Financial Market report for the month of March 2014.
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On Monday March 31, 2013, Global Financials, IXG, led World Stocks, VT, Nation Investment, EFA, and Dividends Excluding Financials, DTN, higher, on a Yellen “Put”, as CNBC reports Stocks Rally As Yellen Vows To Support The Economy. Stocks traded higher on the final trading day of the quarter after Federal Reserve Chair Janet Yellen said there’s still room for the central bank to help.
Aggregate Credit, AGG, traded unchanged 0.0, with Junk Bonds, JNK, trading, 0.1% higher, and US Ten Year Notes,TLT, trading 0.2, lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded slightly higher to 2.72%. The Steepner ETF, STPP, rose 0.6%. Gold, GLD, traded 0.5% lower. WSJ Money Beat reportedJanet Yellen Gives ‘One of the Most Dovish Speeches I Have Ever Read. causing Volatility,^VIX, to plummet.
In the last six months, European Debt, EU, and German Debt, BUND, have become the most highly valued of all debt, as is seen in theongoing Yahoo Finance Chart of European Debt, EU, together with Aggregate Credit, AGG, German Debt, BUND, Junk Bonds, JNK, US Ten Year Notes, TLT, World Government Bonds, BWX, and International Treasury Bonds, PICB. This has driven theEurozone Stocks, EZU, the European Financials, EUFN, European Small Cap Dividend, DFE, and theEurozone Nations, especially theClub Med peripheral PIGS, Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, strongly higher.
Liberal Economist Mark Thoma whites in CBS News, How Economic “Rents” Affect Inequality. Jesus Christ acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the age of credit bringing it to completion in March 2014, producing the most extreme possible moral hazard prosperity, which came through the economic rent of margin debt, as RTG posts NYSE Margin Debt Levels Have Hit New Highs. Rent seeking behavior and the inequality it produced was ordained of God from eternity past, as part of the economy of God.
The age of credit featured the investor and risk-on investing as the centerpiece of economic action, where the greatest investment gains came by investing in Small Cap Value Stocks, RZV, and Small Cap Growth Stocks, RZG, with over-the-counter stocks such as Conrad Industries,CNRD. and formally listed Energy Service Companies, IEZ, such as CJES, BAS, RES, NOAH, EXH, being the investors darlings as well as in the pursuit of yield ETFs, such as Leveraged Buyouts, PSP, and in investments such as Dividends Excluding Financials, DTN, such as Hewlett Packard, HPQ.
US Infrastructure Stocks, PKB, such as Watsco, WSO, which is loaded with Building Material Stocks, such as Mueller Water Products, MWA, finished the month of March, 2014, manifesting a questioning harami, as Number Nomics posts Construction Spending Seen Strong.
The monthly chart of Disney, DIS, manifested a questioning harami as well as the NYT reports A Billion-Dollar Bracelet Is the Key to a Disney Park. Walt Disney World has spent more than a year rolling out a $1 billion system that changes how visitors do everything from enter their hotel to pay for their entertainment via the MyMagic+ Fast Pass Braclet.
Automobile Dealers, such as PAG, SAH, ABG, KAR, AN, KMX, LAD, clearly topped out in March 2014, as is seen in their combined ongoing Yahoo Finance Chart, as California Beach Pundit posts Car Sales Still Strong and Atif Mian and Amir Sufi post Auto Sales And Weather. “We now have an out-of-sample test of our conclusion: March estimates of new auto sales are out, and they are higher than at any other point since 2007. They also beat consensus forecasts, which suggests that analysts didn’t fully account for the weather-related boost.” The monthly chart of Automobiles, CARZ, and supplier Delphi, DLPH, manifested the lollipop hanging man candlestick in March 2014, suggesting a rally finale.
The House of Debt authors also post Another Debt-Fueled Spending Spree? From 2009 to 2013, spending on new autos increased by 40% in nominal terms. All other spending increased by only 20%. We know that the recovery in employment and income has been pretty weak in 2012 and 2013. Do we think that income growth justifies the large increase in auto debt? Who exactly is getting these loans? Are they borrowers who are seeing their income and employment fortunes improve? Will lenders continue to lend if risk-free rates rise? We will further explore these questions in the coming weeks. For now, we just want to flag this as a potential worry. Something to think about.
Benson te writes theUS Dollar Standard Has Spawned One Colossal Global Bubble Finance. The age of credit centered around currency carry trade investing Regional Airlines, such as Ireland’s RYAAY, the Nation of Ireland, EIRL, and its Bank, IRE, as well as debt trade investing in companies such as Real Estate Investment Company, Blackstone, BX, and Industrial Equipment Provider, HEES. Global ZIRP supported Nation Investment, EFA, in countries such as Denmark, EDEN, and a pursuit of yield seen in Gulf Dividends, GULF, and the Netherlands’, EFNL, and its Life Insurance Company, ING.
Regional Bank Leaders, KRE, such as HBAN, SIVB, OZRK, PACW, EGBN, BBNK, SBNY, FITB, BNCN, and CASH, traded higher; but it was the Japanese Banks, SMFG, MFG, and Credit Provider, IX, as well as Stockbroker, NMR, that led Global Financials, IXG, lower in March 2014.
China Investments, such as, CHIX, CQQQ, ECNS, CHII, TAO, YAO, HNP, rallied at the end of March 2014, ABC and The Australian Broadcasting Corporation feature video interviews with James Rickards and Richard Duncan A Sign Emerges That China’s Economy Is On The Verge Of Collapse. New figures reveal that China’s big banks wrote off 10 billion dollars in bad debts last year, double the amount recorded in 2012. The doomsayers reckon the US dollar’s days are numbered as well, after five years of money printing.
Nation Investment, EFA, was led lower by Russia, RSX, ERUS, on the takeover of Crimea, Japan, EWJ, JSC, on the failure of Abenomics, and Peru, EPU, on the failure of Copper, JJC, in March 2014.
The Chart of Natural Gas, UNG, shows a cup and handle completion pattern, and thus Natural Gas,UNG, will be trading lower in price. The chart of Oil,USO, and Brent Oil, BNO, both show they have entered a decline, which will cause Energy Production Companies, XOP, to trade lower. The combined ongoing Yahoo Finance Chart of Energy Partnerships, such as Enbridge, ENB, as well as the chart of 200% Energy Partnerships, MLPW, shows these to be topped out.
Asset bubbles no more. Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, completed the age of credit during March 2014, as the Bear Market Of 2014, both in equity investments, VT, and credit investments, AGG, picked up steam, on the exhaustion of the world central banks’ monetary authority; and pivoted the world into the age of debt servitude.
Confirmation of a bear stock market is seen in Nuveen Closed End Equity Fund, JCE, trading lower. And confirmation of the failure of credit is seen in Call Write Bonds, CWB, trading lower.
Currency carry trade investing drove major world currencies, DBV, and Emerging Market Currencies, CEW, to rally highs in March, 2014, producing peak Nation Investment, EFA, with Denmark, EDEN, Gulf Dividends, GULF, New Zealand, ENZL, trading higher; as well as Emerging Markets, EWM, with India, INP, SCIN, EPI, and Indonesia, IDX, IDXJ, recovering strongly.
The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever-increasing austerity, coming largely from disinvestment out of currency carry trade investments, such as theEUR/JPY, and derisking out of debt trade investing, such as Leveraged Buyouts, PSP, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.
MG investments postsCovenant Erosion in High Yield Bonds Documented, Caveat Emptor. Yes indeed, buyer be aware, the failure of credit has commenced. The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused the Global Growth ETFs, such as Semiconductors, SOXX, and Global Producers, FXR, the Consumer Spending ETFs, such as Internet Retail, FDN, and Distressed Investments,FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed took in under QE 1, and traded out money good US Treasury Notes, TLT, to trade lower from their early March 2014 high.
Equity is no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG,VT:AGG, to trade lower. With the trade lower in World in World Stocks, VT, in March 2014, the world pivoted from the age of credit to the age of debt servitude on the failure of the seigniorage of the world central banks. Look for popular Notes and Bonds ETFs such as TLT to trade lower in value on the ongoing exhaustion of trust in the monetary policies of the world central banks.
Deleveraging out of currency carry trade investments and derisking out of debt trade investments is producing the Bear Stock Market of 2014 and is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession, characterized by economic deflation, which will produce the new economic dynamo of regionalism replacing the former dynamos of creditism, corporatism and globalism.
The age of debt servitude features the debt serf as the centerpiece of economic action, working through his debt servitude in all austerity, where all the debts of the former age will be applied to every man, woman and child on plane earth until all fiat wealth is utterly pulverized into dust as is foretold in bible prophecy of Daniel 7:7.
Examples are now starting to flow in as WSWS writes Detroit water cutoffs, and as Ambrose Evans Pritchard writes with those in the Ukraine serving as an example. And In the news, Short Side of Long postsCitigroup’s US Economic Surprise Index has been dropping lower into the negative territory throughout the month of March, as Global leading indicators continue to show DM improvement.
East Cleveland serves as a foreshadowing of the age of economic deflation. Rust Wire post the video documentaryThe Fall of East Cleveland. Neighborhoodscout relatesThe per capita income in East Cleveland in 2010 was $13,818. East Cleveland also has one of the higher rates of people living in poverty in the nation, with 39% of its population below the federal poverty line. Similarly Biggest US Cities Demographic Data post forEast Cleveland, OH 44112, shows a poverty rate of 36%.
The age of credit was established upon the sovereignty of democratic nation states and the seigniorage of the Creature from Jekyll Island as well as the speculative leveraged investment community. The failure of credit is seen in World Treasury Bonds, BWX, and its closed end fund peer, Pimco Global Government Debt, RCS, both trading lower in value.
The age of debt servitude is being established by Jesus Christ opening 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’état 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% on October 23, 2013. Needless to say a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, trading higher, will evidence the onset and relentless drive of economic deflation, which will be seen in the Most Currency Carry Traded Nations, DFE, IDX, EWUS, GULF, EGPT, GREK, EDEN, SCIN, IWM, GERJ ,ENZL, ECNS, falling rapidly in value.
Seigniorage will come regional leaders, as they work in regional framework agreements, to establish regional security, stability, and sustainability. Most certainly, there will be no anarcho-capitalist libertarian economic leaders, that is those who believe in free markets, the non-aggression principle and respect for private property rights, as economic fascism will be replacing crony capitalism, European socialism and Greek socialism. Libertarianism is a mirage on the authoritarian desert of the real.
Look for a sharp rise in the value of the bear market, that is inverse ETFs, such as Direxion 300% ETFs, ERY, FAZ, SOXS, SPXS, EDZ, KORZ, DPK, EURZ, DRV, TMV, as well as the Proshares 200% ETFs, BIS, SQQQ, SDD, SSG, SKF, EPV, SCC, RXD, DUG, TTT.
One could commence short selling with the funding of a brokerage account with these Market Vane ETFs, STPP, XVZ, JGBS, GLD, EUO, YCS ,OFF, HDGE, SAGG, TYBS, DNO.
One can follow the destruction of fiat wealth with the use of this Finviz Screener.
Wealth will best be preserved, and in fact grown by investing in and taking possession of gold bullion and some silver bullion for bartering, as an investment demand for gold is going to soar as fiat wealth falls into the Pit of Financial Abandon; look for Spot Gold, $GOLD, to start rising from $1,280.
Monthly chart of US Infrastructure, PKB, manifesting a questioning harami during March 2014 communicating peak fiat wealth that came during the age of credit from the inflationism of the world central banks.