Financial Market Report for the week ending Friday July 19, 2013
1) Those of Apocalyptic Vision, perceive that Bible Prophecy of Daniel 2:25-45, foretells of the soon coming of a Ten Toed Kingdom of regional governance, consisting of toes, that is regions, consisting of a miry mixture of iron diktat and clay democracy, which is synonymous with the Beast Regime of diktat and totalitarian collectivism, seen in Revelation 13:1-4, which will arise out of a global credit bust and financial system breakdown, having its origins in the sovereign insolvency and banking insolvency of the Mediterranean Sea PIGS. The Beast Regime, which is replacing the Creature from Jekyll Island, will be popular with many, even to the extent that they will actually worship it, as related in Revelation 13:3-4.
Business Insider relates The next financial crisis will come with a crisis of faith.
Let them eat diktat, is Authoritarianisms call. There will be no populist leader rising to resolve the soon coming economic crisis; rather there will be one familiar with Authoritarianism’s policy of diktat and schemes of debt servitude coming to rule the Eurozone, as foretold in Daniel 8:23-25. This leader is also presented in Revelation 13:5-10, as the New Pharaoh, who will be accompanied by the New Prophet, Revelation 13:11-17, who will together eventually introduce the charagma money system, that is the 666 credit system, where all will be required to take the Mark, in order to buy or sell, Revelation 13:18.
Yes, a Beast Regime, a Pharaoh, and a Prophet are coming to rule the world. Corollary #8 from the Dispensation Economics Manifest is that with the ever increasing failure of Liberalism, the old policy of investment choice and schemes of credit, are being replaced by new policies and new schemes for economic and political action under Authoritarianism.
Under Authoritarianism, the new policy of diktat and new schemes of debt servitude are being developed; these include regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability.
Economic and political movement under Liberalism was based upon ponzi credit, which provided capital and revenue and resulted in a moral hazard based prosperity. Authoritarianism, on the other hand, is based upon trust which provides vitality for statist underwriting of economic activity.
Capital perished on May 24, 2013, with the rise in the Interest Rate on the US Government Note to 2.01%, and it is increasingly being replaced by statist vitality, which is defined as diktat establishing oversight by nannycrats, working in public private partnerships and in regional governance, which become the legislators of economic value and the legislators that shape one’s means and one’s ends.
Gone are the days when liberalism’s bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and the legislators of economic life. Economic and political movement under Authoritarianism is based upon debt servitude which provides for collective action, and crushing austerity.
2) Bond vigilantes have control of the bond market and will be calling the Interest Rate on the US Ten Year Note higher, causing disinvestment out of stocks, and deleveraging out of the EUR/JPY, as well as currency carry trades globally.
Daniel Kruger & Liz Capo McCormick of Reuters present An interest rate yeld forecast. “The term premium turned positive June 19 for the first time since October 2011, according to Columbia Management. A negative number showed that investors were willing to own bonds at such expensive levels as long as the Fed was buying”.
“Economists and strategists see little change in yields for the remainder of 2013, ending the year at 2.62 percent, based on the median of 67 estimates in a Bloomberg survey. That’s below the average yield of 5.37 percent over the past 25 years.
“It’s going to be hard to sell-off unless something dramatically changes, which we don’t forecast over the next couple of months,” Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York, one of 21 primary dealers that trade with the Fed, said in a July 10 telephone interview.
Treasury 10-year note yields have probably established a new range between 2.40 percent and 2.75 percent, Jersey said.”
I contend that bond vigilantes gained control of the credit market calling the Interest Rate on the Ten Year Note, ^TNX, rising to 2.01% on May 24, 2013, and that this was an “extermination event” which terminated Liberalism, ending both its policy of investment choice and its credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, dollarization, financialization of stocks and ETFs, such as corporate bonds which convert into stocks, all of which created capital for corporations to operate and revenue for governments to operate. Debt deflation is underway as currency traders are selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, short.
Investors have taken refuge in US Regional Banks, KRE, and in the Too Big To Fail Banks, RWW, driving up the value of the Russell 2000, IWM, as well as the Small Cap Pure Value Stocks, RZV, and the Small Cap Pure Growth Stocks, RZG. This is reflected in the John Rubino report Oops, we did it again: Banks and houses dominate the recovery. One of the many, many lessons we should have learned from the 2009 crash is that an economy driven by inherently unstable, and completely unproductive, things like rising home prices and bank trading profits can’t be trusted. And yet here we are again. Bloomberg reports that the Manhattan housing boom has spread to the boroughs.
Interest rates are going to being rising much faster and much soon than establishment analysts perceive from their recent July 5, 2013 rally to 2.71%.
3) US Federal Reserve monetary policy and Banker credit schemes have been highly stimulative to US automobile, home sales, home improvement, discretionary spending, while those of the ECB have only served to increase its sovereignty, which is leading to a One Euro Government, at the expense of the of democratic nation states in Europe, thereby terminating Liberalism
Bespoke Investment Group, reports US and European auto sales are oceans apart In recent years, auto sales in the US have seen a sharp rebound even as sales in Europe have been sliding. In fact, while the total number of new cars in the US in the twelve months ending 6/30 hit its highest level in five years (15.0 mln), sales in Europe dropped to their lowest levels since December 1995 (12.1 mln). Even more interesting is the fact that while the last five years have seen rebounding US sales while European sales decline, in the ten years prior to that, it was European sales that were rising while US sales declined. Technology has made the US and Europe more inter-connected than ever, but both literally and figuratively, the two economies are still oceans apart.
In related economic news, Bespoke Investment Group reports Homebuilders diverge from sentiment. And Peter Schwarz of WSWS reports Germany’s Praktiker home improvement chain store declares bankruptcy. Yet US home improvement retailers, HD, LOW, SHW, LL, and home furnishing stores RH, KIRK, GMAN, BBBY, presented in Finviz Screener, are seeing record stock values.
The ongoing Yahoo Finance chart of Consumer Discretionary, IYC, Retail, XRT, Automobiles, CARZ, Homebuilding, ITB, together with Biotechnology, IBB, as well as Germany, EWG, documents the transmission, or perhaps better said, movement, of money coming via inflationism of the monetary policy of the US Federal Reserve, while at the same time destructionism of the loss of sovereignty and seigniorage in Germany. This was aided by the sale of Junk Bonds, JNK, as well as by carry trade financing such as the EUR/JPY provided courtesy of Mario Draghi and the ECB’s LTRO 1 and LTRO 2, and OMT, as well as by Kuroda Abenomics. The US stands at peak sovereignty and seigniorage, producing Peak Wealth, seen in the chart of US Stocks, VTI.
Through anticipation of one last grand finale burst of Inflationism in front of Summer Earnings Season, the most monetary inflationary ETFs and stocks, rose strongly to new rally highs; these being, seen in this Finviz Screener.
With the implementation of the Euro, Europeans centralized money, while the rest of market economic policies were kept at national level, creating an environment in which countries could diverge and did diverge. Germany used restraint in home building and civic projects and kept unit labor costs low; and thus for all practical purposes operated in capitalism, while the other nations, to differing degrees, embarked on European Socialism, and the Greeks pursued Greek Socialism, where state employment was guaranteed by national constitution, and led to great clientelism which the Economist Magazine described the Greek Economy of one of pork and patronage. Tyler Durden reports the grim statistic of economic failure in Greece, At 27.4%, its unemployment problem is the worst in the world according to Bloomberg’s data, followed closely by Spain and South Africa.
The PIGS are insolvent sovereigns, and have insolvent banks, and all European Financial Institutions, EUFN, are loaded to the gills with European nation Treasury debt that cannot be paid. Under Greece Bailout III, the fiscal needs of Greece are being met by the Troika on a month to month basis in front of the Septemeber 2013 German election. The ECB through its monetary policies are providing ongoing fiscal seigniorage to the periphery nations. This stands in awesome contrast to the US Dollar Hegemonic Empire, know as America The Great, one made so through liberal US Federal Reserve policies of investment choice, and ponzi Banker schemes credit, establishing a moral hazard, and not meritocracy based, prosperity. Of note the United States of America was destined to become a global kick ass nation, that is the Great Nation in Genesis 35:11, and the second iron leg in Daniel 2:25-45.
Whether it be on an economic production basis, or on a fiscal basis, European Socialism and more importantly Greek Socialism, are cleary failed economic systems. The EU is defined by failed seigniorage, and failed sovereignty and failed money system. Clearly new sovereignty, new seigniorage, and a new money system will soon emerge. Needless to say there will be many Angry Byrds. While liberalism featured what Doug Noland terms wildcat finance, where bankers waived magic wands of credit; authoritarianism features wildcat governance, where nannycrats waive clubs of debt servitude.
Fiat money died on May 24, 2013, on the rise of the Interest Rate on The US Ten Year Note, ^TNX, with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, on the failure of the world central banks’ monetary authority, and especially the Bank of Japan’s Kuroda Abenomics monetary policies, seen in the Nikkei, NKY, falling sharply lower. The monetary stimulus, credit liquidity, and monetization of debt initiatives of the US Federal Reserve and other central banks, finally crossed the Rubicon of sound monetary policy, and turned “money good” investments bad, yet moving investment capital to find final safe haven rally in US Stocks, VTI, such as the Russell 2000, and the S&P 500, SPY; yet this rally is only a zombie rally, that will soon produce a parabolic turn lower in a broad range of investment choices.
While the diktat money system was conceived by Herman van Rompuy acting together with the EU Finance Minsters, in early May 2010, with the provision of Greek Bailout I, as well as the more recent Greek Bailouts II and III, and the Cyprus Bank Bailin, the diktat money system was unleashed onto the whole world by the bond vigilantes calling the Interest Rates on the US Ten Year Note, ^TNX, higher, and the currency carry traders calling the Yen, FXY, higher, on May 24, 2013, inducing investors out of currency carry-trade, yield bearing investments, such as Electric Utilities, XLU, Mortgage REITS, Global Real Estate, DRW, and Premium REITS, KBWY, Nation Investment, EFA, Emerging Market Investment, EEM, such as Brazil, EWZ, and Small Cap Nation Investment, IFSM, such as EWZS.
According to bible prophecy of Revelation 13:1-4, out of Eurozone, sovereign insolvency and banking insolvency, there will come a movement by federal nannycrats to renounce national sovereignty and announce pooled sovereignty for regional security, stability and sustainability, thereby creating a Eurozone Super State, which will serve as the model of Authoritarianism’s regional governance in all of the world’s ten regions, and totalitarian collectivism in mankind’s seven institutions.
FinancialSurvivalNetwork contends Goldman Sachs is the government. 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 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 exericise oversight of the factors of production, commerce and trade.
4) On the killing of Travon Martin by George Zimmerman.
Business Insider reports This case wasn’t about race, juror says. That juror pointed out that Martin was supposedly stopping, turning, and “cutting through the back” yards of the gated community where the teen’s dad lived. She believes Zimmerman would have treated anybody who acted that way in the same manner, regardless of that person’s race. “I think he just profiled him because he was the neighborhood watch, and he profiled anybody who came in and acted strange,” she told Cooper.
I contend that neighborwood watch groups intenstify the ethical hazard that a psychopath will join and then confront and individual and instigate a situation in which that one uses deadly force, in this case, the shooting of Travon Martin by George Zimmerman.
5) Non pharmaceutical treatment available is available for OCD.
Dr Phil and Dr Badley Jabour of Smart Brain and Health discuss Treatment of OCD.
6) CNBC reports Greeks go on strike as layoffs loom.
7) Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming sovereign.
CPI Financial provides the Reuters report Technocratic government installed in Egypt. Egypt’s new military-backed administration has pleased investors by appointing experienced economic policy makers to a cabinet whose cohesion will be sorely tested in the coming months. Ahmed Galal, managing director of the Cairo-based Economic Research Forum since 2007 and for 18 years a researcher at the World Bank, was appointed finance minister on Sunday.New Prime Minister Hazem el-Beblawi, who is to steer Egypt until parliamentary elections planned in about six months, ran Egypt’s Export Development Bank for 12 years and went on to work at regional economic agencies in the Middle East.
Ahmed Galal, managing director of the Cairo-based Economic Research Forum since 2007 and for 18 years a researcher at the World Bank, was appointed finance minister on Sunday.
Ziad Bahaa El-Din, who is a member of the leftist Egyptian Social Democratic Party, will be deputy prime minister; he has a doctorate in banking law from the London School of Economics and ran Egypt’s investment authority between 2004 and 2007.
Egypt’s interim authorities have not been able to ignore ideology and horse-trading in choosing their economic team. In an effort to reduce political tensions, they have had to take care to appear inclusive of a range of opinion.
Ashraf al-Arabi, a U.S.-educated economist who served as planning minister under Mursi, handling unsuccessful negotiations on a $4.8 billion loan from the International Monetary Fund, was given the same post in the new government.
“As individuals I believe the interim government can handle the priorities, but the biggest challenge is how they will deal with the challenges as a team,” said Kotub at Naeem Financial.
Within minutes of his appointment on Monday, Arabi appeared to raise the possibility of disagreement within the cabinet by telling reporters that the time was not right to reopen talks with the IMF, because $12 billion in aid pledged by Egypt’s Gulf allies would carry it through coming months.
It was not clear whether Arabi was speaking on behalf of the entire cabinet or simply giving his own opinion; Beblawi has not said publicly whether he wants a quick IMF deal, which could help to attract foreign investors back to Egypt.
Many economists think an IMF loan is in any case unlikely before the next parliamentary elections, because it would come with politically explosive commitments to economic reform that an interim government would struggle to provide.
“It would have been extremely difficult anyway to achieve an IMF agreement soon,” said William Jackson, emerging markets economist at Capital Economics in London. Arabi’s comments were “just a realistic assessment”, he added.
The new cabinet will grapple with other tough policy decisions in the next few months. One is how to begin reforming Egypt’s wasteful system of fuel and food subsidies, which is undermining state finances; Egypt needs to find a way to cut overall spending without hurting the poorest people.
Another dilemma is currency policy, which the cabinet is expected to discuss with the central bank. After depreciating nearly 15 percent against the dollar to around 7.0 in the past 18 months, the Egyptian pound has strengthened slightly since last week as the new government has been formed.
With Gulf aid flowing in, authorities may be tempted to spend some of the money to halt further depreciation, to limit inflation and try to restore investor confidence by creating a contrast with the pound’s performance under the Mursi regime.
But such a policy would risk draining Egypt’s foreign reserves, and could hurt the economy by keeping the pound overvalued. Capital Economics estimated a fair value for the pound, which would help Egyptian exports recover, of about 7.50.
Sultan Sooud Al Qassemi for Al-Monitor in Saudi Election reports Gulf States embrace post Brotherhood Egypt. Less than a week after Morsi’s ouster, Saudi Arabia and the UAE on the same day offered Egypt assistance totaling $8 billion. Each would grant Egypt $1 billion and lend it another $2 billion, in the case of the UAE interest free. In addition, the Saudis offered $2 billion worth of oil and gas. Al-Monitor was informed firsthand that the UAE’s assistance to Egypt, announced July 9, is merely the “first step.”
Saudi Arabia’s assistance to Egypt will likely go beyond this individual aid package. The kingdom is a member of the G-20 club, representing the world’s 20 largest economies, and can influence the International Monetary Fund directly as well as via contacts in Washington to finally extend a much-sought $4.8 billion loan for Egypt. This step could not come sooner. Upon former president Hosni Mubarak’s ouster, Egypt had $36 billion in foreign currency reserves. Two and a half years later with Morsi’s ouster, the country has $14.9 billion in reserves. The situation is even more serious when one considers that the previous sum is only sufficient for three months’ worth of imports, with Egypt’s total import bill for 2012 standing at $58.6 billion, according to the country’s Central Bank figures.
Kuwait, among the wealthiest of the Gulf Arab states, steered clear of the Morsi government during the past year due to the Brotherhood’s stance toward the 1990 invasion by Iraqi forces under Saddam Hussein. Back then, according to Wendy Kristianasen of Le Monde Diplomatique, “prominent Brotherhood branches visited Baghdad and issued statements condemning the US presence in Kuwait in language that seemed to support Saddam.” Kuwait, which is no doubt relieved to see the end of the Brotherhood government, announced a major aid package to Egypt on July 10 totaling $4 billion.
Qatar, which had invested a great deal financially, politically and media wise in supporting the Brotherhood, risks having all its investments turn sour. While the Brotherhood was in power, Doha extended Cairo a total of $8 billion in grants and loans as part of an $18 billion financial assistance program. Despite some expectations to the contrary, Qatar issued a press statement the day after the ousting of its close ally “praising the Egyptian army’s role in safeguarding Egypt’s national security” and adding that it “respected the will of the Egyptian people.” The statement also said that Qatar will continue to support Egypt, omitting any reference to the ousted Brotherhood president and government. Qatar is also expected to soon offer Egypt another aid package, in part to quell any assumptions that its only intent had been to assist a Brotherhood government.
While the UAE expressed “satisfaction” over the end of the Brotherhood regime, Saudi King Abdullah lauded the army for saving Egypt from what he called a “dark tunnel.” The Gulf states would be all too happy to see that the Brotherhood never return to power. It would be naïve, however, to assume that Morsi’s ouster is the end of the Brotherhood in Egypt. The world will have to contend with the presence of political Islam in Egypt whether in the form of the Brotherhood or the numerous Salafi parties, at least for the foreseeable future.
Chris Mardsen writes in WSWS Top US official meets with Egyptian junta as crackdown continues. The most significant development yesterday was the nomination of al-Sisi as first deputy prime minister. Al-Sisi also keeps his position as defence minister, making clear just who represents the real power in the land. This means that the government consists of Al-Sisi and the US stooge ElBaradei, sitting alongside.
8) An inquiring mind asks, does the ISON present comet cosmic risk to the earth and its inhabitants?
Alan Boyle, Science Editor NBC News reports Comet ISON gets its day in the sun. Comet ISON, the fuzzy snowball that skywatchers hope will become the “comet of the century” in November, shines in a colorful setting provided by the Hubble Space Telescope and its science team. The actual comet is out of view until next month, due to its current position in relation to the sun. However, the Hubble picture shows ISON as it looked on April 30, against a background of stars and galaxies. This image is an exclusive from the Hubble team’s ISON Blog, which will deliver images and lore about the comet as its approaches the sun. The world’s most loved space telescope, plus the comet of the century? That sounds like a match made in the heavens.
This inquiring mind asks, does the ISON comet present cosmic risks to the earth and its inhabitants?
10) On Tuesday July 16, 2013, a see saw destruction of fiat money as Aggregate Credit, AGG, traded higher, and the Regional Banks, KRE, and the Too Big To Fail Banks, RWW, led World Stocks, VT, lower, on the miss in retail sales versus expectations.
Mike Mish Shedlock writes Big miss in retail sales vs. expectations. DXLG has been one of the hot retail stocks of late, it traded down 0.9%, as the Retail Stocks, XRT, traded 0.7% lower.
Destination XL Group, DXLG, annouinced May 6, 2013, in press release Destination XL launches national ad campaign to support major retail expansion. The TV and radio spots, titled “No Man’s Land”, use humor to underscore the shared and relatable shopping frustrations bigger guys face, and remind them that Destination XL is committed to addressing their fashion needs. The television spot features bigger men standing in a barren wasteland aimlessly searching for quality clothing that fits. In one scene, a grown man in his underwear exclaims, “I found this shirt, but I can’t find any pants that fit” as he sifts through clothes desperately trying to piece together an outfit. This is a common problem for men searching for XL sizes who, more often than not, walk out of stores empty-handed due to the consistent lack of options.
“The symbolism of standing in a vacant wasteland of a shopping center, neglected by retailers, hits home for many bigger guys,” said DXLG Chief Executive Officer David Levin. “Our mission at Destination XL is to fill this void by offering these guys the widest array of styles, brands and selections in the sizes they need to help them look and feel their best.”
The ad campaign launched on May 5 with a national rollout that includes cable TV, radio and outdoor placements. DXLG teamed with Interpublic Agency, Gotham, to create the spot. The new campaign coincides with the accelerated store expansion plan for this rapidly growing men’s XL retailer. Destination XL, which currently has more than 50 stores across the country, expects to operate between 105 and 112 stores by the end of the fiscal year, and more than 200 stores by 2016.
Stockbrokers, IAI, Investment Bankers, KCE, Regional Banks, KRE, such as RF, the Too Big to Fail Banks, RWW, led World Stocks, VT, lower, as Aggregate Credit, AGG, traded higher, with the longer duration bonds, such as ZROZ, and BLV, trading higher more than their shorter duration peers, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower, to 2.53%, on the miss in retail, XRT, sales versus expectations.
Automobile Companies and their part manufacturers TSLA, F, AXL, TRW, SMP, MGA, DORM, and DLPH, led Automobiles, CARZ, lower. Biotechnology, IBB, Clean Energy, PBD, Media, PBS, and IPOs, FPX, traded lower as well.
Energy Partnerships, AMJ, and Utilities, XLU, led the Interest Bearing Equities, lower.
The Nikkei, NKY, traded lower. from its rally high.
Currency traders took the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, higher, forcing the US Dollar, $USD, lower. Gold, GLD, and Silver, SLV, traded up, taking Gold Miners, GDX, and Silver Miners, SIL, higher.
11) On Wednesday, July 17, 2013, World Stocks and US Stocks traded higher, as the bond vigilantes continued calling the Interest Rate on the US Debt, ^TNX, lower.
Aggregate Credit, AGG, traded higher again, as bond vigilantes continued calling the Interest Rate on the US Debt, ^TNX, lower to 2.49%; and Bespoke Investment Blog reports Treasury yields fall to test upward trend line.
World Stocks, VT, traded to a new rally high, and US Stocks, VTI, traded up to its previous high, with Networking, IGN, Internet Retail, FDN, Software, IGV, Small Cap Pure Growth, RZG, and Small Cap Pure Value, RZV, trading higher; the rise in the last two drove the Russell 2000, IWM to a new high. Emerging Market Finanials, EMFN, European Financials, EUFN, Regional Banks, KRE, The Too Big To Fail Banks, RWW, Automobiles, CARZ, Biotechnology, IBB, Media, PBS, S&P High Beta, SPHB, and Semiconductors, SMH, traded higher on the day as well.
In yield bearing investment Telecom Stocks, IST, Global Utilities, DBU, Leveraged Buyouts, PSP, Ultra Yield Bonds, UJB, Junk Bonds, JNK, rallied.
The Nikkei, NKY, traded up to its previous rally high, with Japanese Small Cap Stocks, JSC, such as Makita, MKTAY, moving up to a new rally high.
Thailand, THD, Vietnmam, VNM, The Philippines, EPHE, Indonesia, IDX, Indonesia Small Caps, IDXJ, New Zealand, NZD, Australia Small Caps, KROO, South Korean, EWY, and Australia, EWA, traded higher.
Brazil, EWZ, Brazil Small Caps, EWZA, Russia, RSX, Russia Small Caps, ERUS, Chile, ECH, and Argentina, ARGT, traded higher.
Bloomberg reports Bernanke says Fed bond purchases not on preset course. Federal Reserve Chairman Ben S. Bernanke said the central bank’s asset purchases “are by no means on a preset course” as he sought to tamp down an increase in borrowing costs that threatens to slow the economic expansion. “We’re going to be responding to the data,” Bernanke said today to the House Financial Services Committee. “If the data are stronger than we expect, we’ll move more quickly” to reduce purchases. If data “don’t meet the kinds of expectations we have about where the economy’s going, then we would delay that process or potentially increase purchases for a time.”
Lloyds Broup, LYG, and Bank of America, BAC, both rose to a new high; Zero Hedge reports Bank Of America: From loss to profit thanks to mark-to-unicorn.
The US Dollar, $USD, UUP, traded up from yesterday, and Gold, GLD, and Silver, SLV, traded lower. I am of the opinion that the Dollar will be going up from today’s close and that all of the Individual Currencies will be trading lower, as Risk On, ONN, turns to Risk Off, and as Volatility, ^VIX, pick up.
An inquring mind asks is an Elliott Wave 3 Down about to commence in the S&P 500, $SPX, SPY? Is Risk-On, ONN, about to turn to Risk Off, OFF? Will Volatility, TVIX, VIXY, VIXM, and XVZ, be rising soon? One can find answers to these questions by watching their ongoing Yahoo Finance Chart.
12) On Thursday, July 18, 2013, Dan Berman of Hot Stock Minute reports Dow, S&P 500 rise to all time highs; Morgan Stanley beats; Dell rises on delayed vote. Europe, VGK, led World Stock, VT, US Stocks, VTI, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, higher. Countries rising strongly included the Greece, GREK, Italy, EWI, Ireland, EIRL, Spain, EWP, Nikkei, NKY, Canada, EWC and the UK, EWU.
Oil, USO, rose 1.4%, causing the energy sectors to rise strongly
Small Cap Energy, PSCE 2.2
Energy Production, XOP 1.8
Exxon Mobil, XOM, 1.0, to close at 94.38
Energy Service, OIH 1.2 and IEZ 1.2
Sectors rising strongly included
Health Care Provider, IHF 2.1
Transportation, XTN 1.3
Global Industrial Producer, FXR 1.3
Bevreages, PBJ 1.2
Aerospace, PPA 1.0
Small Cap Industrial, PSCI 1.0
Industrial, XLI 1.0
Small Cap Pure Value, RZV 0.7
Retail, XRT 0.6
Global Consumer Discretionary, RXI 0.6
Yield bearing sectors rising strongly included
Leveraged Buyoust, PSP 1.1
Industrial Office REITS, FNIO, 1.0%, ReaI Estate, IYR 0.6, Small Cap Real Estate, ROOF, 0.7%
Utilities, XLU 0.8
Utilities, DBU 0.5
National Bank of Greece, NBG, soared 9.1%, Deutsche Bank, DB, rose 2.4%, taking European Financials, EUFN 1.8, higher, causing Europe, VGK, to rise 0.8%.
Regional Banks, KRE 1.8
Investment Bankers, KCE 1.5
Too Big To Fail Banks, RWW 1.5
Stock Brokers, IAI 1.3
The National Bank of Greece, NBG, led Global Financials, IXG, higher; banks rising strongly included NBG, BPOP, RF, BAC, RBS, SMFG, DB, BCS, CS and UBS.
Semiconductors, SMH -2.1%, with FCS, -10.1, -INTC -3.7 and DIOD -2.9. And Taiwan, EWT, dropped 2.7%, as Semiconductor Manufacturer, TSM, dropped 8.9%, and Semiconductor Equipment Manufacturer, ASX, dropped 2.4%
Aggregate Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to close at 2.53%. Junk Bonds, JNK, and Ultra Junk Bonds, UJB, traded higher with stocks.
The reason for the strong rise in the National Bank of Greece, NBG, and European Financials, EUFN, was the news that Troika has finally laid down the law so as to speak and demand that Greece annul the constituonal right to state employment and begin some limited level of dismissals, being privitizatons, impose some austerity measures, as well as commence some improvement in tax collection.
Robet Stevens of WSWS writes The New Democracy (ND)-PASOK government is to vote through cuts agreed after the recent review of Greece’s austerity measures by the “troika” of the European Union, European Central Bank and International Monetary Fund. Receipt of £5.8 billion in further loans from the troika requires the government to pass the legislation, which will enforce the firing of tens of thousands of public sector workers, including teachers, hospital staff and municipal workers.
According to Bloomberg, a European Union official said that senior euro-area financial officials are to hold a discussion July 24 to determine whether Greece qualifies for further loans from the €240 billion ($314 billion) overall loan agreement.
The omnibus legislation, which the troika specified had to become law by July 19, contains 109 articles including privatisations, health sector spending and taxation changes. The legislation centres on the firing of 4,000 state employees this year, including teachers, broadcasting workers, public building caretakers and municipal police officers. A further 15,000 are to be sacked by the end of 2014 and 25,000 placed in a mobility scheme (4,200 of these by the end of July and 12,500 transfers this year).
Those being dumped into the scheme include 1,000 hospital staff, move that will wreak further havoc on already devastated public health provision. The scheme is a euphemism for firing workers. They will have an eight-month period on 75 percent of their salaries. After that period, they are forced to accept any job offered to them, or, if no place is available for them in another part of the public sector, as is almost certain, they will be made redundant.
The Financial Times welcomed the troika/government proposals, declaring this week, “Greece’s civil service cull heralds break with the past.”
Stating that the “game was up” for public sector workers, the FT said, “While dismissals this year will amount to less than one percent of the civil service payroll, they send a message that a longstanding taboo on firing public sector workers has been broken, according to Kyriakos Mitsotakis, the newly appointed minister for public administration, who worked for the consultants McKinsey before entering politics.”
Even these measures are not enough, with the FT complaining, “Even though jobs for life are no longer guaranteed, procedures for sacking can be long drawn-out. About 6,000 state employees whose temporary contracts have ended, including janitors, cleaners and gardeners, are being paid in full while they contest their dismissal in the courts. The government has agreed to settle all such disputes this year.”
Dhara Ranasinghe of CNBC reports Pimco’s Gross has a post-Bernanke trade for you Federal Reserve Chairman Ben Bernanke’s semi-annual testimony on Wednesday drew swift advice from bond guru Bill Gross: time to buy five to seven-year Treasurys since interest rates are likely to be on hold for some time.
Those Treasuries are traded by IEF, and they will trade lower in value as bond vigilantes have control of the Interest Rate on the US Ten Year Note, ^TNX, and will be calling it significantly higher very soon, its rise on May 24, 2013, constituted an “extinction event” which terminated Liberalism and introduced Authoritarianism. There be no more traditional sovereigns as democratic nation states are being replace by regional sovereign leaders, nannycrats, and regional sovereign bodies. Money died, and the fiat money died on May 24, and just how high interest rates go, is something only God knows. One thing for sure is that a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening will duplicate itself across all crecit instruments wiping them out and taking down stocks in the process.
Zero Hedge reports June restaurant spending plunges by most since February 2008. Restaruants that have traded lower a little of late include BAGR, CHUY, BLMN, TXRH, DNKN, KKD, FRGI, IRG, EAT.
Today’s strong trade lower in EBAY has made Internet Retail, FDN, a very attractive short selling opportunity.
13) On Friday July 19, 2013
Global Industrial Producers, FXR, and World stocks, VT, traded unchanged for the day, yet attained a four week rally high, following some forecast busting U.S. earnings and assurances from the Federal Reserve about its plans for stimulus withdrawal. Gold, GLD, traded up for the week; but Silver, SLV, traded lower on the week, as the Dollar, $USD, UUP, gave back Thursday’s gains to trade lower for the week. Aggregate Credit, AGG, rose both for the day and the week, as the Interest Rate on the US Sovereign Debt, ^TNX, closed at 2.49%.
Oil rose 0.3%, taking energ sectors higher
XOP, PSCE, 1.3, 0.7
IEZ, OIH 2.0, 1.8
Sectors rising included
Yield bearing sectors rising included
Countries rising included Norway, NORW, Sweden, EWD, Europe, VGK, Vietnam, VNM.
Of note Gold Miners, GDX, and Silver Miners, SIL, traded up.
Chile, ECH, Peru, EPU, Taiwan, EWT, The Nikkei, NKY, traded lower.
Automobiles, CARZ, traded 1.1% lower. And Microsoft, MSFT, traded 11.7%, lower, turning Software, IGV, 1.1%, lower
This week’s 7% rise in Bank of America, BAC, completes BAC’s 103% rise over the last year which has created a safe haven rally for now in the Small Cap Pure Value Stocks, RZV, the Russell 2000, IWM, and the S&P 500. And the rise seen in Glacier Bancorp, GBCI, a multi-bank holding corporation with roughly one-hundred branches in Montana, Idaho, Colorado, Wyoming, Utah, and Washington. The company is headquarterd in Kalispell, MT. And serves as definition and example of US Federal Reserve monetary transmission that has inflated Regional Banks, KRE.
Leading Banks by Region include the following seen in this ongoing Yahoo Finance Chart; these six banks are amongst the leading banks; these exemplify the best of the Regional Banks, KRE.
Pacific Bank, GBCI, Kalispel, MT
Mid Atlantic Bank, SNV, Columbus, GA
Southwest Bank, FFIN, Abilene, TX
Southeast Bank, RNST, Tupelo, MS,
Midwest Bank, FITB, Cincinatti, OH
Northeast Bank, SBNY, New York, NY
All of these banks serve communities of industry, and stand in sharp contrast with the National Bank of Greece, NBG, which serves a community of dependency.
Christoph Dreier of WSWS reports Greek government bans demonstrations in central Athens. The Greek government has used the visit on Thursday by German Finance Minister Wolfgang Schäuble to impose a blanket ban on demonstrations in central Athens,
The Greek Parliament approved the austerity package, the seventh since 2010, to secure payment of its next tranche of credit of €2.5 billion. The package calls for firing 15,000 public employees, with 150,000 to be sacked by the end of 2014. The package was dictated to the Greek government by Schäuble and his European colleagues.
The package won the support of 153 of 300 deputies. After the withdrawal of the Democratic Left (DIMAR) from the coalition in June, the Greek government was left with a majority of just 5 seats. All of the opposition parties voted against the law, but DIMAR chairman Fotis Kouvelis stressed that his party agreed in principle to the cuts.
Greek Finance Minister Giannis Stournaras defended the mass layoffs, which he claimed should have taken place much earlier and not merely as a result of pressure from foreign creditors. He added that drastic measures were necessary to achieve Athens’ goal of a primary budget surplus for 2013.
After discussions with Samaras and Stournaras, Schäuble declared that the EU would provide Greece with aid credits beyond 2014, on condition the country respect its previous agreement to implement comprehensive privatization measures and mass layoffs.
Given the catastrophic social situation in Greece, his proposal to provide small and medium enterprises with credits of €100 million is a drop in the ocean. The sum is a fraction of the monies Germany receives in interest payments on its previous loans to Greece.
From the very start of the European crisis, Greece has been the model for the implementation of austerity measures across the continent. With the Greek political establishment and union bureaucracy increasingly discredited in the eyes of the masses, Athens increasingly resorts to police state measures to suppress opposition to its policies.
The Greek government has imposed martial law on striking workers on no less than three separate occasions this year and just a few weeks ago permitted riot police to invade the premises of Athens central university to dispel students. This was the first such police operation since the overthrow of the military junta in 1974.
The latest ban on demonstrations is a further step towards authoritarian forms of rule in Europe.
It is Jesus Christ, operating in the Economy of God, Ephesians, 1:10, who is bringing forth the Beast regime of regional governance and totalitarianism, out of the clientelism of Greek Socialsim, and the moral hazard of Crony Capitalism. Yes, God’s Son, Jesus Christ, is doing what Ron Paul could not do. He is terminatiang the Banker regime, beginning first with the financial insolvency and national insolvency of Greece as a means of terminating the age of investment choice and introducing the age of diktat.
Under Liberalism, the monetary sovereignty of the US Federal Reserve, and the political sovereignty of the United States, gave great seigniorage of credit, that is great moneyness of trust in bankers, to risk assets such as Biotechnology, IBB, and Regional Banks, KRE.
Under Authoritarianism, the sovereignty of regional nannycrats will increasingly grow in power, causing disinvestment out of risk assets; and all banks, everywhere, will be integrated regionaly with government, and will be known as the government banks, to provide the seigniorage of diktat, that is the moneyness of trust in public private partnerships, for regional security, stability, and sustainability.
This week, the chart of the S&P 500, $SPX, shows a 0.7% rise to a new all time high.
VTI , 1.0
Financial sectors rising included
Sectors rising included
OIH, and IEZ 2.7
Yield bearing sectors rising included
Doug Noland reports that the chart of the US Dollar, $USD, shows a decline of 0.5% to 82.61 (up 3.6% y-t-d). For the week on the upside, the Mexican peso increased 2.3%, the Swedish krona 2.0%, the New Zealand dollar 1.8%, the Norwegian krone 1.6%, the Australian dollar 1.4%, the South African rand 1.1%, the British pound 1.1%, the Brazilian real 0.9%, the euro 0.6%, the Danish krone 0.6%, the Swiss franc 0.6%, the Canadian dollar 0.3%, and the South Korean won 0.2%. For the week on the downside, the Japanese yen declined 1.4%, the Singapore dollar 0.3% and the Taiwanese dollar 0.2%.
The weekly chart of Spot Gold, $GOLD, shows a 0.9% rise to close at 1,295. Under Authoritarianism, the two forms of sovereign wealth, and thus sustainable wealth, are diktat and the possession of gold bullion.
Adam Hamilton writes in Safehaven.com Gold short squeeze. The CFTC releases its CoT late every Friday afternoon, current to the preceding Tuesday. So the latest available data when this essay was published was Tuesday July 9th’s. Gold-futures speculators held the short side of an astounding 178.9k contracts that day! This was at least a 12.3-year high, the most-extreme gold-futures spec short position by far in gold’s entire secular bull.
The sheer size of this bearish bet is breathtaking. Each COMEX gold contract controls 100 troy ounces of the yellow metal. So American futures speculators have borrowed and sold 17.9m ounces, or 556.4 metric tons! That even dwarfs the also-outlying record selloff in the holdings of the flagship GLD gold ETF over the past 7 months, which now weighs in at 417.3t. This epic gold short is wildly unprecedented.
The risks of such a big downside bet on gold are mind-boggling. By definition, futures speculators don’t produce or consume the commodities they trade. They aren’t gold miners, so the only way they can repay the 556.4t of gold they’ve borrowed is by buying it in the futures market. But even that won’t be easy. 556.4t is the equivalent of a fifth of total global production from all the world’s gold mines last year!
In order to amass such an enormous collective bet on further gold downside, futures speculators have to be both exceptionally bearish and highly convicted about that worldview. This is especially true given the very high leverage inherent in futures trading. High leverage makes already-unforgiving short selling an extraordinarily risky game, greatly multiplying both the speed and magnitude of losses when gold rallies.
At $1250 gold, a single 100-ounce futures contract controls $125,000 worth of the metal. But traders don’t have to put up the full $125k to play. The minimum maintenance margin on COMEX gold futures contracts these days is just $8k. This means the maximum leverage available to aggressive gold shorts is 15.6 to 1! Stock traders can scarcely comprehend that, as stock margin has been legally limited to 2 to 1 since 1974.
At maximum leverage, a mere 6.4% gold rally would wipe out 100% of the capital risked by gold shorts! While not all futures traders run with minimum margin, plenty do. The faster that gold rallies, the more pressure it puts on these guys to buy offsetting futures longs to cover. Short squeezes are born when just a small fraction of traders are forced to cover, unleashing buying pressure that sucks in many more.
The power of this futures leverage to violently move prices shouldn’t be underestimated. It is actually the dominant factor responsible for most of gold’s extraordinary losses this year. Year-to-date as of its recent late-June low, gold had lost $474. Incredibly $285 of this, or 60%, happened on just 3 trading days. First in mid-April and then in late June, the very high leverage inherent in gold futures fueled selling panics.
Every futures contract is a deal between two traders, the buyer on the long side and seller on the short side. And this is a zero-sum game, every dollar won by one trader is a direct dollar loss for the opposing counterparty. Back in April and to a lesser extent in June, gold plunged so fast that the max-leveraged speculator longs were forced to sell. Their selling greatly exacerbated gold’s selloff, sparking that vicious circle.
This cascading dynamic amplified gold’s down days to 4.7%, 9.6%, and 5.1%, enormous selloffs. The leveraged futures traders didn’t even have a choice. With gold moving so fast, brokerage margin computers stepped in to unilaterally sell longs at any price to protect their firms from having to make good on their customer traders’ losses. High leverage amplifies big moves as trapped futures traders are forced out.
This is true both ways, on exceptional down days and exceptional up days. Just as plunging prices drive forced liquidations of longs, surging prices drive forced buying by shorts. The brokerages unilaterally close these risky positions by buying at any price, and that buying pressure amplifies the rally which forces out more shorts. Today’s bull-record gold-short position among speculators is like short-squeeze rocket fuel.
After plummeting so rapidly in 2013, largely driven by the high gold-futures leverage biting the longs, gold is hyper-oversold and due for a massive rebound rally. If that happens fast enough, the shorts will be forced to buy to cover rapidly and trigger a short squeeze. The US futures markets have a long history of every contract being honored, there are no defaults. So the vast gold shorts can only be closed by offsetting buying.
Obviously speculators willing to run 10-to-1-plus leverage are much more sophisticated than your average long-only stock trader. High leverage is very unforgiving, quickly weeding out the traders who don’t know what they are doing. Nevertheless, as a herd gold-futures speculators have a long track record of making the wrong bets at price extremes. They miss major reversals as they get too fixated chasing momentum.
When gold-futures speculators are the most bearish, as evidenced by relatively high total shorts and relatively low total longs, gold is nearly always in the process of carving a major bottom. I highlighted instances of this in light blue above. These are major gold lows leading into major new uplegs where the futures speculators were utterly convinced gold would continue heading lower. Their track record is dismal.
A great example is the last secular-bull-record short position held by gold-futures speculators in early 2005. With gold near a major low, longs plunged to 145.1k contracts while shorts surged to 108.3k. This extremely bearish bet by the futures traders was dead wrong though. Over the next 15 months or so, gold would blast about 65% higher in its biggest upleg of its secular bull at the time. High spec shorts are a bullish indicator.
And with gold merely near $425 at this bull’s last record high in spec shorts, they were risking far less capital than they are today with gold near $1250. Those 108.3k contracts then controlled $4.6b worth of gold, but the recent outlying-record 178.9k contracts controlled a staggering $22.4b worth of gold! The more extreme the futures speculators’ shorts, the more guaranteed buying exists to catapult gold higher.
At peak bearishness during the stock panic, futures speculators’ long and short gold positions fell and rose to 144.7k and 84.5k contracts. These guys, with nearly everyone else, were utterly convinced gold was dead. If it couldn’t rally during an ultra-rare stock panic with the greatest market fear anyone will see in our lifetimes, then when would gold ever rally? The bearishness in it then was absolutely universal.
Yet nearly all traders, even the sophisticated leveraged futures guys, bet wrong at price extremes. They are the most bearish after long exceptional selloffs when they should be the most bullish. That happened in late 2008, it happened at this secular bull’s other major gold lows, and it is happening again today. These big short positions are actually what fuels the early rallies out of lows, when they’re often the only demand.
Shorts have to cover, they have effectively borrowed gold from other traders that has to be repaid. And the smart ones want to buy after extreme selloffs, to close their successful downside bets and realize their profits. But buying isn’t always easy. Every futures contract requires a willing buyer and willing seller. And as a price starts surging out of major lows, there aren’t many traders looking to sell gold futures.
So as shorts bid on gold futures to cover, in a short-squeeze situation there’s insufficient supply. The shorts dominate the market and a large fraction of them want to buy. But the longs who bought low are not interested in selling to the shorts in a nascent rally likely to run much higher. So in order to buy to cover, the shorts have to keep raising their bids to attract sufficient supply which accelerates the rally higher.
That classic dynamic was very apparent in late 2008’s stock panic, when gold started surging dramatically out of the depths of despair on gold-futures short covering. And compared to today, both the peak speculator shorts and gold price were much lower then. So the shorts then only had $6.6b of forced buying they were legally and institutionally bound to do, compared to the utterly staggering $22.4b today!
If that last episode of extreme bearishness among gold-futures speculators led to gold nearly tripling, how much more bullish is today’s far-greater extreme? In the post-panic years between 2009 and 2012, total spec long and short positions in gold averaged 288.5k contracts and 65.4k contracts. Merely to mean revert to these levels, not even overshoot, will require incredible gold-futures buying in the coming year.
On the long side, speculators would need to buy 91.6k contracts (9.2m ozs or 284.9 metric tons) to just return to post-panic-average long levels. Unlike the shorts who have to buy to repay the gold they’ve borrowed, this buying is optional for the longs. But as we saw after the stock panic, nothing brings back futures longs like rapidly rising prices. In under only a year after late 2008, longs were once again high.
The average futures-speculator short position in gold in the 4 full years after 2008 and before 2013 was 65.4k contracts. That is a long way down from today’s outlying-record 178.9k short position, we are talking 113.5k contracts! This is a mind-boggling 11.4m ozs of gold, or 353.1t. And unlike the longs, this buying is not optional. All this futures gold borrowed and sold short has to be repurchased, full stop.
Add these mean reversions from extreme lows in speculator gold longs and extreme highs in speculator gold shorts, and you get highly-probable buying in the coming year of 20.5m ounces or 638.0t! This is the equivalent of nearly a quarter of total world mine production in 2012! And all this is atypical exceptional demand on top of all the normal gold demand throughout any given year. So much buying is wildly bullish.
And I just can’t see how an exit from such outlying-record gold shorts when gold is at hyper-oversold lows and due to surge can be orderly. At some point, gold is almost certain to rally as fast as it plunged on the down days when the long futures traders were trapped in forced liquidations. And with such massive and highly-leveraged short positions, a short squeeze cascading into a buying panic is highly likely.
The total buying pressure on gold as it rebounds is going to be unprecedented. On top of the futures mean-reversion buying, there is the 417.3t of GLD holdings that had to be liquidated since December as money managers dumped gold. When gold starts rallying decisively again, they will realize they’ve made a mistake in portfolio allocation and migrate back in. GLD holdings should recover to new record highs in a year or two.
On top of all this exceptional buying, with wildly unprecedented 1055.3t potential between gold futures and GLD, is gold’s strong season. Much of gold’s enormous secular-bull run has been driven by huge buying out of Asia. The strong season over there begins with harvest in August, and runs for months on end. And unlike dumb American investors who foolishly like to buy high, Asian investors love bargains.
They are going to buy like never before with gold so extremely oversold and at such incredibly low levels compared to the past couple years. This is going to put even more pressure on the gold-futures speculators to exit their short positions. We are truly set up for a perfect storm of gold buying after 2013’s perfect storm of gold selling. The futures-short-driven component of that selling has to and will reverse.
The bottom line is the record short position futures speculators have amassed in gold is wildly bullish for the yellow metal. These guys have a long track record of betting completely wrong at major gold lows, extrapolating major downtrends continuing indefinitely even when they’ve begun reversing. This grave error leads to forced buying as the rallying gold price forces the shorts to cover their hyper-bearish bets.
And given such extreme spec gold shorts, widespread despair, and gold recently hitting the most oversold levels by far of its secular bull, it is due for a monster upleg. As this accelerates, the leveraged shorts will be forced to buy back the gold they owe at increasing rates. This will feed on itself and likely ignite a buying panic. It will very likely lead to the biggest and fastest upleg of gold’s entire secular bull.
Christoph Dreier of WSWS has it right when he relates “The latest ban on demonstrations is a further step towards authoritarian forms of rule in Europe.” There will be no populist leader rising to resolve the soon coming regional and global economic crisis; rather there will be one familiar with Authoritarianism’s policy of diktat and schemes of debt servitude coming to rule the Eurozone, as foretold in Daniel 8:23-25. This leader is also presented in Revelation 13:5-10, as the New Pharaoh, who will be accompanied by the New Prophet, Revelation 13:11-17, who will together eventually introduce the charagma money system, that is the 666 credit system, where all will be required to take the Mark, in order to buy or sell, Revelation 13:18.
Revelation 13:4, foretells that people will worship the Dragon, that is Satan, Lucifer, the Devil, and the Beast. Out of the soon coming Financial Apocalypse, that is a global credit bust and financial breakdown, people will be so amazed of the economic recovery that comes through regional governance and totalitarian collectivism, that the trust engendered in the Beast Regime’s diktat, will be defined as worship.
Worship is one thing Satan has always wanted for himself, and he will receive it through the success of the Beast Regime, the Sovereign and the Segnior, as he imbues, and comes to occupy in all three. In Revelation 5, the Lamb is declared worthy to take the scroll and to “receive power and riches and wisdom, and strength and honor and glory and blessing.” But in Revelation 13, it is three Beasts, a Beast Regime, A Beast Ruler, and a Beast Prophet, who take the place of the Lamb and rule over mankind.