Financial Market Report for the week ending Friday February 28, 2014
1) … Meet the new economic dynamic: destructionism
Destructionism is starting to replace inflationism as the world’s economic dynamic; this comes from the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning on October 23, 2013, to 2.66% on February 28, 2013, and investors derisking out of Global Financials, IXG, in particular Chinese Financials, CHIX. Sober Look reports International Banks under pressure.
Bespoke Investment Group reports Italy has seen the largest decline in yields this month as the yield on its 10-year has declined 38 bps to eight-year lows. Investors using credit margin stimulated investment in Eurzone Debt, EU, which drove Eurozone Stocks, EZU, and European Nation Stocks, such as Ireland, EIRL, and its bank, EIRL, new highs, as Credit Bubble Stocks reports Update to Hussman’s Ratio of Margin Debt.
The bond vigilantes in calling the Benchmark Interest Rate, $TNX, higher from 2.48%, resulting in Aggregate Credit, AGG, trading lower, and the currency traders following in selling the Major World Currencies, DBV, such as the Chinese Yuan, CYB, the US Dollar, $USD, and the Emerging Market Currencies, CEW, created an extinction event, that being the death of fiat money on October 23, 2013; yet the currency traders have taking the Euro, FXE, to a new rally high of 136.35, on higher Eurozone Debt, EU.
The death of fiat wealth, defined as World Stocks, VT, and Nation Investment, EFA, awaits as these have reflated to, and even exceeded their previous highs.
When the death of fiat wealth occurs, a second, that is twin extinction event will occur, fully complementing the death of fiat money, terminating the age and paradigm of liberalism, and introducing the age and paradigm of authoritarianism.
2) … Meet the new person: the debt serf; he is emerging via diktat money.
Just as the woolly mammoth was made extinct by a sudden ice age extinction event, liberalism’s investor, is being made extinct, as the dynamos of liberalism, these being creditism, corporatism, and globalism, are winding down.
Furthermore the investor’s habitat, this being democratic nation states and banks, are being literally obliterated; Benson te writes Thailand hit by a bank run; and he writes Kazakhstan’s devaluation triggers bank runs.
The nature of personhood is changing, this comes via the extinction of liberalism’s investor and his activity of investment choice, and the death of his element of life, that being fiat money and very soon fiat wealth, which comes from the credit and flow of nation states and bankers, … the new person is emerging, … that being the debt serf, and his economic activity, that being debt servitude, through the creation of diktat money, which comes from statist regional leaders, becomes his element of life.
Inasmuch as democratic nation states are crumbling, new regional sovereign authority is rising establishing the debt serf’s habitat, that is a gulag of regional economic governance and totalitarian collectivism; the Eurozone is ground zero for this new habitat, with Robert Stevens of WSWS reporting European Union demands more austerity in Greece Demands for further austerity come after the Council of State ruled previous wage cuts to the armed forces, police, coast guard and firemen unconstitutional. And a Gloomy European Economist writes Greek Tragedies, 2014 Edition
An inquiring mind asks, who is one going to be; and what can serve as the moral foundation of economic life?
No one wants to be a debt serf; but authoritarianism’s singular dynamo of regionalism, operating within economic fascism, is producing authoritarianism’s person. The economic mastery of the Beast Regime in working in the dynamo of regionalism, will be so effective through regional fascism in establishing regional security, stability, and sustainability, that people will be astonished and follow after it, declaring it to be all powerful, so much so, that no one can make war against it, as foretold in Revelation 13:3-4.
Under liberalism bankers, corporations, government, entrepreneurs, and citizens acting as investors and clients of democracies were the legislators of economic value and the legislators of economic life that shaped one’s means and one’s ends.
Under authoritarianism, currency traders, bond vigilantes and appointed leaders working in public private partnerships establishing mandates of regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends. Detroit serves as authoritarianism’s poster example of private public partnership of economic fascism. Barry Grey reports The rape of Detroit: Deindustrialization, financialization and parasitism.
Two options exist to authoritarianism’s economic life of debt servitude, where one has fiat identity and experience of the world, where economic life is defined as the credit and flow from regional leaders, where one has broad spectrum of activities including capitulation, licentiousness, worldliness, antipathy, meanness, busybodyness, preeminence, mischievousness, maliciousness, as one lives in the ever increasing carnality of popular culture. Under liberalism’s life of investment choice, the moral foundation of economic behavior was for most, self interest in rule based utilitarianism, which says that one should follow rules that, if they were always followed, make people better off. There are two better moral foundations of economic behavior, the first is in libertarianism, and the second is in holiness.
First, one can have fiat identity and economic life experience within libertarianism, where one maintains an intellectual framework that integrates principles of free market economics with those of philosophy, law, and liberty, where economic life manifests in the principle of non-aggression, and in ethics such as regard for the person and property of others, preferably for people of like ethnic culture, as Justin Raimondo posts in Economic Policy Journal, Crimea for the Crimeans.
Or secondly, one can have identity as God’s elect, as is presented by the Apostle Paul in Ephesians 1:4, where one has economic life experience in the holiness of God, and manifests in virtue, that is admirable qualities, presented in 2 Peter 1:4, such as altruism, kindness, peace and kindness, as well as in ethics, that is regard for the person and property of others, such as not defrauding others.
In the age and paradigm of authoritarianism, there are three sources of sovereign authority; these being, Regional Leaders, The Sovereign Individual, and the Name of the Lord; one cannot have multiple sovereigns, there can only be one prevailing authority; it is out from this authority that one enjoys economic experience coming from the credit and flow from that authority.
Inasmuch as nations states are rapidly crumbling, there is only one citizenship, that of the region in which one lives, ie the EU, or the state of one, that is the state of the sovereign individual, or heaven. One cannot have dual citizenship; there be only one prevailing citizenship; it is out of this of this citizenship that one has moral and ethical experience.
Dispensation economics communicates that there is no human action, rather all thing are of God, and that all economic action comes through the dispensation, that is the household administration of Jesus Christ, sometimes called the economy of God, for the completion and perfection of every era, epoch, age and time period, as presented by the Apostle Paul in Ephesians 1:10.
The Apostle Paul presents liberty as a higher human objective. one is to come out and be separate from the world, and manifest in the only right there is, that being the right to manifest as God’s child, as presented by the Apostle John in John 1:12, and in so doing come to know liberty from sin and death.
Authoritarian rule is God’s forge and furnace, hammer and anvil where one’s right, is learned, developed and exercised, and one comes to know liberty from sin and death setting one to know and experience life in Christ.
Paul served as living example of the one and only right in 2 Corinthians 4:7-10: “We have this treasure in earthen vessels that the excellence of the power may be of God and not of us. We are hard pressed on every side, yet not crushed, perplexed, but not in despair; persecuted, but not forsaken; struck down, but not destroyed always carrying about in the body the dying of the Lord Jesus, that the life of Jesus also may be manifested in our body.not your own: for ye are bought with a price”, that price being the blood of Jesus.
Liberty comes through and from Christ, He is one’s constitution, one’s all-in-all, one complete life experience; he said You will know the Truth, and the Truth will set you free and who said If the Son sets you free, you are free indeed. It’s only through Christ that one has freedom; as the Apostle Paul said: for the law of the Spirit of life in Christ Jesus made me free from the law of sin and of death.
3) … Fiat money has died, fiat wealth is about to die as well.
Liberalism’s economy is about to die, it has partly died with the collapse of the Emerging Markets, EEM; this coming with the death of fiat money on October 23, 2013, and will die most likely totally with the death of fiat wealth in March 2014.
Twin extinction events are about to terminate liberalism as both an age and a paradigm. and as a result its creation, that being the investor and the client are passing away, as greed has turned to fear that the world central banks’ monetary policies have crossed the rubicon of sound monetary policy and have made “money good” investments bad.
The first extinction event was the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, which terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.
Bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders calling the Japanese Yen, FXY, higher, and Emerging Market Currencies, CEW, lower, which forced the investor to derisk out of the Emerging Market, EEM.
Thus beginning on October 23, 2013,The First Horseman of the Apocalypse, that is the Rider on the White Horse, seen in Revelation 6:1-2, began passing The Bow of Economic Sovereignty from democratic nation states and the world central banks, to regional sovereigns and regional sovereign bodies.
These are now growing in political capital, and its authority to establish regional economic fascism, replacing all isms, such as crony capitalism, European Socialism, Greek Socialism, and Communism.
Regional economic fascism is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink in the tossing sea of debt deflation driven, competitive currency devaluation.
The Telegraph posts Rome days away from bankruptcy. The Independent reports Rome faces shutdown in cash crisis. Zero Hedge posts Rome is on the verge of Detroit style bankruptcy. The Telegraph reports Eternal city warns it will go bust for the first time since it was destroyed by Nero. Bloomberg reports Renzi considers stricter conditions on City of Rome in bailout
Mike Mish Shedlock writes Eurozone in deflation; monetarist mouthpieces will scream. And writes Leaving the euro painful but staying in more painful.
While monetarist talking heads may call for money printing, the bond vigilantes have been calling European Sovereign Interest Rates, lower, resulting in EU Debt, EU, the European Stocks, EZU, and the European Nation Investment such as Ireland, EIRL, and the European Financial Financials, EUFN, higher, such as Ireland’s Bank, EIRL, higher.
Regionalism is establishing a new debt based money system, that being the diktat money system, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism unifying all of mankind’s seven institutions, establish regional security, stability and sustainability, this being accomplished by the destiny of the fulfillment of bible prophecy of the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, and the Beast Regime of Revelation 13:1-4.
The two iron legs seen in Daniel’s Statue of Empires of Daniel 2:25-45, have been the British Empire, and the US Dollar Hegemonic Empire. Libertarian Michael Rozeff writes in EPJ Understanding the US Empire. It’s expansionism, dominance, control, influence, hegemony seeking that’s at work; it’s empire-building that’s at work.
News reports reflect that the beast empire of Revelation 13:1-4, is now rising out of waves Club Med sovereign, banking, and corporate insolvency, as the replacement for the US Dollar Hegemonic Empire.
Its first of ten regions of dominance will be in Europe, where it has the feet of a bear in banking supervision in Frankfurt; mouth of a lion in Berlin, as DW reports German FM vows more aggressive foreign policy; and coat of a leopard in fiscal supervision in Brussels
A One Euro Government, featuring a banking union, military union, and fiscal-debt union will coalesce, as leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty as they set forth regional framework agreements, as these constitute the constitution of regional economic governance featuring economic fascism where public private partnerships direct the economy. Erick Gray writes this will be a type of a Revived Roman Empire
The Eurozone Superstate will be headed up by the Sovereign, Europe’s New Charlemagne, seen in Revelation 13:5-10, as well as by the Seignior, that is the Top Dog Money Lord, seen in Revelation 13:11-18; and that they will forge, the new normal seigniorage wealth of diktat, and they will coin its peer, diktat money, out of their fiery words, will and way.
God, the Sovereign Lord God, accomplishes His will and establishes the economy of God, that is the dispensation of Jesus Christ, via empires. He always has, and He always will. The new empire replaces the Creature from Jekyll Island, and is a much more fearsome interventionist; as it will utterly pulverize all of liberalism’s money and wealth as is seen in Daniel 7:7.
The second extinction event will be the trade lower in World Stocks, VT, Nation Investment, EFA, as well as Global Financials, IXG, possibly coming as early as March 2013.
4) … Consider the short selling opportunity, that of selling at a market top.
World Stocks, VT, and Nation Investment, EFA, have reflated to their previous highs, while Global Financials, IXG, have languished, as day traders took selected sectors higher; these have included,
Social Risk Sectors, such as Pharmaceuticals, FDN, PJP, and BJK, with MPEL, WYNN, and LVS, soaring in value.
Manufacturing Risk Sectors, such as Semiconductors, SOXX, and Alternative Energy, GEX.
Legacy Sectors, such as Timber Producers, WOOD. Steel Producers, SLX, plummeted as Credit Bubble Stocks posts Iron ore prices plunge below $120 on Chinese lending fears, and as Shaun Richards relates China’s shadow banking sector and the iron ore and copper problem. Quarts posts Five charts to explain China’s shadow banking system and how it could make a slowdown even uglier
Most Carry Traded Nations, such as European Small Cap Dividend, DFE, Denmark, EDEN, India Small Caps, SCIN, and UK Small Caps, EWUS.
Consumer Spending Sectors, such as Small Cap Consumer Discretionary, PSCD, and Retail, XRT, with WAG, RAD, CVS, M, GPS, FL, K, and LUX, trading higher.
Eurozone Nations, such as Greece, GREK, and Ireland, EIRL.
Regional Banks, KRE, rebounded 4.5% this week as the LA Times reports Bank profits at record levels due to lower loss reserve.
Yield Bearing Sectors, such as Leveraged Buyouts, PSP.
Bespoke Investment Group reports S&P 500 makes a new bull market and all time closing high
The stock market top is seen in the chart of debt trades, Real Estate Asset Manager Blackstone, BX, Call Write Bonds, CWB, and Rental and Leasing Agents, United Rentals, URI, and H and E Equipment Services, HEES, as well as in the charts of Euro Yen, EUR/JPY, currency carry trades, such as RYAAY, BUD, COV, ENL, CBI, NXPI, and LYB.
Investing.com, Action Forex, and Yahoo Finance all show a close of this currency carry cross at 140.48.
One could use the following ETFs as basis for one’s short selling account STPP, HDGE, XVZ, JGBS, GLD, OFF, EUO, YCS, SAGG, HDGI.
Finviz shows, CAF, fell 3.4%, as Benson Te reports China’s shanghai index drops 5% in 4 days as the Yuan sinks. Business Insider reports Chinese Yuan’s drop is largest since its 2005 currency revaluation. And Zero Hedge posts China currency plunges most in over 5 years, biggest weekly loss ever.
Short Side of Long posts Citigroup’s US Economic Surprise Index has finally tumbled into negative territory, letting us know that the overwhelming majority of the data is surprising to the downside
Brent North Sea Oil, BNO, traded lower.
While one could short sell, I believe it behooves one to dollar cost average into the purchase of, and possession of gold bullion.
5) … In the news
Robert Stevens of WSWS posts Devastation of health care in Greece The closure of the entire state- un outpatient clinic network for one month to introduce the new Primary Healthcare Network could lead to thousands of job losses.
Jean Shoul of WSWS posts In the name of “peace”, the European Union readies for war A recent series of policy briefs indicate a new stage in the aggressive imperialist foreign policy of the European powers.
Stephane Hugues of WSWS posts French automaker PSA plans to slash jobs at Poissy, shift production to Asia PSA is intensifying the exploitation of its work force, relying on speedup and job cuts in Europe while preparing a major production shift towards Asia.
Automatic Earth posts Divide and rule the Black Sea
Blessed Economist posts Red Horse in the Ukraine
Kevin O’rourke posts The Future of the Euro
Market Sanity posts Risk in banking system ‘greater than ever’ Richarks says
Personal Liberty posts Are 9 dead bankers a sign of impending economic collapse?
Gold Money posts Profit taking after eight consecutive weeks of rising prices
The Guardian posts Spain’s crash landlords: empty homes spawn black housing market
Coppola Comment Deflation is not benign. In an economy where the money supply depends on the production of debt, deflation can never be a good thing. In fact as any cyclist can tell you, deflation means you aren’t going anywhere.
Confounded Interest posts Capital expenditure growth slumps to recession levels
6) … At least three factors have destroyed the potential for America for becoming a moral nation: TV Viewing, Sports Entertainment, and The Gangsta Lifestyle.
These are all part of various aspects of popular culture establishing carnal not noble values, and thus destroying the individual’s heart and mind, precluding the establishment of virtue and ethics.
CP, writes in review of Credit Bubble Stocks Review of four arguments for the elimination of television, Bowling Alone, which I am working on a review of, shows that people have chosen to watch television instead of participating in society
My acquaintances and friends, who have values, ethics, and virtues, while owning a TV, do not watch TV, and do not subscribe to TV Services.
Living in a low income apartment building in the downtown area, I observe, most everyone is into TV Viewing, and has TV services such as the Movie Channel. Practically none of these are involved in community service; they access community services, but do not volunteer to serve others. I have observed that these have no values which support virtues or ethics. In this inner city, social setting, the sociopath and psychopath roam about devouring whoever they may, acting without restraint in pimping acting in intimidation and speaking in abuse. The most aggressive live in clientelism, receiving SSI/SSD, a Section 8 Voucher and SNAP Food Stamps, rejecting any empathy and restraint, they live in antipathy and licentiousness.
The world is at the peak of the paradigm and age of liberalism, which is pivoting into that of authoritarianism. At peak liberalism Television Programming, like Walking Dead, Social Media, like Facebook, and Sports Entertainment, like WWE, depreciate the value of other people, and detract from values which support the development of ethics and virtues. Depreciation of others and the obliteration of values commenced with TV programs like MASH and continued on with Beavis & Buthead.
The black culture, decimated by the expatriation of manufacturing jobs, is leading the way lower into social collapse, which Elaine Meinel Supkis relates in Gangsta Black Teens, is characterized by gangster teens refusing to learn, stating, I remember when we started Save Our Schools (SOS) in New York City 40 years ago. At Boy’s High, the principal told me he had the students under control because there were only three shootings there that year! I walked into classrooms in Brooklyn where children were running around, throwing things and totally ignoring the teachers. And the teachers were desperate and had zero support for disciplining students.
I believe that unemployed black fathers and welfare dependent black mom’s have created an antipathy black culture.
7) … One can follow the effect of destructionism, that being the decline of equity wealth, by using this Finviz Screener of 50 Popular ETFs.
8) …. Readings in International Living
Mountain Vision posts If you have an offshore bank account
International Living posts How to get by with a little help: friend in Ecuador
9) An inquiring mind asks, will the crisis in Ukraine, be a Black Swan event, one of those unforeseen investment shocks, that comes seemingly out of nowhere to turn the bull stock market into a ber stock market? John Mauldin posts Black swans and endogenous uncertainty