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Financial Market Report for the week ending May 30, 2018
1) … Article Summary: Peak money and peak wealth has been attained and is the culmination of the activity of Jesus Christ in the economy of God, that is His household stewardship of all things; and He has begun to pivot commodities lower on the debasement of fiat money.
2) … As presented by the Apostle Paul in Ephesians 1:10, Jesus Christ is maturing and completing perfecting the paradigm and age of liberalism, which featured nation state central bank economic stimulus, much like a ship’s captain completes the manifest before setting sail. He will soon pivot the world into the paradigm and age of authoritarianism, which features regional fascist mandates.
As investors start to derisk out of money manager capitalism’s debt trades and currency carry trades, the world will enter the final phase of the business cycle known as Kondratieff Winter.
The age of currencies was fathered by Milton Friedman with his Free To Choose Manifesto, and the the age of credit was fathered by Ben Bernanke with his QEs, Mario Draghi with his LTRO1, 2, and OMT, and Hiroki Kuroda, with this Abenomics.
Each of economic geniuses, Bernanke, Draghi, and Kuroda, provided his own credit stimulus for trust in risk on investing; these birthed and defined the investor as the centerpiece of economic activity.
God purposed for a debt based money system, and provided the Banker Regime to establish currencies and credit to achieve His purposes. It was by God’s design from eternity past, and ongoing fulfillment of His will that the central bank leaders’ provision of currencies and credit, provided seigniorage, that is moneyness, for investment gain, and very little stimulus for economic recovery since the Great Recession, as the investor was ordained from eternity past to be the centerpiece of economic activity.
God provided the Euro, FXE, as a platform for speculative leveraged investment purposes; its rise over the Yen, FXY, seen in the chart of the EURJPY rising, established great investment gain in currency carry trade investing, in companies such as Ireland’s ACN, MNK, RYAAY, JHX, COV, IR, Finland’s NOK, Netherland’s AER, LYB, ENL, NXPI, UN, ST, PHG, Belgium’s DEG, BUD, France’s VE, SNY, ORAN, Luxembourg’s AGRO, Italy’s LUX, TI-A, and also debt trade investing, in Italy’s Debt, ITLY, and in European Financials, EUFN, such as Spain’s SAN.
Jared Bernstein presents Hysteresis The phenomenon of cyclical weakness morphing into structural weakness. I’ve got a very interesting piece on this coming out soon, if I may say so, and it shows the damage done to the growth rates on both our own and many other economies by the Great Recession and the series policy mistakes made in its wake. Not trying to be the skunk at the garden party here. Just trying to keep it real and not lean too far over the skies as we glide over alleged green shoots that turn brown in the time it takes for a head fake.
Thus there was no fluke, error, or failure of policy, whereby employment and household debt relief were given little regard by the world central bank leaders in the Great Recession.
It’s important to reflect on the Club Med, that is PIGS, mentality and culture. Scott Sumner posts There is one thing we do know about Italy, the low level of per capita GDP (compared to France) is almost entirely due to an absolutely horrendous performance in southern Italy, where roughly 1/3 of all Italians live. And there is a lot of circumstantial evidence that at least part of the difference between southern and northern Italy is cultural. Not “cultural” in the sense that some people use the term (a code word for lazy.) After all, southern Italians do quite well in America. Rather cultural in the sense that everyone’s hobbled by a culture of corruption than no single Sicilian or Neapolitan is in a position to change. So I don’t believe you can think about France vs. the US without also thinking about southern Italy. That’s part of the rich mosaic that is the Welfare States of Europe (the WSE), just as South Dakota Indian reservations, and McAllen Texas, and rural Mississippi are part of the United States of America (USA), the world’s richest big economy.
Economics is defined as one’s life experience in sovereign money. Sovereign currencies, that is Major World Currencies, DBV, such as the Euro, FXE, began to trade lower in early May 2014; this loss of seigniorage communicates a historic dwindling of sovereign authority of the world’s democracies, and resulted in an unwinding of the Euro Yen Currency Carry Trade, that is EURJPY, which stimulated a sell out of nation investment in most of the peripheral Eurozone nations, specifically Portugal, PGAL, Italy, EWI, Ireland, EIRL, and Greece, GREK, but not Spain, EWP.
Out of soon coming global economic chaos, people will come to trust in new sovereign authority and monetary and economic policies of regional economic governance and schemes of debt servitude to establish regional security, stability, and sustainability, where the debt serf is the centerpiece of economic activity, and ever increasing poverty is the way of economic life.
Fiat money, defined as the combination of Major World Currencies, DBV, and Emerging Market Currencies, CEW, together with Aggregate Credit, AGG, will soon literally start dying. Out of soon coming Financial Apocalypse, seen in bible prophecy of Revelation 13:3-4, diktat money, defined as the mandates of regional fascist leaders for regional security, stability, and security, will underwrite all economic activity.
The Defensive Stocks, DEF, all of which are Dividend Payers, such as Insurance Companies, KIE, Health Care Providers, IHF, Global Integrated Energy Companies, IPW, FILL, Real Estate, IYR, DRW, Global Agriculture, PAGG, Electric Utilities, XLU, PUI, Consumer Staples, KXI, and Global Utilities, DBU, are topping out, reflecting that the rally in stocks is coming to an end.
Soon the investor, most critically the fixed income investor will be going extinct, as investors derisk out of debt trade investments and currency carry trade investments.
The Precious Metal Commodities, JJP, were driven lower by the strong rally in credit sensitive stocks, and the trade lower in the Major World Currencies, DBV; both of which drove the Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, lower.
Global ZIRP has finally run its course, and as a result, the rotation out of High Beta Stocks, and into US Debt, such as US 30 Year Government Bonds, EDV, and US Ten Year Notes, TLT, and the pursuit of yield in High Yielding Debt, the proof positive of risk-on investing, as well as support for ongoing equity market investing and all credit market investing, is coming to an end.
The only safe haven investment will be in taking physical possession of, and safely storing, gold bullion; an investment demand for gold will soon commence on the failure of fiat money and fiat wealth which is defined as Equity Investments and Credit Investments.
The wisest investment one can is to start to dollar cost average investing in gold bullion. Buying gold bullion in price dips of gold will turn out to be outstanding investments as the price of gold will be going significantly higher on the soon coming utter failure of fiat money and fiat wealth.
The Apostle John relates in the opening remarks of the last book of the Bible, the contents of a dream given to him by angels while in his 90s, while living in exile on the Isle of Patmos, Revelation 1:1 “The Revelation of Jesus Christ, which God gave unto him, to shew unto his servants things which must shortly come to pass; and he sent and signified it by his angel unto his servant John”.
This inquiring mind asks, what must shortly come to pass? A global economic earthquake is imminent as investors will soon start to massively derisk out of debt trades, and deleverage out of currency carry trades, in Equity Investments, as well as Credit Investments, as the wisest of investors no longer trust in the monetary authority of the world central banks to provide investment gains and global growth.
The death of fiat money has commenced, seen in the Euro, FXE, and European Credit, EU, trading lower, causing debt deflation in periphery Europe, specifically Portugal, Italy, Ireland, and Greece, but not Spain, trading lower.
Soon, the death of all fiat money will terminate the Banker Regime; and introduce the Beast Regime of Regional Governance and Totalitarian Collectivism, seen in bible prophecy of Revelation 13:1-4, which features diktat money.
3) … The short selling opportunity of a lifetime has arrived. Given that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened at the end of the week of May 30, 2014, and given that Equity Investments are terrifically overbought, and given that US Government Debt, EDV, TLT, is approaching overbought, the short selling opportunity of a lifetime has arrived.
Just as one buys into dips in a bull market one sells into pips in a bear market; for those inclined to trade, now is the time to start short selling.
Global Financial Institutions such as Japan’s IX, NMR, Brazil’s BSBR, ITUS, Mexico’s BSMX, India’s IBN, HDB, the UK’s RBS, LYG, Canada’s BNS, TD, CM, BMO, Chile’s BCH, BCA Spain’s STD, and Argentina’s BFR, will be trading strongly lower, leading Nation Investment, EFA, lower, as debt deflation picks up at the hands of the currency traders and the call of the bond vigilantes, and thus are excellent short selling opportunities .
Many short selling opportunities exist, in Savings and Loans, BOFI, in Asset Managers, PFG, AMP, BEN, VOYA, CNS, IVZ, LM, BR; in Retail, RAD, WAG; in Semiconductors, RFMD, TQNT, BRCM, AMKR, MU, GTAT, AVGO, RMBS, MXIM, RMBS, ISIL, IDTI, CAVM, TSM, INTC, FCS, NXPI, CODE, STM, MPWR, QCOM, ISSI, PLAB, AMD; in Electronics, MXWL, MSI, AME, APH; in Data Storage, SNDK, WDC; in Basic Materials, AOS, EXP, GSM, ZINC, KALU; in Automobiles, F; in Aerospace and Defense, BA, LMT, GD, UTX, NOC, RTN, COL, TXT, BEAV, ERJ, LLL, HRS, ESL, MOG-A, HII, CW, VSEK; in Railroads, TRN, UNP; in Real Estate Development, TPL, HHC; in Rental and Leasing, URI, HEES; in Services, SNX, BAH, EEFT, LABL, HURN, RIES, RXPC, TTEC, EPAM, STB, SCOR, ASGN, KFY, ROL, CTAS; in Chemical Manufacturers, DOW, LYB, DD, CE; in Metal Manufacturing, AA; in Entertainment, DIS, TWX; in Telecom Services, VZ; in Airlines, DAL; in Transportation, FDX; in Consumer Staples, REV, SAFM, EL, PEP, GIS, IBA, DEO, TAP, ADM, CAG, KRFT, KMB, INGR, MJN, MDLZ, IFF, in Industrial Manufacturing IR, GE, MMM, CMI; in Technology, AAPL, in Nasdaq Internet, EQIX, NFLX, SATS, CMCSA, VIAB, PCLN, BIDU, GOOG, MSFT, INTU, AMZN, in Specialty Chemicals, PPG; in Cloud Computing, XRX, ORCL; in Medical Devices, ABT, COV, in Semiconductor Equipment, AMAT; in Credit Services, MA, V; in Packaging, GPK; in Energy Production, EOG, COG, HP, in Energy Service, HAL, SLB; in Energy Production, COP; in Networking, CSCO; in Circuit Boards, FLEX, AVGO; in Biotechnology, GILD, CELG, BIIB; in insurance Companies, KIE, FNF, FNHC, UIHC,AFH, AFSI,; even in Small Cap Pure Growth, RZG, GSAT, SPB, NPO, TOWR, TRX, AAON, NTK, NP, MEAS, CIR, CFX, PKOH, AGX, TPC; and in Small Cap Pure Revenue, RZV, MCO, POOL, SIX, PAG, SAH, ABG, KAR, AN, LAD.
Those who are into short selling may want to consider using a portfolio of Inverse Market ETFs as basis for collateral; these might include STPP, XVZ, EUO, YCS, CMD, DNO, MLPS, SAGG, DTYS, JGBS, GLD, GYEN, GEUR, GGBP, as well as, HDGI, YXI, EUM, DOG, SEF, EFZ, DDG, PSQ, REK, which must be managed closely as they are volatile, and are not held to term but are traded on waves of buying and selling.
Efficient management of such a portfolio should produce a daily gain of 0.2%, and a weekly gain of 0.1%, before trading fees in and out of these ETFs.
The case for short selling comes from the fact of increased global insecurity. Elaine Meinel Supkis writesNATO Approves Of Full Military Attacks On Separatist East Ukrainians After Fake Election: Many Killed. Our bankrupt empire runs riot right on the front doorstep of Russia. This inquiring mind asks, when and how, that is in what way will war with Russia, and/or China breakout, and where will it erupt? Will it occur in Syria? or will it be in the Ukraine? or will it be in the Asia seas? It is apparent that the Ukraine is being divided up into Crimea becoming part of Eurasia, and Eastern Ukraine and Western Ukraine, becoming part of the Eurozone.
4) … On Wednesday, May 28, 2014, Macronomy reports Japanese pension fund buyers purchase US Debt, as they perceive them to be a safe haven investment. They bought the longer duration ones rather than the shorter duration ones, plowing greater sums into the 30 Year US Government Bond, EDV, than the US Ten Year Note, TLT.
There was a strong trade higher in Aggregate Credit, AGG, on May 28, 2014. The chart of the Interest Rate on the US Ten Year Note, ^TNX, shows an awesome trade lower from 2.52% to 2.44%, the lowest rate in 2014. Aggregate Credit, AGG, soared beyond its May 15, 2014, high, being driven parabolically higher by 30 Year US Government Bonds, EDV, US 10 Year Government Notes, TLT, and Mortgage Backed Bonds, MBB. Junk Bonds, JNK, traded higher than their previous high which occurred on May 16, 2014. Credit Investments are near to topping out.
Bloomberg reports Bond Surge Worldwide Drives Index Yield to One-Year Low. A worldwide bond-market surge pushed yields to the lowest levels in a year on growing evidence central banks can keep stimulating economic growth without igniting inflation. Treasury 10-year note yields, fell to the least since June. A rally yesterday drove the yield on the Bloomberg Global Developed Sovereign Bond Index to 1.28 percent, the lowest since May 2013. Australia’s (GACGB10) 10-year yield dropped to an 11-month low, Japan’s slid to the least in 12 months, while European bond yields were close to the lowest since the formation of the region’s shared currency. The U.S. sold $29 billion of seven-year notes at the lowest yield since October.
The dramatic flattening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, flattening, highlights the investors perceived concept of US Treasuries as “safe assets”.
Risk aversion stimulated the currency traders to sell the Major World Currencies, DBV, such as the British Pound Sterling, FXB, the Australian Dollar, FXA, and the Euro, FXE, as well as a whole host of Emerging Market Currencies, CEW, and bought the Japanese Yen, FXY.
The chart of the major currency crosses GBP/JPY, the AUD/JPY, and the EUR/JPY, all manifested lower; yet surprisingly there was only a slight follow through trade lower in Equity Investment, VT, and only a slight follow through trade lower in Nation Investment, EFA, and Small Cap Nation Investment.
Rudolf E. Havenstein posts The US Has Been Devaluing The Dollar Almost Continually For Over 100 Years.
Devaluation of the US Dollar intensified when currencies were established to float as President Nixon embraced the Milton Friedman Free to Choose, Floating Currency Manifest in 1971. The US went off the gold standard and the combination of US Dollar Hegemonic activity and Nation Investment birthed the investor as the centerpiece of economic, where fiat money has produce fiat wealth.
Now with currencies sinking at the end of May, 2014, the US will no longer be the world’s Hegemon, and the investor will be going extinct.
The world is at a historic inflection point. The death of currencies, such as the Euro, FXE, is underway, on the failure of trust in the monetary policies of the world central banks to stimulate equity investment growth and global economic growth, with the result that the US Dollar, $USD, UUP, is trading somewhat higher.
The trade higher in US Dollar, $USD, UUP, coming largely from a purchase of the 30 Year US Government Bonds, EDV, and 10 Year US Notes, TLT, caused Gold, GLD, which is both a currency and a commodity, to trade strongly lower, falling out of a consolidation chart pattern. Its lower price presents a buying opportunity, as it is in a bull market, and will be in demand as fiat money and fiat wealth is now in a dying process. One should begin dollar cost averaging a purchase of gold bullion.
The trade higher in the US Dollar, $USD, UUP, and the trade lower in the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, on May 28, 2014, means a loss of the US Dollar as the world’s reserve currency, and as such the US Dollar Hegemonic Empire is starting to crumble.
This is foretold in bible prophecy of Daniel 2:25-45, where the two greatest global hegemonic empires of all time, these being the British Empire and the US, will collapse, and out of their ruin, a Ten Toed Kingdom of regional fascist government, with toes of iron diktat and clay totalitarian collectivism, will rise as a global empire to subdue mankind.
Inasmuch as currencies are the wheels upon which economics operate, currency devaluation at the hands of the currency traders, is totally destructive to all current economic systems, such a Crony Capitalism, European Socialism, Chinese Capitalism, and Russian Communism.
The three dynamos of creditism, corporatism and globalism are winding down on the destruction of the fiat money used for investment gain. And the singular dynamo of regionalism is establishing diktat money, where regional fascist leaders issue economic mandates for regional security, stability and sustainability.
The extinction of the investor has commenced, at the hands of the currency traders and at the club of the bond vigilantes; the first to be butchered are the investors in periphery Europe, that is Portugal, PGAL, Italy, EWI, Ireland, EIRL, Greece, GREK, but not Spain, EWP. The birth of the debt serf has commenced.
Ever since Milton Friedman came out with the Free To Choose doctrine of floating currencies, the world has been operating on a debt based money system, and to the dismay of Austrian Economist, not a hard asset money system.
At the end of the age of liberalism, meaning freedom from the state, debt becomes money, as the fiat, that is the rule of the Banker Regime is coming to a climax. And as is seen in May 28, 2014 financial marketplace trading, with 30 Year US Government Debt, EDV, and US Ten Year Notes, TLT, rising strongly in value, debt has become wealth.
The Distressed Investments, traded by the Fidelity Mutual Fund, FAGIX, have increased in value ever since the US Fed traded out “money good” US Treasuries for the worst of debt in QE1 in 2008, with the aim of restarting financial marketplace investing and regenerating the global economic system.
The US Fed’s monetary policies and the Banker Regime’s policies of credit choice were stunningly successful, in that they have produced terrific Equity Investment, VT, and Credit Investment, AGG. On May 28, 2014, the world is attaining peak wealth, it is an awesome moral hazard based wealth.
As the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has flattened, seen in the Flattner, ETF, FLAT, trading higher in value, Gold, GLD, has been pummeled, and Distressed Investments, FAGIX, and Junk Bonds, JNK, have come to be established as the most valued of all investments.
Soon physical possession of gold bullion will emerge as the only “safe asset”, as the fiat of the Banker Regime fails, as investors derisk out of currency carry trade investments and debt trade investments.
The new fiat of diktat coming from the Beast Regime’s regional fascist leaders, will emerge to establish regional security, stability and sustainability, and enforce debt servitude in each of the world’s ten regions, and throughout all of mankind’s seven institutions, this being foretold in Bible Prophecy of Revelation 13:1-4.
This monster is completely different than the Creature from Jekyll Island; as is has feet of a bear, mouth of lion, and the stealth of a leopard, and is foretold to arises out Mediterrean, that is Club Med, waves of sovereign insolvency, banking insolvency and corporate insolvency.
We see news of its rise in the Reuters report ECB Goes On 300 Million Euro Spending Spree For Bank Watchdog. ECB will spend 300 million euros this year and next in building an elite group to monitor top banks, with the lion’s share spent on generous pay for many of its staff.
Not only is the death of currencies underway, but the failure of trust is underway as well. While there was only a slight follow through from the sale of the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, seen in only a slight trade lower in Equity Investment, VT, there was a sell in Regional Banks, KRE, beginning in April 2014, led by the weakest of banks, such as, MBFI, BBNK, UMBF, ABCB, SASR, ABCB, FRME. One reason for the trade lower in Regional banks, KRE, and its follow through into the US Small Cap Stocks, IWM, is that bankers do not like to see a flattening yield curve, and the other reason is that investor’s greed has turned to fear, specifically fear that regional banks can no longer serve as a transmission vehicle for the US Fed’s monetary policies.
In summary of financial market place trading, on Wednesday May 28, 2014, US 30 Year Government Bonds, EDV, US Ten Year Notes, TLT, and Mortgage Backed Bonds, MBB, traded higher, as the Benchmark Interest Rate, ^TNX, closed at 2.44% in a process of coming to establish peak credit wealth, AGG.
If one is invested in a bond fund, then one is jubilant, as these have soared terrifically higher since the first of 2014. For example, the PIMCO Long-Term US Government C, PFGCX, has returned 8.9% this year, and at the same time yields 1.8%.
Investment manage Scott Grannis posts Onward and Upward. The market capitalization of global equity markets is now at a new all-time high, having gained $38 trillion from the March 2009 low. These are huge numbers, considering that the total market cap of the U.S. equity market is currently almost $23 trillion according to Bloomberg. Eurozone equities have been rising in line with the ongoing recovery in U.S. equities for the past two years. In fact, Eurozone equities have recorded outsized gains over the past two years: the total return on the S&P 500, SPY, is 51%, while the Euro Stoxx 50 Index, FEZ, has posted a total return of 77%
And AEI author Jonathan Buchleiter posts A Call For Reform Of Conservative Thinking: A manifesto to rebrand the Republican Party to help the middle class attract voters. In the YG Network’s new book “Room to Grow: Conservative Reforms for a Limited Government and a Thriving Middle Class,” Yuval Levin of National Affairs and Peter Wehner of the Ethics and Public Policy Center called for policymakers to look forward rather than fight past battles. Levin described how experimentation, evaluation, and evolution are essential to successful policies. The YG Network’s Reihan Salam advocated for a comprehensive rethinking of higher education to address ballooning tuition costs. And AEI’s Ramesh Ponnuru and Ross Douthat of The New York Times argued that conservatives can expand their electorate by demonstrating how their policies will enable Americans to prosper.
And Cecchetti & Schoenholtz post Economics Helps People Live Better Lives.
I respond to all three, that as presented by the Apostle Paul in Ephesians 1:10, Jesus Christ developed and has now matured the paradigm and age of of liberalism, which is defined as freedom from the state.
Beginning with the creation of the Creature from Jekyll Island, He perfected the Banker Regime, with its monetary policies of investment choice and schemes of credit, to produce peak prosperity and peak wealth.
Mankind’s peak economic experience has been attained, it came via the chieftain geniuses at the US Fed, the ECB, and the Bank of Japan, via their provision and enforcement of Global ZIRP that began with QE1 and TARP
Now, not only is the death of currencies underway, as is seen in the Major World Currencies, DBV, such as the Euro, FXE, and the Emerging Market Currencies, CEW, trading lower in value; the failure of credit, that is failure of trust in the Banker Regime is underway, and is seen in the Floating Rate Note, FLOT, paying 0.41%, starting to trade lower in value on May 28, 2014.
Of note, European Credit, EU, has traded lower in value, as Deutsche Bank posts in PDF document concerns over European social turmoil: the eurosceptic parties increased their share substantially, but winning parliamentary representation is not equivalent to gaining actual political influence.
As currency traders force derisking out of debt trades and deleveraging out of currency carry trades, by selling the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, and as the bond vigilantes force derisking out of credit investments, by calling the Benchmark Interest Rate, ^TNX, higher from 2.44%, both fiat money and fiat wealth will tumble, and being unable to underwrite safe assets, democratic nation state governance will crumble.
Soon, as is presented in Revelation 13:3-4, out of a global credit bust and financial system breakdown, known as Financial Armageddon, leaders will meet in summits to renounce national sovereignty, and to announce regional pooled sovereignty, and to appoint regional fascist leaders who direct regional economies in economic policies of regional economic governance, and in schemes of debt servitude, and fully birth the debt serf as the centerpiece of economic activity. Welcome to the age of diktat and the era of debt servitude, where diktat money replaces fiat money.
5) … On Thursday, May 29, 2014, risk on investing continued as Nation Investment, EFA, traded to a new all time high (up 3.4 YTD) as Gulf States, MES, Turkey, TUR,Singapore, EWS and Singapore Small Caps, EWSS, traded to new rally highs; Australia, EWA, and Argentina, ARGT, traded strongly higher; while Egypt, EGPT, Vietnam, VNM, and the Philippines, EPHE, traded lower from their rally highs, thus evidencing as market top is being achieved; other evidence of a stock market top is seen in the ratio of Stocks, VT, relative to Aggregate Credit, AGG, VT:AGG, topping out in value.
World Stocks, VT, and the S&P 500, SPY, (Up 4.1% and 4.6% YTD respectively) traded to new all time highs as Solar Energy, TAN, Energy Production, XOP, Energy Service, OIH, Food & Beverage, PBJ, Social Media, SOCL, Nasdaq Internet, PNQI, Cloud Computing, SKYY, Design Build, FLM, Internet Retail, FDN, Automobiles, CARS, Networking, IGN, Consumer Staples, KXI, Transportation, XTN, Biotechnology, IBB, Retail, XRT, and Semiconductors, SOXX, drove strongly higher.
The two three investment sectors are Transportation, XTN, up 13.5% YTD, Semiconductors, SOXX, up 12.5% YTD, and Energy Service, OIH, up 10.3% YTD.
Dividends Excluding Financials, DTN, traded to a new all time high; up 6.5% YTD
Global Financials, IXG, traded to a new all time high; up 2.2% YTD
In Yield Bearing Investments, Global Real Estate, DRW, Global Utilities, DBU, Preferred Financials, PGF, Shipping, SEA, Global Infrastructure, IGF, traded to a new all time high, and European Small Cap Dividend, DFE, Australia Dividend, AUSE, traded strongly higher in recovery from a sell-off.
Closed End Funds, GCE, traded to a new rally high; up 8.3% YTD
The bull market is acting like a bull market and in the process, peak fiat money and peak fiat wealth was achieved on Thursday, May 29, 2014, this being conveyed in the chart of Call Write Bonds, that is convertible securities, CWB, establishing a double top high. Other evidence of peak economic experience comes from Ludwig von Mises which posts The New Skyscraper Curse. And the high PEs of ETFs evidence a market top; these include the debt trades of Industrial Office REITS, FNIO, with a PE of 45, and Residential REITS, REZ, with a PE of 38.
The Nasdaq, QTEC, QQQ, rally is over as is seen in the strong rise in Netflix, NFLX, and in Biotechnology leaders GILD, CELG, BIIB, coming to a screeching halt.
6) … On Friday May 30, 2014, the commodity ETFs, DBC, and GSG, pivoted lower on May’s trade lower in the Major World Currencies, DBV, and Emerging Market Currencies, CEW, with the result that investors sold investments in Steel Producers, SLX, such as OSN, GSI, X, AKS, NUE, GGB, SID, MTL, PKX, Global Industrial Miners, PICK, such as VALE, RIO, BHP, Coal Miners, KOL, Uranium Miners, URA, and Rare Earth Miners, REMX.
The Commodity ETFs, DBC, and GSG, pivoted lower on Friday May 30, on the trade lower in the Major World Currencies, DBV, and Emerging Market Currencies, CEW, that occurred during May 2014. This loss of investment value is the birth pains of the new normal of destructionism replacing inflationism; and heralds that the paradigm of authoritarianism will replace that of liberalism. Thus commodity price deflation came as the result of currencies trading lower during the month of May 2014.
The South African Rand, ZAR, dropped strongly lower stimulating a trade lower in South Africa, EZA. The Brazilian Real BZF, traded lower stimulating Brazil’s Integrated Energy Company, PBR, Brazil Financials, BRAF, and Brazil to trade lower. The India Rupe, ICN, traded lower, stimulating India Earnings, EPI, and India, INP, to trade lower. South Korean, Steel Producer, PKX, Electronic Manufacturer, LPL, Bank, SHG, KB, and Telecom Provider, KT, traded lower not on South Korea Won devaluation, but rather on Commodity, DBC, and GSG, deflation, which in turn stimulating South Korea, EWY, to trade lower.
Emerging Markets, EEM, traded lower as Indonesia, IDX, IDXJ, Philippines, EPHE, Egypt, EGPT, Russia, RSX, ERUS, Emerging Europe, ESR, Emerging Africa, GAF, Chile, ECH, Mexico, EWW, Turkey, TUR, traded lower.
The loss of Brazil’s, India’s, and South Korea’s seigniorage is an investment coup d etat, coming from the ever increasing power of global investment destructionsism, which is replacing inflationism.
Ongoing currency carry trade disinvestment is going to be highly destructive economically. The result of debasement of the world’s currencies will be economic economic destabilization and the much feared economic deflation.
Given currency deflation in the Euro, FXE, the British Pound Sterling, FXB, the Swedish Krona, FXS, and the Swiss Franc, FXF, as well as the India Rupe, ICN, and the Brazil Real, BZF, economic growth is impossible.
Economic growth was a largely a side benefit, that came from investment gains, flowing from the credit stimulus of Global ZIRP. Economic growth was a function of the investor pursuing investment gain in the bygone era of currencies, and the age of credit. One follow the ongoing collapse of currencies with thisFinviz Screener of leading currencies.
Austrian economist Mike Mish Shedlock writesEmerging Fed Policy If employment growth stalls, tapering will slow or halt. Long-term, hikes are longer off than most realize. Also, the Fed will never sell anything. Assets will be held to term.
Under the power of the Bow of Economic Sovereignty, that is the Interest Rate on the US Ten Year Note,^TNX, and its enforcing authority of The Rider on the White Horse, galloping with greater intensity over planet earth, seen in Revelation 6:1-2, the bond vigilantes, not the Fed, has been in control of interest rates beginning in May of 2013, and will continue to be hiking interest rates, and that at a rather quick pace.
This inquiring mind asks, just exactly who are the bond vigilantes? It is the Primary Dealers!!! And of note, it is these who hold tremendous amounts of Interest Rate Swaps, literally given to them by the US Fed, as part of an incentive to sell US Debt under POMO. So not only did the Primary Dealers get an a cut on issuing of bonds, they got deferred payment in terms of bets against bonds!
Financial Post reports Mohamed El-Erian in Bloomberg News reports “Judging from data provided by the Commodity Futures Trading Commission, the movements in both rates and flows are catching many professional traders by surprise. Despite some recent repositioning, the net short position of non-commercial investors in 10-year Treasuries is the biggest in two years, meaning speculators have made bets designed to profit from an increase in yields and related outflows. Dealers are similarly positioned: Their net short in the largest in almost a year”.
As is seen in the trade lower in Portugal, PGAL, Italy, EWI, Ireland, EIRL, Greece, GREK, but not Spain, EWP, the failure of credit, that is trust in the monetary policies of the world central banks’ monetary authority has commenced, and will be evidenced by Global Financials, IXG, and Dividends Excluding Financials, DTN, Nation Investment, EFA, and World Stocks, VT, trading lower in value.
And the failure of trust in the Banker Regime is seen in Commodities, DBC, and GSG, pivoting lower in value on May 30, 2014, which has begun to terminate the age of credit and the era of currencies, and which is starting to birth the age of debt servitude and the era of diktat.
Economics is defined as one’s life experience in sovereign money and sovereign authority. With the ongoing trade lower in Major World Currencies, DBV, and a sustained trade lower in Emerging Market Currencies, CEW, a new sovereignty, that is the sovereignty of regional economic governance will emerge; and it will provide new sovereign money, that being diktat money to replace fiat money.
Out of a soon coming global credit crisis and worldwide financial system breakdown, known as Financial Armageddon, foretold in Bible prophecy of Revelation 13:1-4, nation state leaders will meet in summits to renounce national sovereignty, and to announce regional pooled sovereignty, and to appoint regional fascist leaders whose mandates will establish regional security, stability, and sustainability.
Carmax, KMX, traded lower, distinguishing itself as a loss leader amongst its peers and among Small Cap Pure Value Stocks, RZV, as is seen in the ongoing Yahoo Finance Chart of PAG, SAH, ABG, KAR, AN, LAD, and KMX. The auto dealers as a group have been the very definition of risk-on investing as well as the definition of the investor, not employment, not economic renaissance, as the centerpiece of economic recovery; this is confirmed in the My Budget 360 report Non Working America: Those Not In The Labor Force Up By 12,000,000 Since Recession Ended.
Clearly the investor was brought to the forefront of economic action by the US Fed’s monetary policies and schemes of credit stimulus. The economy existed for the investor, and for the purpose of developing a moral hazard based prosperity. Spectacular investment results came to those who understood that Ben Bernanke’s Cool Aid would be the Juice of Juice and the Elixir of Stock Jockeys. The chart of the Small Cap Pure Value Stocks, RZV, shows these credit intensive stocks in the middle of a broadening top candlestick pattern; of which Street Authority relates, When you see the broadening top, the market will eventually drop.
Now with destructionism replacing inflationism, the debt serf will become the centerpiece of economic action; and all economic resources will be centered upon him.
South Africa, EZA, and South Korea, EWY, traded lower. Emerging Markets, EEM, traded lower as Indonesia, IDX, IDXJ, Philippines, EPHE, Egypt, EGPT, Russia, RSX, ERUS, Emerging Europe, ESR, Emerging Africa, GAF, Chile, ECH, Mexico, EWW, Turkey, TUR, Brazil, EWZ, EWZS, and India, INP, traded lower.
The South African rand dropped 2.6% this week, stimulating a 4.2% trade lower in South Africa, EZA. Brazil’s Integrated Energy Company, PBR, and Brazil Financials, BRAF, traded lower on a lower Brazilian Real, BZF, and India Earnings, EPI, traded lower on a lower India Rupe, ICN. And South Korean, Steel Producer, PKX, Electronic Manufacturer, LPL, Bank, SHG, KB, and Telecom Provider, KT, traded lower not on South Korea Won devaluation, but rather on Commodity, DBC, and GSG, deflation. The loss of South Korea’s seigniorage is an investment coup d etat, coming from the ever increasing power of the First Horseman of the Apocalypse, as is seen in Revelation 6:1-2.
The WSJ reports Moody’s Warns on EU New Banking Rules. Rating Agency Says Directive Could Leave Stakeholders Vulnerable to Banking Crises. Moody’s Investors Service Inc. has become the latest of the three big debt rating firms to warn that new European Union rules could make stakeholders more vulnerable to losses in any future banking crisis. In response to the EU’s so-called Bank Recovery and Resolution Directive, under which shareholders, bondholders and some depositors may have to stomach big losses or commit to so-called bail ins to help rescue ailing banks, Moody’s has cut its long-term rating outlook on 82 European Banks, EUFN, to negative.
Reuters reports Israel Limits Cash Transactions Between Businesses To $1,400. Nation vows to fight money laundering and tax evasion. And Israel Today reports Israel Eyes Becoming a Cashless Society. A special committee headed by Prime Minister Benjamin Netanyahu’s chief of staff, Harel Locker, has recommended a three-phase plan to all but do away with cash transactions in Israel. The motivation for examining a cashless economy is combatting money laundering and other tax-evasion tactics, thereby maximizing potential tax collection and greatly expanding the tax base. This is important considering the enormous strain put on Israel’s national budget by the army, healthcare system and other public services. The committee estimated that the black market represents over 20 percent of Israel’s GDP, and cash is the facilitating factor. Cash enables tax evasion, money laundering and even financing terrorism.
7) … Signs of headline inflation are emerging. Headline Inflation is a result of a steepening yield curve, as well as currency deflation, and can be present even in economic deflation.
The chart of the Steepner ETF, STPP, reflects a slight steepening in the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX; it is out of this dynamic that headline inflation will eventually occur. And headline inflation will increase as formerly sovereign currencies buy ever increasing Dollar denominated commodities.
The chart of the ratio of Long Term Tips, LTPZ, relative to the US Ten Year Notes, TLT, that is LTPZ:TLT, communicates that bond market investors expect price inflation to occur; and the Proshares UltraPro 10 Year TIPS/TSY Spread,UINF, is trading higher confirming the expectation of inflation on the failure of credit. Headline Inflation is seen in the Reuters reportConsumer Prices Post Biggest Gain In 10 months.
8) ..Brad Delong asks What Do We “Deserve” Anyway? I relate that news reports document that there was a strong populist vote for new leadership in the Eurozone. voters in the EU have called for a break from past policies; the Europeans believe they deserve better; yet strangely in their call of change, the European Debt Crisis has fallen from the public’s mind
The Telegraph posts The Race Is Wide Open For The European Commission’s Top Job. The lesson is simple: offer voters a binary choice between “more Europe” and “no Europe”, and eventually they will choose the latter. The answer must be sweeping reform.
Peter Schwarz of WSWS posts The European Elections And The Crisis Of The EU. The SEP and PSG participated in the European elections in order to provide a perspective for the coming class battles and build sections of the International Committee of the Fourth International throughout Europe.
WSWS correspondents post Participants Speak At PSG’s Eve Of Poll Election Meeting. The PSG were the only ones “who focused their election campaign on the danger of war,” a participant told the WSWS.
Alejandro Lopez of WSWS posts Spain’s Major Parties Hammered In European Elections. The ruling right-wing Popular Party (PP) and the opposition Socialist Party (PSOE) both had their worst results since the first elections in post-Franco Spain. And Jordan Shilton of WSWS posts Ireland’s Governing Parties Punished In Local And European Elections. The most significant result was the collapse of support for the Labour Party and the resignation of its leader.
Reuters posts Populist Advances Set To Hobble EU Integration. Tuning gains by anti-EU and populist parties in the European Parliament elections will prevent any new treaty on deeper Eurozone integration for the foreseeable future and may tilt Europe’s economic policy mix more towards expansion.
James G. Neuger of Bloomberg posts Protest parties racked up gains across the 28-nation European Union in elections to the bloc’s Parliament, turning the assembly designed to unite Europe into an echo chamber for politicians who want to tear it apart. The wave hit hardest in France, Greece and the U.K., undermining the leaders of those countries and making it more difficult to steer the EU as a whole. In all, protest parties won 30% of the Europe-wide vote, up from 20% in the current Parliament. Political forces suspicious of the U.S. made inroads across the continent, threatening to snag Trans Atlantic Trade talks the EU hopes will spur an economy struggling with the after-effects of the euro debt crisis. The U.K. Independence Party, which wants to yank Britain out of the EU, won the election in Britain, beating Prime Minister David Cameron’s Conservatives into third place. The protest vote ‘will have a huge impact on the parties and policies back home,’ said Pieter Cleppe, head of the Brussels office of U.K.-based think tank Open Europe. ‘They will make it harder to centralize powers in the EU, especially when it comes to managing the euro crisis.’
Bruegel posts New European Leadership Needs To Focus On Growth The EU and in particular the euro area suffer from two key problems.Growth and job creation is unsatisfactory and one can therefore not say that the crisis is over.The governance of the European Union is still far too complicated and ineffective to address crises and respond to citizens’ needs.A key message and mandate EU leaders should give to the post-election EU would therefore be to focus on what can actually be accomplished. The new European leadership consisting of the President of the European Commission, the President of the European Council and the President of the European Parliament should be able to act forcefully on growth. This will require the three individuals and their institutions to work together effectively. They will have to constantly remind the national leaders about the importance of enacting national reforms that not only create jobs but are also consistent with the prerogatives of monetary union. Putting public finances on a sound footing is one of the many challenges. But without a European growth initiative it will be hard to deliver on domestic fiscal targets. Therefore, the new EU leadership should develop a convincing European growth strategy.
I believe that we deserve that God fulfill his word of prophecy as presented in Revelation 13:5-10, which presents there is waiting in the wings of Europe stage, the most capable of sovereigns, perhaps this one is Jean Claude Juncker. Out of the European Debt Crisis, the Sovereign will step into the limelight, and through cunning and shrewdness rise in power to rule, as is seen in Daniel 8:6-8, and be accompanied in power by the Seignior, that is top dog banker, who in coining money, takes a cut, as foretold in Revelation 13:11-18. Their word, will and way will provide economic direction unifying all of the Eurozone. This New Charlemagne and his Monetary High Priest, will eventually come to rule the world, in a one world religion, from their capital in Jerusalem, as foretold in Daniel 9:25.
Reuters reports Cameron Says Can’t Guarantee UK Staying In EU If Juncker Gets Top Job. British Prime Minister David Cameron has warned he would no longer be able to guarantee that Britain would remain a member of the European Union if European leaders elect Jean-Claude Juncker as European Commission chief, Germany’s Spiegel said.
The European Commission president is selected by EU leaders but must be approved by the assembly, where Eurosceptics from the right made gains in last week’s election. The European People’s Party, which won the most seats in the vote, had chosen Luxembourg’s ex-premier Juncker as their candidate.
In a pre-publication copy of an article, Spiegel said Cameron had explained, on the sidelines of an EUsummit in Brussels on Tuesday, that if Juncker became Commission president, he would no longer be able to ensure Britain’s continued EU membership.
The magazine said participants understood Cameron’s comments on the sidelines of the meeting to mean that a majority vote for Juncker could destabilise his government to the extent that an “in-out” referendum would have to be brought forward.
Antiwar posts Obama Seeks to Heavily Censor Drone Memo. And adds Memo Outlines Obama’s Plan to Use the Military Against Citizens.
Zero Hedge reports that the failure of Avionics is causing price inflation in Japan. Abenomics Suffers Crippling Blow: Economy Sputters As Inflation Soars, BOJ QE Delayed Indefinitely.
Abenomics is a failed central bank economic stimulus initiative.
Reuters reports Japan Consumer Spending, Factory Output Skid After Sales Tax Hike. Japan’s household spending in April fell at the fastest rate in three years in a sign that consumption could be slow to recover from an increase in the nationwide sales tax, raising questions over the pace of economic recovery. Japanese household spending fell 4.6 percent in April from a year ago, more than the median market forecast for a 3.2 percent annual decline. That marked the fastest annual decline since March 2011, when an exceptionally powerful earthquake triggered a nuclear disaster. Compared to the previous month, spending tumbled by a record 13.3 percent in April, more than the 13.0 percent decline expected by economists. Government data published with the new figures show that household spending fell further after the April 1 sales tax hike than it did after the 3 percent sales tax in was imposed in 1989, and when it raised the tax to 5 percent in 1997.
Economics is defined as one’s life experience in sovereign money and sovereign authority. One’s economics comes from the isms of life, that is the process of branding, where a sovereign establishes identity and experience. Many will be of the fascist and totalitarian brand of the Beast Regime, and give homage to it, for prophecy of Revelation 13:3-4, communicates they worshiped and followed after the Beast, saying who can make war against it.
Jesus Christ is the ism of God, that is thedivine nature of theGodhead, by which some come to know the identity of God and have experience in God. The experience of His Sovereignty is one of holiness and of truth as presented in Hebrews 1:3, and John 14:7. His Apostle Peter, writes of addition of the elect in 2 Peter 1:5-7, “Add to you faith virtue, to virtue knowledge,to knowledge self-control, to self-control perseverance, to perseverance godliness, to godliness brotherly kindness, and to brotherly kindness love”; it is out of this practice that one has identity as a Christian and life experience in Christian ethics. When one takes Christ’s brand, that being the Gospel, which translated into English means the Good News, then one has identity and experience in His Sovereignty, and becomes a Christian.
There are many other isms; these include Socialism, Communism, Capitalism, and Libertarianism.
When one embraces personal sovereignty and individualism for identity and experience, one practices Libertarianism, and becomes a Libertarian.
One cannot serve two authorities, one will yield to one, and turn away from the other.
Thus, one cannot be a Libertarian and a Christian. An individual is one or the other. And it was a choice made in eternity past by God. One decides to follow Jesus, but that choice is one made by The Sovereign of All, as he looked down the hallways of time and decided to have mercy on who ever he would; it was a decision not based on one’s meritocracy but upon God’s infinite grace and mercy..
It’s my hope that one will follow the Apostle Paul, and be God’s economist, that is one who has life experience out of the sovereignty of Jesus Christ. As one Has life, one comes to greater trust, and grows the credit and flow of His holiness; and one grows in personal satisfaction of His brand.