Archive for September, 2013

Those Things Which Much Shortly Come to Pass Will Unleash A New Sovereignty And A New Seigniorage As A Sovereign Encounter With Jesus Christ Forces Stocks And Currencies To Trade Lower In Value

September 28, 2013

Financial Market Report for the week ending September 27, 2013

1) … Those things which must shortly come to pass will unleash a new sovereignty and a new seigniorage.

Friday, September 20, 2013, was liberalism’s day of investment instability that marked an inflection point that pivoted the world from the paradigm of liberalism into the paradigm of authoritarianism, and from a moral hazard based prosperity into a debt servitude based austerity. With the financial markets turning from risk-on to risk-off, as indicated by the Market Off ETN, OFF, trading higher, and  the stock market turne from bull to bear.

Currency Carry Trades unwound worldwide with the Japanese Yen, FXY, trading higher and individual currencies such as the India Rupe, ICN, and the Euro, FXE, trading lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing investors to derisk and deleverage out of World Stocks, VT, and Global Industrial Producers, FXR, such as BA, UTX, DOW, EMR, GE, ROK, F, GM, MT, CRH, BUD, SAP, CNH, COV, CRH, MHK, HON, MMM.

Action Forex chart report shows the EUR/JPY closed at 134.54, standing at the middle of a broadening top pattern, that goes back to January 2010; it’s as Street Authority relates, when you see the broadening too, the market will eventually drop.  Yahoo Finance chart report showing the EUR/JPY down from its Wednesday September 18, 2013, high of 134.726, on Wednesday September 18, 2013, evidences the zenith of carry trade investing in the business cycle.

With Jesus Christ at the helm of the Economy of God, Ephesians 1:10, World Stocks, VT, and Nation Investment, EFA, traded lower, on Friday September 20, 2013, from the climax of the No Taper Rally,with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Indonesia, IDX, Malaysia, EWM, Turkey, TUR, and Chile, ECH, traded lower, on the the exhaustion of the US Fed’s monetary policies of easing, as the provision of QEternity marked the crossing of the Rubicon of sound monetary policy, and destabilized global economics pivoting the world from liberalism’s banker regime of democratic nation states into authoritarianism’s beast regime of regional governance and totalitarian collectivism.

The 1.3% rise seen in the weekly chart of the S&P 500, $SPX, closing at 1709, reflects an Elliott Wave 5 High.  The chart of $NYMO, shows there is as sudden and severe loss of breadth momentum (an important red flag) is taking place, communicating that one should flee to the exit doors, as the stock market is moving from bull to bear.

India Banks, EPI, such as IBN and HDB, led India, INP, and the Emerging Market Financials, EMFN, lower.

The National Bank of Greece, NBG, Ireland’s IRE, and Germany’s DB, led Greece, GREK, Ireland, EIRL, and the European Financials, EUFN, lower.

China’s Bank, SHG, and China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower. The Finviz chart of Catalog and Mail Order Company, DANG, shows a massive broadening top pattern, with rise to strong resistance at 9.84.  It’s as Street Authority relates When you see the broadening top, the market will eventually drop.

Interest Rate Sensitive Stocks, that is Leveraged Buyouts, PSP, Home Builders, ITB, Utilities, XLU, Global Utilities, DBU, Real Estate, IYR, and Global Real Estate, DRW, traded lower.

Sectors trading lower included Aerospace, PPA, Paper Producers, WOOD, and Automobiles, CARZ. And Metal Manufacturing, XME, was led lower by Coal Miners, KOL, Industrial Miners, PICK, and Steel Producers, SLX. And Gold, GLD, and Silver, SLV, traded lower, forcing Junior Gold Mines, GDXJ, Gold Miners, GDX, Junior Silver Miners, SILJ, and Silver Miners, SIL, lower.

Aggregate Credit, AGG, traded unchanged, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close the week at 2.73%, down sharply from its recent high near 3.0%.

Financial Times Lexicon writes of Bubblecovery. A bubblecovery is a term coined by financial blogger Jesse Colombo to describe what he calls a bubble-driven economic recovery spurred by cheap credit. He says the cheap credit has a tendency to flow into temporary growth-generating speculative endeavours.

JP of The Capital Spectator writes The evidence is compelling for arguing that the latest profile of economic activity continues to suggest that business cycle risk is low.

But I contend, that both the fiat asset inflation and economic expansion part of the business cycle ended Friday September 20, 2013, with Aggregate Credit, AGG, having fallen strongly in value since May 2013, and now with the weekly jobless claims report heralding the reality that the economy is failing to produce new jobs, as Andrew Klips reports in Equities.com reports. In August, the U.S. only added 169,000 new jobs and June and July figures underwent sharp revisions, including July’s figure plunging to only 104,000 new jobs. The unemployment rate ticked down to 7.3 percent, but only because more people gave up actively seeking employment.

The 38 ETFs seen in this Finviz Screener, exemplify the financial assets that have been fueled by Bubblcovery, that is by stimulus of the US Federal Reserve’s QE monetary policy, and are poised to fall strongly lower on the exhaustion of the US Fed’s and world central bank’s monetary authority, that is as bond vigilantes, begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.73%, and currency traders once again, begin selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, lower; these are XIV, FDN, CARZ, PBS, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, FXR, BJK, PBJ, EFNL, YAO, PPA, PNQI, EZA, KROO, ARGT, EWY, GNW. The short selling opportunity of a lifetime has arrived, and these ETFs can serve as the basis of a short selling portfolio, as well as a metric to follow the entrance into Kondratieff Winter, the very last season of the business cycle. Wiley investors went long these fiat assets, lived risk free on a moral hazard based rally, to experience tremendous gains; but now it’s as Mamta Badkar of Business Insider writes, All Hell Is Going To Break Loose, Fleckenstein Says.

Asset Managers such as Blackrock, BLK, coined the final swell of Liberalism’s wealth with QEternity; since April 2009 the Keynesian and Monetarist money printing policies of the US Federal Reserve, together with carry trade financing have inflated the Sector ETFs from this Finviz Screener as follows below.

The business cycle is now showing nascent signs of completion, with the weekly jobless report indicating that the economy is failing to provide new jobs, and the PMI is in downturn, and that an investment bubble is apparent … presenting both short selling opportunities, as well as the opportunity for investing in physical possession of gold bullion.

Fiat money died Friday September 20, 2013, with World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower as Jesus Christ is operating in dispensation, presented by the Apostle Paul in Ephesians 1:10, that is in administrative oversight of all things economic and political, and has pivoted the world out of liberalism and into authoritarianism, and as such the stock market is turning from bull to bear; those ETF sectors which rallied over the last year and countries which rallied from late June 2013 to late September, 2013, seen in this Finviz Screener, will be trading lower on competitive currency devaluation and on the exhaustion of the world central banks’ monetary authority as investors come to greater realization that the US Fed’s monetary policies have crossed the Rubicon of sound monetary policy, and have made “money good” investments bad.

Please consider Corollary #8 from the Dispensation Economics Manifest. The No Taper Rally of September 18, 2013, in World Stocks, Major World Currencies, DBV, and Emerging Market Currencies, was Liberalism’s peak event, which terminated the Creature Jekyll Island and birthed the Beast Regime of Revelation 13:1-4. and which pivoted the world from a policy of investment choice …  consisting of 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 …  to a policy of diktat … consisting of debt servitude schemes, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability.

The gains seen in the following ETFs over the last year, are over, through, finished, and done.

Internet Retail, FDN, 40%

Automobiles, CARZ, 56%

Media, PBS, 39%

Biotechnology, IBB, 45%

Small Cap Pure Value, RZV, 33%

Small Cap Industrial, PSCI, 35%

IPOs, FPX, 42%

Stock Brokers, IAI, 46%

Transportation, XTN, 48%

Semiconductors, SMH, 26%

Retail, XRT, 29%

Pharmaceuticals, PJP, 35%

Leveraged Buyouts, PSP, 32%

Solar, TAN, 87%; of note this ETF, rose 1.1% today, and ReneSola, SOL, traded strongly lower.

Global Consumer Discretionary, RXI, 33%

Design Build, FLM, 22%

Paper Producers, WOOD, 24%

Too Big To Fail Banks, RWW, 35%

Global Industrial Producers, FXR, 36%

Resorts and Casinos, BJK, 44%,

Food and Beverage, PBJ, 28%

Aerospace, PPA, 40%

Nasdaq Internet, PNQI, 45%

The Keystone Speculator posts VIX Volatility Daily Chart  Projection is for VIX to move higher in the days and weeks ahead, and, considering the CR deadline is now only 6 days away, it is reasonable to expect fear to increase and volatility to rise. I comment look for Volatility, XVZ, as well as TVIX, VIXY, VIXM, seen in this Finviz Screener to soar.

Michael Snyder of The Economic Collapse blog, asks in ZeroHedge Are You Ready For Yellenomics?  Are you ready for Janet Yellen? Wall Street wants her, the mainstream media wants her and it appears that her confirmation would be a slam dunk. She would be the first woman ever to chair the Federal Reserve, and her philosophy is that a little bit of inflation is actually good for an economy. She was reportedly the architect for many of the unprecedented monetary decisions that Ben Bernanke made during his tenure, and that has many on Wall Street and in the media very excited. Noting that we “already know that Yellen is on board with Bernanke’s easy money policies”, CNN recently even went so far as to publish a rabidly pro-Yellen article with this stunning headline: “Dear Mr. President: Name Yellen now!

But after watching what a disaster Bernanke has been, do we really want more of the same? It doesn’t really matter whether she is a woman, a man, a giant lizard or a robot, the question is whether or not she is going to continue to take us down the path to ruin that Bernanke has taken us. As I have written about so many times, the Federal Reserve is at the very heart of our economic problems, and under Bernanke the Fed has created a mammoth financial bubble unlike anything that we have ever seen before. If Yellen keeps us going down that road, financial disaster is inevitable.

Sadly, Yellen is not a woman that believes in free markets. She had the following to say back in 1999

“Will capitalist economies operate at full employment in the absence of routine intervention?  Certainly not.”  Yellen believes that without the “routine intervention” of the central planners at the Fed, our economy will not produce satisfactory results. So if you thought that Bernanke was an “interventionist”, you haven’t seen anything yet.

In fact, according to Time Magazine, Yellen was continually urging Bernanke to do even more “to help stimulate the economy”. But as the most recent financial crisis proved, a good Fed chief needs to be willing to think outside the box to achieve its goals of low, steady inflation and full employment. This is exactly what Bernanke did, using the powers of his office to launch a massive bond-buying program aimed at lowering interest rates further down the yield curve and promising to keep short-term interest rates at near zero for years. Bernanke, however, didn’t launch these programs immediately. Behind the scenes, it was reportedly Yellen who was the most forceful advocate for the Fed doing more to help stimulate the economy. It is truly frightening to think that Yellen might turn out to be “Bernanke on steroids”. Let’s hope that she is not the choice.

The costs of healthcare are too big to pay for. So, the doctor can’t see you now, that’s right, rationing of doctors and services has commenced. Under President Obama’s Affordable Care Act, with a swell of people coming into the system with the dual mandate to cover preexisting conditions and the mandate to hold down premiums, health care providers and major insurers are sharply limiting the number of doctors and hospitals available to patients in the various states’ new health insurance markets opening Oct. 1, 2013.

Fox News reports Ohio Clinic Touted By Obama Slashes Budget Due To ObamaCare. An Ohio clinic that was touted by Obama while he was speaking on health care reform is now blaming ObamaCare after it was forced to cut $330 million from its budget. Fox 8 reports the Cleveland Clinic, which is the largest employer in Northeast Ohio with about 39,000 workers in the region, announced the cuts to its 2014 budget at a meeting Wednesday. A spokeswoman for the clinic tells Fox News the clinic is being forced to cut back to prepare for increased costs and decreased revenue under the health care reform law. These changes will include offering early retirement to approximately 3,000 employees, reducing operational costs, and then layoffs as needed.

Steve Midkiff writes of A Sovereign Encounter heralding “those things which must shortly come to pass” as presented in Revelation 1:1.

It is through Christ’s Sovereignty, and out of banking insolvency and sovereign insolvency of the Mediterranean Nation Sea States of Portugal, Italy, Greece and Spain, that is out of a Financial Apocalypse, a credit bust and financial system breakdown, that nannycrats will unleash Authoritarianism’s sovereignty of regional governance and totalitarian collectivism, as well as its seigniorage of diktat, as foretold in Revelation 13:1-4.

Liberalism was defined by what Doug Noland terms wildcat finance, where bankers of all types fiercely outdo one another to generate the greatest investment gains, and where Ben Bernanke fathered credit easing.

Authoritarianism, on the other hand, is defined by wildcat governance, where leaders bite, rip and tear one another apart in their struggle to become top dog leader, and where Angela Merkel fathered debt servitude with Greek Bailouts I, and II, and she  in calling for More Europe, laid the groundwork for a soon coming One Euro Government.

Of note, Katerina Selin and Christoph Dreir of WSWS writes Greek workers demonstrate against mass sackings, fascist violence. Protests were held in all major Greek cities Wednesday, September 18, 2013, against the austerity measures of the Greek government and the European Union.

The Globe and Mail of Toronto writes For Victorious Merkel, Little Incentive To Change Course On Austerity and Reuters reports Merkel Romps To Victory But Faces Tough Coalition Choices and an

article in Greek Ta Nea carries the headline, Europe becomes Merkeland after the triumph of the Queen of austerity.  WSWS writes Why Merkel Won The German Elections.

Charles Hugh-Smith of the OfTwoMinds blog, posts in Zero Hedge The Big-Picture Economy, Part 3: Scarcity, Risk And Debt. Manipulating rates to near-zero and opening the credit floodgates has incentivized everything sound economic policy avoids: moral hazard, speculation, leverage and reliance on marginal credit expansion for profits and “growth.” “Growth” that depends on manipulated interest rates and easy credit is a sand castle awaiting the rising tide; its destruction is assured.

Money as it has been known no longer exists. Fiat money died Friday September 18, 2013, with the trade lower in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Economies, CEW.  Diktat money is rising it its place, as the sovereignty of nation states gives way, and nannycrats meet in summits and work group to renounce national sovereignty, and establish ever increasing regional sovereignty. Liberalism featured credit, and trust in the world central bankers. Another word for credit is trust. Now in authoritarianism, specifically out of waves of economic and political turmoil in the Mediterranean Sea nation states of Portugal, Italy, Greece, and Spain, people will come to trust in the word, will, and way of sovereign regional leaders, that is statist nannycrats, for regional security, stability, and sustainability, as communicated in bible prophecy of Revelation 13:3-4.

On Friday September 20, 2013, the National Bank of Greece, NBG, led both Greece, GREK, and the European Financials, EUFN, lower, as Roger Cohen of NY Times The perfect political storm for violent extremism has descended on Greece. As Kyriakos Mitsotakis, the minister responsible for the cuts, explained to me inside the besieged ministry, the message from the “troika” (the International Monetary Fund, the European Commission and the European Central Bank) is clear: “If you don’t do it, no more money!” Europe’s requirement is: Reform or else.

Greece, with an estimated $3.3 billion shortfall in its social security fund this year and a larger financing gap looming over the next two years, still needs money, if much less than before. More urgently, it needs international understanding. The combination of the demands of the troika (widely seen by Greeks as a Trojan horse for Germany) and the frustration evident outside the ministry, Soultos’s private sector has lost close to 1.5 million jobs as unemployment has reached 28 percent, is combustible.

Troika officials will visit Athens next week. If they make further demands for cuts in wages and pensions they could push Greece over the edge. Germany has not yet learned to play the benign superpower. It is time; and after the German election this Sunday there may be a little more wiggle room. Toughness toward Greece has played well in Germany but, as Mitsotakis put it: “The country has been stretched to its limits. This needs to be very, very clear.”

LuggageTag posts Greece Is Characterized By The 3Cs: Cronyism, Clientelism And Corruption. The pervasiveness of corruption at all levels of society, including the widespread and “honorable” practice of “fakelaki”, cash inside an envelope for the attainment of public services and personal favors; hence also the routine violation of civility norms and a culture of complacency that pervades public life.

Indeed, for decades, the dominant image that prevailed about Greeks among many northern Europeans and Americans was a nation of lazy, uncultured and irresponsible citizens, mustachioed men who spent all their time either inside or outside coffee houses, usually with a cigarette in one hand and a string of beads in the other, while the women worked in the fields. The contributions to world culture of the likes of Giorgos Seferis and Odysseus Elytis two Nobel Prize winners in Literature, Nikos Kazantzakis and Yannis Ritsos both nominated scores of times for the Nobel Prize in Literature, but rejected because of their communist beliefs, Angelos Sikelianos one of the most inspiring poets in modern Greek history, Maria Callas the greatest opera diva of last century, Dimitri Mitropoulos and Mikis Theodorakis two world class conductors and composers, respectively were reserved for conversations in polite society. According to the dominant impression, average Greeks lacked discipline and the capacity for self-reflection and were instinctively drawn to populist, charismatic political leaders who promised them bread, butter and honey in their everyday lives, a position not a job! in the public sector, and retirement after a couple of decades of working.

In recent times, this caricaturish image of the Greek national character has insidiously resurfaced in various non-Greek newspapers and magazines, with regard to the profile of the typical Greek public employee: fat, lazy, and unshaved, sitting behind a desk with stacks of papers in front of him and with a cigarette hanging out of his mouth. Which brings us back to the question of Greece’s current crisis. Is the nation’s political culture, the civil culture, responsible for the economic and social ills facing Greece today?

Probably to the surprise of those who still hold on to a caricaturish image of contemporary Greek culture, the majority of Greek citizens seem to be convinced that the political culture is indeed primarily responsible for the catastrophic crisis currently facing the nation – although it is uncertain to what extent they all understand, or accept, the idea of political culture as a reflection of the customs and mores of a society. For instance, while tax evasion has been traditionally a national sport for all social classes in Greece, almost everyone expects and demands that the state provide free services in all areas of public life, generous benefits to the unemployed and the pensioners, subsidies to small businesses and farmers, and so on and so forth. Likewise, people may speak of meritocracy, but family amoralism permeates every pore of the national life. As yet another example of distorted values shaping a nation’s culture, students with the overwhelming majority of faculty on their side want free access to university education and books free of charges, but no conditions placed upon academic progress and the completion of studies. Hence, students are not required to attend classes, may repeat course exams as many times as they like, and there are no limits to how many years they may remain enrolled in a university program. In sum, lots of rights, but no obligations.

For a nation that throughout its history has fought heroic battles for precious rights and liberties recall only Winston Churchill’s famous words, inspired by the Greek resistance to the Italian and German invasions of Greece in the course of World War II: “Hence we will not say that Greeks fight like heroes, but that heroes fight like Greeks!”, gaining rights and privileges but shedding obligations and social responsibilities developed, somehow, into something of a cultural movement in contemporary times in Greece. The roots of this trend can be traced to the immediate period following the re establishment of parliamentary democracy after seven years of a brutal dictatorship 1967-1973, but it takes off and becomes an institutionalized incentive system of behavior with the rise of PASOK Panhellenic Socialist Movement of the 1980s and the irresponsible populism of its leader Papandreou.

While populism, clientelism and cronyism were ever-present ingredients in modern Greek political life, under the pseudo-socialism of PASOK, they became constitutive of the party’s fundamental strategy: locking voters into long-term relationships based not on the delivery of public goods and a just social order, but on promises of targeted resource distribution to the party faithful. At least two generations of “leftist” voters were shaped and molded in the Papandreou/PASOK era, including the major syndicalist movement, the General Confederation of Greek Workers GSEE. Of course, the conservatives relied on the same unscrupulous tactics thus making it virtually impossible to judge which of the two parties was more immoral, corrupt and dangerous to the nation’s interests, but they did not have history on their side, let alone the fact that they were no match for Papandreou’s political canniness and personal magnetism.

Under PASOK, the public sector became a cash cow to be bled, not just milked, a practice the conservatives also did not shy away from on the few occasions they found themselves in power during the past 30 years. After all, it is far more difficult to change the culture of an organizational setting than to create a new one, especially if the parties involved are the main beneficiaries. Thus, for decades, socialists and conservatives alike were involved in various large-scale scandals centered on exploiting state resources to transfer wealth from the public to the private sector, to enrich themselves and to redistribute wealth from the bottom to the top. Corruption became so endemic that it was perceived as normal for public sector employees in Greece’s tax, urban development and municipal government offices to be bribed and even to confuse at times public finances with their personal finances. It was normal for hospital doctors to be recipients of cash gifts by a patient’s family members who were afraid that their loved one would not otherwise receive proper medical attention. It was normal for people to hold two, three and sometimes even four different paid appointments in the public sector. It was normal for already employed journalists to be simultaneously on the payroll of government ministers

The Team at The Institute for New Economic Thinking writes The Problem of Too Big to Fail Is Even Bigger Than Before 2008, Simon Johnson relates.

Benson te writes Essentially the UnTaper seem to have been designed to burn short sellers with particular focus on the bond vigilantes, where the latter may impact the balance sheets of the banking system.  Dramatic volatility from the May “taper talk” even compelled Fed chair Dr. Ben Bernanke to explicitly say “I don’t think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low. If we were to tighten policy, the economy would tank” [16]. In other words, the taper option functioned as a face saving valve in case the rampaging bond vigilantes would force their hand. For me Dr. Bernanke’s calling of the Poker “taper” Bluff has been part of the tactic.

The bond vigilantes have gone beyond the Fed’s assumed control over them. And since the Fed construes that the rising yields has been built around the expectations of the Fed’s pullback on monetary accommodation, what has been seen a Fed “spook” for the mainstream may have really been a desperate ALL IN ante “surprise strike” gambit against the bond vigilantes. The UnTaper was the Pearl Harbor equivalent of Dr. Bernanke and company against the bond vigilantes.

The question now is if the actions in the yield curve have indeed been a function of perceived “tapering”. If yes, then given the extended UnTaper option now on the table, bond yields will come down and risk assets may continue to rise. But if not, or if yields continue to ascend in the coming days that may short circuit the risk ON environment, then this may force the FED to consider the nuclear option: bigger purchases.  With shrinking budget deficits, meaning lesser treasury issuance and with the FED now holding $1.678 trillion in ten year equivalents, or 31.89% as of August 30th total according to ZeroHedge [17], the Fed’s size in bond markets have been reducing availability of collateral. Reduced supply of treasuries, which function as vital components of banking reserves will only amplify volatility. The Fed’s policies are having far wider unintended effects on the bond markets. Should the Fed consider more purchases it may expand to cover other instruments. Quantitative Easing extrapolates to discoordination or the skewing of consumption and production activities which leads to massive misallocation of capital or “malinvestments”. QE also translates to grotesque mispricing of securities and maladjusted price levels in the economy benefiting the first recipients of credit expansion. Eventually such imbalances will be powerful enough to overwhelm whatever interventions made to prevent them from happening, specifically once real savings or capital has been depleted.

Austrian Ludwig von Mises warned in Interventionism An Economic Analysis [22] The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances.

Banks, that is the Too Big To Fail Banks, and the Regional Banks have been the engine of QE. Currently the Too Big To Fail Banks, RWW, are trading 2%, and the Regional Banks, KRE, are trading 7%, below their August 1, 2013, high, in stark contrast to the Large Cap Growth Stocks, JKE, which led the No Taper Rally as is seen in the combined Google Finance Chart of JKE, together with RWW, and KRE. The reason for the banks relatively strong decline is the large amount of US Treasury Based Excess Reserves, such as 10 Year US Government Bonds, TLT, residing at the Fed, which have lost a lot of value since early May, 2013, creating very much a deadweight loss for the banks. Banks certainly do not have any incentive to hold Excess Reserves other than loyalty to the Fed.

On Friday, September 20, 2013, the financial markets pivoted from risk-on to risk-off, as seen in the Market Off ETN, OFF, trading higher. The financial markets manifested an inflection point that marked the beginning of the end of financialization, which will come through a soon coming global credit bust and financial system breakdown, foretold in Revelation 13:3-4, whereby nannycrats will act to integrate banks of all types into government; these will be know as the government banks or gov banks for short, and in so doing there will be a great tidying up of the Banks Excess Reserves at the US Fed.

Along this line of thought James Brewer of WSWS writes Detroit’s emergency manager plans early payoff of top banks

Michael Snyder of The Economic Collapse Blog writes Too Big To Fail Is Now Bigger Than Ever Before. The too big to fail banks are now much, much larger than they were the last time they caused so much trouble. The six largest banks in the United States have gotten 37 percent larger over the past five years. Meanwhile, 1,400 smaller banks have disappeared from the banking industry during that time. What this means is that the health of JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley is more critical to the U.S. economy than ever before. If they were “too big to fail” back in 2008, then now they must be “too colossal to collapse”. Without these banks, we do not have an economy. The six largest banks control 67 percent of all U.S. banking assets, and Bank of America accounted for about a third of all business loans by itself last year. Our entire economy is based on credit, and these giant banks are at the very core of our system of credit. If these banks were to collapse, a brutal economic depression would be guaranteed. Unfortunately, as you will see later in this article, these banks did not learn anything from 2008 and are being exceedingly reckless. They are counting on the rest of us bailing them out if something goes wrong, but that might not happen next time around.

Yardeni posts Government Support Increasingly Boosts Incomes (excerpt) The big story here is that entitlements (“government social benefits to persons”) has soared from less than 5% of national income in the early 1950s to recent record highs around 17%. The federal and state governments are currently redistributing income at an annualized rate of almost $2.4 trillion, which slightly exceeds the sum of federal income and payroll taxes. In effect, every tax dollar collected from workers by the federal government is redistributed to entitlement beneficiaries.

Liberalism was characterized by clientelism, and in particular transfer payments to Social Security recipients in the form SSI Disability which for many is simply another name for welfare; many “live free” from work by claiming and being awarded SSDI, and SSI, for conditions such as chronic pain, anxiety, antisocial disorder, ADHD, Depression, Asperger Syndrome, PTSD, Bipolar Disorder, Depression, and Fibromyalgia, make it impossible for them to work.

Real Clear Markets posts America’s Growing Social Security Disability Problem. The latest Social Security Administration data document that Social Security Disability Insurance (SSDI) rolls reached a record high of 8.85 million in March 2013, an increase of 1.6 million or 21 percent since the start of the Great Recession.

This long running disability epidemic, which hit its pandemic stage in the aftermath of the 2007 recession, has almost nothing to do with a decline in the overall health of working age Americans or in the severity of their health-based impairments. Rather, it is primarily the consequence of fundamental flaws in the SSDI program and its administration which have increasingly made it a long term unemployment program rather than the last resort transfer program for those unable to work due to their health-based impairments that Congress intended it to be. These flaws become most evident during severe during economic downturns but will remain long after we recover from the Great Recession.

Most SSDI growth is driven by its incentive structure and the increasing difficulty of its administrators to determine disability (as discussed in my recent book, co-authored with Mary Daly, The Declining Work and Welfare of People with Disabilities (AEI Press, 2011) and in our point-counterpoint debate article in The Journal of Policy Analysis and Management).

The New American reports Record Number: 10.9 Million Americans Collecting Disability

And The New American reports Disability Recipients Admit Finding Employment Isn’t a Priority. The Examiner reported that many recipients were in a “general cycle of poverty”, a way of life wherein families break down, education efforts fail, and government dependency is virtually assured. The cycle is especially apparent when evaluating recipients who have little knowledge about their fathers.

For example, 30 percent of SSDI recipients are unsure of the highest year or grade their father finished in school, while 40 percent of SSI recipients answered the same; thirty-one percent of SSDI recipients noted that their father did not complete high school or receive a GED, while 26 percent of SSI recipients reported the same.

The number of people claiming disabilities has climbed upward since the recession began. Investor’s Business Daily noted in a 2012 report: “More workers joined the federal government’s disability program in June than got new jobs, according to two new government reports, a clear indicator of how bleak the nation’s jobs picture is after three full years of economic recovery.”

With an aging U.S. population, a weakened job market, and a relaxing of eligibility requirements for disability, fraud has undoubtedly played an integral role in the government’s rapidly expanding disability system. The U.S. Senate’s Permanent Subcommittee on Investigations reported last September that 25 percent of disability cases were granted benefits “without properly addressing insufficient, contradictory and incomplete evidence.”

According to a 2009 study by the Social Security Administration, recipients of federal disability checks acknowledge that finding a job is not a priority, with a startling majority making no effort to gain professional or educational skills to find employment. While the study was published years ago, it was just recently brought to light by the Washington Examiner, which released a lengthy report on the findings, including the fact that many recipients admit that pursuing opportunities to escape the disability rolls is not among their goals. Compiled from responses of 2,300 disability beneficiaries, the report noted that most recipients had not seen a doctor or received medical treatment for their condition within a year, even though medical issues are the basis for qualification of disability benefits. The Examiner inspected the results from the individuals surveyed and condensed the findings into a pool, which helped highlight the survey’s trends.

Unearned disability, or Supplemental Security Income (SSI), applies to individuals who have very limited income and assets, and who have petitioned to be classified as disabled. Earned disability, or Social Security Disability Insurance (SSDI), applies to individuals who were previously employed and have rendered at least some of their income into Social Security before becoming disabled. Approximately 11 million Americans are on the SSDI roll, while seven million Americans are receiving SSI benefits.

Whereas if recipients’ claims for disability are genuine one would expect both groups to give similar answers to questions about their levels of suffering, this was not the case. Recipients of government checks in the SSI program were found to have less bodily pain than recipients who paid into the system, according to the analysis, and they are typically uneducated, overweight, or were raised in broken homes.

SSDI – Earned Disability for those who paid into Social Security prior to applying for disability benefits.

SSI – Unearned Social Security disability benefits.

2) … Details of this week’s financial market trading

On Monday, US Stocks, VTI, such as US Infrastructure, PKB, Home Building, ITB, and Regional Banks, KRE, led World Stocks, VT, lower as Bloomberg reports Markit PMI Factory Index In US Fell To 52.8 in September From 53.1 providing more evidence that the business cycle has peaked and is turning lower. And Zero Hedge reports US PMI Misses Expectations To 3-month Lows. And Yahoo News reports U.S. Factory Activity Loses Momentum In September..

Sectors trading lower included Too Big To Fail Banks, RWW, Solar, TAN, Internet Retail, FDN, Networking IGN, and Biotechnology, IBB.  Yield bearing sectors trading lower included Global Utilities, DBU, and Global Real Estate, DRW. European Financials, EUFN, traded lower. Countries trading lower included Thailand, THD, and Indonesia, IDX. Gold Mines, GDX, and Silver Miners, SIL, traded lower, on a lower price of Gold, GLD, and Silver, SLV. The EUR/JPY closed lower at 133.31. MarketWatch reports JP Morgan, Bank of America, Citi, And Financials Drop On Fears Of Trading Decline.

Mike Mish Shedlock reports Europe Hooked On Easy Money Too: ECB President Draghi Threatens Another LTRO, Sings Praises OF Excess Liquidity. It’s liquidity full throttle in the Eurozone as well because Draghi Says ECB Will Offer More Long-Term Loans If Needed, Bloomberg reports. The largest global-coordinated financial gambit in history shows no real signs yet of slowing down.

September 20, 2013, was a pivotal day in global economic history from which there is now no return, despite what liquidity measures Mario Draghi might propose.  With Jesus Christ at the helm of the Economy of God, Ephesians 1:10, World Stocks, VT, and Nation Investment, EFA, traded lower, with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Indonesia, IDX, Malaysia, EWM, Turkey, TUR, and Chile, ECH, traded lower, on the the exhaustion of the US Fed’s monetary policies of easing, as the provision of QEternity marked the crossing of the Rubicon of sound monetary policy, and destabilized global economics pivoting the world from liberalism’s banker regime of democratic nation states into authoritarianism’s beast regime of regional governance and totalitarian collectivism.

On Tuesday, Small Cap Energy, PSCE, and Energy Production, XOP, rose to new highs as Oil, USO, and Natural Gas, UNG, traded lower. Global Telecom, IST, rose to a new rally high with TI, and NOK, rising to new highs. Home Builders, ITB, US Infrastructure, PKB, Solar, TAN, and Internet Retail, FDN, bounced higher. Facebook, FB, Applied Material, AMAT, and Rite Aid, RAD, gapped open higher to new rally highs.  ASML Holding, ASML, Delta Airlines, DAL, General Motors, GM, Safeway, SWY, and Illinois Tool Works, ITS, traded higher.

Small Cap Pure Value, RZV, such as FNGN, NCI, III, CEB, NEWT, EXAM, III, MCS, RICK, STAN, ACXN, MEG, LOV, AHC, ASGN, ADUS, NICK, ECPG, WRLD, FTK, ODC, STMP, FICO, BYD, MOVE, CKEC, MDCA, NXST, FCFS, and DXPE, rallied to a new high, manifesting a questioning harami, as Large Cap Value, JKE, continued to trade lower from their rally high.

Software, IGV, traded lower. Investment Banker, JPM, traded strongly lower, inducing the Too Big To Fail Banks, RWW, to trade lower. Real Estate, IYR, traded lower.

Gold Miners, GDX, and Silver Miners, SIL, traded lower on a lower price of Gold, GLD, yet their chart patterns suggest a bottoming out.

The Vice Stocks, traded by Fidelity Mutual Fund VICEX, traded lower, communicating an end to leveraged speculative investing.

The Market Off ETN, OFF, rose as the US Dollar, $USD, traded slightly higher, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, led so by the Australian Dollar, FXA. The EUR/JPY closed lower at 133.05.

Greece, GREK, traded higher as Holly Ellyatt of CNBC reports Temperature rises in Athens amid 48-hour strike. Asia Excluding Japan, EPP, traded lower as Indonesia, IDX, IDXJ, Thailand, THD, the Philippines, EPHE, Malaysia, EWM, and New Zealand, ENZL, traded lower. China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower. India, INP, Chile, ECH, Peru, EPU, and Turkey, TUR, traded lower;  all of which drove the Emerging Markets, EEM, and the BRICS, EEB, lower.

A see saw destruction of fiat wealth is underway, as Major World Currencies, DBV, Emerging Market Currencies, CEW, and World Stocks, VT, are trading lower, and Aggregate Credit, AGG, is trading higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.65%, from its recent high of almost 3.0%. Eurozone Debt, EU, traded higher on comments by Mario Draghi for ongoing ECB liquidity. Fiat wealth as it has been known, and the Milton Friedman Free To Choose Floating Currency Regime which generated that wealth be no more, as Jesus Christ is operating in the Economy of God, as presented by the Apostle Paul in Ephesians 1:10, pivoting the world out of liberalism and into authoritarianism. Liberalism was the era of investment choice based upon credit and carry trade investing. Authoritarianism is the era of diktat based upon debt servitude.

John Rubino references Forbes article China Corporates Not Making Debt Payments and highlights Credit Excesses In China. This article is even more apocalyptic than its title implies. To extract a few data points: China’s corporate debt has risen from 86% of GDP to 155% since 2008; “Net debt of the corporate sector was 30 times net earnings in 2012, up sharply from 10 times in 2011”; and “free cash flow is severely negative.” These are some serious trend reversals. Using IOUs to pay bills is exactly the same thing as borrowing the money, in the sense that it creates an obligation that eventually has to be satisfied with cash. So “acceptances” rising from 3% to 11% of GDP is a helluva jump in private sector debt. It’s not clear whether the analysts quoted above are counting this in their other totals.

Robert Wenzel of Economic Policy Journal Venezuela Orders Takeover of Toilet Paper Factory.  Price controls in action. Reuters reports Venezuelan state agency on Friday ordered the temporary takeover of a factory that produces toilet paper in what it called an effort to ensure consistent supplies after embarrassing shortages earlier this year. Critics of President Nicolas Maduro say the nagging shortages of products ranging from bathroom tissue to milk are a sign his socialist government’s rigid price and currency controls are failing. A national agency called Sundecop, which enforces price controls, said in a statement it would occupy one of the factories belonging to paper producer Manpa for 15 days, adding that National Guard troops would “safeguard” the facility. “The action in the producer of toilet paper, sanitary napkins and disposable diapers responds to the state’s obligation to ensure a steady supply of basic goods for the people,” Sundecop said, adding it had observed “the violation of the right” to access such products … Mr Wenzel comments Notice the use of National Guard troops. When price inflation heats up in the US, will price controls be implemented here? My greatest fear is that they will then be enforced by TSA and other DHS employees let loose on the land. Then you will know why you don’t want a surveillance state, even if “you have nothing to hide.” You will when you need to buy from a back market to survive.

Benson te writes Inflation and price controls are siblings. First government inflates, then they place the blame on the public for the ramifications of their actions, thus justifying price controls. Yet the consequence of this inflation price control feedback loop has been to create shortages. The toilet paper shortage in Venezuela is great example. The average Venezuelans seek titles to capital goods or proxies to real assets as haven from massive loss of purchasing power. As one would note, interventions breed interventions until the economy eventually collapses.

I comment that nannycrats, such as Sundecop, are now the economic leaders. Christ has been working and continues to work in dispensation, that is in the management plan of God, to complete and fulfill all things in every epoch, era and time period, as presented by the Apostle Paul in Ephesians 1:10. He is laboring to make diktat complete in the age of authoritarianism. Gone is free enterprise, it is simply an epitaph on the tombstone of the age of liberalism, as statism governs and is the legislator of economic value and is the legislator that shape one’s means and one’s ends. Authoritarianism features a new trust; liberalism featured trust in bankers, carry trade investing and credit, in particular nation state Treasury debt; but authoritarianism features trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude.

Reuters reports If You Live In Venezuela And Want To Fly Abroad, Get In Line. Flights are booked solid months in advance, not from a new interest in exotic destinations but because locals are profiting from a play on the nation’s tightly controlled currency market.

The airline scramble has added to shortages, power cuts and runaway prices as another symbol of the Byzantine economic challenges facing the new government of President Nicolas Maduro in the South American OPEC nation.

“It’s like you’re trapped here,” said travel agent Doris Gaal, telling a customer he would be better off taking a boat to a Caribbean island because the daily flights are fully booked. “It’s all because of these stupid dollars!”

After a decade of currency controls set up by late socialist leader Hugo Chavez in 2003, the disparity between the official and black-market rates for the local bolivar currency is higher than ever. Greenbacks now sell on the illegal market at about seven times the government price of 6.3 to the dollar.

There are strict limits on the availability of dollars at the 6.3 rate, but Venezuelans are cashing in on a special currency provision for travelers. With a valid airline ticket, Venezuelans may exchange up to $3,000 at the government rate.

Some are not even flying, leaving many planes half empty.

“It is possible to travel abroad for free due to this exchange rate magic,” said local economist Angel Garcia Banchs.

The profit is realized from an arbitrage process known locally as “el raspao,” or “the scrape.”

Credit cards are used abroad to get a cash advance — rather than buying merchandise. The dollars are then carried back into Venezuela and sold on the black market for some seven times the original exchange rate. The large profit margin easily absorbs the cost of flights and accommodation for a trip.”I’ve been able to buy new clothes and give some cash to all my closest family members!” said one delighted Venezuelan lady, just back from a trip to Europe. “It was really easy. There was a guy in a hotel room with 10 point-of-sale machines who swiped my card for $1,000 each day,” said a Venezuelan pensioner, also asking not to be named as he described his trip to a Caribbean island.

Some Venezuelans do not even bother leaving the country, but merely send their credit cards to friends overseas, who swipe the cards and send the cash back to Venezuela. “This is the reason many airlines are sending half-empty planes,” Ricardo Cusanno, head of a local tourism council, told Reuters, saying the government should cross-reference flight lists with those requesting foreign exchange to outwit the no-shows.

As a result of the high level of unused seats, some airlines are beginning to overbook at much higher rates than usual.

“Raspao” was now the “most dynamic sector” of the country’s economy, the story added.

The currency controls that Chavez implemented have exacerbated some of the very problems they were meant to address: inflation and capital flight from the country. The lack of dollars has left importers struggling to pay for basic items that range from toilet paper to bread and wine for church masses.

It is also fueling the highest price rises in the Americas, 45 percent in the last year. For critics of the government, the phenomenon of sold-out flights is a symbol of excessive interference and economic mismanagement during the last 14 years of socialist rule.

For Maduro and his team, it is symptomatic of unscrupulous and greedy capitalist opponents who are “sabotaging” Venezuela’s economy in order to sink him. Maduro recently set up a new telephone hotline, 0-800-SABOTAGE, for Venezuelans to report illegal economic activity.

Adding to the frenetic demand for plane tickets is the low cost of flights – when they are available – for those with hard currency that they have changed on the black market. This has turned Caracas into an informal hub for frequent fliers across the region. “People from all over Latin America come here to buy flights using black market money,” said Gaal, the travel agent. Given the high demand, at least one foreign airline is looking to expand in Venezuela.

Alexander Fangmann of WSWS writes Amid Extreme Inflation And Severe Shortages, Venezuela To Revamp Currency Laws Although the country’s severe problems result from global economic pressures along with deteriorating industry and infrastructure, Venezuelan President Nicolás Maduro has claimed they are the result of sabotage.

Bionic Mosquito, writes, “Gary North is far and away the expert when it comes to the intersection of economics and the Bible”  I ask, well what about me, theyenguy? I’m not being proud, but I believe that I run a close second, as I write on the Economy of God, continually, like day and night, and am here now to relate that Money as it has been known no longer exists. Fiat money died Friday September 18, 2013, with the trade lower in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Economies, CEW.  Diktat Money is rising it its place, as the sovereignty of nation states gives way, and nannycrats meet in summits and in work groups to renounce national sovereignty, and establish ever increasing regional sovereignty. Liberalism featured credit, and trust in the world central bankers. Another word for credit is trust. Now in authoritarianism, specifically out of waves of economic and political turmoil in the Mediterranean Sea nation states of Portugal, Italy, Greece, and Spain, people will come to trust in the word, will, and way of statist regional leaders for regional security, stability, and sustainability, as communicated in Revelation 13:3-4.

Bionic Mosquito continues “The problem isn’t big business, the problem is the political entrepreneur; the idol isn’t money, it is central planning serving those who fail at serving customers. This is what the Pope should attack…humbly offered, of course.”  I respond that the problem is that people fail to comprehend the Bible doctrines of

1) Dispensation, Ephesians 1:10, specifically that Jesus Christ is acting in the household administration of God to bring about the completion and fulfillment of every age, epoch, era and time frame.

2) The Ordination of Empires, Daniel, 2:25-45, specifically The British Empire and the US Dollar Hegemonic Empire, where the UK becomes a global power as a multitude of nations, and the US follows it to be the leading world power, as promised to Abraham in Genesis 12:2, Genesis 17:4-6, and Genesis 48:16, immediately before these loose their global domination to a Ten Kingdom of Regional Governance, comprised of ten toes of a miry and unstable mixture of iron diktat and clay democracy.

3) Apocalyptic Bible Prophecy, specifically that three Beasts are rising to rule mankind. The First, a Beast Regime, Revelation 13:1-4. The Second, a Beast Sovereign, that is ruler, Revelation 13: 5-10, Daniel 9:25. And Third, a Beast Seignior, that is a top dog banker who takes a cut, Revelation 13:11-18.

4) Bible Prophecy of the Syrian War of Isaiah 17:1-11, will precede the Ezekiel 38-39 War, where war against Iran will be initiated. Robert Fisk relates in Common Dreams Iran, Not Syria, Is the West’s Real Target.  Business Insider reports The US Strategy In Syria Is Unraveling.  CNN reports Syrian Rebels Reject Interim Government, Embrace Sharia. A collection of some of Syria’s most powerful rebel brigades have rejected a Western-backed opposition group that announced the creation of an interim government in exile this month. The 13 rebel groups, led by the al Qaeda linked al-Nusra Front, also called on supporters of the Syrian opposition to embrace Sharia law “and make it the sole source of legislation. The WSJ reports UN Members Agree on Syria Disarmament. Security Council’s five top powers draft resolution that requires destruction of chemical arsenal but puts off enforcement.

In conclusion to Bonito Mosquito, I write that Austrian Economists are in denial of the truth as they hold forth that there be sovereign individuals who have experience in human action, as Ludwig von Mises wrote in Human Action (p.240 the scholars edition)

Theism and Deism of the Age of Enlightenment viewed the regularity of natural phenomena as an emanation of the decrees of Providence. When the philosophers of the Enlightenment discovered that there prevails a regularity of phenomena also in human action and in social evolution, they were prepared to interpret it likewise as evidence of the paternal care of the Creator of the universe. This was the true meaning of the doctrine of the predetermined harmony as expounded by some economists. The social philosophy of paternal despotism laid stress upon the divine mission of kings and autocrats predestined to rule the peoples. The liberals retorted that the operation of an unhampered market, on which the consumer–i.e., every citizen–is sovereign, brings about more satisfactory results than the decrees of anointed rulers. Observe the functioning of the market system, they said, and you will discover in it the finger of God

The reality is there is only the administration of Jesus Christ, Ephesians 1:10, in all things, and that it is Jesus Christ who appoints power structures under both liberalism, which came to an end September 20, 2013, on the failure of World Stocks, VT, Major World Currencies, DBC, and Emerging Market Currencies, CEW,  as well as under authoritarianism.

On Wednesday, Scott Grannis posts Dramatic Improvement In Household Balance Sheets

The Federal Reserve today released its estimate of households’ balance sheet as of the end of June. The report contained some significant upward revisions to past estimates of financial assets and net worth, with the result that household net worth now stands at $74.8 trillion, up some $4.5 trillion from the previous (March ’13) estimate, and up $18.4 trillion from the recession low. Virtually every metric of households’ financial health has shown significant improvement over the past several years. Owner’s equity in household real estate has surged 50% since 2009; net worth and financial assets are up 35% from their March 2009 low; the value of households’ real estate holdings is up 17% in just the past two years; owner’s equity as a percent of household real estate has jumped to almost 50%, up from its all-time low of 37% four years ago; household debt has declined by almost $1 trillion from its 2008 high, and is now back to the levels of early 2007. Net worth at a new high, financial assets at a new high, real estate values recovering, debt declining: what’s not to like?

I comment that Liberalism was defined by fiat investment wealth, specifically ETFs such as Gaming and Casinos, BJK, and Vice Stocks, such as those traded by the Fidelity Mutual Fund, VICEX, all of which were leveraged up by first the trade in debt, such as Eurozone Debt, EU, as well as the toxic debt taken in by the US Federal Reserve, such as that traded by the Fidelity Mutual Fund FAGIX, under QE1, and secondly by carry trade investing, such as the EUR/JPY. The Fed be dead, and its twin,  Japanese Yen based carry trades, be dead as well; both died the week ending September 20, 2013, on the climax on the No Taper Rally, where QEternity was announced, which pivoted the world from Liberalism to Authoritarianism.  Now, Authoritarianism is defined by the diktat of statist regional nannycrats, as well as by the physical possession of gold bullion for wealth preservation, and physical possession of silver bullion for bartering.

Silver Miners, SIL, and Gold Miners, GDX, and the Silver ETF, SLV, and Gold ETF, GLD, traded higher, as Spot Silver, $SILVER, traded higher to 21.78 and Spot Gold, $GOLD, traded higher to 1,333, continuing above its $1,300 breakout level.

The Gold ETF, GLD, moved higher in its Elliott Wave 3 UP, to close at 128.79, a move that commenced in July 2013, as Gold started to rise from its July 2013 bottom, as is seen its Weekly Chart, as Bloomberg reported US Budget Concerns Escalate. The Elliott Wave 3 Ups are the most dramatic of all economic waves, and create the bulk of wealth gains, of all of the five waves.

The No Fed Taper Rally, commenced global debt deflation, that is global competitive currency devaluation, as the US Fed’s QEternity monetary policy has crossed the Rubicon of sound monetary policy, and has turned money good investments bad. The chart of the US Dollar, $USD, shows a death cross, as it traded lower on September 18, 2013, on the UnTaper Rally, to $80.00, terminating the US Dollar’s power to be the world’s reserve currency.

World Stocks, VT, traded lower on lower Major World Currencies, DBV. China, YAO, traded lower on a lower Yuan, CYB. Sweden, EWD, traded lower on a lower Swedish Krona, FXS.  Emerging Markets, EEM, traded lower on lower Emerging Market Currencies, CEW.  Brazil, EWZ, EWZS, traded lower on a lower Brazilian Real, BZF. Indonesia, IDX, and Malaysia, EWM, traded lower. Argentina, ARGT, Greece, GREK, and Egypt, EGPT, traded higher.

As seen in the Statue of Empires, presented in Daniel 2:25-45, liberalism was characterized by the twin iron legs of global hegemonic power of the British Empire, and the United States of America.  Now, authoritarianism is characterized by ten toes of iron diktat of regional goverance and totalitarian collectivism, manifesting as statism in the Eurozone, and alliances in other regions, such as the ASEAN group of nations. Ulrich Rippert of WSWS reports Forming A New German Government: Parties Prepare For War And Social Attacks. All the parties are trying to establish a ruling coalition stable enough to push through unpopular measures on behalf of the ruling class.

GoldSilverWorlds reports CFTC Believes That Silver Is A Free Market After 5 Year Investigation. I comment that I hope this news puts to rest the ongoing debate as to potential of the price of silver to rise higher over the price of gold. Silver will never, ever, leverage higher over the price of gold. One of the reasons is because of the huge potential for production by Silver Standard Resources Inc, SSRI, which has been one of the most speculative and carry traded investments of all time. The company does not have a forward PE, and it has plenty of contracts to sell its production, so the result is that the price of silver will never, ever outperform gold.  Silver Standard Resources is a dead investment, and serves as an epitaph on Liberalism’s age of speculative leveraged investment.

In the last month, Gold Mining Stocks, GG, ABX, and NEM, have been unable to leverage up over the price of Gold, GLD, as is seen in their combined ongoing Yahoo Finance Chart. Gold Mining Stocks are now lagging the price of Gold because their PE’s have topped out; for example, Goldcorp, GG, has a Forward PE of 20; American Barrick, ABX of 8, and Newmont Mining, NEM, of 15.

Solar Stocks, TAN, traded higher. Aggregate Credit, AGG, traded higher as the Interest Rate, ^TNX, traded lower to close at 2.61%. Eurozone Debt, EU, traded lower.

Shares of Deutsche Bank, DB, traded 2.4%, lower as Bloomberg reports Jain Says Deutsche Bank’s Debt-Trading Revenue Falls. Deutsche Bank AG, DB, co-Chief Executive Officer Anshu Jain said third-quarter revenue from trading debt probably slumped at Germany’s largest bank. “We currently anticipate debt sales and trading revenues in the third quarter to decline significantly from last year,” Jain, 50, told investors at a conference in London today. “Market activity was substantially lower which has affected our corporate banking and securities revenues.”

Deutsche Bank, DB, has been an Eurozone Financials, EUFN, Germany, EWG, and Eurozone, EZU, stalwart, as is seen in the combined ongoing Yahoo Finance chart of EUFN, EWG, and EZU. The trade lower in DB, heralds a soon coming trade lower in Eurozone Financials, Germany and Eurozone stock.

The profitability of Deutsche bank and trade in Eurozone Financials has been predicated upon trading in Eurozone Debt, EU. Jesus Christ, acting in Dispensation, that is in the administration of all things economic and political, for the completion and fulfillment of every age, era, epoch and time period, is terminated trade in Eurozone debt, as part of the process of ending the sovereignty and seigniorage, of Liberalism, and introducing a the sovereignty and seigniorage of Authoritarianism.

A new sovereignty is coming, specifically from that of the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of statist regional governance, Revelation 13:1-4, where eventually there will be ten regional kings ruling in the world’s ten regions, Revelation 17:12. And a new seigniorage is occuring, that is a new moneyness, is happening, from the seigniorage of investment choice, to the seigniorage of diktat.

The change of sovereignty and seigniorage comes largely through Jesus Christ releasing the First Horseman of the Apocalypse, Revelation 6:1-2, where The Rider on the White Horse, who has a bow but no arrows, symbolizes a non-bloody economic and political coup d’etat, where the baton of sovereignty and seigniorage is being passed from democratic nation states to nannycrats in statist regional governance and totalitarian collectivism.

Fox News reports Kerry Signs UN Arms Treaty, Senators Threaten To Block It. US Secretary of State John Kerry signed a controversial U.N. treaty on arms regulation, riling U.S. lawmakers who vow the Senate will not ratify the agreement. As he signed the document, Kerry called the treaty a “significant step” in addressing illegal gun sales, while claiming it would also protect gun rights.

On Thursday,  Inverse Volatility, XVZ, rose, as Volatility, XVZ, traded lower, as World Stock, VT, rose, as Solar Stocks, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, Biotechnology, IBB, Media, PBS, Casinos and Resorts, BJK, Global Consumer Discretionary, RXI, Smallcap Industrials, PSCI, US Infrastructure, PKB, and Shipping Stocks, SEA, traded higher. Energy Production, XOP, and Small Cap Energy, PSCE, rose to new rally highs. The Russell 2000, traded to a new rally high on higher Small Cap Pure Growth, RZG, and Small Cap Pure Value, RZV, both rising to new rally highs.  In yield bearing sectors, Leveraged Buyouts, PSP, traded higher, and International Telecom, IST, rose to a new rally high, while Utilities, XLU, traded lower.

Japan, EWJ, JSC, rose taking the Nikkei, NKY, to a new rally high. Other nations trading higher included Egypt, EGPT, Indonesia, IDX, IDXJ, South Korea, EWY, New Zealand, ENZL, Australia, EWA, KROO.  Peru, EPU, Turkey, TUR, Netherlands, EWN, traded lower.

Intel, INTC, Broadcom, BRCM, Atmel, ATML, traded lower, turning Semiconductor, XSD, lower. Networking, IGN, and Transportation, XTN, traded lower.

China, YAO, traded unchanged as Value Walk reports Chinese Bank Problems Echo Those Of Japan (Not US), Michael Pettis Says. And Mike Mish Shedlock references Michael Pettis asking So why is China’s GDP growth rising again? The simple answer is shadow banking has revived. Is it sustainable? Of course not. Debt is growing faster than it can possibly be paid back. In his email Pettis stated that he felt like a broken record, repeating the same story over and over again.I don’t mind, because it’s clear that people have not gotten the message, especially in regards to using alleged reserves. Please reread that section until you understand it.

The UnTaper rally drove up Nation Investment, EFA, to an all time high, with the following nations leading the way higher: EGPT, 31%, ARGT, 23, EFNL, 22, EWY, 18, KROO, 17, YAO,  17, EIRL, 16, EZA, 16, EWN, 16, as is seen in their combined ongoing Yahoo Finance Chart. Ireland, EIRL, has been liberalism’s nation investment superstar.

The EUR/JPY closed up at 133.42, supporting Eurozone Stocks, EZU, despite a lower European Financials, EUFN, led so by Ireland’s IRE, and Germany’s DB, while Banco Santander, SAN, rose taking Spain, EWP, to a new rally high.

Silver Miners, SIL, and Gold Miners, GDX, lower on a lower price of Silver, SLV, and Gold, GLD.

Aggregate Credit, AGG, traded lower as The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%; and the Steepner, STPP, rose after having fallen for two weeks, reflecting a re-steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX. The No Taper Rally supported a rally in the longer duration debt such as The Zeroes, ZROZ, 30 Year US Government Debt, EDV, High Yield Munis, HYD, Longer Duration Corporated Debt, BLV, Emerging Market Bonds, EMB, but inasmuch as money failed with the UnTaper Rally, the rally in these debts has ended as is seen in their combined ongoing Yahoo Finance Chart.

Patti Dom of CNBC reports Corporate America Took On A Record Amount Of Debt In September as corporate Treasurers rushed to take advantage of a dip in rates and a receptive market. Verizon’s biggest ever $49 billion offer helped drive the month’s investment grade offerings to an all-time high of $147.8 billion so far, besting the $133.9 billion of May, 2008, according to Informa Global Markets. But the offers picked up momentum as the month wore on, and particularly after the Fed surprised markets last week by leaving its $85 billion monthly bond buying program intact for now.

Zero Hedge reports Greece On The Verge? Military Special Forces Have 15 Demands, Or Else. As the website Keep Talking Greece notes, the statement on the union’ website included 15 demands,  including the resignation of the Greek President, and urged people to gather at the infamous Syntagma Square on Saturday. The statement was interpreted by some as a call to a coup d’etat, denied by the union, but prompted Greece’s Supreme Court to meet to discuss it.

Open Europe in their for fee newsletter reports Greek Golden Dawn MPs Consider Resigning, Could Trigger Fresh Elections. MPs of the far-right Golden Dawn party have threatened to resign from the Greek parliament, a move which could lead to demands for snap general elections. Kathimerini Kathimerini 2 EUobserver Times Reuters AFP HLN Volkskrant AFP2 Guardian Guardian 2

The ratio of equity to debt such as Eurozone Stocks relative to Eurozone Debt, EZU:EU, as well as Nation Investment relative to World Treasury Debt, EFA:BWX, and World Stocks relative to Aggregate Credit, VT:AGG, communicates that stocks are leveraged at terrific levels attained through the No Taper Rally.

The WSJ reports No Clear Path to Avoid Shutdown as House GOP Stands Firm. Congress’s rocky path to avoiding a government shutdown became even rougher Thursday, as Speaker John Boehner said the House wouldn’t accept the spending plan likely to emerge from the Senate. The Ohio Republican’s announcement foreshadows a set of last-minute legislative volleys between the House and Senate to fund federal agencies ahead of a deadline Monday, the final day of the fiscal year. he Senate is expected to pass a bill Friday that would fund the government for the first 1½ months of the new fiscal year. But Senate Democrats plan to restore money for the Affordable Care Act that House Republicans had stripped out, leaving the two chambers in conflict.

On Friday, September 27, 2013, The stock markets moved from risk-on, to risk-off, as the Risk On ETN, OFF, traded higher, as both Industrials, XLI, ie Small Cap Growth Stock, ROLL, and Large Cap Growth Stock, ITW, Transports, XTN, as well as Dividend Growth, VIG, traded lower on the week, establishing a turn from a bull stock market to a bear stock market, on the exhaustion of the world central banks monetary authority, specifically that the US Fed’s monetary policies have crossed the rubicon of sound monetary policy, and have turned money good investments bad, resulting in the end of the age of Nation State Investment, EFA, in countries such as the Netherlands, EWN, and its companies, PHG, CNH, YNDX, NXPI, and profitable global industrial production, FXR, ie WHR.

The chart of the Dollar’s 200% ETF, UUP, turned terribly bearish as The US Dollar, $USD, traded lower. The US Dollar, $USD, is being dethroned as the world’s reserve currency as AP reports Preparing for Shutdown, Government Plans Furloughs. More than a third of federal workers would be told to stay home if the government shuts down, forcing the closure of national parks from California to Maine and all the Smithsonian museums. The EPA would essentially be closed to most of its approximately 17,000 employees, except for those involved in shutting down systems, tasked with emergency cleanups, or doing legal work in ongoing federal cases, said John O’Grady, president of the local union of EPA employees in Chicago. NASA is still working on shutdown plans, but the agency doesn’t have a launch scheduled until Nov. 6, spokesman Bob Jacobs said. Nearly all but a few hundred of the space agency’s 18,000 employees would be furloughed under a contingency plan outlined in 2011.

Money as it has been known, died on the unwinding of the No Taper Rally, which some call the Un Taper Rally, as evidenced by a trade lower in World Stocks, VT, and Major World Currencies, DBV, as well as Emerging Market Stocks, EEM, Emerging Market Currencies, CEW, and Emerging Market Bonds, EMB.

Jesus Christ, operating at the helm of the Economy of God, that is in administration of all things economic and political, has completed the age of liberalism by producing a moral hazard and currency carry trade prosperity. With peak prosperity having been achieved, He is introducing the age of authoritarianism, which features a debt servitude based austerity.

Jesus Christ has unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, where the Rider on the White Horse, having a bow but no arrows is effecting coup d’etat word wide, passing the baton of sovereignty to new sovereigns. A new money, that being diktat money is being established, as nannycrats meet in summits and workgroups to renounce national sovereignty and to pool sovereignty regionally for regional security, regional stability and regional sustainability.

The turn lower from the No Taper Rally of September 18, 2013, ends liberalism’s sovereignty of nation state democracy and marks the beginning of authoritarianism’s sovereignty of regional governance and totalitarian collectivism.

Liberalism was the epoch of the Milton Friedman Free To Choose Floating Currency Banker Regime, featuring policy of investment choice, and schemes of credit and carry trade investing.  Now, Authoritarianism is the epoch of the Angela Merkel Diktat Beast Regime of Revelation 13:1-4. featuring policies of diktat and schemes of debt servitude.

Brian Parkin and Tony Czuczka of Bloomberg report Germany’s Free Democrats, who have held the balance of power more than any other political party in the republic’s history, were ousted from parliament for the first time after voters defected to Angela Merkel’s Christian Democrats and the euro-skeptic AfD. The liberal FDP, which served as the junior partner in Christian and Social Democrat-led governments, gained just 4.8% in federal elections yesterday, less than the 5% needed to enter the Bundestag. The party’s worst result contrasts with its best of 14.6%, gained four years ago to rule under Angela Merkel. The FDP’s exit from Germany’s lower house marks the end of 64 years of parliamentary representation, in which it championed free market policies and personal freedoms, challenging the postwar consensus-orientated politics of the larger people’s parties.

Competitive currency deflation is strongly underway on the unwinding of the No Taper Rally, which some call the UnTaper rally. Debt deflation, that is currency deflation is seen in Major World Currencies, DBV, of which the US Dollar, $USD, is a component, which traded strongly lower.

Emerging Market Currencies, CEW, traded lower on a lower Indian Rupe, ICN, which forced India, INP, SCIN, and its banks, HDB, IBN, strongly lower. The Brazilian Real, BZF, traded lower, which forced Brazil, EWZ, EWZS, lower. The Mexico Peso, FXM, traded lower, taking Mexico’s Bank, BSMX, and Mexico, EWW, strongly lower. Emerging Market, EEM, Emerging Market Small Cap Dividend, DGS, and Emerging Market Bonds, EMB, finished the week lower.

The Euro, FXE, traded to a new rally high, and yet the Yen, FXY, traded even higher, taking the EUR/JPY, lower on both the day and on the week, to close at 132.77; yet Eurozone Stocks, EZU, traded near their week’s high; European Financials, EUFN, traded lower on the week. The Swiss Franc, FXF, traded higher, taking Switzerland, EWL, higher. Netherlands, EWN, Italy, EWI, traded lower. Spain, EWP, and Greece, GREK, traded higher.

Egypt, EGPT, traded higher. Argentina Banks, BFR, GGAL, and BMA, traded higher, taking ARGT,  higher.

The Chinese Yuan, CYB, traded lower as China’s Financials, CHIX, led China, YAO, China Industrials, CHII, and China Infrastructure, CHXX, lower.

US Stocks, VTI, traded lower; the chart of the S&P 500, $SPX, traded by the ETF, SPY, shows a 1.0% trade lower on the week.  A lower US Dollar, kept losses in World Stocks, VT, to a minimum. Countries with balance of payment issues traded lower, these included Thailand, THD, Turkey, TUR, South Africa, EZA, Philippines, EPHE, Malaysia, EWM, and Peru, EPU. Russia, RSX, ERUS, and Italy, EWI, traded lower.  Yahoo Finance Chart communicates that Peru, has the worst amount of derisking and deleveraging amongst all of the Emerging Markets over the last six months.   John Quigley of Bloomberg reports Peru’s bond risk is soaring more than any investment-grade debtor nation in the Americas as tumbling metal exports erode the country’s budget surplus and prompt the government to double its borrowing. The cost to protect Peruvian dollar debt against non-payment for five years using credit-default swaps has climbed 0.4 percentage point to 1.40 percentage points in the past six months..

Metal Manufacturers XME, such as CRS, MLI, STLD, WOR, RS, traded lower, Steel, SLX, such as TS, MT,  SID, NUE, Coal, KOL, such as CLF, Uranium, URA, Industrial Miners, PICK, such as VALE, ZINC, GSM, PKX, Rare Earth Miners, REMX, and China Miners, CHIM, traded lower.

Utilities, XLU, such as those seen in this Finviz Screener, traded lower.

Small Cap Pure Value Stocks, RZV, such as First Internet Bancorp, INBK, Home Health Care Company, ADUS, Casinos, Lakes Entertainment, LACO, and Boyd Gaming, BYD, traded lower.

International Paper, IP, traded lower, taking Paper Produces, WOOD, lower.

Halliburton, HAL, traded lower, taking Energy Service, OIH, lower.

Networking Stocks, IGN, traded lower.

Semiconductors, such as BRCM, ATML, INTC, MSCC, MRVL, FCS, TSM, FSL, XLNX, ADI, and LLTC, traded lower, taking Semiconductors, SMH, lower

Bank of America, BAC, traded lower, taking the Too Big To Fail Banks, RWW, lower. Asset Managers, such as BlackRock, BLK, traded lower. Investment Bankers, KCE, traded lower.

Life Insurance companies, such as ING, seen in this Finviz Screener, traded lower.

Shipping Stocks, SEA, such as those seen in this Finviz Screener, traded lower.

Agriculture, MOO, and Fertilizers, SOIL, traded lower.

Silver Miners, SIL, and Gold Miners, GDX, are unable to leverage higher on a rising price of Gold, GLD, and a rising price of Silver, SLV, as is seen in the charts of SIL:SLV, and GDX:GLD.

Liberalism was an era that was characterized by free-money, coming from the world central banks monetary policies of Global Zirp, a record level of margin credit, and the Bank of Japan, and its lenders such an NMR, MTU, SMFG, MFG, as well as China’s SHG, presented together in the chart of Far East Financials, FEFN, providing Yen carry trade loans. Leveraged Buyouts, PSP, traded higher. Debt laden Blackstone, BX, is trading near its rally high, as CNBC reports its chief Joseph Baratta, saying “We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity,” … “The cost of a high yield bond on an absolute coupon basis is as low as it’s ever been.” And Gerry Murray, head of JPMorgan Chase & Co.’s North America leveraged finance business, said The Federal Reserve’s surprise decision last week to not reduce its stimulus ‘gave a shot of adrenaline into the leveraged markets

Solar Stocks, TAN, seen in this Finviz Screener, traded to a new rally high.

Aggregate Credit, AGG, traded higher, as The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.62%.

Jesus Christ acting in Dispensation, that is in oversight of all things economic and political, has fully completed Liberalism as an age of investment choice powered by credit and carry trade investing, by expanding fiat wealth to an unprecedented level, as Doug Noland relates in Safehaven.com article, The Federal Reserve has created a massive Bubble of risk assets. Since since ’08 Household holdings of mutual funds and equities have surged $10.640 TN, or 85%, to $23.191 TN. Pension Fund Entitlements jumped $4.675 TN, or 33%, to $18.737 TN. It’s no longer true that American households have the majority of their wealth in savings and real estate. These days, and much the product of experimental monetary policy, Household perceived wealth is wrapped up in the risk markets. Those of a bullish persuasion would argue these dynamics confirm the underlying strength and stability of the U.S. economy. I’ll counter with the view – one supported by Fed data – that massive federal deficits and Federal Reserve monetization have created unprecedented and deeply systemic financial and economic distortions

In the age of authoritarianism, physical possession of gold bullion, and diktat will be the only forms of sovereign and thus sustainable wealth.

3) … The development of character begins in childhood. Elaine Meinel Supkis writes Berlin High Students Join Other Party-time Teens In Upstate NY To Vandalize Football Player’s Mansion.

It’s apparent that a wilding took place, it’s part of what the Bible refers to as the mystery of iniquity.

I live in the inner city, and use public facilities, like the local bus depot and the library, as well as reside in an apartment building owned by a non-profit charity which exposes me to many who live not only libertine but antisocial.

Psychopathy can be inherited, and can does develop as young people cross the rubicon of sound ethical behavior, so that over time the boundary between ruling over others and being independent from others is erased; so I feel sorry, in a sense, for the 300, as everyone of them now has eroded the ethical standard of responsible living and they live exposed to living more in iniquity.

There is a responsibility on the part of parents to educate their children in ethical living. I’m not particularly a fan of William J. Bennett, but he with the help of two individuals, wrote The Book of Virtues, and the Chapter on Responsibility presents CS Lewis Men Without Chests, and develops the  idea that parents and mentors have a responsibility to educate children in moments of learning to have the right response; specifically to train children to feel pleasure in doing and seeking after things which are noble and praiseworthy, and to feel disgust and contempt for things which are injurious, so that when the age of reason comes, he will embrace virtue and ethics, into his soul, and be nourished thereby, and in so doing become a person of gentle spirit and good way.

I feel sorry for the parents, they are the largest losers of all, as they lost the reward that comes from raising children who go on to live noble lives. Thank God, I have never had any children and have never been a parent. Residing where I do in the downtown area, I see daily the mystery of iniquity being played out and pray that I will have a love of Christ, and through his Spirit, live in the mystery of righteousness.

4) … The richest and poorest states revealed. Mike Sauter of 24/7 Wall St lists  America’s Richest and Poorest States Maryland is the wealthiest state while Mississippi, Arkansas, West Virginia, Alabama and Kentucky are the places of greatest poverty.  In Mississippi, about one in five households depended on food stamps last year, second only to Oregon. The state’s poverty rate was 24.2%, the highest in the nation by more than three percentage points.

5) … Are electrical waves making you sick? Liberty Crier reports Customers say OG&E smart meters making them sick, giving them headaches

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Apocalyptic Music For One’s Listening Enjoyment

September 21, 2013

For your listening enjoyment  Blues Brothers 2000 – Opening : John the Revelator, uploaded at BluesBrothers.de

 

Liberalism Achieves Peak Prosperity As Ben Bernanke Announces Plan For QEternity

September 21, 2013

Financial Market Report for the Week Ending September 20, 2013

1) … The possibility of withdrawal of US Central Bank monetary stimulus caused investment growth in the emerging markets to collapse beginning in May 2013.

The global central bank credit bubble, BWX, began to collapse, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.1% on May 24, 2013, and then to 2.9% on Friday September 13, 2013, on fears of US Fed tapering, with the result that the crack up boom in stocks began to implode; but only reflated with QEternity, on September 18, 2013. The benchmark rate fell to 2.73% the week ending September 20, 2013.

Beginning in May, 2013, investors began to sell mining export nations such as Chile, ECH, and Peru, EPU, Emerging Market Nations, EEM, with high balance of payments, such as Turkey, TUR, Indonesia, IDX, IDXJ, Malaysia, EWM, India, INP, SCIN, Philippines, EPHE, Thailand, THD, and New Zealand, ENZL, as well as interest rate sensitive stocks such Homebuilding Stocks, ITB, Utility Stocks, XLU, and Real Estate Stocks, IYR, such as REM, ROOF, REZ, FNIO. 

Bloomberg reports on the collapse of state owned banking in India. Record Rout in Government Banks as Buffers Drop: Corporate India. Shares of India’s state-run banks are trading near record-low valuations as concern grows about narrowing risk buffers and rising bad loans. Indian Bank, United Bank (UNTDB) of India Ltd. and Union Bank of India, have fallen more than 55 percent this year to Sept. 12, the most among the nine government banks that are leading declines for India’s 40 bank stocks. Shares of the nine lenders are all trading below the value of their assets amid lower-than-average capital adequacy levels and bad loan ratios that are about double those of private-sector lenders.

Brand names disappear from the retail shelves when the balance of payments issue becomes extreme as Francisco Toro of Caracas Chronicles reports Keep walking…right over the BoP cliff-edge. Been having trouble shaking that end-of-times feeling over the looping Balance of Payments cliff-edge? Here’s some confirmation-bias catnip for you from Confirmando.com Faced with an acute shortage of dollars and no end-in-sight, the unthinkable has now happened: licquor stores in Caracas have started rationing the sale of Scotch. “No hay garantía de inventarios para el mes de mayor demanda como es diciembre y ha obligado a imponer una especie de racionamiento. ‘Vendemos solo 4 botellas de Old Parr, Buchanan’s o Etiqueta Negra 12 años’, apunta una de las promotoras de la tienda de Licores Mundial en la urbanización Las Mercedes.Una situación similar ocurre en las licorerías de varios supermercados en Caracas, donde se prohibió la venta de cajas de 12 botellas de estas marcas y sólo se acepta un máximo de 3 unidades. Frente al alza del precio y la limitación en la venta, hay consumidores que optan por migrar a otras marcas, pero no abandonan su hábito por el escocés. Fin. Du. Monde”!

Francisco Toro of Caracas Chronicles writes Occam’s razor on sabotage.  Willie Neuman’s piece in the New York Times on Maduro’s sabotage-obsession is a pretty good primer for people who haven’t been following the story. It bothers me a bit, though, that he barely mentions, in passing, the government’s obvious political rationale for making up outlandish tales that have no evidence to back them: deflecting blame for its own appalling record of neglect over the nation’s infrastructure. To Venezuelans with dos dedos de frente, this is obvious, but perhaps it is less so for Willie’s readers stateside: the maintenance culture inside Pdvsa and Corpoelec has frayed badly over the last 15 years, leaving a brittle infrastructure that’s given rise to an appalling industrial safety record. At Corpoelec in particular, efforts to face up to the crisis have taken the form of a loosening of safeguards against corruption, leading to the Bolichicos scandals we’re all too familiar with. So not only does the National Grid suck, the billions spent to fix it are being looted.

Fox News reports Venezuelan inflation soars as Maduro creates organization to fight sabotage

2)  … A disavowment of a Chinese taper stimulated Chinese stocks to rally beginning July 2013.

Tyler Durden writes in Zero Hedge China: No Leverage, No Growth. When it comes to the very simplest axiom on modern Keynesian economics, it seems one can’t repeat it enough times: have leverage, have growth … don’t have leverage, don’t have growth.

That is the main reason why in lieu of any organic credit growth (total consumer bank loans and leases now are still below the level when Lehman filed), it has been up to the Fed to step up and provide “leverage” into the system, in the form of excess reserves, resulting in $2.5 trillion in excess deposits over loans, or just the void filled by the Fed’s printing of lower powered money. That is also the reason why in early summer, China tried to conduct a mini-taper of its own to streamline its monetary pipeline which had been so filled with bad and non-performing credit, that the PBOC effectively pulled the switch on new liquidity for over a month.

What happened almost immediately after, when rates on ultra short term funding soared to 20%+, nearly destroyed the domestic banking system and resulted in a major slowdown in the Chinese economy. “Luckily” for China, its close encounter with the taper was brief, if quite painful, and following a period of shock, the Chinese central bank had no choice but to resume injecting banks with their daily dose of monetary morphine all over again.

This in turn, has brought us to square one: nothing in the local banking system has been fixed, and what’s worse, while China has bought itself a few months respite, the dominant old problem of a collapsing credit impulse, as described before, in the country with the largest corporate credit bubble in the world, is about to come back with a bang in a few short months. In short: China just did what the US has boldly done so many times before kicked the can.

NidStyles comments On December 1913, when the monetary system was fraudulently changed into a debt based fractional reserve monetary system through the creation of the Federal Reserve. Since then, there can be no economic growth without credit growth. Economic growth is tied up to credit growth. If the overall debt of the system was to be reduced then the entire system would collapse into a deflationary death spiral. For this reason, no government in this fiat based currency world should have a balanced budget. They all have to keep a certain amount yearly growth of their national debt. The EU for example is aiming at a yearly growing debt rate of 3% of GDP for each Euro Zone country (they are still far from it though). And Tabarnaque commentsI was about to forget. In case you haven’t seen this classic Youtube Video Money as debt. This is a must be seen in order to understand the monetary system we live in.

Investors bought China’s kicking the can credit rally, from Mid June 2013 to September 13, 2013, as is seen in the ongoing Yahoo Finance Chart of China Financials, CHIX, China YAO, China Industrials, CHII, China Mining, CHIM, and China Real Estate, TAO, providing investment gains of 20%, in just  three months; as well as similar gains in Industrial Mining Stocks, PICK, such as RIO, Steel Mining, SLX, such as MT, GSM, as well as in Asia Regional Stocks, Australia Small Caps, KROO, Australia Bank WBK, New Zealand, ENZL, South Korea, EWY, as well as in Distant Regional Stocks, Egypt, EGPT, South Africa, EZA, Argentina, ARGT, as well as in Shipping Stocks, SEA, seen in this Finviz Screener. These stock investments are ready to implode.

In early September, China, YAO, Finland, EFNL, Shipping, SEA, Solar, TAN, Biotechnology, IBB, Casinos and Resorts, BJK, Semiconductors, SMH, Internet Retail, FDN, Design Build, FLM, Internet Retail, FDN, Small Cap Industrial, PSCI, Automobiles, CARZ, S&P High Beta, SPHB, and Paper Producers, WOOD, such as TIS, SWM, KS, SEE, PKG, GPK and IP, seen in this ongoing Yahoo Finance Chart have outperformed and are primed for a great fall. 

3) … Nation investment soared the week ending September 20, 2013, on confirmation of QEternity

On Monday September 16, 2013, Stocks rally, dollar dips as Summers quits Fed race.  Marc Jones of Reuters reports that investors wagered that U.S. monetary policy would stay easier for longer should the other leading candidate for Fed chair, Janet Yellen, get the job. Markets had perceived Summers as less wedded to aggressive policies such as quantitative easing and more likely to scale stimulus back quickly than Yellen, who is currently second in command at the Fed.

Nation Investment, EFA, and Small Cap Nation Investment, IFSM, traded to new rally highs.

The Eurozone, EZU, and the traded to a new rally high, as Italy, EWI, Netherlands, EWN, Spain, EWP, Italy, EWI, Ireland, EIRL, Greece, GREK, and Germany, EWG, EWGS, traded higher.  

US Stocks, VTI, traded to a new rally high.

Asia Excluding Japan, EPP, traded to a new rally high.

World stocks, VT, and Global Industrial Producers, FXR, rose to a new rally high.

Sectors trading higher included Paper Producers, WOOD, Solar, TAN, Design Build, FLM, Gaming, BJK, Automobiles, CARZ, Inverse Volatility, XIV.

Filled black candlesticks formed in a number of stock charts such as SPY, IWM, FXI, EZU, EUFN, SMH, IBB, KROO, SPHB, XTN, YAO, PSP, and RXI, as well as the Euro, FXE, foreshadowing a market reversal.  

Yahoo Finance chart shows the EUR/JPY closed at 132.26.  

The US Dollar, $USD, traded lower, as the Indian Rupe, ICN, the Swedish Krona, FXS, and the Australian Dollar, FXA, and the Euro, FXE, traded higher.

The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.87%.

Oil, USO, traded 1.9% lower.

The Gold ETF, GLD, traded 1.1% lower as Spot Gold, $GOLD, traded lower to $1313.

On Tuesday, September 17, 2013, Volatility, XVZ, and the US Dollar, $USD, traded lower, as World Stocks, VT, traded slightly higher,  ahead of FOMC Day. Reuters reports Wall Street ends up amid Fed talks; Nasdaq logs best close in 13 years.  US Stocks, VTI, rose on Tuesday on expectations the Federal Reserve will make only modest changes to a monetary policy that has been highly supportive of stocks and other assets.

Gold Mining Stocks, GDX, such as those seen in this Finviz Screener, traded higher, on a slight rise in the price of the Gold ETF, GLD; the internals of their chart patterns suggest that their direction is going higher once again. 

Australia’s Westpac banking, WBK, led New Zealand, ENZL, Australia, EWA, and Asia Excluding Japan, EPP, higher, while Shanghai, CAF, led China Industrials, CHII, Indonesia, IDX, and Indonesia Small Caps, IDXX, lower.  German Small Cap Stocks, GERJ, and Greece, GREK, led the Eurozone, EZU, slightly higher.

Sectors trading higher included, Inverse Volatility, XIV, Nasdaq Internet, PNQI, IPOs, FPX, Networking, IGN, Retail, XRT, such as RAD, KR, TJX, Semiconductors, SMH, Consumer Services, IYC, Internet Retail, FDN, Small Cap Pure Value, RZV, Stockbrokers, IAI, and Aerospace and Defense, PPA.  Regional Bands, KRE, traded higher. Energy Production, XOP, and Small Cap Energy, PSCE, traded higher despite a trade lower in Oil, USO.

 Credit Provider MasterCard, MA, rose strongly, and Delta Airlines, DAL, rose strongly on recent announcement that it will join the S&P 500.

The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.85%.

On Wednesday September 18, 2013, Wall Street ends at record, Fed maintains stimulus US stocks rallied to record highs on Wednesday after the Federal Reserve surprised investors and decided against trimming its bond-buying stimulus program, which has fueled Wall Street’s rally of more, Reuters reports.  Volatility, XVZ, traded strongly lower. The US Dollar, $USD, traded strongly lower to close at  80.23.  Major World Currencies, Brazilian Real, BZF, Indian Rupe, ICN, Australian Dollar, FXA, Swedish Krona, FXS, Swiss Franc, FXF, British Pound Sterling, FXB, and the Euro, FXE, as well as Emerging Market Currencies, CEW, all rose strongly. 

Spot Gold, $GOLD, rose 4.2% to close at $1,365. The Gold, ETF, GLD, rose 4.4%, and the Silver ETF, Silver, SLV, 6.4%, taking Gold Miners, GDX, 8.9%, and Silver Miners, SIL, 11.0%, higher. Oil, USO, rose 2.5%.  

In what amounts to debt monetization, that is free money for investors, World Stocks, VT, rose 2.0%, Nation Investment, EFA, 2.7% … Emerging Markets, EEM, 4.2% … The  BRICS, EEB, 3.2%, with INP 5.3, EWZ 5.1, RSX 4.9, YAO, 1.7 …  Asia Excluding Japan, EPP, 2.6%, with, IDX, 8.6, EPHE 7.2, THD 5.9, TUR 5.6, EWM 4.6, ENZL, 2.2 … Others with ECH, 5.3, EZA 4.6, ARGT 4.5, EWY 4.1 … The Eurozone, EZU, 2.6%, with EWP, 3.8, EFNL, 3.4, EWI, 3.3, GREK, 2.8, EWG, 2.6, EIRL 2.2, EWN 2.2, EWGS, 1.7 … US Stocks, VTI, 1.2%, with SPY 1.2, QQQ 1.2% with sectors Home Building, ITB 4.8%, Inverse Volatility, XIV 3.7, Coal Miners, KOL 3.7, Industrial Miners, PICK 3.2, China Industrials, CHII 3.2, Solar Stocks, TAN 2.9, Steel Producers, SLX 2.9.

Investors have been clamoring for Growth Stocks, Large Cap Growth, JKE, and Small Cap Pure Growth, RZG, have been outperforming their peers, Large Cap Value, JKF, and Small Cap Pure Value, RZV, as is seen in their combined ongoing Yahoo Finance Chart 

Aggregate Credit, AGG, rose strongly as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close at 2.71%, as the Father of QE, Ben Bernanke, called for ongoing monetary intervention. 

The apostle of QE Unlimited, a promise to buy assets every month until conditions improve, Dr. Marc Faber, and investment newsletter publisher of The Gloom Boom & Doom Report, posts in Zero Hedge My view was that they would taper by about $10 billion to $15 billion, but I’m not surprised that they don’t do it for the simple reason that I think we are in QE Unlimited. The Fed will continue to print and if the stock market goes down 10%, they will print even more. And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate. The endgame is a total collapse, but from a higher diving board now.  Wikipedia relates He correctly predicted QE to infinity.[16] And On March 27, 2013 Faber said that the U.S. is creating “nowhere to hide” bubbles in many emerging economies such as Indonesia, the Philippines, Thailand (up four times from 2009 lows).[17]

I comment that when one can not go left or right, and when one can not go up or down, then all one can do is go further in at an accelerated rate. which will result in total destruction known as supernova, in this case Financial Armageddon, a global credit bust and worldwide financial system breakdown, that is foretold in Bible Prophecy of Revelation 13:3-4.  

Benson te writes Inflationism represents just one of the many slippery slope towards more interventionism (price controls, foreign exchange and capital controls, wage and labor controls, trade controls, border controls and more) and even risks of wars.

And Benson te also writes Poker bluff called: US Federal Reserve balks at taper. I have been saying so. The supposed taper talk, like all the rest of “exit” talks since 2010, has all been but a poker bluff.

Given the entrenched dependency relationship by the mortgage markets and by the US government on the US Federal Reserve, the Fed’s QE program can be interpreted as a quasi-fiscal policy whose major beneficiaries have been the political class and the banking class. Thus, there will be little incentives for FED officials to downsize the FED’s actions, unless forced upon by the markets. Since politicians are key beneficiaries from such programs, Fed officials will be subject to political pressures.

This is why I think the “taper talk” represents just one of the FED’s serial poker bluffs. The US Federal Reserve called the bluff. The FOMC announced that they will refrain from tapering until supposed evidence will warrant it.

The global system has been acutely hooked on steroids which will only be given up when forced upon by the markets. Such dependency will even be more entrenched.

Such actions by the FED also runs in contradiction to supposed claims of economic recovery as the Zero Hedge rightly observed.  It seems the Fed is so scared about something (despite every long-only asset manager telling us day after day that the economy is recovering and the US doesn’t need crisis support… oh and can withstand higher rates) that they have gone against consensus and decided that Tapering now is premature.

FED policy represents a subsidy or transfer of resources to Wall Street and the government diverted from the main street, the economy will hardly post a robust real recovery. And worse, such transfers encourage malinvestments and consumption of capital.

Naturally markets addicted to the FED steroids went into a bacchanalia. The markets has turned into a full Risk ON mode. The taper bluff reinforces the record run for the S&P 500.

QEternity in September 2012 had a 3 month effect of the tempering of bond yields. Confirmation of QEternity will have a shorter duration of impact. In other words, the bond vigilantes will be having a short vacation but they will back soon, perhaps in less than a month.

Back in August PBS Holdings wrote Emerging markets want QEternity.  Over the past few years, QEternity is the humorous moniker that’s been used to describe the Federal Reserve’s seemingly never ending monetary stimulus. But the beginning of the end of QE and one of the most liberal monetary experiments in human history is nigh.

Central banks from emerging market countries like Brazil, India,Indonesia, and Turkey, are already taking aggressive steps to prepare for massive capital outflows ahead of the Fed’s decelerated asset purchases.

But as money flows away from emerging economies back into to developed countries, funding future economic growth and servicing debt becomes more difficult. Also, there’s the problem of containing inflation, which is still too high in BRIC nations like Brazil and India.

Emerging markets have been among the greatest beneficiaries of the Federal Reserve’s five-year easy money cycle. Essentially, Bernanke & Co. encouraged the “risk-on” trade of owning riskier assets by pushing investors out of low-yielding “safe” assets.

On Wednesday September 18, 2013, a QEternity rally drove the Emerging Market Stocks which had sold off, strongly higher, as is seen in the combined ongoing Yahoo Finance Chart of New Zealand, ENZL, Chile, ECH, Malaysia, EWM, India, INP, and especially thailand, THD, Philippines, EPHE, Turkey, TUR, and Indonesia, IDX, with the latter recovering 20% from their sell off lows.

Mike Mish Shedlock writes One sided risk assessment. The Fed sees risks all the time. But it’s all one-sided. The Fed never sees risk in tightening too little. The Fed always sees risks in tightening too much. The result is a series of bubbles of ever-increasing amplitude.

And Mike Mish Shedlock writes Let’s see how long this rally in emerging market currencies lasts. I suspect not long. Brazilian state development bank president Luciano Coutinho who expects currency volatility to increase because the Fed didn’t start tapering. “For us, the sooner it starts and ends, the better. I would rather see it start today and have some date to finish because then we will feel the whole impact. The worst thing is the uncertainty.” And Bloomberg reports One-hundred-year bond wipeout in Mexico triggered by Fed.

Back in July Wall Street Fool wrote Home builders about to feel the wrath of The Titans.  The FED tapering its QEternity Program, is probably the single worst news for Home Builders Stocks.

QEternity rallied Home Builders, ITB, more than any other sector. 

On Thursday September 19, 2013, Stocks soared In overnight trading. Benson te writes Asian markets jump on the FED’s QE extension. The reality is that all these stock market-currency market movements have been representative of the pricing of distortions brought about by FED and other central bank policies that has nurtured the market’s addiction to low interest rates environment and the subsequent credit fueled asset boom that has largely little to do with “fundamentals” or the real economy. Europe’s parallel universe should be a prime example.  What really has been a bubble has been misconstrued as a boom. Eventually booms end up in busts and crises as have been through history.

And in overnight trading, AP reports Fed shock sweeps through financial markets. Global stocks surge after Fed maintains stimulus in surprise move. The response in financial markets was immediate, tocks around the world surged, with the major U.S. indexes and Germany’s DAX striking record highs, while the dollar and U.S. government bond yields were pummeled. Commodities, such as oil and gold, were also in demand as were financial assets in many emerging markets as much of the money generated by the stimulus over the years has been invested around the globe to seek potentially higher returns. “Given the extreme moves in financial markets overnight and this morning, some participants have been on the receiving end of a short and sharp lesson on the dangers of attempting to second guess the U.S. Federal Reserve,” said Brenda Kelly, senior market strategist at IG.

Volatility, XVZ, traded slightly higher.  AP reports Dow, S&P End Lower After Record-Setting Run; Groupon, GRPN, Tesla, TSLA,  Spike after record setting rally.  Rite Aid, RAD, spiked higher as well.

Global Producers, FXR, trading higher included TWX, ETN,  FLS, ROK, SNA, CIR, ITT, DOV, and JBT.

Eurozone Stocks, EZU, trading higher included TS, ASML, and CRH.

Japanese Stocks, EWJ, trading higher included IX.

US Regional Banks, KRE, such as RF, STI, HBAN, SNV, traded lower. Global Banks such as LBCS, YG, RBS, SAN, and IBN, HDB, and BPOP traded lower as well. European Financials, EUFN, traded lower. Emerging Market Financials, EMFN, blasted higher, reflecting yesterday’s rally.  

Nations trading lower included South Africa, EZA, Russia, RSX,  ERUS, Australia, EWA, and the Philippines, EPHE. Nations trading higher included Turkey, TUR, and Thailand, THD. Sectors trading lower included Health Care Providers, IHF, Home Building, ITB, and Leveraged Buyouts, PSP, as well as Gold Miners, GDX, and Silver Miners, SIL.

The chart of the US Dollar, $USD, shows a slightly higher close at $80.50. The Chinese Yuan, CYB, as well as Major World Currencies, DBV, Emerging Market Currencies, CEW, traded slightly higher to a rally highs; these are now primed for a competitive currency devaluation at the hand of currency traders as investors derisk and deleverage out of World Stocks, VT. 

Yahoo Finance reports that EUR/JPY blasted higher to close at 134.5 but below its recent high of 135, as the Euro, FXE, closed at 133.87, and the Japanese Yen, FXY, shows close lower at 98.41.  The Stockcharts.com chart of EURJPY shows what may turn out to be a dark cloud covering evening star candlestick, communicating an end to Liberalism’s carry trade investing.

The Stockcharts.com charts of World Stocks relative to Aggregate Credit, VT:AGG, Nation Investment relative to World Government Treaury Bonds, EFA:BWX, and Eurozone Stocks relative to EU Deb, EZU:EU, communicate the end of Liberalism’s credit induced speculative leveraged invesing, as well as the achievement of peak wealth: Liberalism’s fiat wealth system is at its zenith. 

The Interest Rate on the US Ten Year Note, ^TNX, traded slightly higher to close at 2.75%.

Business Insider reports BlackBerry Plans To Fire Up To 5,000 Employees.

Robert Wenzel of Economic Policy Journal writes White House signals “Yale School” Yellen will be nominee for Fed Chief. For the record, Yellen comes out of the “Yale school” of Keynesian macroeconomics. Her dissertation adviser was the Keynesian James Tobin.   Tobin was a huge advocate of using government intervention to stabilize financial markets

CNBC reports Eurozone’s North South divide to widen further. Economic differences between the euro zone’s core and periphery are their most marked in over 10 years, according to a new report, and look set to widen as the region’s nascent recovery takes hold.

Professional services firm Ernst and Young (EY) said that euro zone countries were now at their most economically divergent since the early 2000s, according to its “convergence indicator,” which takes into account variables including gross domestic product, inflation, unemployment rates and government balances.

The gap can been seen in terms of growth – Germany’s economy expanded by 0.7 percent in the second quarter of this year, but the economies of a number of countries, such as Spain and Italy, continued to shrink – as well across lending and employment.

“Sharp differences in financing conditions and labor market developments will maintain stark divergence between euro zone countries,” according to the Eurozone Forecast, published on Thursday. “This poses a threat to efficient decision-making and further economic integration – both of which are necessary to ensure the eurozone’s stability.”

EY said it expected unemployment in the region to continue to rise, peaking at 12.6 percent in the middle of next year, and warned that the “substantial divergence” in unemployment rates across the continent would persist. It said it expected joblessness in Spain and Greece to peak at 27.6 percent and 29 percent respectively in 2014 – while Germany’s will be remain substantially lower at 5.4 percent.

On Friday September 20, 2013, Volatility, XVZ, rose, as the US Dollar, $USD, rose slightly to close at 80.56. The Market Off ETN, OFF, rose in value. Currency Carry Trades unwound worldwide with the Japanese Yen, FXY, trading higher and individual currencies such as the India Rupe, ICN, and the Euro, FXE, trading lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing investors to derisk and deleverage out of World Stocks, VT, and Global Industrial Producers, FXR, such as Boeing, BA. 

Masaki Kondo, Mariko Ishikawa and John Detrixhe of Bloomberg report Federal Reserve Chairman Ben S. Bernanke’s surprise decision yesterday to refrain from reducing the central bank’s unprecedented stimulus threatens one of the surest bets in currency markets this year. Traders borrowing funds in Japanese yen and using the proceeds to buy dollars earned an annualized 21% this year through Sept. 17, a record based on data compiled by Bloomberg back to 1990.

Nation Investment, EFA, traded lower, with the Emerging Markets, EEM, and Asia Excluding Japan, EPP, leading, the way lower. South Africa, India, INP, Thailand, THD, The Philippines, EPHE, Turkey, TUR, and Chile, ECH, traded lower. 

India Banks, EPI, such as IBN and HDB, led India, INP, and the Emerging Market Financials, EMFN, lower.

The National Bank of Greece, NBG, Ireland’s IRE, and Germany’s DB, led Greece, GREK, Ireland, EIRL, and the European Financials, EUFN, lower.

China’s SHG, and China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower.

Interest Rate Sensitive Stocks, that is Leveraged Buyouts, PSP, Home Builders, ITB, Utilities, XLU, Global Utilities, DBU, Real Estate, IYR, and Global Real Estate, DRW, traded lower.

Sectors trading lower included Aerospace, PPA, Paper Producers, WOOD, and Automobiles, CARZ. 

Metal Manufacturing, XME, was led lower by Coal Miners, KOL, Industrial Miners, PICK, and Steel Producers, SLX.

Gold, GLD, and Silver, SLV, traded lower, forcing Junior Gold Mines, GDXJ, Gold Miners, GDX, Junior Silver Miners, SILJ, and Silver Miners, SIL, lower.    

Aggregate Credit, AGG, traded unchanged, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to close the week at 2.73%. 

Summary of this financial market trading for the week ending May 20, 2013.

Liberalism achieved peak prosperity on a non taper rally. On going monetization of debt, specifically Ben Bernanke’s call for no tapering, that is for QEternity, made for a sell of the US Dollar, $USD, which closed the week down 1.2% at 80.56, and propelled Nation Investment, EFA, 2.2%, World Stocks, VT, 1.6%, Global Producers, FXR, 1.4%, US Stocks, VTI, 1.3%, and the S&P 500, SPY, 0.8%, to new all time highs.  

Sectors rising this week included Solar Stocks, TAN, 3.8%, Nasdaq Internet, 3.6%, Home Builders, ITB, 3.0%, Small Cap Pure Value, RZV, 2.4%, Casinos and Resorts, 2.2% higher.  Global Real Estate, DRW, popped 3.9%, higher. 

The Eurozone, EZU, rose 3.1%, to a new rally high, as Italy, EWI, rose 3.8%, Spain, EWP, 3.6%, Germany, EWG, 3.3%, and Ireland, Ireland, EIRL 3.2%, and Finland, EFNL, 3.0%.  

Asia Excluding Japan, EPP, rose 2.5%, to a new rally high, as THD, rose, 6.7%, IDX 5.6%, New Zealand, ENZL, 4.4%, EWM 4.1%, and the Philippines, EPHE, 3.8%.

Emerging Markets, EEM, rose 2.2%, to a new rally high, as Turkey, TUR, rose, 9.5%, Chile, ECH 4.9%, Argentina, ARGT, 4.7%.

US Stocks, VTI, rose 1.4%, and the S&P 500, SPY, 0.8%, both to new all time highs, with the chart of the S&P 500, $SPX, showing a rise of 1.3% to its new all time high. 

Doug Noland reports Last week set an all-time weekly record for corporate debt issuance. The year is on track for record junk bond issuance and on near-record pace for overall corporate debt issuance. At 350 bps, junk bond spreads are near 5-year lows (5-yr avg. 655bps). At about 70 bps, investment grade Credit spreads closed Thursday at the lowest level since 2007 (5-yr avg. 114bps). It is a huge year for M&A. And with the return of “cov-lite” and abundant cheap finance for leveraged lending generally, U.S. corporate debt markets are screaming the opposite of tightening.

August existing home sales were the strongest since February 2007. National home prices are now rising at double-digit rates. An increasing number of local markets certainly including many in California are showing signs of overheating. Prices at the upper-end in many markets are back to all-time highs. And despite a backup in mortgage borrowing costs from record lows, housing markets have yet to indicate a tightening of Financial Conditions. Clearly benefiting from loose lending conditions, August auto sales were the strongest since 2006.

Anna-Louise Jackson and Anthony Feld of Bloomberg reports More Americans took to the water in new boats this summer, often buying smaller, less expensive models, as the industry is showing signs of a recovery. Purchases of powerboats, which include yachts, pontoons and fishing vessels, rose 18.9% in July from a year earlier, according to Statistical Survey.

Lisa Abramowicz of Bloomberg reports America’s companies, from Apple to Verizon, are saving about $700 billion in interest payments with the Federal Reserve’s unprecedented stimulus. Corporate bond yields over the past four years have fallen to an average of 4.6% from 6.14% in the five years before Lehman Brothers Holdings Inc.’s demise, a savings equal to $15.4 million annually per every $1 billion borrowed. Businesses took advantage of the Fed’s largesse to lock in record low rates, extend maturities and raise cash by selling $5.16 trillion of bonds.  ‘The stimulus was a huge saving grace in the economy overall,’ said J. Michael Schlotman, the chief financial officer at Kroger. The grocery store operator that estimates it’s paying about $80 million less in interest than it would have pre-crisis.

I comment that the Fed’s ongoing stimulus has created unprecented inflation in the most debt ridden of stocks such as Kroger, KR, whose stock value has more than doubled since November 2011. 

The 37 ETFs seen in this Finviz Screener, have risen strongly under US Fed relentless QE monetary policy, and are poised to fall strongly lower on the exhaustion of the US Fed’s and world central bank’s monetary authority, that is as bond vigilantes, begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.75%, and currency traders once again, begin selling Major World Currencies, DBV, and Emerging Market Currencies, CEW, these are XIV, FDN, CARZ, PBS, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, FXR, BJK, PBJ, EFNL, YAO, PPA, PNQI, EZA, KROO, ARGT, EWY, GNW

Jim Sinclair writes of the Wednesday September 17, 2013, money printing operation by the US Federal Reserve in article QE to infinity. QE is in fact debt monetization but central banks do not want to call it that because the historical and traditional understanding of debt monetization is and will in time follows.

I comment that a re-monetization of the world’s only debt-free money, that being gold, is underway. And that the chart of the Gold ETF, GLD, shows that it entered an Elliott Wave 3 up with a 4.4% rise on Wednesday, September 17, 2013; these are the most powerful of all economic waves, generating the bulk of wealth gains. 

Jesus Christ has always been at the helm of the economy of God, Ephesians 1:10, operating in dispensation, that is in active oversight of human economic and political endeavors, for the fulfillment of every age, epoch, era and time period.   

Under his administration the fiat wealth of liberalism has been surging ever higher. With Fed Chairman Ben Bernanke affirming QEternity; it’s provision constitutes passing the Rubicon of sound monetary policy, as evidenced by the trade lower in World Stocks, VT, on Friday September 20, 2013 manifesting as Liberalism’s fated day of instability, with the Market Off ETN, OFF, and Volatility, XVZ, as well as TVIX, VIXY, and VIXM, rising in value.  Peak Prosperity has come via a policy of investment choice in the moral hazard based fiat money system, which is based on schemes of credit and carry trade investing, all designed for investment gain.

Nikolaj Gammeltoft and Cecile Vannucci of Bloomberg report The next drop in U.S. equities may spur a bigger jump in the Chicago Board Options Exchange Volatility Index as investors rush to cover their record bets against the gauge, according to Societe Generale SA. Hedge funds and other large speculators have more than doubled short positions on VIX futures to 189,020 contracts since the end of June. This year’s rally in U.S. stocks has led to a 19% plunge in the VIX, creating profitable strategies to bet against volatility futures. A decline in equities and subsequent increase in share-price swings would bring losses for VIX short sellers, which may drive them to cover the trades, according to Ramon Verastegui of Societe Generale. Increased demand for the contracts will push volatility higher and may exacerbate the stock-market selloff, he said. ‘The concentrated short in the VIX futures is like a red point if you look at a map of the market, signaling potential risk,’ Verastegui, head of engineering and strategy at the French bank, said. ‘A short squeeze in the VIX will have an impact on the volatility market and that can spill over into other markets, accelerating a move down in the S&P.’

 The zenith of liberalism was foretold in the statue of empires, as foretold in Bible prophecy of Daniel 2:25-45, where two iron legs of hegemonic power, would rise to rule the world, these being the British Empire, and the US Dollar Hegemonic Empire, only to experience dissolution into an unstable mixture of ten toes of iron diktat and clay democracy, that is ten zones of regional governance and totalitarian collectivism, this being confirmed by the rise of the Beast Regime of Revelation 13:1-4, to replace liberalism’s Banker Regime.  God’s idea of economy has been, is now, and will ever be one of empire. The Libertarian dream of freedom, and free things like “free prices” for labor, for example, is an illusion on both the liberalism as well as authoritarianism “desert of the real”.  

Under authoritarianism, the schemes of debt servitude schemes, are the order of the day and include such things as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability; all of which enforces austerity.

The details of the US Hegemonic Empire are provided by Robert Wenzel of Economic Policy Journal in the post of Llewellyn H. Rockwell, Jr. article Who are the champions of the common man?

As the country at large endures great economic distress, civilian employment has skyrocketed in Washington, DC, where the average federal worker earns more than double the salary of the average worker in the private sector. The parasite-host relationship that exists between the ruling few and the toiling many is rarely so stark.

It’s no coincidence that Murray Rothbard, was also a pioneer in power-elite analysis. For instance, Rothbard’s essay “Wall Street, Banks, and American Foreign Policy,” published as a small book by the Center for Libertarian Studies, proposes that there might be a teensy bit more to American foreign policy than a disinterested dedication to promoting “democracy.”

Consider just a few paragraphs:

A glance at foreign policy leaders since World War II will reveal the domination of the banker elite. Truman’s first Secretary of Defense was James V. Forrestal, former president of the investment-banking firm of Dillon, Read & Co., closely allied to the Rockefeller financial group. Forrestal had also been a board member of the Chase Securities Corporation, an affiliate of the Chase National Bank.

Another Truman Defense Secretary was Robert A. Lovett, a partner of the powerful New York investment-banking house of Brown Brothers Harriman. At the same time that he was Secretary of Defense, Lovett continued to be a trustee of the Rockefeller Foundation. Secretary of the Air Force Thomas K. Finletter was a top Wall Street corporate lawyer and member of the board of the CFR while serving in the cabinet. Ambassador to Soviet Russia, Ambassador to Great Britain, and Secretary of Commerce in the Truman Administration was the powerful multi-millionaire W. Averell Harriman, an often underrated but dominant force within the Democratic Party since the days of FDR. Harriman was a partner of Brown Brothers Harriman.

Also Ambassador to Great Britain under Truman was Lewis W. Douglas, brother-in-law of John J. McCloy, a trustee of the Rockefeller Foundation, and a board member of the Council on Foreign Relations. Following Douglas as Ambassador to the Court of St. James was Walter S. Gifford, chairman of the board of AT&T, and member of the board of trustees of the Rockefeller Foundation for almost two decades. Ambassador to NATO under Truman was William H. Draper, Jr., vice-president of Dillon, Read & Co.

That’s just half of Rothbard’s analysis of the power elite surrounding just one president’s foreign policy team.

Who has benefited from the American warfare state? Who, that is, apart from those with political connections or government jobs? The question answers itself. Everyone else has suffered from the trillions of dollars looted from them so the Pentagon might have the power to obliterate every conceivable enemy city a dozen times over. We have suffered from increased indebtedness, and – because capital formation is undermined by the squandering of resources in war and in massive diversion of resources to the military sector – lower real wages than we would otherwise have enjoyed. We’ve suffered from the civilian research and development that never occurred because the brains behind it were siphoned into military research. The costs go on and on.

Who angled for the Federal Reserve? The American public, or the bankers themselves? Anyone reading Rothbard knows the answer. It is not reasonable to expect us to believe that in just this one case, an interest group coming together to enshrine its preferences in law was doing so entirely for the public welfare.

The Fed, meanwhile, has not “stabilized the economy,” contrary to the usual propaganda, and in recent years gave rise to a housing bubble that wrecked the finances of a great many ordinary Americans. Then, adding insult to injury, it bailed out – on preposterous and indefensible grounds – some of the most reckless and irresponsible institutions.

What has the Fed’s economic planning accomplished for Main Street? The Fed’s planning, according to David Stockman, was based on the “wealth effect”: if the Fed pushed stock prices higher, Americans would feel wealthier and would be likely to spend and borrow more, thereby stimulating economic activity.

The results? Zero net breadwinner jobs created between early 2000 and early 2007. From 2000 to 2012, there have been 18,000 new jobs created each month. That’s about one-eighth of the growth in the labor force over the same period.This is what the average person is supposed to be so grateful for?

The state, in short, enriches itself at the expense of the public it fleeces, all the while using its influence over education, the media, and culture to persuade the people that all this fleecing is good for them, that taxes are donations, and that bombing foreigners on ludicrous pretexts is “serving your country.” It urges the general public to consider the absence of the state as the most horrifying, inconceivable scenario of all.

The libertarian tears off the mask of the state, revealing it as the wealth-destroying, poverty-enhancing instrument of terror and expropriation it is. The advances that constitute civilization, libertarians argue, have resulted not from the orders of hangmen and other executioners, or the social planning of bureaucrats and academics, but from human beings cooperating voluntarily in ways that will amaze and astonish anyone who opens his eyes to see them.

And that makes libertarianism the most liberating political philosophy of all.

In rebuttal to Llewellyn H. Rockwell, Jr, I state that God, and His Son Jesus Christ are sovereign over all; that there are no sovereign individuals, and that there is no human action, as there is only the dispensation of Jesus Christ, Ephesians 1:10, in all things, and that it is Jesus Christ who appoints power structures under both liberalism as well as under authoritarianism. God operates in empires; always has, and always will. He has a King, that being Jesus Christ, and a Kingdom, and it is coming by the Revelation of Jesus Christ, Revelation 1:1, where we are witnessing “those things which must shortly come to pass”, before it begins as the 1000 year rule and reign of Jesus Christ on planet earth. 

I’m rejoicing because I know the truth, and it has set me free from the deception of human philosophy of Libertarianism, which is simply just another experience in will worship, that is the worship of human things desired, as communicated by the Apostle Paul in Colossians 2:23. 

Now under authoritarianism, the only form of genuine wealth will be diktat and the physical possession of gold, as the diktat money system becomes fully established enforcing austerity; where debt servitude schemes, are the order of the day and include such things as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability.

4) … Regional governance will arise out of the failure of nation investment as well as out of the collapse of the US Dollar and the Rise of the Petro Yuan

Deviant Investor provides the Bill Fleckenstein quote Money-printing cannot solve problems. It doesn’t really give us much gross domestic product growth, as we have seen. It hasn’t really helped on the employment front either, as job growth is meager (of course, it is also hampered by other government policies). What money-printing has accomplished is to push the stock market high enough to cause people to once again become delusional in their expectations” … and Deviant Investor relates To the extent we rely upon the fantasies of ever-increasing debt, money printing, and credit bubbles, we are vulnerable to financial collapses.

Nation Investment, EFA, is now peaking. Yet out of a soon coming Financial Armageddon, a global credit bust and worldwide financial system breakdown, foretold in Bible Prophecy of Revelation 13:3-4. regional governance will rise as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, for regional security, stability, security and sustainability.  

Zero Hedge reports Canadian Billionaire Investor Ned Goodman in video report relates The dollar is about to be dethroned as the world’s de facto currency. The President and CEO of US $ 9.6 billion Dundee Capital markets sees the end of the US dollar as the world’s reserve currency with the rise of the Petro Yuan, as China is replacing the USD with oil being traded in the Renminbi, that is the RMB, or Yuan, CYB.  Dan Collins in Financial Sense writes Rise of the PetroYuan. No more King Dollar.

US Dollar hegemony accelerated when massive money printing took place after 2001. As the U.S. government began buying its own bonds with money it printed to keep interest rates low for the domestic market, it dropped the bond yields of countries like Saudi Arabia and China, reinforcing the petro-dollar as a means of global growth and trade.

Now, history is being written in the East, and the petro-yuan will be a driving factor in the rise of the king of the east, who presented in Bible prophecy, will come with a 200 million man army to the Battle of Armageddon.

5) … A Soon Coming Global Credit Bust And Financial System Breakdown Will Lead To The Establishment Of a New Global Religion, Specifically A One World Religion Unifying Mankind.

Libertarian Dr. Ron Paul keynoted the Fatima Center conference  “Fatima: The Path to Peace”, held in Niagara Falls, Ontario, Canada on September 8-13, 2013. Other speakers included John McManus, president of the John Birch Society, and William F. Jasper, senior editor of the JBS publication New American. John McManus’ presentation was titled “We’re being led to a one world government and a one world religion”.  

It was Milton Friedman who received the Nobel Peace Prize for his Free To Choose economic doctrine that provided Liberalism’s bedrock floating currency regime and which served as the basis for interventionist policies of monetary inflation by the world central banks.  Out of the ruin of a soon coming global credit bust and financial system breakdown, a world sovereign, that is a world leader, and a world seignior, that is a top dog banker who takes a cut, will unify the world in the establishment of a one world religion establishing Authoritarianism’s beast regime of diktat.    

The first attempt to establish a one world religion was by humans coming together with a single language and migrating from the east, that is the land of Shinar to build the Tower of Babel, Genesis 11.  Mitt Vittnesbord writes on the emergence of a one world religion. The word Babel is from the Hebrew Ba-bhel, from Akkadian ba-b-ilu “gate of god.” Bab is the semitic word for gateway or portal and el means deity or god. So Bab-il means gate or portal to god. These people were attempting to unite into a powerful ecumenical force.

Francisco Toro of Caracas Chronicles writes of a state religion in Journey into the heart of Chavista Chronicles. Because chavismo, deep-down, isn’t really a political movement. Its essence is mystical, afro-caribbean, rooted in a form of spirituality that nobody in Germany has any kind of reference point for. What Hugo Chávez brought to Venezuela isn’t a “dictatorship” in any sense that would make sense to Erich Honecker or even Nicolae Ceaușescu. What we have is the takeover of the state, and much of the public sphere, by a new kind of religious cult that borrows heavily from the language of the political left to create a new devotional system.

I reply that 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, 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 this monster, as presented in Revelation 13:3-4.

Through this soon coming financial apocalypse, the sovereignty and seigniorage of the nation state banker regime will fail and a fierce individual committed to policies of regional diktat, and schemes of debt servitude, will come to rise to rule the Eurozone, as foretold in bible prophecy of 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 call for emperor worship, Daniel 9:25, and who will introduce the charagma money system, that is the 666 one world currency system, where all will be required to take the Mark, in order to buy or sell, Revelation 13:18.

John the Revelator in Revelation 13:4, foretells that people will worship the Dragon, that is Satan, Lucifer, the Devil, and the Beast as 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.

6) … A potential government shutdown looms for October 1, 2013

Andre Dimon of WSWS reports The House also passed a bill that would link continued government operations to the removal of funding for the Obama administration’s Affordable Care Act, setting the stage for a potential government shutdown on October 1.

Five Years Out From Financial Crisis, Liberalism Has Produced Peak Prosperity With World Stocks, Nation Investment, and Global Producers Rising To All Time Highs

September 14, 2013

Financial Market Report for the week ending Friday September 13, 2013

1) … Mike Mish Shedlock writes End of U.S. Imperium? Finally? We should all hope so.

I commented on his article relating lease do not include me in the “all hope so”. That end, will not come through Congressional vote. God will soon terminate US Imperium only to raise up Euro Imperium, where a Sovereign, presented in Revelation 13:5-10, and a Seignior, Revelation 13:11-18, that is a prophet and banker, to rule first Europe, and then the entire world from Jerusalem as presented in Daniel 9:25.

Your Austrian Economics moralizing, is spectacular denial of the truth of bible prophecy. I don’t want any morals or ethics coming out of the will worship of any human philosophy or any bankrupt human religion. My values are found in Reformed New Testament doctrine, and my life experience is found in the virtues and ethics are found in the Economy of God, Ephesians 1:10.  The Statue of Empires found in Daniel 2:25-45, provides historical proof and presents mankind’s destiny that there be truly hegemonic empires, the last one was the iron leg of the the British Empire, and the current iron leg is the United States, which will fall to the Ten Toed Kingdom of regional government.

Accompanying the rise of the Beast System as foretold in Revelation 13:1-4, which is replacing the Milton Friedman Free to Choose Banker Regime, that commenced beginning with the Greek Bailout I in May 2010, and intensified with the rise of the Interest Rate on The US Ten Year Note, ^TNX, to 2.1% in May 2013, to 2.8% at the end of August 2013, there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and a third world war, foretold in Ezekiel 38.

Illuminati Prophet Albert Pike had Luciferian insight that there would be three world wars.   D. Robert Singer writes the article The Modern State of Israel: Providence, Miracle, or What Really Happened.  In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.

ThreeWorldWars.com writes The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view. [1] [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15,

1871.

Bible Prophecy there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and that following this there will be a third world war as foretold in Ezekiel 38, which will be the basis for the rise to power of Europe’s Sovereign, Revelation 13:5-10, and Revelation 13:11-18, to their power in Jerusalem, as they promote a middle east peace plan, Daniel 9:25.

With the soon coming war in Syria, and all kinds of economic and political implications in my life, I ask myself what is it that want?

Do I want freedom? Do I want free prices, a free market economy, More time? More opportunity to use my talents? Protection of my personal property? More relationships or better relationships?

The only thing I want is to do the Lord’s Will, which is to keep his Word of endurance, and shrink not from His Name, that is presence and authority.

Andrew Oliver reports Massachusetts housing inventory: very little available at lower prices The median price for a home in Salem is 326,000. I relate that the 3 Bedroom and 2 Bath home at 9 Cottage St, Salem, MA 01970 presented by Redfin for $339,900 typifies homes in Salem. .

Benson Te writes US Equity Markets: The Deepening Wile E. Coyote Moment the cost of servicing debt has been climbing alarmingly faster than the economy’s ability to pay them (via real economic growth) and from Ponzi finance dynamics, where the liabilities are growing far more than the increases in asset prices.

I comment that the Apostle reveals in Ephesians 1:10, that Jesus Christ is acting in dispensation, that is in oversight of all things political and economic, bringing completion and fulfillment to every age, epoch, era, and time frame.

Liberalism was the era of credit, that is trust, that supported monetary inflation. Jesus Christ terminated Liberalism in August 2013, by enabling the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher, and currency traders to call the Euro, FXE, and other major currencies, as well as the Emerging Market Currencies, CEW, lower since mid August 2013, on competitive currency devaluation, causing debt deflation, in World Stocks, VT.

Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4, and will usher in Authoritarianism’s era of debt servitude, as a result of monetary deflation. Liberalism featured credit and a moral hazard based prosperity; but Authoritarianism features a debt servitude based austerity.

2) … Financial market trading for the week ending September 13, 2013

On Monday September 9, 2013, Volatility, XVZ, traded lower, as the stock market turned to Risk On, forcing the Risk Off ETN, OFF, to trade lower, as Reuters report Wall Street rises after Chinese data, deals.  Stocks rose on Monday to extend last week’s advance as upbeat Chinese data and merger activity boosted sentiment, and concerns eased about an imminent Western strike against.

The chart of the S&P 500, $SPX, shows a rise to 50 day moving average.

Nation Investment, EFA, rose to its previous high; nations and regions traded higher,

EFA, 1.4, a new rally high

EPP, 1.5%, a new rally high

YAO, 2.1, a new rally high.

ECNS, 1.7, a new rally high

EWA, 1.5, a new rally high.

KROO, 1.5, a new rally high.

EWT, 1.2, a new rally high.

EWY, 1.2, a new rally high

ENZL, 1.0, a new rally high

THD, 6.3

IDX, 6.2

EWM, 3.6

EPHE, 3.1

EWS, 2.0

EWSS, 1.2

EWJ, 2.6

JSC, 2.8

VTI, 1.1, with IWM, 1.6

EEB, 2.6, a new rally high

RSX, a new rally high

ERUS,  2.7, a new rally high

INP, 3.2

SCIN, 3.0

EWZ, 2.2

EWZS, 2.2

EWW, 3.5

EWUS, 1.3

EZU, 0.9

EFNL, 1.8, a new rally high

GREK 3.6

EIRL, 0.8

EWI, 1.9

EWP, 1.0

EWGS, 1.3

EWD, 1.4

NORW, 1.2

ECH, 2.5

TUR, 6.1

EZA, 1.5, a new rally high

EWUS, 1.2, a new rally high

ARGT, 2.5, a new rally high

VT, 1.4, a new rally high,

EEM 2.8, a new rally high

Sectors traded higher

CHII, 1.3

FXR, 1.6

XLI, 1.3

XTN, 1.6

SLX, 2.8, a new rally high, taking PICK,2,3,  KOL, 3.0, and XME,2.4  higher.

IEZ, 1.6, a new rally high

OIH, 1.6, a new rally high,

XOP, 1.2, a new rally high,

PSCE, 1.5, a new rally high

SPHB, 1.7, a new rally high

FLM, 2.2, a new rally high

IGV, 1.4, a new rally high

IBB, 2.0, a new rally high

TAN, 2.4, a new rally high,

BJK, 2.1, a new rally high,

SMH, 1.3, a new rally high,

FDN, 1.2, a new rally high

XIV, 3.8

XRT, 1.6

RZV, 1.7,

WOOD, 1.5

IGN, 1.4

RXI, 1.1

PBS, 1.0

Yield bearing sectors traded higher

SEA, 1.7, a new rally high

PSP, 1.5, a new rally high

DBU, 1.3,

CHIX, 2.8, a new rally high

FEFN, 2.3, a new rally high, led by SHG

EMFN, 1.5

EPI, 3.3

AUSE, 1.5

EUFN, 0.8

IAI, 1.1

KCE, 1.0

RWW, 0.8

KRE, 0.5

IXG, 1.5

Robert Wenzel of Economic Policy Journal writes So Much for Congress: Kerry Gives Assad One Week Deadline. The Guardian reports: The US secretary of state has said that President Bashar al-Assad has one week to hand over his entire stock of chemical weapons to avoid a military attack. But John Kerry added that he had no expectation that the Syrian leader would comply.

Kerry also said he had no doubt that Assad was responsible for the chemical weapons attack in east Damascus on 21 August, saying that only three people are responsible for the chemical weapons inside Syria – Assad, one of his brothers and a senior general. He said the entire US intelligence community was united in believing Assad was responsible.[…]Kerry said Assad might avoid an attack if he handed every bit of his chemical weapons stock, but added that the Syrian president was not going to do that.[…]

Kerry said the Americans were planning an “unbelievably small” attack on Syria. “We will be able to hold Bashar al-Assad accountable without engaging in troops on the ground or any other prolonged kind of effort in a very limited, very targeted, short-term effort that degrades his capacity to deliver chemical weapons without assuming responsibility for Syria’s civil war. That is exactly what we are talking about doing – unbelievably small, limited kind of effort.”

And Robert Wenzel of Economic Policy Journal writes Rand Paul’s Neocon Meetings.  In a Politico blog post on Rand Paul’s position on NSA spying on Americans, I found this side report quite interesting: Paul has had meetings with, among others, Republican mega-donor Paul Singer, a pro-Israel hardliner, and former Mitt Romney adviser Dan Senor. Hmm, Dan Senor. Now that’s a very smart guy who could provide very useful information to Rand on how to run an early presidential campaign and who has the connections in MSM to make sure Rand is treated correctly. Has Politico provided us with an important clue as to who is providing valuable guidance to Rand.

I comment Dan Senor is a political advisor, and zionist of zionists, advocating for war in Syria. His profile on NNDB, communicates that he is a zionist of zionists, as that he is a founding member together with Robert Kagan, a founder of PANC, and Bill Kristol, a correspondent with The Weekly Standard, at The Foreign Policy Initiative. He was a Senior Advisor for Romney for President and was a Spokesman for Coalition Provisional Authority in Iraq. He married Campbell Brown on April 2, 2006, then weekend anchor of The Today Show on NBC.

David Edwards of Raw Story writes Bush neocon Dan Senor worries that Syria vote means that Congress won’t back Iran strike.

On Tuesday, September 10, 2013, Volatility, XVZ, traded lower, The chart of the S&P 500, $SPX, manifested a strong rise above its 50 day moving average.  Liberalism has achieved Peak Prosperity as both World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rose to new all time highs, taking Major World Currencies, DBV, higher to strong resistance, as the Yen, FXY, traded lower, as UK Stocks, EWU, EWUS, such as LYG, rose to rally highs taking the British Pound Sterling, FXB, higher, and as Australia Stocks, EWA, KROO,such as WBK, rose to rally highs taking the Australian Dollar, FXA, higher, as investors cheered the possibility of averting a Western military strike against Syria and China’s economy showed strength, with Bloomberg reporting China August industrial output rises 10.4%.

Nations and regions trading higher included

VT, 1.0

EFA, 1.3

EEM, 0.8

EEB, 1.4

EZU, 1.7, a new all time high

EWW, 3.5

EWD, 1.5

NORW, 1.6

EFNL, 1.5, a new all time high

EWN, 1.8

EWP, 1.5

EWGS, 1.3

GERJ, 0.9

GREK, 0.6, a new rally high

EIRL, 0.4, a new all time high

EPP, 1.5

EWY, 0.8,

EWT, 0.3

IDX, 2.1

ENZL, 1.0

EWA, 1.6

KROO, 1.8

YAO, 1.3, a new all time high

NKY, 0.9, a new rally high

INP, 0.9

SCIN, 0.8

ARGT, 2.6, a new all time high

TUR, 1.8

VTI, 0.7, with IWM, 1.0

Sectors trading higher included

TAN, 1.2, a new rally high,

XIV, 3.6,

SMH, 1.8, a new rally high

FLM, 2.5, A new all time high,

BJK, a new all time high,

PPA, 1.1

FDN, 1.3, a new all time high

IGV, 1.2, a new all time high,

RXI, 1.0

RZV, 0.9

WOOD, 0.8, a new all time high

PBS, 1.2, a new all time high

XTN, 2.6, a new all time high

FXR, 1.5, a new all time high

XLI, 1.5, a new all time high

PSCI, 1.4, a new all time high

CHII, 1.6, a new rally high

PICK, 2.6

XME, 0,6

COPX, 0.4

Yield Bearing Sectors trading higher included

PSP, 0.6, a new all time high

SEA, 0.6, a new all time high

AUSE, 1.9

EPI, 1.7

FEFN, 1.3

CHIX, 1.7, a new rally high

EUFN, 1.0, a new all time high

EMFN, 0.8

RWW, 1.5

IAI, 1.6, a new all time high

KCE, 1.7

IXG, 1.2

Sectors trading lower included

GDX, -3.9, GDXJ, -4.3 and SIL, -3.1, SILJ, -2.8, SSRI, -3.9

Mail Online reports Now Putin calls the shots on Syria: Russia tells U.S. to call off strikes before chemical weapons deal.  USA Today reports Syria will sign arms ban, open storage sites and the Washington Post reports Syrians divided on support for Russian move but appear to agree it has undercut Obama

Tehran Times reports  Iranian official, Syrian FM discuss Russian initiative. Damascus and Tehran believe that Russia’s proposal must put an end to hostilities against the Syrian people and to measures [which are taken] to support terrorist and Takfiri groups in the country,” Iranian Deputy Foreign Minister Hossein Amir-Abdollahian said in Moscow on Tuesday following a meeting with Syrian Foreign Minister Walid al-Muallem, Press TV reported.“Damascus and Tehran believe that although Moscow’s initiative provides all sides with an appropriate political opportunity to resolve the Syrian issue peacefully, the entire region must become free of [all kinds of] weapons of mass destruction,” Amir-Abdollahian added.

Jason Ditz of Antiwar writes Kerry still pushing for Syria War, says US won’t wait long.  He argued that the US strikes were vital and that the US needed to increase aid to the rebels, declaring that if Assad wins Syria could give rise to terrorist groups “worse” than al-Qaeda.

There is no human action as Libertarians such as Justin Raimondo of Antiwar posts We beat the War Party. Rather, there is only Jesus Christ moving to accomplishing the Economy of God, as described by the Apostle Paul in Ephesians 1:10, specifically to accomplish God’s purposes as foretold in Bible Prophecy, as in today’s case, a soon coming war in Syria, where Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1; and which will serve to draw Russian out military forces to commence World War III, specifically to put hooks in Russia’s jaws, and lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4.  Duane and Shelley Muir of Signposts of the Times write Starting World War III

In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.

Through the US Federal Reserve’s “crisis aid”,  losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America.  Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.

There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.

The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.

Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and  Emerging Market Currencies, CEW.  Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.

On Wednesday, September, 11, 2013, Volatility, XVZ, traded lower.  Italy, EWI, Finland, EFNL, Spain, EWP, Ireland, EIRL, Germany, EWG, and Greece, GREK, traded higher, taking the Eurozone, EZU, to a new rally high. Poland, EPOL, Israel, EIS, Norway, NORW, Sweden, EWD, and the UK, EWU, traded higher.

On September 11, 2013, the world passed through an epic pivot point on the topping out of stock wealth, VT, as well as exhaustion of the world central banks’ monetary authority to stimulate global growth and trade, as the US Federal Reserve has crossed the Rubicon of sound monetary policy and has made “money good” investments bad, on the rally from defeat of Obama’s Push War In Syria, and as this upcoming Wednesday the Fed will reveal its much-anticipated “tapering” plans.

The most toxic of debt, such as Fidelity’s Distressed Investments, FAGIX, specifically assets taken in by the US Federal Reserve under QE1, Junk Bonds, JNK, Emerging Market Bonds, EMB, and Eurozone Debt, EU, have been the credit basis of Liberalism’s Grand Finale Stock Rally that that began June 2012 with a Euro Yen, EUR/JPY, currency carry rally, and attained its zenith on September 11, 2013, at 133, with Nation Investment, EFA, World Stocks, VT, Eurozone Stocks, EZU, and Global Industrial Producers, FXR, all topping out in value.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, have been trading lower since May 2013, as competitive currency devaluation is underway on debt deflation, in particular World Treasury Bonds, BWX, and Mortgage Backed Bonds, MBB.

The seigniorage, that is the moneyness of the Milton Friedman Free To Choose Floating Currency Regime, based upon national sovereignty of democratic states, failed on May 21, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, stimulating currencies to fail, giving confidence to the concept that regionalism is rising to replace capitalism and European socialism and Greek Socialism, with the result being that Large Cap Dividend Stocks, Excluding Financials, DTN, such as S&P Telecom, IST, Utilities, XLU, and Pharmaceuticals, PJP, are no longer underwriting Dividend Growth, VIG.

The global debt bubble served to leverage up the most speculative of stocks, such as the vice stocks held in the Fidelity Mutual Fund VICEX, the Casino and Resorts ETF, BJK, as well as Small Cap Value Shares, RZV, such as PSUN, with the result being that the dynamos of global growth and corporate profitability are winding down, and the dynamos of regional security, stability and sustainability are winding up regionalism, and terminating the concept of investment choice.

Investors should start thinking an investment strategy that is based upon the concept that regional leaders, such as the EU Finance Ministers, and regional bodies such as the ECB, are going to introduce regional governance with new taxes, bank deposit bailins, and capital controls.

The topping out of the EUR/JPY at 133 on September 11, 2013, has opened the door to the short selling opportunity of a lifetime where one should commence selling into rallies as they appear, as in a bull market one buys in dips, but in a bear market one sells into pips.

The 35 ETFs and Stocks seen in this Finviz Screener are excellent short selling opportunities; these being XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP,  TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, SPHB, FXR, IGN, BJK, PBJ, EFNL, YAO, NKY, SEA, IX, PRAA, GNW, LYG.

One should consider using the Market OFF ETN, OFF, for the basis for one’s short selling account, as well as buying small amounts of the Gold ETF, GLD, as it dips below 130; and one should consider dollar cost averaging the purchase of physical gold, that is gold bullion as it dips lower, as gold is in a bull market.

On Thursday, September 12, 2013, Volatility, XVZ, (also seen in ^VIX) and the Market Off ETN, OFF, traded higher, as the Euro Yen currency carry trade, EUR/JPY, traded lower, inducing Gold, GLD, 3.0% lower, and Silver, SLV, 5.5%, lower, taking Gold Miners, GDX, GDXJ, Silver Miners, SSRI, SIL, SILJ, lower. Sectors trading lower included Solar, TAN, Automobiles, CARZ, Small Cap Industrials, PSCI, and Transportation, XTN, as well as Metal Manufacturing, XME, Steel Producers SLX, Coal Miners, KOL, Industrial Miners, PICK, and Copper Miners, COPX.  World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, traded lower.  European Financials, EUFN, and the Eurozone Stocks, EZU, traded lower. China Financials, CHIX, traded lower, inducing China, YAO, lower. Mexico, EWW, Indonesia, IDX, Philippines, EPHE, Thailand, THD, Peru, EPU, Chile, ECH, Argentina, ARGT, and India, INP, traded lower.

ETF Daily News reports Higher Interest Rates Are Disrupting The Job Market

Tabinda Hussain of ValueWalk writes EUR Likely To Fall As Selling Pressure Looms Societe Generale’s latest hedge fund monitor sees some troubling signs for the Euro, FXE, ahead, the report expects selling pressure to return to euro soon as monetary policy in U.S. and Europe takes decidedly different course. Currently hedge funds are net buyers of euro against the dollar

Benson te rightly asks Who says stock markets reflect on the state of the economy European stocks represented by the STOXX 50 have been rising since the last quarter of 2011 and have presently been drifting at 2 year highs

Even as the Eurozone has been mired by a continuum of negative growths (based on annual and quarter growth) for the entire 2012 until the 1st quarter 2013

GDP annualized

GDP by quarter

The parallel universe and the divergence between stock market performance and economic activity such a GDP, began to narrow ever so slightly on Thursday, September 12, 2013.

Jesus Christ acting in dispensation, Ephesians 1:10, that is working to fulfill and complete every age and era, brought liberalism’s moral hazard based investment prosperity to its zenith on September 11, 2013, on a Euro Yen currency carry trade, and on a Renminbi/Yuan currency carry trade, and now money, that is currency and stock wealth, is dissipating as trust waines in the authority of nation states and central bankers. The result being that the fiat money system, which has been the driving factor for all economic and political activity since 1971 when President Nixon followed Milton Friedman’s advice and took the US off the gold standard, is being replaced by the diktat money system.

Through the failure of money, that is currency and stock wealth, the new paradigm of authoritarianism and trust in regional governance, totalitarian collectivism and nannycrats is commencing, by Jesus Christ laboring in the household administration of God, Ephesians 1:10, to produce a new epoch and time period. There is neither choice nor human action, there is only destiny and fate coming through the movement of the Spirit of God in the lives of people, producing the will of God in all things.  It is not as Ludwig von Mises relates “Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”

Liberalism was the era of investment choice powered by credit, and was shaped by great leaders;  authoritarianism is the era of diktat powered by debt servitude, it will also be shaped by great leaders.

Time Magazine always comes up timely and thought provoking articles. Time Magazine’s cover for the September 23rd issue states How Wall Street Won. And Chris Rossini writes in Economic Policy Journal, The Stalwart thinks that it’s different this time around. You’d think Keynesian Joe would be happy with the big bold letters. Wall Street did “win” right? They got their bailouts, and their fat bonuses, at the taxpayer expense. They also got a slew of QE’s from The Fed to help artificially pump up the stock market again. And let’s not forget that The Fed also “saved the system”. With such a victory, what problem can Weisenthal have? Well, right underneath the prominent headline, it mentions the 2008 crash, and how “It could happen all over again”. Weisenthal will have none of that dispirited talk!

Can’t everyone just wise up and understand just how powerful The FED is? They can counterfeit $1 Trillion per year out of thin air? Who else has that kind of power?

You see, according to Joe, this time is different. This time, the economic laws of supply and demand have been removed from existence. Cause & Effect too…they’re gone. This is typical thinking for those who operate without theory. Keynesians, like Weisenthal, just focus on the latest data (and anyone who reads Joe knows that he’s like a kid in a candy store anytime numbers are released). There’s no perception past that data. This is why Keynesians are always “shocked” when the downturn occurs. Once again, those of us who do see it coming, will have to weather yet another tough economic downturn. And we’ll have to do it with our “shocked” antagonists telling the world that “no one saw it coming.” It’s getting old.

Siite refers us to the Time Media Kit Biographies of Time Magazine Founder Henry Luce. Henry R. Luce, co-founder of TIME magazine, was described in 1961 by Current Biography as “the giant of twentieth-century American journalism.” He served as editor-in-chief of all TIME Inc. publications until 1964, when he resigned and became editorial chairman of TIME Inc.

The camaraderie Luce felt with Hadden continued to develop as the two enrolled together as members of the class of 1920 at Yale University. With Hadden as chairman, Luce served as editor of the Yale Daily News. Luce and Hadden entered Yale’s Reserve Officers Training Corps and both rose to the rank of second lieutenant. Luce often spoke of the countless nights he spent at Camp Jackson in South Carolina with Hadden discussing journalism and the need for a new kind of newspaper or magazine to help educate a misinformed populace. Luce was voted “most brilliant” of his class at Yale and, after graduation, parted ways with Hadden to study history at Oxford University for a year.

Luce returned to the U.S. and accepted a job as a cub reporter at the Chicago Daily News. He joined Hadden in Baltimore in December 1921 where they worked side by side as reporters for The Baltimore News. Nightly discussions of the concept of a newsmagazine led the two, both age 23, to quit their jobs in 1922. Having raised $86,000 of a $100,000 goal, the first issue of TIME was issued on March 3, 1923. Hadden became editor and Luce business manager. With regards to this arrangement, Luce said, “When the Time came to decide who was editor, Brit Hadden just had to be it, so I took the business side.” Luce and Hadden annually alternated year-to-year the titles of president and secretary-treasurer.

Upon Hadden’s sudden death in 1929, Luce assumed the role of editor of TIME magazine.

Henry Luce died in March of 1967 and was remembered by Life magazine as “the most successful editor of his TIME, a great popularizer of ideas, a man who revolutionized modern journalism.”

Wikipedia relates The group Skull & Bones is featured in conspiracy theories, which claim that the society plays a role in a global conspiracy for world domination. Theorists such as Alexandra Robbins suggest that Skull and Bones is a branch of the Illuminati.[20]  The yearbook listing of Skull & Bones membership for the 1920 delegation included co-founders of Time magazine, Briton Hadden and Henry Luce.

Members are assigned nicknames (e.g., “Long Devil”, the tallest member, and “Boaz”, a varsity football captain, or “Sherrife” prince of future). Many of the chosen names are drawn from literature (e.g., “Hamlet“, “Uncle Remus“), religion, and myth. The banker Lewis Lapham passed on his nickname, “Sancho Panza“, to the political adviser Tex McCrary. Averell Harriman was “Thor“, Henry Luce was “Baal“, McGeorge Bundy was “Odin“, and George H. W. Bush was “Magog“.[23]

In the 2004 U.S. Presidential election, both the Democratic and Republican nominees were alumni. George W. Bush wrote in his autobiography, “[In my] senior year I joined Skull and Bones, a secret society; so secret, I can’t say anything more.”[24] When asked what it meant that he and Bush were both Bonesmen, former Presidential candidate John Kerry said, “Not much, because it’s a secret.”[25][26]

The society’s current class meets every Thursday and Sunday night during their senior year.[27]

On Friday September 13, 2013, The Interest Rate on the US Ten Year Note, ^TNX, closed at 2.9%. The EUR/JPY closed at 132.02, down from its mid week high of 133.

Sarika Gangar and Veronica Navarro Espinosa of Bloomberg report: “Verizon Communications Inc. and Ecopetrol SA are leading the busiest week ever for dollar- denominated bond sales. Corporate borrowers have issued $80.1 billion of debt this week, surpassing the previous record of $60.4 billion set in March 2012. Verizon’s unprecedented $49 billion offering followed a $2.5 billion sale by Colombian oil producer Ecopetrol and $2.42 billion of subordinated debt from Citigroup Inc. that removes the last vestiges of its government bailout during the financial crisis.”

Puerto Rico, like the nations of Chile, ECH, Peru, EPU, is a failed democracy and has no fiscal or financial seigniorage, as Laura Marcinek and Michelle Kaske of Bloomberg report Popular, Puerto Rico’s biggest bank, extended a three-day slide after the island’s economy shrank and yields on the government’s debt rose past 10%..The shares have declined 15% since their two-year high on Aug. 20. Chief Executive Officer Richard Carrion has sought to rid Popular of bad loans after a $935 million U.S. bailout in 2008. The local economy contracted 5% this year through July, the most since February 2010. Puerto Rico’s bonds rank one step above junk, and yields have soared amid doubt about the government’s ability to carry more debt. Popular’s bailout debt is the largest still outstanding in the Troubled Asset Relief Program’s capital purchase fund. It’s almost three times more than the second-largest debtor, Puerto Rico’s First BanCorp, which owes $254 million.

3) … On Friday September 13, 2013, five years out from the financial crisis, liberalism has produced peak prosperity with World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rising to all time highs.

The collapse of the Investment Bank Lehman Brothers occurred five years ago, on September 15, 2008, and brought to the surface the global financial crisis. In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.

Through the US Federal Reserve’s “crisis aid”,  losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America.  Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.

This week margin credit drove World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, to their all time highs.  In the US, VTI, the Russell 2000, IWM, and the S&P 500, SPY, rose for all practical purposes to their all time highs.  It has been margin credit coming from the leveraged speculative investment community, specifically Regional Banks, KRE, such as RF, the Too Big To Fail Banks, RWW, such as BAC, Asset Managers, such as BlackRock, BLK, Stock Brokers, IAI, such as ETFC,  as well as a topping out of the Euro Yen currency carry trade, that is the EUR/JPY, that has given seigniorage, that is moneyness, to the Russell 2000, IWM, and the S&P 500, SPY, as is seen in the ongoing combined Yahoo Finance Chart of  IWM, KRE, SPY, and RWW. Of note, Biotechnology, IBB, Casinos and Resorts, BJK, and Semiconductors, SMH, soared this week, as Volatility ETF, XVZ, and the Market Off ETN, OFF, traded near their all time lows.

There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.

The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.

Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and  Emerging Market Currencies, CEW.  Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.

4) Summary thoughts on Bible Prophecy and Syria.

If God’s Word of Bible Prophecy be true, Russian President Vladimir Putin who op-ed in The New York Times about Syria, will have to eat his words, “We must stop using the language of force and return to the path of civilized diplomatic and political settlement,” as Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1, and as God will put hooks in Russia’s jaws, and will lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4. Perhaps one might consider reading Duane and Shelley Muir of Signposts of the Times who appropriately write Starting World War III.

Bloomberg reports Hoyer Says Obama Could Strike Syria Without Congress Vote. The second-ranking House Democrat said President Barack Obama has the authority to use military force against Syria without returning to the U.S. Congress for approval should diplomacy fail to compel Syria to surrender its chemical weapons arsenal. Democratic Whip Steny Hoyer of Maryland said neither he nor House Minority Leader Nancy Pelosi “believe the president is required to come to Congress in this instance, and could act on his own.” He made his comments in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Bloomberg reports Washington Leadership Vacuum Raises Risks of Shutdown. President Barack Obama couldn’t get Democrats to go along on Syria. House Speaker John Boehner couldn’t get fellow Republicans to go along on a budget bill. The one man who has proven he can cut deals with the White House, Senate Republican leader Mitch McConnell of Kentucky, is consumed with a tough re-election bid. It’s enough to have Americans asking: Who’s running Washington.

Jesus Christ Is Terminating The Old Things Of Liberalism And Introducing The New Things Of Authoritarianism

September 8, 2013

Financial market report for the week ending August 6, 2013

1) … Jesus Christ has completed the economic and political paradigm of liberalism and is introducing that of Authoritarianism.

Liberalism’s dollarization scheme of credit is failing. Bloomberg reports Asian bonds tumble below par in capital flight. Asia dollar-denominated bonds have dropped below par for the first time since 2011 as investors pull money out of the region amid concerns that growth is slowing and as currencies from the rupee to rupiah plunge. Average prices of company debentures in the region fell to 98.61 cents on the dollar on Aug. 22, the least since October 2011, Bank of America Merrill Lynch indexes show. Dollar bonds globally have held above 100 cents since September 2009. Both investment- and non-investment-grade debt in Asia were below par on Aug. 22. The last time that happened was in September 2008, when Lehman Brothers Holdings Inc. collapsed. Investor sentiment toward Asia is shifting as economic growth in China slows and currencies in India and Indonesia — the two countries with the biggest external funding needs in the region — plunge. About $44 billion has been pulled from emerging-market stock and bond funds globally since the end of May, data provider EPFR Global said on Aug. 23. “You risk being swept away by fund outflows even if you buy bonds from the best companies in Asia,” said Ben Bennett, a global credit strategist in London at Legal & General Investment Management, which manages $670 billion. “You’d need to be very brave to add credit risk before currencies show signs of stabilization.”

And a complete hemorrhaging of the Milton Friedman Free To Choose Floating Currency Regime has commenced, as Andrew England and Robin Harding of FT report in article Call for aggressive action over emerging markets crisis at conclave of central bankers at Jackson Hole. South African finance minister Pravin Gordhan spoke of the “inability to find coherent and cohesive responses across the globe to ensure that we reduce the volatility in currencies.” And Agustin Carstens, Mexico’s central bank governor said the “volatility of [capital] flows has been very pernicious.”

Sam Ro of Business Insider reports The meltdown of the 4 worst emerging market currencies in 2 charts. Foreign selling of emerging market assets has caused the currencies of many developing economies to depreciate vis-à-vis the U.S. dollar). Among large developing economies, the worst performing currencies over the past three months have been the Turkish lira, which has weakened about 10 percent against the greenback, the Indonesian rupiah and the Brazilian real (both down about 15 percent or so). The Indian rupee has plunged 20 percent, and it nosedived to an all-time low against the dollar this week. What these countries have in common is that they each run current account deficits at present.

With the failure of not only credit, but also of currencies, Jesus Christ, acting in dispensation, that is the oversight of all things economic and political, Ephesians 1:10, is completing the old things of liberalism, and is establishing the new things of authoritarianism.  

New dynamos are in operation. The dynamos of corporate profit and global growth were based upon investment opportunities in sovereign nation states, are powering down; now the dynamos of regional security, stability and sustainability, are powering up, reflecting responsibilities to regional authority. The emergent solutions came from markets opportunities, are snuffed out by top-down, elite-driven commands.  

A new seigniorage, that is a new moneyness, is developing. The seigniorage of investment choice, is waning; and the seigniorage of diktat is gaining strength. Robert Stevens of WSWS reports  Euro zone hatches plan to wring further billions from Greece. According to a report, the EU, ECB and IMF sent an email to the Greek government “insisting on liquidating state enterprises and dismissing their employees without compensation.”

A new trust is emerging. Gone is trust in bankers, carry trade investing and credit, in particular Treasury debt, to increasing trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude, growing to the point of deification of regional governance, as is presented in Revelation 13:3-4, where the people’s trust comes to constitute worship. There be no more citizens or patriots of countries, there be only residents of a regional state, that is one of ten regional zones. Countries are developing bilateral arrangements that avoid the US, the US dollar, such as the Ambrose Evans Pritchard report China to dictate tough terms on BRICS rescue fund. Under authoritarianism, regional undollar economies are overseen by regional technocrats, who oversee the factors of production, commerce and trade for regional security, stability, and sustainability.

A new order of financial control is developing. Automatic Earth reports Holders of financial derivatives enjoy super-priority in municipal and financial institution bankruptcy; this may potentially leave nothing for other creditors to divide during subsequent proceedings.  Along this line of reporting Andre Damon and Barry Grey of WSWS write The Detroit bankruptcy and the drive toward dictatorship. And Ellen Brown, of Web of Debt writes The Detroit Bail-In Template: Fleecing pensioners to save the banks. Banks will be integrated into the government and be known as government banks or Govbanks for short.

2) … Financial market trading for the week August 3, 2013, to August 6, 2013.

On Tuesday, August 3, 2013, The Japanese Yen, FXY, fell sharply lower, on the failure of Kuroda Abenomics, and as the NYT reports  Japan panel backs sales tax hike coupled with stimulus, and as Reuters reports Total JGB issuance set to hit record high in 2014/15. The Euro, FXE, fell slightly lower, which forced the Swiss Franc, FXF, lower. The India Rupe, ICN, traded lower, forcing India, INP, and India Small Caps, SCIN, lower. The Australian Dollar, FXA, rose strongly. The US Dollar, $USD, rose to 50 day moving average at 82.41.

The strong fall lower in the Japanese Yen, FXY, popped the Nikkei, NKY, higher; yet debt deflation drove the Interest Rate on the Japanese Government Bonds, higher, causing its inverse, JGBS, to rise from a recent double bottom.  

China, YAO, blasted to a new rally high, as China Industrials, CHII, China Financials, CHIX, China Small Caps, ECNS, China Real Estate, TAO, and Far East Financials, FEFN, rose as Yardini reports China’s economy perking up (excerpt)  The manufacturing purchasing managers’ index (M-PMI), compiled by China’s National Bureau of Statistics, rose to 51.0 in August from 50.3 in July, the highest level since last April and ahead of market expectations of 50.6 in a Reuters poll. The official survey showed an across-the-board recovery in all sub-indexes, ranging from new orders and quantity of purchases to input prices and employment, pointing to a positive picture for the huge factory sector.

Confirming the strength of China’s economy are electricity output and crude oil usage. Both rose sharply during July to new record highs. On August 13, I noted that an exclusive report in South China Morning Post revealed that the “mainland government is quietly offering financial stimulus to key cities and provinces to help them maintain local economic growth.” Instead of massive economy-wide stimulus, the government is targeting big projects around the country to stimulate growth. The new approach seems to be working

Finland, EFNL, and Nokia, NOK, popped higher, as Microsoft, MSFT, traded strongly lower, as  Microsoft announced a deal to acquire Nokia’s mobile handset business for 5.44 billion euros.  

World Stocks, VT, traded higher. Sectors trading higher included, 200% Volatility, XIV, Design Build, FLM, Casinos and Resorts, BJK, Biotechnology, IBB, Solar, TAN, Internet Retail, FDN, Global Consumer Discretionary,  RXI, S&P High Beta, SPHB, Leveraged Buyouts, PSP,  and Automobiles, CARZ.

Technology Stocks, MTK, seen in this Finviz Screener, such as ALU, ERIC, MU, QCOM, PHG, TEL,  EGHT, ENVI, CIEN, CALX, TLAB, CLFD, CAMP, IDSY, HRS, WSTL, VCRA, WTT, ROP, ST, BSX, ALGN, MTSC, MEAS, and FEIC traded higher. Sweden, EWN, Norway, NORW, and the UK popped higher in sympathy with Finland. Facebook, FB, and LinkedIn, LNKD, rose to new rally highs. And Global Industrial Producers, PICK, copper Miners, COPX, Rare Earth Miners, REMX, Metal Manufacturers, XME, Steel Producers, SLX, and Coal Miners, KOL, traded higher.

Asia Excluding Japan, EPP, traded higher. The ever volatile, Taiwan, EWT, and South Korea, EWY, popped higher. But Indonesia, IDX, traded lower.

Utilities, XLU, traded lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening, as the Interest Rate on the US Ten Year Note, ^TNX, spiked the most in two months, blasting strongly higher to 2.85%, sending Aggregate Credit, AGG, and the Credit ETFs, seen in this Finviz Screener lower.  Michigan Closed End Municipal Bonds, MIW, Pennsylvania Closed End Municipal Bonds, EIP, New York Closed End Municipal Bonds, ENX, the Zeroes, ZROZ, and 30 Year US Government Bonds, EDV, are leading Bonds, BND, lower.        

321 Gold writes  Gold’s battle for $1425. The Finviz chart of the Gold ETF, GLD, shows a strong rise on the day to close at strong resistance at 136.42. Spot Gold, $GOLD, closed at $1,411.

Jack Chan’s chart of the Gold ETF, GLD, shows it to be rallying higher in breakout.

Jack Chan’s chart of the gold mining stocks, GDX, such as those seen in this Finviz Screener, to be topped out.

Jack Chan’s chart of the Euro, FXE, shows that it has broken down, and is no longer a viable currency.

Jack Chan’s chart of the Interest Rate on the US Ten Year Note, TLT shows it to be a failed investment, communicating that trust in US Treasury Debt has failed, and that the US has lost both its financial sovereignty and its financial seigniorage, that is financial moneyness, communicating the soon coming end of the American SSI Disability and Transfer Payment State, what some call the American Welfare State of TANF, and SSI Disability Payments,  as well as the US Dollar Hegemonic Empire, known as the United States of America; and also known as the Milton Friedman Free To Choose Banker Regime, this coming at a time when Justin Raimondo of Antiwar writes A blank check for war.  

Jesus Christ has been operating in economy of God, Ephesians 1:10, first to establish liberalism, beginning in 1971, when President Nixon, followed Milton Friedman’s advice, to take the US off the gold standard, and to pursue endless wars via the military industrial complex; and second to complete liberalism in August 2013, when the bond vigilantes drove the Interest Rate on the US Sovereign Debt, ^TNX, to 2.75%, destroying Credit, AGG.  

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In today’s news, The WSJ reports New York’s next mayor faces union showdown The city’s next mayor will face the biggest showdown with labor unions since New York’s brush with bankruptcy in the 1970s,

Daily KOS posts The Nation article NYC Mayor: Bill de Blasio (D), The only candidate who will end the stop-and-frisk era. In running for mayor, de Blasio has promised to tackle the city’s inequality crisis head-on, harnessing what he has called “the most powerful local government on earth” to bring affordable housing, living-wage jobs, universal pre-kindergarten and genuine opportunity to the city’s millions of forgotten residents. “My job is to help New Yorkers live in New York,” he told New York magazine in a recent interview.

There is a lot to like, from proposals on education and homelessness to public safety—but among the ideas that we found most persuasive is his unusually diverse economic development strategy, which embraces not only job creation but also enhanced labor protections and long-overdue investments in New York’s once-great public universities. De Blasio was a major force behind living-wage and paid-sick-leave legislation—indeed, he fought for much stronger bills than those ultimately passed by the City Council—and his platform contains additional policies to increase wages for the city’s working poor. He is also steadfastly pro-union, which is both a welcome change and a crucial one after twelve years of an administration so hostile to labor that all 152 of the city’s public unions are without contracts. And in an effort to stanch New York’s affordable-housing crisis, he has put forward an ambitious plan to build or preserve nearly 200,000 affordable-housing units over the coming decade, while pledging to remove wasteful tax breaks for real estate developers.

Perhaps most unexpected is the centerpiece of de Blasio’s platform: a city income-tax surcharge on New Yorkers earning over $500,000 a year to provide truly universal, full-day pre-kindergarten to every child in New York City—a game-changing investment in the next generation of New Yorkers. The revenue from this surcharge would also fund after-school academics, athletics and cultural programming for every middle-schooler. It is notable that deBlasio made this tax proposal in the belly of the beast, at a meeting of the city’s corporate leaders.

Finally, de Blasio has been one of the fiercest critics of the NYPD’s stop-and-frisk policy, which has seen hundreds of thousands of young black and Latino men wrongly detained and subjected to searches. And of the candidates, he has been the most vocal and persistent supporter of a bill to prohibit racial profiling and impose greater police oversight. He has also pledged to replace Police Commissioner Ray Kelly, who stubbornly defends stop-and-frisk. – The Nation, 8/8/13

On Wednesday, August 4, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.9% today. World Stocks, VT, traded higher. Sectors rising included Networking, IGN, Semiconductors, SMH, Solara, TAN, Biotechnology, IBB, Transportation, XTN, S&P High Beta, SPHB, Internet Retail, FDN, Small Cap Industrial, PSCI.  Australia, EWA, rose, taking Asia excluding Japan, EPP, higher. Oil Price reports Tesla opens first European Model S assembly plant and supercharger network.  Finviz Daily Chart of Tesla, TSLA, shows its parabolic rise from its April 1, 2013, price of 44, to its September 3, 2013, price of 168.

Many libertarian bloggers are writing today that they are disgusted with both political parties as ABC News reports Boehner’s Aboard: Obama gains Syria strike support. President Barack Obama gained ground Tuesday in his drive for congressional backing of a military strike against Syria, winning critical support from House Speaker John Boehner while key Senate Democrats and Republicans agreed to back a no-combat-troops-on-the-ground action in retaliation for a chemical weapons attack.

I am not disgusted with any political party, as I know that according to the Apostle Paul in Ephesians 1:10, that Jesus Christ is operating in the economy of God, bringing Liberalism to its zenith, and introducing Authoritarianism as the world’s economic and political paradigm.

How can I be disgusted, when I know according to the Prophet Daniel in Daniel 2:25-45, that God ordained there be two great world powers, these being the British Empire and the US Empire of Crony Capitalism, whose iron legs of hegemony would rule before their empires collapse, and a Ten Toed Kingdom of regional governance would come to govern the world, in a miry mixture of iron diktat and clay democracy.

In fact, I’m rejoicing because I know the truth, and it has set me free from the deception of human philosophy of Libertarianism, which is simply just another experience in will worship, that is the worship of human things desired. as communicated by the Apostle Paul in Colossians 2:23.

It was the true great and original libertarian, the one who set the world on the course away from control by the state, John Calvin, who described will worship as that “which men choose for themselves at their own option, without authority from God.” What a fitting description of libertarianism today.  Libertarianism is self-made religion, as it has its origins in the concept that individuals are sovereign individuals. Scripture reveals that only God be sovereign. Libertarianism is a worship of “free choice” rather than that of “divine choice”.  Because libertarianism comes from a sense of self-determination, it is enslaving, corrupting, intoxicating, and ultimately destructive.

The Prophet Daniel, in Daniel 2:25-45, has presented the reality that God operates in empires, always has, and always will. And John the Revelator adds emphasis in Revelation 13:1-4, describing the soon coming Ten Toed Kingdom, as a Beast Regime that will occupy not only in ten zones of regional governance; but also in totalitarian collectivism in all of mankind’s seven institutions.

So if one be disgusted today, one will only be enraged tomorrow.   

Brandon Cornett of The Home Buying Institute reports San Francisco home prices have rebounded the furthest from their crisis low point. Since March 2009, when this market officially hit bottom, prices have risen by a whopping 49%. That’s more than any other metro area tracked by the Case-Shiller Index. I comment, that if you are looking for a home in Excelsior, well then, perhaps the 3 Bedroom and 1 Bath home at 206 Lisbon St, San Francisco, CA 94112, is for you.  

Ask Blog provides Another essay for everyone to ignore on housing finance reform.  It’s appropriate to focus and then refocus again for emphasis on housing finance reform, as Jesus Christ has been in dispensation, that is in the active management of all things economic, political, and spiritual, as revealed by the Apostle Paul in Ephesians 1:10, bringing forth Liberalism in 1931, with the establishment of the US Fed; and then again maturing Liberalism in 1971, with the provision of the Milton Friedman Free To Choose floating currency system, and in 1999 with the Repeal of the Glass Steagall Act establishing a modern banking regime, and with the provision of the Euro currency as a platform for further monetary expansion as well as regional political intervention.

Liberalism’s policy was one of investment choice, with all kinds of credit schemes like Ask Blog mentions, and all kinds of currency carry trade schemes as well, as some bought their homes using FX currency carry trades originated by Austrian bankers.

But now with the Interest Rate on the US Debt having soared to 2.75% in August 1, 2013, Jesus Christ like a ship’s steward, has fully completed the ship’s manifest, providing a moral hazard based prosperity, where gains have been privatized to the bankers and losses socialized to the public.

And with John McCain fathering World War III in the Middle East, Jesus Christ is fully pivoting the world into Authoritarianism, with its policies of diktat, and schemes of control and debt servitude producing austerity for all.

Ron Paul writes in Liberty Crier Private property is the essence of liberty. Similar thoughts come from Hoppe, Hans-Hermann, writing in Lew Rockwell, 2004. “The Ethics and Economics of Private Property.”  I comment that respect for the person of others, and the property of others is the basis of ethics.

On Thursday August 5, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.97%, causing Aggregate Credit, AGG, to trade sharply lower. The 10 30 US Sovereign Debt Yield Curve, $TNX:$YTX, steepened, as is seen in the Steepner ETF, STPP, steepening. World Treasury Debt, BWX, Longer Duration Corporate Debt, BLV, traded lower.

Inverse Volatility, XIV, rose, as YAO, and China Financials, CHIX, China Industrials, CHII, China Small Caps, ECNS, and Chia Real Estate, TAO, rose strongly higher, taking Far East Financials, FEFN, South Korea, EWY, and Taiwan, EWT, higher. Solar Stocks, TAN, rose.  India, INP, Brazil, EWZ, Russian, RSX, rallied with China, taking the BRICS, EEB, and the Emerging Markets, EEM, higher.  The US Dollar, $USD, rose strongly to close at 82.66. Gold, GLD, and Silver, SLV, traded lower, taking Gold Mining, GDX, GDXJ, and Silver Mining, SIL, SILJ, SSRI, lower. Yet, Poland, EPOL, fell 5%, as Poland Government Seizes Half of Pension Funds

On Friday August 6, 2013, This week Aggregate Credit, AGG, traded 0.70% lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher from 2.75% to 2.94%.  

Lisa Abramowicz and Liz Capo McCormick of Bloomberg report “The worst losses in U.S. debt in at least 37 years are being magnified by investors exiting the market at the same time new regulations prompt Wall Street firms to cut back on trading corporate bonds. Bank of America Merrill Lynch’s U.S. Broad Market Index is on pace to drop 4.41%, the biggest annual loss since at least 1976. Investors pulled $123 billion from bond funds since May, according to TrimTabs. Trading in corporate fixed income securities is the lowest ever as a proportion of outstanding debt, and volumes in Treasuries are little changed from 2007 levels even though the market has almost tripled to $11.5 trillion, Financial Industry Regulatory Authority and ICAP Plc data show. Bonds are getting riskier even with inflation at bay and corporate profits hitting new highs. ‘When bond investors start to meaningfully divest themselves of their positions, it will be analogous to yelling fire in a crowded theater,’ Michael Underhill, the chief investment officer at Capital Innovations LLC, which manages $1.5 billion, said”

Brian Chappatta of Bloomberg reports “The biggest losses since 1999 for municipal debt signal that Detroit’s bankruptcy and 14 weeks of withdrawals from mutual funds are overwhelming historical trends pointing to a rebound in the $3.7 trillion market. Local debt lost 1.6% in August, the steepest drop for the month in 14 years. It marked just the second time in 25 years that the obligations fell in both July and August, a period in which the market usually rallies as investors get cash from coupon and principal payments while issuance dwindles. Benchmark yields are the highest since 2011 and exceed those on Treasuries and AAA company debt by the most in at least 20 months”

Sean McLain and I Made Sentana of the WSJ report on the failure of Liberalism credit scheme of Dollarization “Companies across Asia are facing a debt repayment crunch as plunging local currencies make it more costly to repay foreign loans, a situation that is exacerbating stresses on the region’s economies. Asian companies took out sizable foreign loans in recent years as the U.S. Federal Reserve kept interest rates low and printed money. For firms in nations like India and Indonesia, rates on U.S.-denominated debt were more attractive than local borrowing costs. But the current exodus of capital from emerging markets, amid expectations the Fed will end its period of extraordinary monetary stimulus later this year, has changed that equation. Foreign funds are pulling out of Asian bonds and other assets amid expectations U.S. rates will rise further. That is pushing currencies in Asia sharply lower and raising the cost of repaying U.S. denominated borrowings.”

Ben Bland of the Financial Times reports “The gloom surrounding Indonesia continued to deepen on Monday after southeast Asia’s biggest economy posted a record monthly trade deficit and inflation climbed to a four-year high. The trade deficit jumped to $2.3bn, much higher than expected, in July as imports remained strong while exports fell because of the slowdown in China and ongoing troubles in Europe and the US. Annual consumer price inflation rose to 8.8% in August, from 8.6% one month earlier, with economists predicting that inflation may reach double digits by the end of the year, putting pressure on the central bank to continue hiking interest rates. Indonesia has been hit hard by the recent sell-off, which has also ensnared other emerging markets with large current account deficits and a need for foreign financing like Brazil, India, South Africa and Turkey.”

James Crabtree of Financial Times reports “Fears are rising for the health of India’s banking system as slowing economic growth and rapid currency depreciation threaten to worsen asset quality and reduce demand for bank credit from large industrial companies. The growing concerns complicate the task facing Raghuram Rajan, who takes over today as head of the Reserve Bank of India,  a role that includes responsibility for bank regulation, as he attempts to chart a path through the deepening currency crisis. Non-performing and restructured loan levels in Asia’s third-largest economy have risen steadily over the past year to stand at around 9% of assets and could reach 15.5% over the next two years, according to Morgan Stanley. Indian companies hold around $225bn of US dollar-denominated debt, as much as half of that estimated to be unhedged, while some larger Indian banks including State Bank of India and ICICI have raised money via dollar-denominated bonds in recent years.”

The chart of the S&P 500, $SPX, shows a massive dark filled questioning harami on Friday September, 6, 2013, and a 1.4% rise for the week. Sectors trading higher this week included

Solar, TAN, 9.2 (a new rally high)

Inverse Volatility, XIV, 5.5

Networking, IGN, 4.7

Biotechnology, IBB, 4.0 (a new rally high)

Internet Retail, FDN, 3.7 (a new rally high)

Automobiles, CARZ, 3.6

Casinos and Resorts, BJK, 3.5 (a new rally high)

Semiconductors, SMH, 3.4

Design Build, FLM, 3.3

S&P High Beta, SPHB, 3.2

Stock Brokers, IAI, 3.1

Eurozone Financials, EUFN, 3.0

Global Consumer Discretionary, RXI, 2.9

Life Insurance Companies, GNW, 2.8 (a proxy for life insurance companies)

Media, PBS, 2.6

Energy Production, XOP, 2.5

Transportation, XTN, 2.4

Too Big To Fail Banks, RWW, 2.3

Small Cap Pure Industrials, PSCI, 2.2

IPOs, FPX, 2.1, (a new rally high)

Small Cap Pure Value, RZV, 2.0. It is Regional Airlines, Business Services, Personnel Services, and Business Software and Services, that have been leading lower, as this month’s loss leading sector, despite Bespoke Investment Blog reporting, ISM Services Index Hits Highest Level Since 2005!   

Countries trading higher this week included

Nikkei, NKY, 3.4

US Stocks, VTI, 1.6

Sweden, EWD, 3.5

Eurozone, EZU, 2.6

Europe, VGK, 2.6

Norway, NORW, 2.5

Asia Excluding Japan, EPP, 4.1, a new rally high

Thailand, THD, 6.7

South Korea, EWY, 5.5, a new rally high

Australia, EWA, 4.3, a new rally high

Taiwan, EWT, 3.8

The Philippines EPHE, 3.4

The BRICS, EEB, 6.1, with Brazil, EWZ, 6.8, Russia, RSX, 5.4, India, INP, 6.5, and China, YAO, 4.8, a new rally high. In the last month, SHG, and CHIX, have been leading CHII, ECNS, and TAO higher, as is seen in their ongoing Yahoo Finance chart. Emerging Market Financials, EMFN, rallied 4.4%, and Far East Financials, FEFN, 3.0%, this week.   

Chile, ECH, 7.1

Poland, EPOL, traded 4.8 lower this week.

2) … Authoritarianism’s paradigm of diktat and debt servitude is emerging as Jesus Christ is in active administration of the economy of God terminating Liberalism’s paradigm of investment choice and credit … Luciferian Worship Will Emerge Out of a Middle East Third World War.  

Eleni Panagiotarea authors the book Greece in the Euro: Economic Delinquency or System Failure.

I comment that the Euro, currently a currency without a state, is about to become the world’s preeminent region of economic governance and totalitarian collectivism, rising out of sovereign and banking insolvency of the PIGS.  And Canada, Mexico, and America, is about to become the leading example of the Security State. The centuries-old individualistic American culture which featured diversity and volunteerism, will be will be washed away through compulsion and uniformity, as foretold in Revelation 13:4, where John the Revelator wrote, “So they worshiped the dragon who gave authority to the beast; and they worshiped the beast, saying, “Who is like the beast? Who is able to make war with him?”    

Wikipedia relates that The Westphalian System is used as a shorthand by academics to describe the system of states which make up the world today.[6]

In 1998, at a Symposium on the Continuing Political Relevance of the Peace of Westphalia, the then NATO Secretary-General Javier Solana said that “humanity and democracy [were] two principles essentially irrelevant to the original Westphalian order” and levied a criticism that “the Westphalian system had its limits. For one, the principle of sovereignty it relied on also produced the basis for rivalry, not community of states; exclusion, not integration.”[7]

In 2000, Germany’s Foreign Minister Joschka Fischer referred to the Peace of Westphalia in his Humboldt Speech, which argued that the system of European politics set up by Westphalia was obsolete: “The core of the concept of Europe after 1945 was and still is a rejection of the European balance-of-power principle and the hegemonic ambitions of individual states that had emerged following the Peace of Westphalia in 1648, a rejection which took the form of closer meshing of vital interests and the transfer of nation-state sovereign rights to supranational European institutions.”[8]

In the aftermath of the 11 March 2004 Madrid attacks, Lewis ‘Atiyyatullah, who claims to represent the terrorist network al-Qaeda, declared that “the international system built up by the West since the Treaty of Westphalia will collapse; and a new international system will rise under the leadership of a mighty Islamic state”.[9]

It has also been claimed that globalization is bringing an evolution of the international system past the sovereign Westphalian state.[10]

Benedict Anderson refers to putative “nations” as “imagined communities.” Others speak favorably of the Westphalian state, notably European nationalists and American paleoconservative Pat Buchanan.[11][12] Some such supporters of the Westphalian state oppose socialism and some forms of capitalism for undermining the nation state. A major theme of Buchanan’s political career, for example, has been attacking globalization, critical theory, neoconservatism, and other philosophies he considers detrimental to today’s Western nations. In a 2008 article Phil Williams links the rise of terrorism and other violent non-state actors (VNSAs), which pose a threat to the Westphalian sovereignty of the state, to globalization.[13]

A new notion of (humanitarian intervention and) contingent sovereignty seems to be emerging, but it has not yet reached the point of international legitimacy. Neoconservatism in particular has developed this line of thinking further, asserting that a lack of democracy may foreshadow future humanitarian crises, or that democracy itself constitutes a human right, and therefore nation states not respecting democratic principles open themselves up to just war by other countries.[14] However, proponents of this theory have been accused of being concerned about democracy, human rights and humanitarian crises, only in countries where American global dominance is challenged, such as the former Yugoslavia, Iraq, Iran, Russia, China, Belarus, North Korea, Sudan, Venezuela, etc., while hypocritically ignoring the same issues in other countries friendlier to the United States, such as Pakistan, Saudi Arabia, United Arab Emirates, Jordan, Egypt, Georgia, and Colombia.

The seigniorage of Liberalism’s nation state single reserve currency system is failing; the seigniorage of Authoritarianism’s undollar regional governance and totalitarian collectivism diktat system is rising as   Joseph Stuber writes in Seeking Alpha As The Bernanke Era Comes To An End A New Global Paradigm Is Almost Certain But Few See It Coming

Many of us wondered if the Jackson Hole Summit this year would offer anything of significance with Bernanke not in attendance. The primary focus for most was the hope that we would we get some clues on the matter of the Fed’s timing on pulling back on the controversial QE program?

Surprisingly we did indeed get something of significance coming out of the Jackson Hole Summit but it was not what most expected. The following quote is the opening statement in a Reuter’s article entitled Central bankers debate risks from withdrawing global liquidity:

Global financial stability is at risk as central banks draw back from ultra-easy policies that have flooded the world with cash, because emerging markets lack defences to prevent potentially huge capital outflows, top officials were warned on Saturday.

The Fed’s talk of tapering is real and relevant to investors but it is only of secondary importance as far as this article is concerned. The primary focus of this article is whether or not the US dollar will remain the world’s reserve currency. It is a very complex and highly controversial subject that gets almost no play in the press but an enormous amount of focus behind the scenes.

The harsh truth is that we have reached the end of an era and it is blatantly clear to those of us who understand the subject that Keynes was right when he stated at the 1944 Bretton Woods conference that a sovereign currency would not work as the world’s reserve currency. The reasons are multifaceted and complicated to say the least and I am not sure I can explain the complexity of the issue in terms the average investor will understand but at the request of a number of my readers I am determined to give it a try.

Why would a decision by the United States to withdraw monetary stimulus by slowing down or terminating QE create global instability?

The answer to that question is complex but we need to start with a discussion on the nature of a reserve currency. The US dollar is the world’s reserve currency and providing a sufficient supply of US dollars to the world’s sovereign nations is the principal function of the US as it relates to its role as supplier of reserve assets. To understand the implications one needs to understand what was decided in 1944 at the Bretton Woods Conference that resulted in what French Finance Minister Valery Giscard d’Estang termed “exorbitant privilege” – a privilege bestowed on the United States when the US dollar was established as the world’s reserve currency.

Here is the condensed version of what happened at Bretton Woods back in 1944: The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states in the mid-20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.

Preparing to rebuild the main international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known at the Bretton Woods Conference. The delegates deliberated during 1-22 July 1944, and signed the Agreement on its final day.

Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments.

So the outcome of this new system was that the US dollar was designated as the world’s reserve currency and the United States guaranteed that those sovereigns holding dollars would be allowed to exchange them at a rate of $35 for 1 ounce of gold. We all know how that worked out though – it didn’t – and for reasons that were easily predictable by competent economists.

The motivation for a system of trade that was fair was well articulated by Cordell Hull, United States Secretary of State from 1933-1944:

Unhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war…if we could get a freer flow of trade…freer in the sense of fewer discriminations and obstructions…so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance of lasting peace.

We of course didn’t create that system Hull hoped for – we simply transferred preferred status from Great Britain to the United States. Great Britain no longer held exboritant privilege but the United States did. And the very thing that Hull hoped for – a system based on fairness – has to this day eluded us and we now find ourselves once again at the point where something is about to happen that will dramatically change the system.

In an article entitled – Bretton Woods and the Forgotten Concept of International Seigniorage – Dix Sandbeck expands further on the debate at Bretton Woods on the nature of the new reserve currency:

Keynes envisaged the bancor as an international trade currency and unit of account. Its management and issue was to be in the hands of an another planned international organization, the International Clearing Union (ICU). The value of the bancor was to be determined by the value of the different national currencies in a trade weighted basket. Values of currencies would be fixed, but could be changed by mutual agreement.

A fundamental aim of Keynes’ plan was to install a truly multilateral system. No nation would be allowed to dominate; nations in surplus or in deficit would be disciplined alike. Shortly before the conference however, the Americans rescinded their support for the bancor. Presumably, they felt that the bancor scheme, with its control in the hands of the ICU, was a shrewd strategy to rob the United States of its greatest spoil of victory: unfettered post-war dominance.

Instead, the Americans insisted on a system where the US dollar would be fixed to a gold value of $35 per ounce, though convertible only for central banks. All other currencies were to be aligned to this dollar-gold anchor. If adopted, this would confer on the US an unprecedented supremacy Even Britain, at the pinnacle of her power had not enjoyed such a position. But at Bretton Woods the exhausted European nations were eager for the continued flow of dollars to finance the war and the impending reconstruction. No nation was in a position to challenge the American volte-face.

Seigniorage is the difference between the value of money and the cost of producing it. It is that concept that sets the US apart from every other nation in that it derives the benefit of the currencies purchase value and bears almost no effective cost at current interest rates. Here is how it works. The US government expands the debt ceiling at will and then borrows money by issuing treasuries.

Countries who are net exporters then buy those instruments from the United States in order to invest the dollars they receive in international trade. If you are a net exporter then you build a surplus of US dollar denominated assets. If you are a net importer the inverse is true.

The benefits to the reserve currency issuer is that they are allowed to borrow in great quantity relative to other sovereigns without the commensurate cost these other countries would incur were they to do the same. The reason is simple – if you want to import or export goods and services you do so using US dollars as the form of payment. In other words there is a high demand for dollar denominated assets for reasons unrelated to the interest rate paid on those assets.

A country like China then ends up with a surplus of dollars and here is why. A company in China exports goods and receives in return US dollars. That exporting company then needs to convert those dollars back to the sovereign currency and so the central bank exchanges those dollars for yuans. Now the central bank has dollars which it uses to buy US debt.

That isn’t the way most investors see it though. Most investors see China as deliberately buying US debt for any number of sinister purposes. Others see us at the mercy of China and that may end up being true but not for reasons that are readily apparent.

China by the way has a unique arrangement that links the yuan to the US dollar and that would suggest that the yuan would not appreciate if China sold US dollars and bought the yuan but that is only partially true. The problem with China is multi-faceted. A strong dollar necessarily results in a strong yuan relatively speaking due to the yuan’s link to the US dollar. In other words a strong dollar could end up having a modest impact on Chinese export demand. On the other hand a weak US dollar could have an inflationary effect on the yuan domestically.

Additionally, the Chinese use a novel approach to curbing inflation domestically. They simply raise bank reserve requirements in lieu of withdrawing liquidity. That creates an instant muting of the expansionary impact of the fractional bank multiplier. At the same time it can produce a serious liquidity crisis domestically in China when they attack inflation in this manner.

Another problem as far as China is concerned is rooted in the US blunders from a domestic perspective that create instability in the dollar and in US Treasuries. Blunders like consistently inflating investment assets as in the mortgage debt crisis that impacted global economies across the spectrum.

So what happens then that causes a crisis in the emerging market economies. Here is what Jim Rickards – author of Currency Wars: The Making of the Next Global Crisis – sees happening:

If the Fed does what they say they’re going to do-which I don’t think they will-but if they do… and they reduce asset purchases and U.S. interest rates go up, the capital outflows are going to come from the emerging markets back to the U.S., the carry trades are going to be unwound and that’s going to leave these economies high and dry,” says Jim Rickards, senior managing director of Tangent Capital.And ultimately, those emerging markets “will have unsustainable projects and bank debt, and it could be the beginning of another emerging market crisis which as we know in 1997-1998 spread to major economies.

Rickards made the above statement back in June. There seems to be a pretty broad consensus view today that tapering will start this year. Furthermore, projected deficit levels this year suggest that new Treasury issues will be substantially reduced in fiscal 2013 meaning that the Fed’s bond buying program at current levels will consume roughly 70% of new issue.

So even though there are a very few reasons for tapering there are perhaps a lot more reasons for not tapering. My guess is Rickards will end up being right and the US will not taper but for reasons that are again not so obvious.

When rates start to climb the dollar carry trade loses its appeal and not just in the emerging market economies. Borrowing short term to invest long term works as long as the yield curve remains attractive. But what happens to bonds when rates start to climb. Bonds at the long end of the curve lose value and that applies to all bonds – not just emerging markets. That of course exacerbates the problem as the selling pressure on bonds begets more selling pressure.

Is the Fed really to blame for recent bond weakness?

The following excerpt on the matter of foreign sales of US Treasuries suggests that there is a lot more than QE taper talk driving bonds lower:

(Reuters) – China and Japan led an exodus from U.S. Treasuries in June after the first signals the U.S. central bank was preparing to wind back its stimulus, with data showing they accounted for almost all of a record $40.8 billion of net foreign selling of Treasuries.

The sales were part of $66.9 billion of net sales by foreigners of long-term U.S. securities in June, a fifth straight month of outflows and the largest since August 2007, U.S. Treasury Department data showed on Thursday.

One can argue that China and Japan are selling US Treasuries as they fear the Fed is losing control of the bond market. One can also argue that they are doing so as they are no longer trading exclusively in US dollars.

Consider this from Aljazeera on the matter of trade agreements not involving the US dollar:

Over the past two years, China has announced a string of yuan internationalization efforts that are systematically chipping away at the dollar’s importance to global trade. Financial blog Zero Hedge reports: “One more domino in the dollar reserve supremacy regime falls. [T]he announcement two weeks ago that ‘Australia and China Will Enable Direct Currency Convertibility’ … was the culmination of two years of yuan internationalization efforts as summarized by the following”:

“World’s Second- (China) and Third-Largest (Japan) Economies to Bypass Dollar, Engage in Direct Currency Trade” “China, Russia Drop Dollar in Bilateral Trade” “China and Iran to Bypass Dollar, Plan Oil Barter System” “India and Japan Sign New $15bn Currency Swap Agreement” “Iran, Russia Replace Dollar With Real, Ruble in Trade, Fars Says” “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran in Rupees” “The USD Trap Is Closing: Dollar Exclusion Zone Crosses the Pacific as Brazil Signs China Currency Swap”

What we know is that the Fed hasn’t begun the process of tapering back QE purchases yet the yield on US Treasuries has skyrocketed – doubling since the mid-2012 lows:

(click to enlarge)

This can only be explained in the context of foreign sales of US Treasuries. In June foreign sales of US Treasuries exceeded the Fed’s purchases by roughly $27 billion. In other words US Treasuries aren’t falling as a result of taper talk but as a result of the selling pressure created by those countries no longer trading in US dollars.

If China, Japan, Australia, Brazil or one of the many other countries now by-passing the US dollar no longer receive US dollars in payment for exports then it creates an altogether different dynamic that tends to diminish the exorbitant privilege of the US.

Take Japan as an example. If they receive US dollars in trade settlements they either hold the dollar or interest bearing treasuries. In other words they buy US Treasuries pushing bond prices up and yields down. Do they want to do that? The answer is no but they have no choice. If they simply sell US dollars and buy yens they drive the yen higher and the result is a dampening of demand for Japanese produced goods. It hurts the domestic economy so they are forced to reinforce the exorbitant privilege of the reserve currency nation.

How are bilateral trade agreements affecting markets?

Let’s look at the bond market to see if this dynamic is really occurring. Here is the bond market (TLT):

(click to enlarge)

Once again we know why bonds have been weak of late – foreign sales of US Treasuries. And we know why that is occurring – bilateral trade agreements that don’t result in US dollars being received to the degree they have in the past. It can be argued that the recent spike is the result of a safe haven bid for US Treasuries based on the prospects of heightened tensions in the middle east arising from the mess in Syria but will it last? Probably not as the overriding influence on bonds is the bilateral trade agreements that are bypassing the US dollar.

Debunking the capital flowing to US equities bull market argument

The idea that capital will flow to US equities as US equities are the best value is refuted by the fact that US equities will likely suffer a major hit as China, Japan, Russia, Brazil, India and others bypass the US dollar. What will occur instead is an end to the demand for US Treasuries that has driven bond prices higher and yields lower. This can occur at a much more rapid rate than many would imagine.

The result is an end to exorbitant privilege status for the US. Interest rates will continue to climb or normalize as some say and that will necessarily result in a deleveraging – a reduction in debt levels – that will cause M2 growth to stall out and perhaps decline. So the take away then is that even in a period of disinflation or deflation we could still see the US dollar fall relative to other currencies. It isn’t supposed to work that way of course but then we don’t have a period we can reference to inform us on what happens to the US dollar when it loses its reserve currency status.

Each of us has to judge for ourselves what will occur in the coming months and all I can do is inform readers of what I see and what I see is a major seminal moment that will come upon us with a suddenness that few expect. The big question is will a sell off be in the category of normal or will it be much more dramatic. I am confident that it will be the latter and wonder if maybe the time is now upon us.

I continue, as having brought liberalism with its policies of investment choice and schemes of credit and carry trade investing to fulfillment, Jesus Christ, acting in dispensation, Ephesians 1:10, is now introducing authoritarianism, and John The Revelator’s Beast Regime, with its policies of diktat and schemes of nannycrat control, where through a soon coming credit bust and global financial system breakdown, foretold in Revelation 13:3-4, regional leaders, that is, nannycrats, will meet in summits, to renounce national sovereignty, and announce regional pooled sovereignty, in each of the world’s ten regional zones, most likely first with the Eurozone, and secondly with the North American Continent, which will become a North American Union, or NAU, a region I call CanMexAmerica. Thus the The Westphalian System of sovereign nation states is collapsing, and out of its ashes the Beast Regime of regional governance and totalitarian collectivism is rising to rule the world.

Accompanying the rise of the Beast System, will be a war in Syria foretold in Isaiah, 17, and a third world war, foretold in Ezekiel 38. Illuminati Prophet Albert Pike had Luciferian insight that there would be three world wars.   D. Robert Singer writes the article The Modern State of Israel: Providence, Miracle, or What Really Happened.  In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.

ThreeWorldWars.com writes The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view. [1] [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15, 1871.

3) One light in the Lord, and the other dark in the world

As I’ve shared in the past, I reside in the Sea Breeze Apartments, in downtown Bellingham; its the bottom of the social pyramid, specifically Claritas Prizm Sector 65, Inner City Blues 66; the most economically challenged of all demographic areas.

Most individual here have physical health, emotional health, and mental health handicaps.

Two returned late in the day on saturday. One guy, who has lived here seventeen years, is a sabbatarian, always observant of keeping his faith, returned dressed in pressed white shirt, black tie, and black shined shoes, holding his Bible. One gal, returned with pulling an overnight bag, holding a bouquet of flowers. One has relationship with the Lord, and the other has a relationship with her significant other.  

There be no choice; there is only the Lord, with the Spirit, moving in the lives of people. All things are of his choice. He in His Providence of space and time brought forth John Calvin in the reform movement to bring forth genuine liberalism, that is freedom from the state, and also Witness Lee in the recovery movement to recover living principles of grace and truth. People are who they are, because they are both vessels of the Lord, and are shaped, molded, and brought forth by Him, to produce things of His choosing.   

I’ve often wondered about the FWB relationship. When growing up, and into young adulthood, my parents entertained on the holidays and had their friends over. One of mom’s friends brought another; and I asked mom about the relationship, and she said “just friends”. It wasn’t until my third year of college, that I came to understand what friends with benefits means. I’m ok with it when I see it, if there be a ring on the finger communicating a fidelity to the other, and a presence with the other.

Fidelity with the Lord is that which I purpose. I don’t go to a church, yet I endeavor to keep the first day of the week special to and with Him. As we are headed off strongly into another age; I purpose to keep His word of endurance and not deny his name, by living within His presence and authority,           

4)  … Prophetic signs of the endtimes, by Duane and Shelley Muir, of Sign Posts of The Times.

The forsaking of the Gospel Message. How the Seeker-Sensitive, Consumer Church Is Failing a Generation

The destruction of Damascus. Russia warns Of Nuclear Disaster If Syria Is Attacked

The implementation of the daily sacrifices. Temple Institute Opens New School For Training Priests

5)  … Charts of the week

Daily chart of the S&P 500, $SPX, courtesy of Stockcharts.com

Weekly chart of the Small Cap Pure Value Stocks, RZV, courtesy of Finviz.

6)  This is possibly my last post

There comes an end to all writing. I’ve enjoyed writing about what John the Revelator says are “those things which must shortly come to pass”, Revelation 1:1; many of these are about to burst on the scene as the Isaiah 17 War with the destruction of Damascus, and the Ezekiel 38 War as a major assault by Islam against Israel, and vice versa.  Inasmuch as these things will become reality, I see diminishing reward to write about them.