Bear Market Becomes Entrenched After Yellen’s First FOMC Meeting, As The Fed’s Policies Have Crossed The Rubicon Of Sound Monetary Policy, And Have Made Money Good Investments Bad, All To Become More Equal As Stocks And Bonds Turn Lower In Value

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1) … Carola Binder asks Who will save us from inequality? 

Ed Hightower of WSWS posts Forbes list of world’s richest people highlights growth of social inequality. The number of billionaires worldwide increased by 268, the largest such increase ever, with a combined net worth of $6.4 trillion.

Atif Mian and Amir Sufi Of House of Debt write Capital Ownership and Inequality. The top 20% of the wealth distribution holds over 85% of the financial assets in the economy. So it is clear that the direct income from capital goes to the wealthiest American households.

Tyler Durden of Zero Hedge posts Existing Home Sales Lowest In 19 Months, Cheapest Home Sales Tumble 18%

My Budget 360 writes A Land Of Low Wage Jobs 51 million low-wage jobs in the US. The Great Recession has only accelerated deeper structural changes to our economy when it comes to low-wage employment.  While many good paying jobs were lost during the Great Recession many of the new jobs have come in the form of low-wage employment.  Large organizations have used this slack in the market to reduce wages, cut benefits, and ultimately increase profits at the expense of the American worker.  A Job Gap Study found that close to 40 percent of all U.S. employment pays $15 or less.  The threshold changes in terms of inflationary pressures on housing, food, and other items but this is the largest share of our workforce that is now struggling to meet the daily costs of living.  This trend is only increasing as more wealth is filtered into the hands of a very small part of our population.  Banking profits hit another record at the same time we have a record number of families on food stamps.  The U.S. is largely becoming a bifurcated economy where wealth and income inequality is only getting more dramatic.

Jesus Christ, acting in the economy of God ,will save all from inequality, as he introduces the age of debt servitude; where with every greater reality, as all will become more equally poor, as destructionism replaces inflationism, in the pivoting out of liberalism’s age of investment choice, and into authoritarianism’s age of debt servitude.

In Bull Stock Market Turns To Bear Stock Market, I wrote that the Dispensation Economics Manifest, presents the concept of the Apostle Paul, writing in the Epistles of New Testament Scripture, reveals that all things are of God, 2 Corinthians 5:17-18, and presents the Economy of God in Ephesians 1:10, where Jesus Christ is seen acting in stewardship of all things economic and political to bring them to fulfillment and completion.

Beginning with the Repeal of the Glass Steagall Act, Jesus Christ began to develop the investor and investment choice as the centerpiece of economic activity.

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the governance of democratic nation states and the inflationism of the world central banks, which worked through the three dynamos of creditism, corporatism, and globalism, as well as through money manager capitalism of the speculative investment community.

These produced an investor centric, peak moral hazard investment prosperity on March 14, 2014,  which drove the concentration of income and wealth into the hands of the few, as stellar financial rewards accrued to shrewd corporate executives and to wily investors.

He completed liberalism on March 14, 2014, as both a paradigm and an age, and pivoted the world into that of authoritarianism, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, as well as currencies, Major World Currencies, DBV, Emerging Market Currencies, CEW, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value.

All will be saved from inequality by Jesus Christ, as under his economic administration, all become debt serfs, rather than investors, by an ever increasing destructionism, coming with the final phase of the Business Cycle, that being Kondratieff Winter, where economic deflation is the new normal, a condition where weak growth of the economy and the low rate of resource utilization, that is high unemployment, which will lead to falling prices, thus replacing global growth, which was seen in expanding industrial production, as well as increasing durable orders.

Destructionism will stem from disinvestment out of currency carry trade investing, such as  Global Producers, FXR, like those seen in this Finviz Screener, such as ALU, FLR, FLS, IP, PHG, and ETN, as well as out of debt trade investing, such as leveraged buyouts, PSP, such as DLPH.

Tim Duty writes Fed Watch: FOMC Meeting Begins The Federal Reserve expects a long period of low interest rates even after they initiate the first hike.

What a detachment from reality, as on October 23, 2013, the first of two investment extinction events occurred, as is seen in Revelation 6:1-2, Jesus Christ opened the first seal of the Scroll of End Time Events, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

This terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders following in calling Emerging Market Currencies, CEW, lower, forced the investor to derisk out of the Emerging Markets, EEM, with the Emerging Market Financials, EMFN, and the Emerging Market Mining, EMMT, trading strongly lower

The second investment extinction event came on March 14, 2014, with investors selling out of Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, which turned Major World Currencies, DBV, lower.

Short Side of Long posts Geo Political Sentiment Extremes.  Global investors are moving toward a risk-of stance, taking on greater protection, as the prospect of geopolitical instability grows, according to the BofA Merrill Lynch Fund Manager Survey for March. And Benson te posts Marketwatch Video 1,000 Years of Constant European Border Shifts.

The dynamo of regionalism is rising to be the singular dynamo of economic activity, which produces debt servitude centric austerity for all. Regional economic fascism is rising to rule in the world’s ten regions and occupy therein in every one of mankind’s seven institutions.The beast regime is making landfall in the Eurozone, by The Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, that is a top dog banker, who in the process of minting money, takes a cut, 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. Mike Head of WSWS writes  EU-Ukraine trade pact paves way for brutal austerity

There be no longer any citizens, rather there be only residents of regions of economic governance.

Under authoritarianism a new form of money is rising to rule all. Regionalism is establishing a new debt based money system, that being the diktat money, 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, to unify all of mankind’s seven institutions, and establish regional security, stability and sustainability.

The Guardian posts Greece and troika strike deal to release €10bn in aid: PM Antonis Samaras says poorest 1 million Greeks will benefit from deal with EU, ECB and IMF to tune of €500 m. Of note, European Debt, EU, traded to a new all time high, taking debt centris European Nations, such as Greece, GREK, to all time new highs. Those living in the EU will soon be prisoners in a regional banking, debt, fiscal, debt, economic and military panopticon and union, serving as the defining model for regional integration throughout the world.

Robert Wenzel posts The Federal Reserve’s Price Inflation Expectations. If the desire to hold cash balances declines, price inflation could soar. Currently, it appears that the desire to hold cash balances is very high, but that could change dramatically in the future. As I wrote in yesterday’s EPJ Daily Alert: Exact timing on these things are always difficult, but the Fed’s forecasts do not in anyway take into account the changes in the demand to hold cash,which is often the catalyst to accelerating price inflation that is ultimately fueled by massive increases in the money supply (which we already have).

2) … On March 17, 2014, a number of small cap ETFs recovered strongly after the Crimea sell off, driving Dividends Excluding Financials, DTN, to a new rally high, in front of the Fed Meeting, reflecting liberalism’s final pursuit of yield, and establishing the short selling opportunity of a lifetime.

The investment principle is that in a bull market, like the one in Gold, GLD, one buys in dips, but in a bear market, one sells into pips.

Indonesia, IDX, leads the Small Cap Nation, SCZ, investment recovery, since their sell off, as is seen in the combined ongoing Yahoo Finance Chart of IDX, DFE, EWUS, GULF, EGPT, GREK, EDEN, SCIN, IWM, and GERJ, as Reuters reports Greece and its international lenders have struck an agreement in principle to unlock the next tranche of rescue loans. And as Ambrose Evans Pritchard writes Budget 2014: Britain’s false recovery is a credit mirage, unlike real recovery in the US.  The UK has a current account deficit running at more than 5pc of GDP, the worst in a quarter of a century and by far the worst of the G7. And as AP reports London ‘Draining Life’ From Rest of U.K. Economy. The Guardian posts UK Austerity Measures Likely To Hurt Society’s Poorest, The OECD warns warns the pace of cuts likely to intensify over next year and urges government to do more to tackle inequality. CityAM posts Britain’s Real Debt Iceberg Is Getting Scarily Little Attention.

I relate that a strong British Pound Sterling currency carry trade, GBP/JPY, that is FXB:FXY, and foreign nations relocating to London, have driven UK Stocks, EWU, EWUS, such as PUK, and LYB, strongly higher over the last two years, but now are selling strongly off.

Small Cap Consumer Discretionary, PSCD, Small Cap Consumer Staples, PSCC, Food and Beverage, PBJ, and Regional Banks, KRE, have risen strongly since Global Financials, IXG, traded lower, all moving to new rally highs, as is seen in their combined ongoing Yahoo Finance Chart.

Investors in pursuit of yield have taken European Small Cap Dividend, DFE, International Utilities, IPU, and Electric Utilities, XLU, such as GXP, BKH, NEE, UGI, NI, VVC, MDU, D, and NYLD, as is seen in their combined ongoing Yahoo Finance Chart, to new rally highs, as the Interest Rate on the US Ten Year Note, ^TNX, has fallen from 2.79% to 2.68%.

Industrial Office REITS, FNIO, paying a 2.5% dividend, such as CUBE, CWH, DCT, EGP, EXR, HASI, PSA, SIR, … and also Residential REITS, REZ, paying a 3.5% dividend, such as SUI, SNH, MAA, CPT, AIV, AVB, ESS, EQR, and BRE, … and also, Mortgage REITS, REM, paying a 14% dividend, such as AHN, CLNY, EARN, STWD, paying a 14% dividend, have recovered to their October 23, 2013 level, when the Benchmark Interest Rate started to rise from 2.48%.

One could establish a portfolio of ETFs for collateral for short selling, such as those seen in this Finviz Screener FLAT, XVZ, JGBS, GLD, EUO, YCS, SAGG, ZSL, HDGE, and OFF, and commence short selling of selected stocks such as Small Cap Pure Value Stock, RZV, United Rentals, URI, or Small Cap Pure Growth Stock, RZG, Trinity Industries, TRN. In education of trading, Eddy Elfenbein posts Your Handy Guide to Stock Orders.

3) … Both Equity Investments and Credit Investments turned lower on March 19, 2014, after the US Fed FOMC Meeting, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.77%, on the exhaustion of the world central bank’s monetary authority, as the US Fed and other central banks  have crossed the rubicon of sound monetary policy. Global ZIRP, and its excessive credit, working through the speculative leveraged investment community, has fully matured money manager capitalism, and finally made “money good” investments bad, with result that the world has pivoted from the paradigm and age of liberalism into that of authoritarianism.

Now with the bond vigilantes in control of the Benchmark Interest Rate, after Yellen’s first FOMC meeting, and with the bear stock market that began March 14, 2014 fully entrenched, credit as a way of life, and is over, through, finished and done; the world has pivoted into the age of austerity and debt servitude.

Equity Investments, US Real Estate, IYR, Global Real Estate, DRW, and Casinos and Resorts, BJK, led World Stocks, VT, Nation Investment, EFA, such as the Eurozone Nations, EZU, Greece, GREK, and Ireland, EIRL, China, YAO, and Indonesia, IDX, Global Financials, IXG, such as the European Financials, EUFN, and Dividends Excluding Financials, DTN, traded lower, as investors deleveraged out of  EUR/JPY currency carry trade investments, such as AIXG, LUX, ALU, CRH, and NVO, and derisked out of debt trades such as ALU, OAK, FSRV, PUK, NM, and HEES.

Credit Investments, Junk Bonds, JNK, International Treasury Bonds, BWX, International Corporate Bonds, PICB, and US Government Bonds, GOVT, such as US Treasuries, TLT, and Mortgage Backed Bonds, MBB, led Aggregate Credit, AGG, lower, on the higher Benchmark Interest Rate, ^TNX.

Major World Currencies, DBV and Emerging Market Currencies, CEW, traded lower; the US Dollar, $USD, traded higher; with the result that Gold, $GOLD, traded lower. I recommend that now with a trade lower in the price of Gold, $GOLD, from $1380, one start to dollar cost average, an investment in the physical possession of Gold Bullion.

The investment principle is “In a bull market, like the one currently in Gold, GLD, one buys in dips, but in a bear market, one sells into pips.

Of note, gold mining stocks, GDX, are trading strongly lower in value; and with a PE of 34, are greatly overvalued. Gold is going to experience great price inflation, as an investment demand for gold will commence, as competitive currency devaluation creates a see saw destruction of equity investments and credit investments. Gold is the defacto safe haven invesment in times of economic uncertainty and destabilization. Of note, gold mining stocks, GDX, are trading strongly lower in value; and with a PE of 34, are greatly overvalued and overbought.

Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, and the Too Big To Fail Banks, such as BOFI, SIVB, HBAN, BAC, will be integrated into the banks and be known as the Government Banks, or Gov Banks.

Out of chaos, the beast regime of  regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

4) … Japanese Banks, SMFG, MTU, and MFG, and Stockbroker, NMR, led the Far East Financials, FEFN, the Nikkei, NKY, and Japan, EWJ, JSC lower on March 20, 2014 on the failure of Abenomics to stimulate investing, while The Too Big To Fail Banks, Regional Banks, and Stockbrokers trade to new rally highs.

Seeking Alpha Now at Thomson Reuters, writes Kurodanomics And The Missing Third Arrow Unless Mr Abe proceeds with structural reforms, he and Mr Kuroda will soon need to ramp up the degree of stimulus in order to keep investors on board.

Konstantinos Venetis, of Fathom Consulting relates Absent any concrete progress on structural reforms, the so-called ‘third arrow’ of Abenomics, the Bank of Japan’s policies remain the only game in town when it comes to maintaining positive sentiment. In this regard, neither the soft nor the hard data have been particularly encouraging of late. Last week, the Bank explicitly acknowledged the lackluster trend in Japanese exports for the first time, although Governor Kuroda was quick to downplay it as temporary in nature.

Instead, he pointed to the continued improvement in capital spending, corporate profits and industrial production growth as evidence that the ‘virtuous cycle’ between production, income and spending remained intact. We are skeptical – as indeed are Japanese consumers according to the latest surveys. So long as Mr Abe’s plan does not go beyond what essentially is ‘Kurodanomics’, this cycle will ultimately prove unsustainable.

World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Dividends Excluding Financials, DTN, stabilize as The Too Big To Fail Banks, RWW, such as BK, BAC, Regional Banks, KRE, such as SIVB, FITB, HBAN, and Stockbrokers, IAI, traded to new rally highs as the results of the Fed’s Stress Tests were leaked Fed Finds That Nearly All Big U.S. Banks Have Sufficient Capital Buffers. But Bloomberg reports Most Big Banks Would Fail a Real Stress Test. Brazil Financials, BRAF, Brazil, EWZ, and Brazil Small Caps, EWZS, rally on a rallying Brazilian Real, BZF.

5) … At the end of the week, on Friday March 21, 2013, Sectors Biotechnology, IBB, led by BIIB, REGN, ILMN, GILD, CELG, and AMGN, Solar Energy, TAN, and Pharmaceuticals, PJP and Yield Bearing Sector Leveraged Buyouts, PSP, traded lower and Nations, Greece, GREK, and the National Bank of Greece, NBG, traded lower, commencing the Great Bear Market Selloff which has commenced Great Depression II on the exhaustion of the world central bank’s monetary authority.  Dividends Excluding Financials, DTN, popped to an new rally high on short sell covering.

6) … China stocks rallied as Bloomberg reports speculation the government is loosening funding restrictions for property developers and banks to support for issuing preferred stock, causing a  rally led by Chinese Financials, CHIX, Chinese Industrials CHII, China, YAO, China, TAO, China Technology, CQQQ, and China Small Caps, ECNS, all higher, as is seen in their ongoing Yahoo Finance Chart together with China Credit Investment DSUM. One can follow both China equity investments and credit investments with this Finviz Screener.

Ambrose Evans Pritchard posts Tumbling Chinese Yuan sets off carry trade rout. The Yuan, CYB, has lost 3pc since January, a clear break with China’s long-standing policy of slow appreciation. Morgan Stanley said the Chinese central bank may have to intervene to shore up the yuan by selling some of its US dollar bonds if the slide goes much further. The authorities spent $80bn in June/July 2012 to defend its currency band. It is extremely hard to calibrate a soft landing, and the sheer scale of China’s credit boom now makes it a global headache. China accounts for half of the $30 trillion raised in world debt over the past five years.”

Doug Noland asks April/May/June Credit Dynamic? The Chinese renminbi declined 1.22% this week, boosting its one-month drop to 2.16%. The Thursday Bloomberg heading read “China’s Yuan Slumps Most Since 2008 as Central Bank Cuts Fixing. There was another significant default this week (real estate developer), while corporate bond spreads widened further (see “China Bubble Watch”). Finance has tightened markedly, especially for real estate developers and players along the supply chain. Over time, this will more meaningfully impact local government finance that has grown highly dependent upon real estate transactions.

Data this week suggest Chinese home price inflation has slowed markedly in most major markets. This supports the view of an important change in market psychology, although this type of thing usually plays out over months. Nervous lenders and waning availability of mortgage Credit would speed the process. Importantly, the vast majority of markets still show strong year-on-year price gains and there isn’t much yet to suggest that homebuyers are losing access to Credit. The same cannot be said for the weaker developers.

The unfolding crisis in China will turn significantly more problematic as home prices and transaction volumes fall in tandem. This will likely usher in a problematic decline in overall system Credit growth, with waning Credit and liquidity exposing myriad problems. For now, there are indications of mounting apartment inventories. Meanwhile, building additional housing units (apartments) remains an important component of Chinese stimulus programs. The pesky “law diminishing marginal returns” lurks throughout Chinese stimulus and Credit more generally.

In the near-term, there are the unknown consequences related to the PBOC’s decision to devalue the yuan. Asian currencies in general were under further pressure this week. The currency devaluation issue will also evolve over weeks and months

Since 2008, Chinese international reserves have grown $2.293 TN, or 150% – from $1.528 TN to end December 2013’s at $3.821 TN. Over a similar period, Federal Reserve Credit inflated $3.135 TN, or almost 370%, to $4.0 TN. For the past five years I’ve argued that the Fed’s balance sheet and Chinese Credit are closely interrelated facets of the “global government finance Bubble.”

This torrent of foreign-sourced “money” required the PBOC to further inflate domestic Credit and, in the process, exacerbated financial and economic risks. It also required “recycling” the incoming dollar (along with other foreign currencies) balances back into Treasuries and other debt instruments.

Fiona Law of Dow Jones writes Growing worries over the health of Chinese property developers is driving down bond prices and drying up trading volumes in the $47 billion market that had been a favorite of global investors. Property developers had until recently been flooding the market with record dollar-denominated bonds sold in Hong Kong and Singapore, with international money managers snapping up the high yields on offer. Even this year, $15 billion worth of bonds were issued by Chinese developers, mostly in January. That accounted for 40% of global real-estate bond sales, according to Dealogic.

Jeff Kearns of Bloomberg writes Industrial & Commercial Bank of China Ltd., the nation’s largest lender by assets, is among banks that have stopped distributing trust products as the risk of defaults mount, the Securities Daily reported today. China Construction Bank Corp. also ceased marketing the high-yield investment products that have been used to raise funds for companies that don’t have access to cheaper financing such as bank loans, the newspaper reported.

Tanya Angerer of Bloomberg reports Investors are demanding the highest premium to hold Chinese dollar notes in almost seven months as the collapse of a developer and the first onshore bond default fuel speculation missed payments will spread. Yield premiums on securities in the U.S. currency rose to 384 bps on March 17, the highest since Aug. 30. Stocks and bonds of some Chinese developers have slumped after government officials said Zhejiang Xingrun Real Estate Co. collapsed with 3.5 billion yuan ($565 million) of debt. ‘This is merely one example of many distressed small developers in China,’ Bei Fu, a credit analyst at Standard & Poor’s, wrote in a March 18 report. ‘The companies have been struggling daily for survival.’ Real estate companies account for about 60% of dollar bond offerings, DSUM, from Chinese borrowers this year.”

Tanya Angerer and Rachel Evans of Bloomberg report Some 66% of new Chinese developer dollar-denominated bonds sold this year are trading below their issue price amid the collapse of a private real estate company and news the housing market is cooling. The value of home sales in the world’s second-biggest economy fell 5% in the first two months of the year after local governments stepped up measures to curb rising prices.

David Yong of Bloomberg reports China is stepping up scrutiny of its bond market after regulators asked insurers to monitor their debt holdings and as the yield on short-term junk notes jumped this week by the most since December. China Insurance Regulatory Commission told insurers to be aware of the risks in their debt investments, especially in local government financing vehicles, the Shanghai Securities News reported. ‘There’s growing pressure on the bond market because liquidity is generally tighter and sentiment has been affected lately,’ Ivan Chung, a senior credit officer. at Standard & Poor’s, said. ‘March and April is also typically a peak season for refinancing.’

Reuters Reports China’s insurance regulator has warned of risks in investment programmes marketed by insurance asset management firms, an official newspaper reported on Friday, as concerns grow over the health of domestic debt markets and the broader impact on the economy. The China Insurance Regulatory Commission (CIRC) has recently issued an internal notice warning of risks involving so-called insurance investment programmes, off-balance debt schemes issued by asset management firms of insurance firms to raise money from insurers and other institutional investors to invest in industrial projects.Some issuers are not properly backed up by their parent firms, which are supposed to guarantee the payments if the programmes face financial difficulties, among other problems, it said. Last year, a total of 90 such programmes were launched, raising a combined 287.76 billion yuan ($46bn), with the value equalling to the total of all such programmes launched in the previous seven years.

Yimou Lee of Reuters reports Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland. Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43% of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced. The rush to sell coincides with a forecast 10% drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. ‘Some of the mainland sellers have liquidity issues – say, their companies in China have some difficulties, so they sold the houses to get cash,’ said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.

Bloomberg reports China told commercial banks to offer emergency loans and restructure debt for poultry farmers whose business was hurt by bird flu outbreaks in the past year, said people with Knowledge of the matter. The People’s Bank of China said in a notice dated March 10 that banks should extend the term of loans due between Dec. 1, 2013 and June 30 by as much as one year if farmers can’t repay. Outbreaks of the H7N9 bird flu virus caused 20 billion yuan ($3.2bn) of losses in January as consumption fell.

7) … The religious markings of authoritarianism.

Chris Rossini posts in Economic Policy Journal Let us Pray: The Religious Markings of Keynesianism Gary North produced some intellectual gold this morning: “Keynesianism has the markings of a religion. It has a confession: “Fiat money overcomes recessions.” It has an agenda: salvation by economic growth. It has a doctrine of omniscience: monetary central planning. It has a priesthood: Ph.D-holding economists. It has evangelism: Congress, the universities, and the mainstream media.

The new normal is no longer the interventionism of Keynesianism which created a moral hazard based prosperity, but rather the interventionism of authoritarianism which features a debt servitude based austerity.  Now with the bond vigilantes in control of the Benchmark Interest Rate, after Yellen’s first FOMC meeting, and with the bear stock market that began March 14, 2014 fully entrenched, credit as a way of life, and is over, through, finished and done; the world has pivoted into the age of austerity and debt servitude.

Authoritarianism has the markings of a religion. It has a confession: Diktat money for all to establish regional security, stability, and sustainability. It has an agenda: salvation by regional economic governance. It has a doctrine of omniscience: totalitarian collectivism. It has authority: regional framework agreements. It has a priesthood: Regional leaders working in public private partnerships. It has evangelism: the mainstream media.

9) … M2 Money is putting in a double top high. M2 Money is putting in a double top at  $11.37 TN.

10) … In the news.

WSJ reports Hedge fund shutdowns hit nearly five year high. Here comes the flip side of the coin. Amid a booming environment for hedge-fund launches comes some sobering news for industry newbies: Last quarter saw the most hedge-fund liquidations in nearly five years, research firm HFR said Tuesday. Some 296 funds liquidated in the fourth quarter, the most since the first quarter of 2009. In total, 904 funds closed in 2013, with the majority either long/short equity or macro themed. HFR tracks a universe of about 10,000 funds.

Doug Short of Advisor Perspectives writing in Financial Sense relates Industrial production beats expectations, when taken with January data raises a question. The release of the Fed’s Industrial Production report showed a 0.6 percent increase in February, handily beating the Investing.com forecast for a 0.1 percent gain. The decline for two consecutive months is a phenomenon rarely seen outside proximity to a recession. If indeed unusually severe weather has been the dominant factor in the two-month contraction, then we should see a rebound as winter abates, and today’s IP data is certainly encouraging. Note that the most recent data point is the average of the February employment and Industrial Production together with the January data for the other two, hence the question mark.

Rory Dean and Sandy English of WSWS post Newark, New Jersey school official threatens to fire one third of district’s teachers. The layoffs are part of the drive to privatize public education in Newark, the state’s largest city.

Bloomberg reports EU reaches deal on bank failure bill after marathon talks. European Union lawmakers struck a deal on legislation to create a single agency to handle failing euro-area banks after an all-night negotiating marathon ahead of a summit of EU leaders starting today in Brussels.

Reuters reports Europe strikes deal to complete banking union. Reuters reports Europe took the final step to complete a banking union on Thursday with an agency to shut failing euro zone banks, but there will be no joint government back-up to pay the costs of closures.

Reuters reports Key facts about Europe’s banking union. Europe struck a deal to complete a banking union with an agency to shut failing euro zone banks, but there will be no joint backstop for a fund to pay the costs of closures.

Short Side of Long posts Brent Crude is at a decision point and a breakdown looks likely. I comment that When Brent North Sea Oil, BNO, trades lower, Norway, NORW, will fall sharply; the ongoing Yahoo Finance chart of Norway, NORW, and its European peers, EZU, EWU, EDEN, and EWD, shows that it is already falling more bearish than the rest.

11) … Summary Economic destructionism has replace inflationism as the prevailing economic dynamic.

Destructionism is based upon debt deflation. When credit fears arise, economic bust always follows economic boom, as competitive currency devaluation stimulates derisking out of debt trades and delveraging out of currency carry trades.

Destructionism has been underway ever since Jesus Christ opened the first seal of the Scroll of End Time Events, seen in Revelation 6:1-2, and released the Rider on the white horse, that is the rider who has a bow without any arrows, to effect a global coup d’etat, by transferring  sovereignty from democratic nation states to sovereign regional leaders and sovereign regional bodies such as the ECB, by enabling the  the bond vigilantes to begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, which was the first of two extinction events.

This terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders following in calling Emerging Market Currencies, CEW, lower, forced the investor to derisk out of the Emerging Markets, EEM, with the Emerging Market Financials, EMFN, and the Emerging Market Mining, EMMT, trading strongly lower

The second investment extinction event came on March 14, 2014, with investors selling out of Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, which turned Major World Currencies, DBV, lower, as investors derisked out of currency carry trade investments, and deleveraged out of debt trade investments in response to Russia invading and taking over Crimea.

A see saw destruction of credit investments and stock investments commenced in March 2014, as the Interest Rate on the US 10 Year Note, rose to 2.75%. The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will continue steepening, seen in the Steepner ETF, STPP, steepening.

Both Credit investments, AGG, and equity investments, VT, traded lower in March 2014, on debt deflation, seen in International Treasury Bonds, PICB, and World Treasury Bonds, PICB, trading parabolically lower, as competitive currency devaluation picking up steam as is seen in Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value.

At the end of the week, on Friday March 21, 2013, Sectors Biotechnology, IBB, led by BIIB, REGN, ILMN, GILD, CELG, and AMGN, Solar Energy, TAN, and Pharmaceuticals, PJP and Yield Bearing Sector Leveraged Buyouts, PSP, traded lower and Nations, Greece, GREK, and the National Bank of Greece, NBG, traded lower, commencing the Great Bear Market Selloff which has commenced Great Depression II on the exhaustion of the world central banks’ monetary authority.

Now after six years of money manager capitalism, the tail risk of Global ZIRP is economic deflation and economic recession; she is presented in bible prophecy of Revelation 17: 1-5; and she is going to be a bad bitch, as she is the scarlet beast, full of names of blasphemy, having seven heads and ten horns, and upon her forehead a name written, Mystery, Great Babylon, the mother of the harlots, and of the abominations of the earth.

Regionalism is the singular dynamo of economic activity under authoritarianism, and it is bringing forth Mystery Babylon, that is the beast regime of Revelation 13:1-4, as it rules in diktat policies of regional economic governance in all of the world’s ten regions, and occupies in debt servitude schemes of totalitarian collectivism in every one of mankind’s seven institutions.

Joe Firestone writes under the byline Letsgetitdone and is part of a group of individuals who follow an economic school of thought called Modern Monetary Theory or MMT for short; it’s a relatively new “post-keynesian” (despite some of the ideas it’s based on actually influenced Keynes’s theories) economic school of thought that starts with basic facts like “government can create all the money it wants” and ends with a way we could have both stable prices(i.e. low inflation) and truly FULL employment in this country writes The Role Of Government. Congress’s role is to appropriate deficit spending that will do that. The Federal Reserve’s role is to create bank reserves and buy financial assets to target and maintain whatever interest rate is needed to facilitate full employment with price stability, and the Treasury’s role is to implement deficit appropriations by issuing debt instruments to help the Fed drain excess reserves from the economy, and also issue coins to earn seigniorage providing a source of reserve credits from the Fed that Treasury can use in implementing deficit spending, or under certain policies, to redeem previously issued debt instruments as they fall due.

As a result of ever growing geopolitical conflict in the Ukraine, a rib of the Russian Bear, Middle East and Asia, and the financial chaos of a continually rising US Ten Year Bond, ^TNX, coming at the hands of bond vigilantes, who aggressively call credit investments of all types lower, such as US Ten Year Notes, TLT, International Corporate Bonds, PICB, Junk Bonds, JNK, World Government Bonds, BWX, Chinese DSUM Bonds, Emerging Market Bonds, EMB, as well as investors derisking out of stocks, VT, the beast regime of regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

Economic destructionism got fully underway in March 2014 as the world central bank’s monetary policies have crossed the rubicon of sound monetary policy and have made money good investments bad. Inflationism is no longer the prevailing economic dynamic.

As a result, the world has pivoted from the paradigm and age of liberalism, where the capstone of economic activity has been the investor, into that of authoritarianism, where the debt serf is centerpiece of economic activity.

The speculative leveraged investment community developed peak prosperity, that is peak real disposable income, and peak moral hazard in March 2014. The new normal is austerity and debt servitude.

Under liberalism the three dynamos of creditism, corporatism, and globalism, supported multiple economic systems, such as crony capitalism, European Socialism, Greek Socialism, and clientelism, But under authoritarianism, the singular dynamo of regionalism supports only regional economic fascism.

The day of the fixed income investor has peaked as is seen in the charts of Dividends Excluding Financials, DTN, and Short Term Bonds, FLOT, topping out in value.

Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, short term interests rates will be rising, causing money market funds to break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US  the bank’s Excess Reserves will be captured, so as to speak, by the US Fed.

With a trade lower in the price of Gold, $GOLD, from $1380, one should start to dollar cost average, an investment in the physical possession of Gold Bullion, as in the age of destructionism, diktat and gold will be the only two forms of sustainable resource and wealth.

12) … The 10 30 Yield Curve steepened after Yellen’s first Fed meeting and a chart analysis of the Steepner ETF, STPP, shows it steepening.  It is the bond market response that is important, and that response was post-Yellen.

Citing Susanne Walker of Bloomberg Benson te writes “The spread between the longer end of the curve particularly the 10 year notes and 30 year bonds has markedly narrowed [10] which has been indicative that markets are now pricing in higher interest rates.”

I see the facts different, yet the prediction the same.  The ongoing Yahoo Finance comparison between the Yield of the US 10 Year Note, ^TNX, and the Yield of the 30 Year US Government Bond, ^TYX, shows for the week ending March 21, 2014, the spread between the shorter end of the curve and the longer end of the curve is increasing. A  steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, caused a rise in interest rates destroying Aggregate Credit, AGG.

A comparison between the yield of the US 10 Year Note, ^TNX, and the Yield of the 30 Year US Government Bond, ^TYX is presented below, shows the post-Yellen steepening of yields.

Debt Deflation.png

And The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, shows steepening post-Yellen.$TNX $TYX.png

And the chart of the Steepner ETF STPP shows a steepening post-Yellen. Stpp.png

Note how the daily chart of STPP is in consolidation; it is going to spring to life utterly destroying both credit investments and equity investments. A steepening yield curve, and a higher Benchmark Interest, $TNX, rate, coming from the bond vigilantes continuing to call the Benchmark Interest Rate higher, is going to be utterly economically destructive, as well as be terrifically destructive to savers invested in Utility Stocks, XLU, US Treasuries, TLT, and US Government Bonds, GOVT, as they will see the basis of their investment depleted.

I agree with Benson te who writes “So we seem on track towards ‘Wile E. Coyote moment’ via the deepening convergence of 3 contravening forces: soaring asset prices (financed by credit) and sustained increase in record debt levels in the face of rising rates (or a tightening environment).“

“The Wile E. Coyote moment will extrapolate to the disorderly unmasking of most of the impossible things the mainstream has come to firmly believe in. Psychological escapism which has evolved out of asset bubbles will see a rude awakening pretty much soon.”

13) … A New Civilization is coming soon.

Christians believe that The Just And Peaceful World will be established through the Millenium Rule And Reign Of Jesus Christ From Jerusalem Over Planet Earth.

14) … The tinyurl for this document is http://tinyurl.com/n2the52

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