Elliott Wave Update, suggesting that the S&P 500, will be entering an Elliott Wave 3 Down; these are the most destructive of all economic waves, as they for all practical purposes wipe out all the wealth garnered on the previous five waves up.
The US Small Caps, IWM, rose 3.2% to a new high, and US Stocks, VTI, rose 2.9% to a new high; Germany, EWG, recovered 6.1%. Since May 1, 2013, it has been Peru, EPU, Chile, ECH, Brazil, EWZ, and the Emerging Market Mining, EMMT, as well as the Emerging Market Financials, EMFN, leading the Emerging Markets, EEM, lower as is seen in their combine ongoing Yahoo Finance chart.
In the yield bearing equity sectors, Utilities, XLU, recovered 4.7%. Of the yield bearing sectors, Mortgage REITS, REM, together with Emerging Market Financials, EMFN, remain sold off since the “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 24, 2013, as is seen in their combined ongoing Yahoo Finance Chart
Of note the Elliott Wave Surfer chart of the EUR/JPY shows an Elliott Wave Top on May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%. This seen also in the Stockcharts.com chart of FXE:FXY. It was at this time that the leverage of carry trade investing collapsed, as is seen in the daily chart of the Optomized Carry Trade, ETN, ICI.
The Interest Rate on the US 10 Year Note, $TNX, closed lower at 2.60%, enabling Aggregate Credit, AGG, to rise 0.92% this week.
This week Commodities, DBC, rose 2.3%; the chart of West Texas Intermediate Crude, $WTIC, rose 2.5%, to close at 106.24; the chart of Spot Gold, $GOLD, rose 5.8%,to close at $1,285, as the US Dollar, $USD, traded 1.8% lower to close at $83.12.
The Great Unwind of the quantitative easing and accomodative policies of the US Federal Reserve is about to commence on the failure of credit, AGG, with a continuing rise in the Interest Rate on the US Ten Year, Note, ^TNX, and a continued steepening of the 10 30 US 10 30 Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, as bond vigilantes call Interest Rates higher. Debt deflation will intensify, resulting in an ongoing global currency war of competitive currency devaluation by currency traders successfully selling currencies short, causing derisking out of nation investment, EFA, IFSM, and destabilizing democracies.
MyBudget 360 writes The era of cheap debt is now reversing and the piper is demanding to be paid. The total US debt markets are now over 3 times our annual GDP. We have largely become a nation built on debt. (I comment, the world economic system has been built on a monetization of that debt). The US is increasingly borrowing money from the world. The world realizes that the Fed is merely bluffing so guess what? Money is now flowing back into US markets to purchase stocks, real estate, and other goods pushing up prices while the middle class is literally living paycheck to paycheck. This is one of the reasons how it is possible to have a booming real estate market, a record in the stock market, while the middle class shrinks, and 47 million Americans are on food stamps. To sum it up, global investors are calling the Fed’s bluff and are now diving into the US market to buy it up on the cheap with a growing erosion of US dollars.
The markets once realizing the Fed was reaching a reckoning when it comes to debt, decided to react as you would imagine. The move in ^TNX, pushes the 10-year Treasury rate to its highest level since 2011.
So you have inflation coming from outside forces while the middle class essentially has watched the Fed assist banks and Wall Street in parceling off pieces of the domestic economy to global buyers. The underlying key to remember is this is happening at the expense of the middle class given that the top echelon of our society has benefitted mightily from this arrangement. The reckoning is here and there is a limit to how much debt you can have while not adding any value domestically.
The combined ongoing Yahoo Finance chart of closed end funds CSQ, PTY, AWP, PFL, RCS, and EIM, communicates that the way is lower for World Stocks, VT, on the failure of Aggregagte Credit, AGG, as well as the World Major Currencies, DBV, and Emerging Market Currencies, CEW, despite this week’s rally in the S&P 500, SPY, and the Russell 2000, IWM.
The words, will and way of the world’s monetary sovereign, gave strong seigniorage to stock investments. The power of this week’s rally is seen in the chart of World Stocks, VT, in relation to Aggregate Credit, AGG, that is VT:AGG, rallying to its highest ever value, suggests that Liberalism’s moral hazard based, Peak Stock Wealth, VT, was achieved the week ending July 12, 2013, as investors used margin credit to take stocks to their likely peak achievement, on the leverage of the world central banks’ monetary policies of investment choice, and schemes of credit expansion, such as quantitative easing. CBS reports Stocks hit new high after Bernanke speech buoys investors, where he commented at a NBER event, “So you put that all together, and I think you can only conclude that highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy”.
On August 25, 2011, Victor Sperandeo wrote in American Spctator, The Fed’s Philosopher King. Ben Bernanke is arguably the most powerful man in the world. And he answers to no one. Having one man control the money supply of 311 million Americansis itself a fantastic and unreal notion. When you then consider the effects of the U.S. Dollar on the remaining 6.6 billion people on this planet, the idea becomes unimaginable. Meet Ben Bernanke: the dollar’s whimsical “Philosopher King,”and the Chairman of the U.S. Federal Reserve.He is arguably the most powerful person in the world, with powers far surpassing those imagined when his position was created. Who knew the Fed Chairman could become so influential?
If you think the rest of the FOMC has any oversight on the Chairman, think again. As the anointed “sun king of currency,” no Federal Reserve Chairman can long tolerate discord in his ranks. The pressure for the FOMC members to follow the lead of the Chairman is immense.
Granting the power to print an unlimited amount of paper“money” to one unelected individual is like playing monetary Russian roulette with a Glock. Have we forgotten that Sir Alan Greenspan is now criticized for policies that led to the subprime collapse, including keeping Fed Funds at 1 percentfor over a year at the start of the contagion? But no one saysa harsh word about the current Chairman for keeping Fed Funds at zero for 33 months and promising tomaintain zero Fed Funds for “atleast two more years,” even though the National Bureau of Economic Research (NBER) claims the recession officially ended two years ago (June 2009).
Who wins from this structure? The government of course, because they borrow more money than anyone else, just ahead of the Fortune 500 companies and Wall Street traders and speculators. The losers will be savers —those on fixed incomes, the middle class, and of course the global poor, who will suffer most because of inflationary increases in the cost of basic foods and fuel.
Jean-Baptiste Say (1767-1832) is generally credited with the creation of what is referred to as “Say’s Law”, the original version of what has developed into modern“supply-side” economics. The basic tenet of supply-side economics is that the level and extent of aggregate demand is a function of the long-term trend of innovations and new inventions. That trend is a direct function of the demand for workers and their productivity.
The number of workers demanded, and their productivity, in turn depends on the rate of capital investment by the private sector, which is caused by market demand and the quantity of innovations and inventions. These new products are driven — like almost all human endeavors — by incentives, and by a group of risk takers called entrepreneurs. These entrepreneurs are generally supplied with capital by a similar group of risk takers called venture capitalists, who measure each entrepreneurial opportunity as a ratio of risk to reward. These two groups thrive in direct proportion to the level of economic freedom, tax rates, and regulatory interference found in a nation.
Remember the internet and dot-com boom in the mid-1990s? Say’s Law operated with great results. Supply created demand as eBay, Yahoo, Amazon, Google, and many more great businesses flourished. Huge wealth expansion resulted for all, while the growth in profits and increased tax revenue created by these innovators helped balance the Federal budget. In the same period, Main Street saw 4 percent real GDP growth while employment increased across the board.
Now we need to return to an atmosphere of1990s-style innovation, but be even more vigorous. This can only be done with private investment and an atmosphere of acceptable risk.
It cannot beaccomplished by borrowing 40 cents or more of every dollar spent by the government, maintainingzero interest rates, and devaluing thereal U.S.Dollar by printing massive amounts of fiat paper money via a central bank under the banners of “quantitative easing” and“stimulus.” These government methods always fail because they are temporary and extremely expensive.
In order for America to get back on top, we need to focus on promoting an atmosphere of free markets and economic freedom, not onprinting stimulus dollars. Only free and functioning markets can create wealth. The current Federal Reserve is broken and completely at odds with the principles of a free market and a free people. It is destructive to the free market system to allow the whim of a “king”to rule over monetary policy and interest rates. We can pay now or pay later, but if we want to unleash American capitalism and the engine to turn the debt and the economy around, we must make the Federal Reserve a free market player instead of an imperfect monarch.
In as much as sovereignty begets seigniorage, that is moneyness, this week’s surge of seigniorage likely marks Liberalism peak sovereignty: World Stocks, VT, are at full leverage over Aggregate Credit, AGG, as is seen in VT:AGG. And Nation Investment, EFA, is at full leverage over World Treasury
Bonds, BWX, as is seen in EFA:BWX. The Milton Friedman, Free To Choose, Floating Currency, Banker Regime of democratic nation states has achieved its zenith in terms of political, economic and monetary power.
It is Jesus Christ, working in the economic and political administrative plan of God, Ephesians 1:10, who has produced Liberalism’s greatest, that is most complete, economic and political experience.
Liberalism was defined as the era of dividend investing, as investors trusted in the monetary authority of the world central banks to provide profits from global growth as well as stock buy backs by corporations provided by the cheap credit of Global ZIRP. Dividends Exluding Financials, DTN, regained its May 24, 2013, high this week. Perhaps the best of all dividend paying stocks have been the Energy Limited Partnerships, AMJ, such as GEL,TLLP, NGLS, WES, MMP, SEMG, TRGP, seen in their ongoing combined Yahoo Finance Chart together with Dividends Excluding Financials, DTN. Of great warning to Energy Limited Partnership investors, the price of Natural Gas, UNG, has fallen with the rise in Interest Rate on the US Ten Year Government Note, ^TNX.
Through “extinction protocol”, He released the Four Horsemen of the Apocalypse beginning in May of 2010 with Greek Bailout I. As presented in bible prophecy of Revelation 6:1-8, the Rider on the White Horse, who has a bow without any arrows, is transferring the baton of sovereignty, from democratic nation states to regional nannycrats, with a goal of terminating democracy throughout the world, first in Greece, with the provision of Three Greek Bailouts, second, in Cyprus with a Bailin of Cyprus bank depositors, and third in Egypt with a military coup.
When the Bretton Woods system, synonymous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of military bases, will collapse, and the Ten Toed Kingdom of Regional Governance seen in Nebuchadnezzar’s Statue of Empires of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy.
The Ten Toed Kingdom is synomous with its Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, which presents ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism, where the seven heads symbolize mankind’s seven institutions: 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.
In the age of Authoritarianism, and its policies of diktat and schemes of debt servitude, wealth can only be preserved by investing in and taking possession of gold bullion either in physical form or by trading on an Internet Platform such as Bold Is Money or Bullion Vault. Suggested chart article reading includes Jack Chan’s This Week In Gold posted in Safehaven.com
7) Bellingham, the city of subdued excitemen, hosts many ecletic service businesses.
There is a great diversity of service businesses in Bellingham, WA; these include Vital Climbing Gym, Fur Ever Friends, and Perch & Play.
8) I reside in a den of libertines and psychopaths; yet live in Christ.
I reside in downtown Bellingham, in a SRO in the Sea Breeze Apartments, which is owned and operated by a small non profit corporation..
Thirteen years ago, at the time Europe started to use the Euro as a common currency, I moved as far north and west as possible, and still be in a city with public transportation within the US, hence I came to reside in Bellingham.
Beginning at the time of Greek Bailout I, in May 2010, I started to notice that the neighborhood became more poneros, that is not only libertine, but actually evil, and wicked, as people began to manifest with animal spirits, in particular those of bear, lion, and leopard, just as one sees in Revelation 13:1-4: I’ve been mauled emotionally and mentally many times by these psychopaths.
I turn on my psychopathic radar immediatly when leaving my cracker box; and continually sweep for their noticable characteristics: any white clothing, a wollen hat, or a cap, or a cowboy hat, social flare consisting of rudeness, loudness, or busybodyness. Once I spot them, I make every effort to turn away and avoid them.
Please consider that if there be a God, that He by definition would have the quality of Goodness; yes God be Good. And being the Genuine God, He desires to see the quality of goodness developed in His elect. So, He purposes to be active in the Blacksmith Shop, tempering his saints, applying His Hammer, forging them against the anvil of adversity, applying great heat to develop His qualities in those of His choosing, while discarding the reprobate.
It has been God’s providence introducing me to the harshness of many mean and crazy individuals, so as to produce His admirable attributes in me. I know one individual by name, who like George Zimmerman, is a neighborhood Guardian Angel; one who intimidates and emotionally bullies all who he can. He bears the marks of prison in that he has Jesus Christ, written on his knuckles, and has a cross, tattooed on his forearm like a knife: he’s a real killer as far as I am concerned. He lives in the same building and is relentless in confronting me about everything and anything. Yet I have never have spoken to him, nor have I even flipped him off.
I do not know what temptations or trials are coming; but I do know that the monetary authority of Ben Bernanke and the national sovereignty of the US is at its peak. Through dispensation, that is through the administration of Jesus Christ operating to produce the fullness and completion of every age, epoch, era and time period, Ephesians 1:10, inflationism is giving way to destructionism. And as a result regional monetary authority and regional sovereignty will provide the seigniorage of diktat and estblish governance enforcing debt servitude for all.
Just as investors placed their trust in Ben Bernake for profitable return, so resdents in each of the world’s ten regions will trust in a New Prophet for their survival; and according to Revelation 13:1-4, the level of trust will be described as worship, just as in the Apocalypse of the First Century.
John Mark Hicks writes The beast, according to Revelation 13:1-2, is given power, authority, and a throne which the whole world worshipped. John’s readers lived daily with the claims and actions of imperial power. For them it looked as if the whole world worshipped the Emperor and Caesar wielded uncontested power over their lives. For Caesar there was only one throne, and it was his.
John’s visionary experience contests Caesar’s claim. This is foundational for the unfolding drama of Revelation 4-16 (the second vision). God sits on the throne, not Caesar, and God remains on the throne despite Caesar’s attempts to unseat the Creator.
Revelation 4 identifies two sets of “celestial” participants around the throne of God. One set–the four living creatures–probably represents angelic figures while the other set–the twenty-four elders–represents human figures. In sum, angelic and human communities are present before the heavenly throne. They surround the throne with their worship, submission, and obedience.
The description of four living creatures before the throne is drawn from Ezekiel 1:4-21 and Isaiah 6:2-4. We may describe them as cherubim (look like Ezekiel) or seraphim (sing like Isaiah) though they are not so identified by John. Rather, as close to the throne, they may represent a kind of angelic hierarchy. Whatever the case, they represent God’s all-seeing (lots of eyes!) activity in the world who are never inactive in God’s cause or mission. They continuously praise the one “who was and is and is to come.”
I am motivated by Christ in me, the hope of glory. And am growing in spirtual understanding, so I can have wisdom in all things. I purpose to enjoy God’s Spirit, and become the New Man in Christ, forsaking carnality and iniquity, to live in God’s virtue and in His revelation of ethics as presented in the New Testament. I endeavor to keep His word of endurance, and not deny His Name, that is His Presence and Authority. To this end, in February 2013, I told my neighbors, who I have known for the last five years, “I am no longer speaking with anyone in the building in which I live”. I received a variety of responses; and now live by this new constitution, as a mean of protecting my sensibilities and purity.