This post is available in Google Documents format here
Financial Market Report for the week ending June 20, 2014,
1) … Introduction. Credit becomes surreal as Shinzō Abe announces Third Arrow and the BoJ prepares to sell GJBs and purchase equities, and as investors pursue the most toxic of Junk Bonds and Emerging Market Bonds.
1A) … BoE’s Mark Carney, sees things as they really are, that there is a war of economic sovereignty between the bond vigilantes and the world central banks; and has communicated the truth that a rate hike is coming sooner than the market thinks; this drove the British Pound Sterling, FXB, yet higher; its chart looks like it has peaked out. Since April 1, 2014,, a stronger British Pound Sterling, FXB, has been driving the UK Stocks, EWU, higher, yet the UK Small Caps, EWUS, lower.
Ed Yardeni, writes The UK Is Hot (excerpt), but it is bound by the bond vigilantes, who having the Bow of Economic Sovereignty, are starting to call interest rates higher world wide.
1B) … Reuters reports Shinzō Abe Announces Third Arrow.
Japan’s government late Monday released a draft of Prime Minister Shinzo Abe’s long-awaited growth strategy.
This included already-flagged policies such as a plan to cut the corporate tax rate and other steps like a promise to ease regulation in agriculture and allow more foreign workers to be employed in the housekeeping and nursing sectors.
“I think the latest moves out of the Abe administration will be very important for sentiment, especially for global investors who had lost some faith in the reform efforts,” said Charles Blankley, CIO at Gemmer Asset Management in San Francisco.
“I think that [sentiment] will clearly turn around in the second half of this year,” he told CNBC Asia’s “Squawk Box” Tuesday.
1C) … Tyler Durden posts Liquidity Is Becoming A Serious Issue As Japan’s Bond Market Death Goes Global.
While we noted last week the death of the Japanese bond market as government intervention has killed the largest bond market in the world; it is now becoming increasingly clear that the dearth of trading volumes is not only spreading to equity markets but also to all major global markets as investors rotate to derivatives in order to find any liquidity.
Central planners removal of increasing amounts of assets from the capital markets, thus reducing collateral availability, leaves traders lamenting “liquidity is becoming a serious issue.” While there are ‘trade-less’ sessions now in Japanese bonds, the lack of liquidity is becoming a growing problem in US Treasuries (where the Fed owns 1/3rd of the market) and Europe
Japan’s bond market is dead; and so is its stock and FX market. As Bloomberg reports Bank of Japan’s Bond Paralysis Seen Spreading. Ten-year bonds yielded 0.595 percent as of 12:55 p.m. in Tokyo, the lowest globally. The benchmark rate fell to an all-time low of 0.315 percent on April 5, 2013, the day after the BOJ unveiled record stimulus, before surging to 1 percent the following month.
“It’s difficult because the (retail JGB) business is shrinking,” Hiroshi Kunimura, the director of fixed-income trading in Tokyo at Barclays Plc, one of the 23 primary dealers obliged to bid at government bond auctions. “Because we’re in an environment where traders take positions at auctions only to sell them at BOJ buying operations, trading volumes with investors struggle to increase.”
Kuroda on June 13, 2014 kept the BOJ’s pledge to accumulate 50 trillion yen of JGBs a year, equal to 42 percent of planned issuance for the fiscal year started April 1 in a bid to boost inflation to 2 percent.
Easing expectations. Forty-two percent of economists forecast Japan’s central bank will expand monetary stimulus in October, which displaced July as the most popular pick for action, according to the Bloomberg survey conducted June 3-6.
Japan’s government bond market is becoming increasingly reliant on BOJ easing, leaving it vulnerable to shocks, according to Deutsche Securities Inc.
“Investors in Japan assume that the BOJ will continue to buy JGBs vigilantly next year and the year after,” said Makoto Yamashita, the chief Japan rates strategist at Deutsche Securities, a primary dealer.
“They take it for granted they can sell those bonds bought expensively to the BOJ as more and more notes disappear from the secondary market. It’s too frightening to think what might happen when the BOJ tapers.”
Sumitomo Mitsui and Daiwa Securities Group Inc. said in April there’s no effective strategy in Japan’s low-yield, low-volatility environment.
Japan’s notes due in more than a year were the worst performers since Dec. 31 among the 26 debt markets tracked by Bloomberg and the European Federation of Financial Analysts Societies, gaining 1.2 percent. Government debt returned 2.9 percent in the U.S. and 4 percent in Germany.
“It’s sad how idle the JGB market is,” said Toru Yamamoto, a former trader for foreign bonds, derivatives who is now the chief strategist at Daiwa Securities Co. in Tokyo. “Coping with BOJ purchases is like running a marathon, if it’s short-distance, you can still push yourself, but in a long run, you will run out of energy.
The Bank of Japan’s unprecedented asset purchase program has released a creeping paralysis that is freezing government bond trading, constricting the yen to the tightest range on record and braking stock-market activity.
“All the markets have been quiet,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “We’ve already seen the BOJ dominance of JGBs since last year, but recently participants in currency and stock markets are also decreasing as those assets have traded in narrow ranges.”
“The flows on both the buying side and selling side continue to fall,” said Takehito Yoshino, the chief fund manager at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest financial group by market value. “Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”
The world shifts to derivatives trading to find liquidity. The boom in fixed-income derivatives trading is exposing a hidden risk in debt markets around the world: the inability of investors to buy and sell bonds.
Bloomberg reports Bond’s Liquidity Threat Is Revealed In Derivatives Explosion. As bond trading has slumped, the notional value of over-the-counter contracts soared fivefold in the past decade to a record $710 trillion, based on the latest data from the Bank for International Settlements compiled by Deutsche Bank AG.
Volume on Italian futures, which give buyers the right to purchase the nation’s debt at a future date and price, has soared more than 800 percent since trading of the contracts began in 2009, data compiled by Bloomberg show. By contrast, average daily trading in Italy’s $2.43 trillion market for government bonds, Europe’s largest, has tumbled 57 percent in the past decade, according to the Ministry of Finance.
For 10-year note futures, a total of 140.4 million contracts have traded in the first five months of the year, approaching last year’s total of 149.8 million, the most on a year-to-date basis going back to 2007, according to CME Group Inc.
Weekly trading of Treasuries with maturities between seven years and 11 years has fallen to $96.3 billion, a 32 percent drop from a year ago, data compiled by the New York Fed show.
“This is a global phenomenon,” Yvette Klevan
No one knows how badly this will end. “There is risk that people won’t be prepared,” Richman said by telephone June 9. “The move in yield could be quicker and more dramatic than it has in the past. That’s something we are on the lookout for.”
“Investors in Japan assume that the BOJ will continue to buy JGBs vigilantly next year and the year after,” said Makoto Yamashita, the chief Japan rates strategist at Deutsche Securities, a primary dealer. “They take it for granted they can sell those bonds bought expensively to the BOJ as more and more notes disappear from the secondary market. It’s too frightening to think what might happen when the BOJ tapers.”
And with that not only have the central planners broken the largest and historically most liquid markets in the world but have forced investors into leveraged derivatives positions (in order to find liquidity for their exposure-seeking) which themselves are entirely over-promise (relative to the underlyings) and under-collateralized with any quality collateral.
As we concluded previously. assume tomorrow the real black swan appears and all the liabilities: traditional and shadow, promptly demand collateral delivery. Well, the $11 trillion shortage would mean that risk values of, for example the S&P, would be haircut by a factor of, say, 75%. Or back to the proverbial 400 on the S&P 500.
Still think owning real high quality collateral, not of the paper but of the hard asset variety such as gold, is a naive proposition, best reserved for fringe lunatic, tin foil hatters and gold bugs? Go ahead then: sell yours.
1D) … In credit market news
Bloomberg reports Sewage-to-Fertilizer Plan Shows No Junk Bonds Stink
WSJ reports Ecuador, Kenya Government Bonds Entice Yield Hunters. In the race for bigger returns, investors are clamoring for debt issued by countries with less-than-stellar credit ratings.
Ecuador sold $2 billion worth of 10-year bonds Tuesday, marking a return to international capital markets after defaulting in 2008. That deal came on the heels of Kenya’s first-ever international-bond sale, which attracted $8 billion worth of orders for two chunks of bonds totaling $2 billion. The Kenya deal was the largest-ever debt sale by an African country.
These two deals, which carry junk ratings, are the latest in a string of bond sales by countries off the beaten track. Many investors now are embracing issuers—and the hefty interest payments on their bonds—that have been shut out of global credit markets until lately. Driving the demand for this debt are the easy-money policies of the world’s major central banks, which has depressed yields on debt of wealthy nations.
Many money managers consider Ecuador and Kenya to be “frontier” markets, a loosely defined term used to refer to countries that are a step below emerging markets but often have better growth prospects.
In 2008, the South American country defaulted on $3.2 billion in debt. Mr. Correa at the time called the debt “illegal” and “illegitimate.”
Bloomberg reports Busier-Than-Heathrow Ambition Spurs Turkey’s Biggest Loan. Banks are buying into Turkey’s ambition to create one of the world’s busiest aviation hubs as they prepare to finance the country’s largest corporate loan. Five Turkish companies contracted to build Istanbul’s third airport are going to banks for about 4.5 billion euros ($6.1 billion). Corporate finance is flowing in Turkey as the lira stabilizes and government borrowing costs decline amid an alleviation of political tension since regional elections in March. The nation is investing in aviation infrastructure to support Turkish Airlines, THYAO, as it builds a long-haul business to compete with European rivals. The call for funds comes as Turkey faces heightened geopolitical risks from neighboring Iraq.
Bloomberg reports JGB Selloff Looms as Post Office Joins GPIF’s Cuts Prime Minister Shinzo Abe’s success in spurring inflation risks triggering a Japanese government debt selloff as the second-biggest JGB holder may begin switching to higher-yielding assets.
Japan Post Holdings Co. sold an unprecedented 15.7 trillion yen ($154 billion) of the notes in the fiscal year ended March 31. It has about 178.9 trillion yen remaining. That’s more than double the total of all domestic bond holdings at Government Pension Investment Fund, the third-largest owner, which is
shifting into stocks and overseas securities. The appeal of notes that offer the world’s lowest yields is
waning as Abe’s stimulus policies succeed in spurring the fastest consumer-price increases since 1991. Citigroup Inc. expects Japan Post’s units to offload as much as 63.8 trillion yen of the debt and increase the weight of equities as it readies for an expected listing next year.
President Nishimuro said in April Japan Post wants to list its banking and insurance units soon after the parent company’s offering, which he had earlier indicated may take place by April 2015. Nishimuro said at the time the company shouldn’t change its investment strategy and will keep its JGB holdings.
“Japan Post units have risks they can take and cannot take, so they wouldn’t simply follow GPIF,” said Ryutaro Kono, the chief Japan economist in Tokyo at BNP Paribas SA. “The government is telling GPIF to buy stocks to boost prices, but it’s not the case with Japan Post.”
The yen’s 18 percent plunge last year, the sharpest annual drop since 1979, has helped boost price growth by increasing import costs. The currency traded at 102.22 per dollar as of 4:48 p.m. in Tokyo yesterday. Consumer prices excluding fresh food rose 3.2 percent in April from a year ago, equivalent to a 1.5 percent increase when the effects of a sales tax increase that month are excluded, according to the Bank of Japan. Some of the major insurance companies that are not state owned are already seeking higher returns by investing in foreign debt. Nippon Life Insurance Co., Meiji Yasuda Life Insurance Co. and Sumitomo Life Insurance Co., announced plans in April in increase purchases this fiscal year. “We are revising allocations as inflation picks up,”
JGBs due in more than a year were the worst performers since Dec. 31 among the 26 debt markets tracked by Bloomberg and the European Federation of Financial Analysts Societies, gaining 1.3 percent. Government debt returned 2.6 percent in the U.S., 2.8 percent in the U.K., and 4.1 percent in Australia. “The risk is that there wouldn’t be any companies that will buy JGBs when the BOJ exit becomes closer,” said Yasuhide Yajima, the chief economist at NLI Research Institute in Tokyo.
Bloomberg reports Japan’s Exports Decline In May On Weak US Asian Demand
2) … In this week’s financial marketplace trading.
2A) In Monday June 16, 2014, financial marketplace trading, the great unwinding of Equity Investments coming from the world central banks’ stimulus, appeared to picked up steam from the prior June 11, 2014 sell off, as Middle East geopolitical tensions drove Gulf States, MES, Turkey, TUR, Egypt, EGPT, Russia, RSX, ERUS, Poland, EPOL, and Developing Europe, ESR, lower. South Africa, EZA, traded lower. Philippines, EPHE, and Indonesia, IDX, IDXJ, traded lower as Emerging Market Currencies, CEW, traded lower. India, INP, SCIN, traded lower as the currency traders called the India Rupe, ICN. The Argentine stock market, ARGT, has literally started to crash, as The Guardian posts Argentine Debt Crisis Fears Grow After US Supreme Court Ruling. And Reuters reports Argentines Want Debt Deal As Economic Woes Pile Up.
Dividends Excluding Financials, DTN, Energy Partnerships, MLPJ, AMJ, EMLP, Global Integrated Energy, IPW, Energy Production, XOP, such as FANG, WLL, CLR, EOG, CRZO, PXD, XEC, COP, NBL, BCEI, Energy Service, OIH, Semiconductors, SOXX, and Medical Devices, IHI, traded to new all time highs. Utilities, XLU, traded higher, but remain below their recent highs. Gulf Dividends, GULF, traded lower.
Bloomberg reports Kurds Grab Fourth-Largest Iraq Oilfield Amid ISIL Advance. Kurdish troops were defending Iraq’s fourth-biggest oilfield against Islamist militants after deploying outside their semi-autonomous region in the country’s north to seize the deposit claimed by the central government. More than 100,000 Kurdish fighters, known as peshmergas, are guarding a “front line” from Iraq’s eastern border with Iran to the northern town of Fishkabur near Turkey
Business Insider reports There’s A Staggering Humanitarian Crisis On The US Border, And It’s Only Going To Get Worse.
‘Wave of humanity’: Border Patrol overwhelmed by flow of illegal immigrants. At daybreak in this border town, two women from Guatemala, one with a small child strapped to her back, wait patiently on the levee overlooking the Rio Grande.
Ed Yardeni posts Eurozone Recovery Remains Lackluster (excerpt)
2B) … In Tuesday June 17, 2014 marketplace trading, the see saw destruction of fiat wealth seemed to intensify, (this commenced with the June 5, 2014, Mario Draghi ECB Mandate for NIRP and TLTRO), as greed seemed to turn to fear, specifically the fear that the world central bank’s monetary authority has crossed the rubicon of sound monetary policy and has made money good investments bad.
The bond vigilantes have control on the Bow of Economic Sovereignty, that is the Interest Rate on the US Ten Year Note, $TNX, and are calling it higher from the recent 2.49%, to 2.65%, thus causing disinvestment out of Credit Investments, causing Aggregate Credit, AGG, to trade lower.
Junk Bonds, JNK, the lever of debt trade investing, traded lower.
Asset Managers, such as BEN, AMP, VOYA, Regional Banks, KRE, such as OZRK, SIVB, FITB, HBAN, SBNY, BBNK, Stockbrokers, IAI, Investment Bankers, KCE, Insurance Companies, KIE, The Too Big To Fail Banks, such as BK, BAC, WFC, USB, PNC, as well as by the most speculative of investments, such as TAN, SOXX, PNQI, XRT, CQQQ, SOCL, IGN, SKYY, FDN, XRT, the most risky of investments, such as RZG, RZV, Manufactured Housing, CVCO, Materials, such as PYZ, PKB, SLX, XME, COPX, Paper & Packaging, Industrial Electrical Equipment, International Industrial Companies, Electronics, Diversified Industrial Producers traded higher; the S&P 500 Midcaps, MDY, having a PE of 19, traded to a new rally high.
Global debt deflation, is underway, coming from the bond vigilantes calling the Benchmark Interest Rate, ^TNX, higher, and calling Interest Rates higher world wide as well, with the result that currency traders have commenced competitive currency devaluation, successfully selling Major World Currencies, DBV, and Emerging Market Currencies, CEW.
Australia, EWA, KROO, and Australia Dividends, AUSE, led Asia Excluding Japan, EPP, lower, as the currency traders sold the Australian Dollar, FXA, as Business Week reports Aussie Declines as Central Bank Says Recovery Uncertain.
The Emerging Markets, EEM, were led lower by Egypt, EGPT, Columbia, GXG, The Philippines, EPHE, Nigeria, NGE, and Chile, ECH. Brazil, EWZ, and Brazil Small Caps, EWZS, traded lower, as the currency traders sold the Brazilian Real, BZF, and the Emerging Market Currencies, CEW, as the bond vigilantes once again called the Emerging Market Interest Rates higher, as is seen in Emerging Market Local Currency Bonds, EMLC, and Emerging Market Bonds, EMB, trading lower.
FT in Video Report posts Don’t Worry About Inflation.
Out of the soon coming failure of credit, that is out fear that borrowers will not repay lenders, Headline Inflation is seen increasing; this is confirmed by the ratio of the Long Term Tips, LTPZ, to 10 Year US Government Notes, TLT, that is LTPZ:TLT, trading higher, and the Proshares UltraPro 10 Year TIPS/TSY Spread, UINF, trading higher. Headline Inflation was reported by Reuters April Consumer Prices Post Biggest Gain In 10 months; and was reported by DSShort May Consumer Inflation Rises To Fed Target. Inflation is the investor’s warning sign to exit fiat investments and to invest in hard assets, that is to start to dollar cost average into the possession of gold bullion.
Under Janet Yellen’s leadership, The Fed Reserve will be developing an exit strategy; it will be one of establishing Financial Stability, this will complement the June 5, 2014, Mario Draghi, ECB Mandate of NIRP and TLTRO, as well asThe June 21, 2014, Mario Draghi ECB Press Announcement of Unlimited Liquidity Through 2016 And Quantitative Easing To Include Not Only Government Bonds, But Also Private Sector Loans, As Well As To Surrender Some Sovereignty, to address secular stagnation, defined as low growth, low employment, low inflation, and the threat of economic deflation.
The ECB posts June 21, 2014, Telegraaf Interview With Mario Draghi, Daghi says unlimited liquidity through 2016 is the ECB signal on rates, and when prompted The ECB has taken many measures, but has not undertaken any quantitative easing, i.e. has not purchased bonds, the ECB Chariman responds, “Quantitative easing can include not only government bonds, but also private sector loans. We will discuss that when the time comes.”
In the interview with Dutch newspaper De Telegraaf published Saturday, June 21, 2014, Draghi said “economic policy cannot be a purely national matter” because of the impact European countries’ policies have on each other.
Much has been undertaken to close the gaps in Economic and Monetary Union, stricter budget rules and a banking union. Is everything now in place?
“The banking union is a major step forward in the direction of a more complete monetary union. The crisis has shown that the economic policies of one country have a clear impact on other countries. Economic policy cannot be a purely national matter. Where fiscal policy is concerned, a certain degree of Union-wide discipline is already given. But the marked imbalances between euro area countries are due to a lack of structural reforms in some countries. The next step to be taken is to subject structural reforms, too, to Union-wide discipline.”
Current economic policy coordination in the euro area is merely a first step?
“Yes, indeed, it is merely a first step.”
What will the second step look like?
“That is a matter for the political domain to decide. In the case of the budget agreements, sovereignty has been shared among Member States. That should also be done with respect to the labour market, competitiveness, bureaucracy, agreements on the internal market. Sovereignty needs to be shared at a level other than the national sphere. That is where I stop. Because now there are several options for politicians to choose from. You could grant greater powers to the European Commission, or to the Member States within the European Council, or you could create new European institutions. That is not for me to decide.”
The contention of some politicians that EMU is complete is thus not correct?
“No, far more is necessary for a perfect monetary union.”
Is a budgetary authority necessary at the euro area level, a fund for the compensation of weak countries?
“That is a highly political issue. Compliance with existing rules would be enough. But it is clear that my predecessor in office, Trichet, made a strong case for a budgetary authority.”
The Mario Draghi ECB June 5, 2014, Announcement of NIRP and TLTRO, and the June 21, 2014, Press Conference Statement calling for a surrender of some sovereignty, come to represent the important assertion of a unified experience, and serves as an early statement in the long process to establish Eurozone economic governance, where diktat provides seigniorage, that is moneyness, replacing democratic nation governance, and the traditional seigniorage of economic choice
Out of soon coming credit crisis and global financial system meltdown, coming from the rise of the Interest Rate on the US Ten Year Note, ^TNX, as well as derisking out of debt trades, and deleveraging out of currency carry trades, Money Market Funds, such as Vanguard’s VMMXX, Regional Banks, KRE, such as HBAN, and Asset Managers, such as STT, BLK, will be integrated into the government, and become known as the Government Banks, or Gov Banks for short. Please note that said fund charges a fee in excess of its yield, in order to maintain its constant one dollar value.
The Primary Dealers, who hold Interest Rates Swaps, that they were literally gifted under POMO, and thus are short Treasuries, and whose customers are short 10 Year US Government Notes, TLT, will likely be forced into becoming Gov Banks as well.
Across The Curve posts Reverse Repo. Citing FT article New York Federal Reserve Takes On Key Role In Repo Market. While the growing presence of the Fed in the market has been welcomed by money market funds keen to transact with the central bank, it comes with risks for the central bank and the broader financial system.
Bill Dudley, New York Fed president, warned last month that if use of the repo facility were to grow too quickly it might “result in a large amount of disintermediation out of banks through money market funds and other financial intermediaries into the facility. This could encourage further enlargement of the shadow banking system.”
Without a cap on use of repo with the Fed, investors who ordinarily lend to banks could instead flock to the central bank in times of market stress, exacerbating a flight from funding of banks, he warned
Other market participants have been supportive of the Fed’s new role.
“The facility could also enable the Fed to become a ‘dealer of last resort’, just as it is a lender of last resort to regular banks. This would ensure a troubled shadow bank could always find a counterparty in the market,” Paul McCulley, chief economist at Pimco, wrote in an opinion piece for the Financial Times this week.
Fitch said the relationship between banks and government money market funds had changed since the Fed launched the RRP. The likes of Citigroup, Bank of America, Crédit Agricole, Goldman Sachsand RBCnow rely less on money market funds for funding, while BNP Paribas, Deutsche Bankand Barclays conducted the largest volumes of repo funding with these players as of May 31, 2014.
The first step in developing the Exit Strategy will be capital controls, specifically an exit charge, that is an exit levy, on withdrawing funds from bond funds as well as money market funds. David Stockman posts A Horror Show Called “Fed-Gate” May Be Coming To Your Bond Fund Soon.
The historically rising value of M2 Money Stock reflects that money market funds have served as risk adverse savings accounts. Their constant one dollar value cannot be sustained now that the Benchmark Interest Rate, ^TNX, has risen from 2.49% to 2.62%, and as both 1-3 Year Treasury Bonds, SHY, and Mortgage Backed Bonds, MBB, have fallen in value, on the failure of trust in the monetary policies of the world central banks to sustain investment growth as well as global growth and trade.
Fiat money is defined as the combination of Major World Currencies, DBV, Emerging Market Currencies, CEW, and Aggregate Credit, AGG.
Through the monetary policies of the world central banks and abundant choices of debt trade investing such as KATE, LAMR, and KR, and carry trade investing, MKTAY, PUK, NMM, money has become cheap, credit has become surreal, and wealth has become totally fiat.
The failure of money has commenced, as all three of its components are now trading lower from their market top highs. The death of currencies, such as the Euro, FXE, the Swiss Franc, FXF, the Swedish Krona, FXS, the Chinese Renminbi, CYB, CHLC, CNY, and the Indian Rupe, ICN, communicates the soon coming beginning of extinction of all investors, specifically the risk adverse investor, the fixed income investor, and the risk purposeful investor. These are like the wooly mammoth, who was frozen instantly in place, by a rush of freezing air or water, as presented By John D. Keyser in Earth Rings and Frozen Mammoths.
Wealth can only be preserved by investing in and taking physical possession of gold bullion and by savings held in gold based Internet trading accounts such as Gold Is Money and Bullion Vault.
Reuters reports Fewer Roadblocks To Bondholder Bailins The Bank Recovery and Resolution Directive published last week in the EU Official Journal is an important building block for effective resolution and underpins our view that extraordinary support for senior creditors is becoming less likely, Fitch Ratings says. Some aspects of resolution are still evolving, but there was sufficient uncertainty about sovereign support to prompt our Outlook revisions in March: around 60 EU bank ratings are now on Negative Outlook because of diminishing support. The Directive gives authorities a comprehensive suite of resolution tools. We believe the bail-in tool to be the most effective because there are fewer practical hurdles.
2C) ... In Wednesday June 18, 2014 marketplace trading, Nation Investment, World Stocks, Junk Bonds, Emerging Market Bonds, and Emerging Market Local Currency Bonds, soared to new highs as investor continued risk on investing and pursuit of yield investing on Janet Yellen comments.
Investors drove Equity Investments strongly higher on comments from Janet Yellen on the lack of any over valuation, by rebounding economic activity, by the expectation of economic expansion to proceed at a moderate pace, and by the recent inflation data as heading towards the Fed’s target.
Reuters reports Fed Keeps Faith In Recovery. At an afternoon news conference, Fed Chair Janet Yellen provided a long list of reasons for short run confidence, from resilient household spending to an improving jobs market. Though officials slashed their growth forecast for 2014 from 2.9 percent to a range of between 2.1 percent and 2.3 percent, Yellen said that was the result of “transitory” factors like a severe winter and that a rebound was underway.
“Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace,” she said. “The economy is continuing to make progress towards our objectives” of full employment and 2 percent inflation”
But Yellen said there had been “a slight decline of projections pertaining to longer term growth” that prompted Fed officials to lower their view of the expected long-term federal funds rate from 4 percent to 3.75 percent. That is below the 4.25 percent historical level identified by New York Federal Reserve President William Dudley.
Nation Investment, EFA, traded to a new rally high, being led so by Japan, EWJ, and Japan Small Caps, JSC, as Reuters reports BOJ to Provide Almost 5 Trillion Yen to Banks to Boost Lending; and in Asia, by EWT, ENZL, EZA, EWC, CNDA, EWS, EWSS, EWT, EWA, KROO, VNM, EWM, EPHE, in Europe by EWU, NORW, EDEN, EFNL, EWN, GREK, EWP, EWI, in the Emerging Markets, EEM, EWX, DBEM, by ARGT, EWZ, EWZS, GXG, TUR, ECH, EWW, and also by worldwide by RSX, ERUS, ESR, EPOL, EZA, EWC, YAO.
Ireland, EIRL, traded lower, as Seamus Coffey of Irish Economy asks Will there be a “state aid” investigation? RTE isreporting that [t]he European Commission is to open a formal investigation into Apple’s tax arrangements with Ireland. An announcement is expected to be made by Competition Commissioner Joaquin Almunia tomorrow. If the Commission decides not to progress with an formal investigation there would only be a limited reputational bump for Ireland but there would have been benefits in terms of reduced uncertainty. If a formal investigation is announced it is bad news for the certainty of the Irish corporation tax regime. The best outcome for Ireland would be a short (< 12 months) investigation. The actual outcome would, perhaps surprisingly, not be the most important factor.
World Stocks, VT, traded to a new rally high, being led so by Precious Metal Mining, GDX, GDXJ, SIL, SILJ, Materials, PICK, SLX, XME, COPX, and High Beta ETFs, IHI, CQQQ, IGV, PBS, RXI, PNQI, FDN, SOCL, XTN, IBB, PJP, CARZ, IYC, PBJ, RZG, SKYY, XRT, RZG, TAN, CVCO. Of note, Consumer Services, IYC, has a stunning PE of 20. Semiconductors, SOXX, traded lower.
The S&P 500, SPY, traded to a new higher, with Fedex, FDX, blasting strongly higher.
Global Financials, IXG, traded higher, approaching its former high, being led higher by Japanese Stock Broker, NMR, Japanese Banks, MTU, MFG, SMFG, Brazil Banks, BBD, ITUB, India Banks, IBN, HDB, Mexico Bank, BSMX, and Asset Managers, such as BLK, BEN, PFG, AMP, BX.
Defensive Stocks, DEF, traded to new rally highs, being led so by IPW, OIH, PAGG, KIE, KXI, XLU, IHF, IYR, DBU.
In Yield Bearing Investments, DTN, traded vertically higher, as Utilities, XLU, Telecom, IST, Global Utilities, DBU, Global Infrastructure, IGF, International Dividend Dogs, IDOG, Leveraged Buyouts, PSP, European Small Cap Dividend, DFE, Euro Stock 50, FEZ, traded higher. Energy Partnerships, AMJ, and, MLPJ, traded lower; but EMLP, traded higher.
Commodities, DBC, traded higher, being led higher by Base Metals, DBB. Gold, GLD, and Silver, SLV, traded higher.
The rally in Equity Investments was so strong that it upset the recent gains of currency traders, who were forced out of their short positions in the Brazilian Real, BZF, and the Australian Dollar, FXA. Major World Currencies, DBV, traded up to its previous rally high. Emerging Market Currencies, CEW, traded strongly higher, but remains below its recent rally high.
All Credit Investments, with the exception of European Credit, EU, traded higher, taking AGG, higher, but not enough higher to offset the destructionism of the bond vigilantes who on June 2, 2014, forced a strong sale in debt investments. The Benchmark Interest Rate, ^TNX, traded lower from yesterday’s 2.65% to 2.62%, which stands slightly higher from its Friday June 13, 2014 value of 2.60%. US Ten Year Notes, TLT, are a loss leading Credit Investment.
2D) … In Thursday June 19, 2014, marketplace trading. Nation Investment, EFA, traded strongly higher to a new rally high, as the US Dollar, $USD, UUP, capitulated and trades lower, turning Major World Currencies, DBV, lower, from their ongoing rally high, as currency traders call all other sovereign currencies higher.
Asia Excluding Japan, EPP, traded higher, as Australia, EWA, KROO, traded up to their previous rally highs and Australia Dividends, AUSE, recovered; while Vietnam, VNM, and Indonesia, IDX, IDXJ, traded lower.
Canada, EWC, CNDA, the UK, EWU, Denmark, EDEN, Taiwan, EWT, Golumbia, GXG, Peru, EPU, and Chile, ECH, traded higher.
China, YAO, ECNS, CAF, ASHS, ASHR, Russia, RSX, ERUS, India, INP, SCIN, Brazil, EWZ, EWZS, Norway, NORW, and European Small Cap Dividends, DFE, traded lower. Reuters reports Argentina Says Next Bond Payment ‘Impossible’, Default Looms
Global Financials, IXG, traded higher as Far East Financials, FEFN, trade higher, and as China Financials, CHIX, Emerging Market Financials. EMFN, and Stockbrokers, IAI, traded lower,
World Stocks, VT, traded higher, being led so by Gold Miners, GDX, GDXJ, Silver Miners, SIL, SILJ, Copper Miners, COPX, Global Industrial Miners, PICK, Consumer Staples, KXI, Small Cap Consumer Staples, PSCC, Food and Beverage, PBJ, Medical Devices, IHI, International Energy, IPW, Energy Production, XOP, Energy Service, OIH, Automobiles, CARZ. On the other hand, China Technology, CQQQ, traded lower, on lower Chinese Financials, CHIX. Solar Energy, TAN, traded lower. Retail, XRT, traded lower from its rally high; CNBC reports Coach Closing 70 Sores As Sales Suffer
Pursuit of Yield Investments traded higher, being led so by North American Energy Partnerships, EMLP, Smart Grid, GRID, Utilities, XLU, International Dividend Dogs, IDOG, Premium REITS, KBWY, Leveraged Buyouts, PSP, and Dividends Excluding Financials, DTN.
Commodities, DBC, traded higher, being led higher by Base Metals, DBB and Gold, GLD, and Silver, SLV, which exploded higher.
Peak wealth has been attained with Utilities, XLU, topping out; its 2.6% rise this week evidences that pursuit of yield investments has run its course; and Global Integrated Energy, IPW, and Global Agriculture, PAG, topping out, evidences the termination of defensive stock investing.
An Elliott Wave 5 High has been attained in the S&P 500, it has come via ever rising Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Aggregate Credit, AGG. In other words, peak moral hazard of the world’s debt based money system has been attained via a zenith in fiat money.
The US Dollar as the international reserve currency, together with the sovereignty of democratic nation states is at its peak, and has produced awesome seigniorage based upon fiat money, which in turn has defined the investor as the centerpiece of economic activity.
Now, with the bond vigilantes, having the bow of economic sovereignty, they together with the currency traders, are effecting coup d etats world wide, with the result being that regionalism is replacing creditism, corporatism, and globalism.
And now The Islamic State in Iraq and the Levant (ISIS), a jihadist group, who carry the Black Flag, as seen in CFR Report, has overnight created a rapidly expanding nation in Iraq and Syria, that threatens to overrun the Kurds in northern Iraq as well as the Shiites in Baghdad. It is a proto-state, that is an unrecognized nation, having de facto sovereignty, which is active even in Lebanon, destabilizing there with an attempted assassination attempt.
The Telegraph reports in video Islamic Army Of Iraq Founder: Isis and Sunni Islamists Will March On Baghdad. The Founder of Islamic Army of Iraq, who was once described by the US as a top terrorist target, explains how the fight against ‘American or Iranian occupation’ has united Isis and other Sunni Islamists in the Battle for Baghdad.
Patrick Martin of WSWS posts Obama Exploits Iraq Crisis As Pretext For War Against Syria The Obama administration made clear on Thursday that a major deployment of US forces in the Middle East will include military strikes beyond the borders of Iraq.
Elaine Meinel Supkis posts US To Bomb Al Qaeda In Iraq While Increasing Arms To Al Qaeda In Syria: Thank You, AIPAC
John Redwood United Kingdom Member of Parliament writes The Outbreak Of Religious War In Iraq Should Not Lead To UK Or US Military Intervention.
Frank Dimora posts Bible Prophecy Foretells Of Two Soon Coming Middle East Wars, these being the Psalms 83 War which is centered upon Syria, and the Ezekiel 38 War which is centered upon Israel. It’s easy to imagine that the US will be involved.
Psalm 83 tells us the Ishmaelites, Edom, Ammon, Amalek, Hagarenes, Gebal, and the Philistines will attack Israel. Who are these nations described as Old Testament territories? In our modern times, these are the nations of Jordan, Lebanon, Iraq, Saudi Arabia, Egypt, the Palestinians, and Syria.
The War spoken about in Ezekiel 38 takes place when Israel thinks they are living in safety without any walls to protect them, we believe the Psalms 83 war will take place at the time Israel and the Arabs are still calling for this Peace and safety and, at the time when Israel is protected by all their bars, gates, and walls.
The new sovereignty of regional economic governance is rising, as is seen in the emergence of Eurasia, through the Russia-China energy compact as well as The June 21, 2014, Mario Draghi ECB Press Announcement of Unlimited Liquidity Through 2016 and Quantitative Easing to Include Not Only Government Bonds, But Also Private Sector Loans, as Well As A Call To The Surrender Of Some Sovereignty.
And a new seigniorage based upon diktat money, is emerging; it features regional statism to establish regional security, stability, and sustainability, where the debt serf is the centerpiece of economic activity.
The pursuit of yield rally, the defensive equity rally, the emerging market rally, and the European nation rally, are now complete, as is seen in the ongoing Yahoo Finance chart of Utilities, XLU, India Small Caps, SCIN, India, INP, Spain, EWP, Turkey, TUR, and Brazil, EWZ, topping out, evidencing the end to debt trade investing and currency carry trade investing.
Investments in Spain, EWP, such as its bank SAN, exemplifies the zenith of debt trade investing.
Investments in Emerging Markets, such as in India’s, Tata Motors’, TTM, Turkey’s TKC, Brazil’s BRFS, CPL, TSU, ELP, CIG, EBR, seen in combined ongoing Yahoo Finance Chart, exemplifies the zenith of currency carry trade investing, which has been based upon the lowering of yield of sovereign debt. The rising value of debt of these democratic nation states has produced currency carry trade leverage over the Japanese Yen, FXY, to produce stunning investment gains.
The genius of Milton Friedman’s floating currencies, and the genius of Ben Bernanke’s Global ZIRP, has come to an end now that the bond vigilantes, are in control of the Bow of Economic Sovereignty, that is the Benchmark Interest Rate, ^TNX, and are calling interest rates higher globally.
Speculative leveraged investing, that came via Asset Managers, has come to an end. Companies which have securitized and traded in financial products, such as Voya Financial, VOYA, are tombstones on the bygone era of credit and the age of currencies.
The Bear Steepening that commenced in early June 2014, continued the week ending June 20, 2014, as The 30 Year US Government Bonds, EDV, The 10 Year US Government Notes, TLT, and Long Duration Corporate Bonds, LWC, traded lower. Risk Free Credit, FLOT, traded to a new all time high.
The Bull Flattening of the 10 30 US Sovereign Debt Yield Curve $TNX:$TYX, came to an end on June 2, 2014, as is seen in Steepner ETF, STPP, steepening in value in June. The surge in Oil, USO, and the investment demand for Gold, GLD, as well as the failure of the government in Iraq and an enduring civil war in Ukraine, has not yet been priced into inflation; there has only been a tiny rise in the ratio of Long Term Tips. LTPZ, to US Ten Year Notes, TLT, that is in LTPZ:TLT.
Junk Bonds, JNK, traded lower. The Long Term Corporate Bonds, LWC, is now tied with Emerging Local Currency Debt, EMLC, and European Debt, EU, in leading all of the High Yield Debt, JNK, LWC, EU, EMB, HYD, EMLC, EMCD, BABS, HYXU, PZA, lower, on the exhaustion of the world central bank’s monetary authority.
It is Jesus Christ, who on October 23, 2013, opened the First Seal of the Scroll of End Time Events, and released the Rider on the White Horse, seen in Revelation 6:1-2, who has the Bow of Economic Sovereignty, to begin economic coup d etats world wide, by empowering the bond vigilantes to commence calling the Benchmark Interest Rate higher from 2.49%.
And it is Jesus Christ, who on June 11, 2014, opened the Fourth Seal of the Scroll of Scroll of End Time Events, and released the Rider on the Pale Horse, seen in Revelation 6:7-8, (compelling Equity Investments to trade lower on the trade lower in the EURJPY, following the ECB Mario Draghi Mandate of NIRP and LTLRO) who introduces economic deflation replacing economic inflation, the result of which is economic death replacing economic life.
A see saw destruction of the components of fiat wealth, these being Equity Investments, and Credit Investments, is underway, on the failure of Sovereign Currencies, such as the Euro, FXE, the Swiss Franc, FXF, the Swedish Krona, FXS, and the India Rupe, ICN, trading lower in value.
2E) … In Friday, June 20, 2014, financial marketplace trading, the stock market actually pivoted from a bull market to a bear market.
With the trade lower in Major World Currencies, DBV, and Emerging Market Currencies, CEW, the June 5, 2014 Mario Draghi ECB Mandate of NIRP and TLTRO becomes the EU Economic Manifest that serves to pivot the world from the age of credit and currencies and into the age of diktat and debt servitude. The June 5, 2014 Mario Draghi Mandate becomes the “manifest direction” for regional economic governance in Europe.
All currencies are either peaking or have peaked out in value, reflecting the failure of democratic nation state sovereignty. Out of soon coming economic chaos, more specifically a credit bust and global financial system breakdown, termed Financial Apocalypse, and foretold in Revelation 13:3-4, regional sovereign leaders will provide diktat to drive regional economic activity.
Nation Investment, EFA, traded lower from its market top high, as Asia Excluding Japan, EPP, traded lower with Emerging Asia, GMF, Taiwan, EWT, Singapore, EWS, EWSS, South Korea, EWY, Australia, EWA, and New Zealand, ENZL trading lower.
The Emerging Markets EEM, EWX, traded lower, on lower Emerging Market Currencies, CEW, and lower Emerging Market Local Currency Bonds, EMLC. Currency hedging no longer provides positive investment gains, as is seen in Hedged Emerging Markets, DBEM, trading lower. Vietnam, VNM, Turkey, TUR, Indonesia, IDX, IDXJ, Emerging Africa, GAF, and Emerging Europe, ESR, traded lower.
Canada, EWC, CNDA, traded to a new rally high, on a rising Canadian Dollar, FXC, which reflects the rally in Oil, USO, and Gold, GLD, which Canada produces. Sweden, EWD, traded lower on a lower Swedish Krona, FXS.
In Yield Bearing Investments, Dividends Excluding Financials, DTN, traded to a new rally high; while Emerging market Dividends, EDIV, Emerging Market Infrastructure, EMIF, Global Infrastructure, IGF, Utilities, XLU, International Telecom IST, Gulf Dividends, GULF, traded lower.
World Stocks, VT, traded unchanged at its rally high, as Energy Services, OIH, traded higher, while Energy Production, XOP, topped out, and Global Integrated Energy, IPW, traded lower. Other sectors trading lower included Global Agriculture, PAGG, Insurance, KIE, and Steel, SLX, with World Steel Association posting May 2014 Crude Steel Production Exceeds Last Year’s Production.
The pivoting from a bull stock market to a bear stock market is seen in the Emerging Market Bear Market ETFs, EUM, EEV, and EDZ, trading higher; the periphery sell off will soon proceed to become core sell off, as sovereign currencies trade lower on debt deflation.
Most of the Inverse Market ETFs, STPP, XVZ, EUO, YCS, MLPS, SAGG, DTYS, JGBS, GLD, GYEN, GEUR, GGBP, YXI, EUM, DOG, SEF, EFZ, DDG, PSQ, REK, MYY, RWM, are now trading higher, evidencing that peak wealth has been attained; these could be used as collateral for the basis of short selling.
The pivot from bull market to bear market is seen in Convertible Securities, CWB, topping out in value, and the 20 20 Target Date ETF, TDH, trading 1.5% lower, and the International Quality Dividend Defensive, IQDE, trading 2.0% lower, and the S&P Buy Write, PBP, trading 2.1% lower in value for the week.
The age of financialization and securitization is over, though, finished, and done, as is seen in the Proshares Short MSCI EAFE, EFZ, trading higher in value. The age of regional economic governance has commenced with the June 5, 2014, Mario Draghi ECB Mandate of NIRP and TLTRO.
The peaking out in risk assets comes with rising headline inflation, and has produced an investment demand for Gold, GLD, and Silver, SLV. The demand for safe assets, that is gold and silver, is seen in the rallying value of gold relative to sovereign currencies, and is presented in the ongoing Yahoo Finance chart of the ETFs, GLD, GYEN, GGBP, and GEUR.
John Templeton said “Bull markets are born on pessimism, grow on scepticism, mature on optimism and die of euphoria.”
The economic data reports scheduled for next week, on consumption and on consumer confidence may be the actual triggers which propel the stock market lower.
Aggregate Credit, AGG, traded higher with Junk Bonds, JNK, which traded to a new rally high, suggesting that Total Credit has surged and is now trading lower from its grand swell higher.
3) … In this week’s news and in commentary
3A) ... Fred Brauer answers the question, “Why did Dave Brat beat Eric Cantor in Virginia’s Republican primary”, relating Yes, Brat’s Victory Was About Immigration. I reply that those Inside The Beltway wanted a “pure Republican”, that is one who makes “no compromise” with Democrats. Of note, Dave Brat had support from right wing pundits Ann Coulter and Laura Ingram.
3B) … Just exactly where do the 1% reside?
Wikipedia relates that they reside in million dollar homes, in such places as The Beltway’s Potomac, MD, or the Upper West Side of Manhattan, or Upper East Side of Manhattan. And wealth demographer Stephen Higley relates they reside in the Higley Elite 100 Neighborhoods, such as the Carderock-The Palisades neighborhood, which is one of The 25 Richest Neighborhoods in America.
Betsy Schuman relates the Palisades community in Bethesda is a small neighborhood of approximately 79 homes in a park-like setting near the canal off MacArthur Boulevard. The Palisades is filled with both traditional and transitional colonials and contemporary homes on lovely treed lots. The lot sizes range from approximately .80 – 3.24 acres.
El Observatorio del Desarrollo Urbano y Territorial posts America’s 1,000 Richest Neighborhoods.
And Richard Florida of City Lab posts America’s 1,000 Richest Neighborhoods. America’s “one percent” are a privileged bunch. It takes an adjusted gross income of almost $400,000 to be counted among those who make up the country’s top earners. Together, the top 1 percent account for nearly 20 percent of reported taxable income in the US. Overall, the one percent are heavily concentrated along the East and West Coasts. And despite all the talk about gentrification and the movement of the uber-affluent back to the cities, their numbers are overwhelmingly concentrated in the upscale suburbs of America’s increasingly bi coastal economy – places like Greenwich, Connecticut; Bethesda and Potomac, Maryland; Coral Gables, Florida; and Newport Beach, California
Des Moines, Iowa, is not where the 1% reside, but it is a major center of the US insurance industry and has a sizable financial services and publishing business base. In fact, Des Moines was credited as the “number one spot for U.S. insurance companies” in a Business Wire article and named the third largest “insurance capital” of the world; it is known as Hartford of the West. Zip Code is 50301. In 2010, Forbes magazine ranked the Des Moines metropolitan area first on its list of “Best Places For Business And Careers,” based on factors such as the cost of doing business, cost of living, educational attainment, and crime rate.
3C) … I reside in a jungle of abuse with the vilest of predators.
Here in downtown Bellingham, WA, it’s a world characterized by melancholy, alienation, bleakness, disillusionment, disenchantment, ambiguity, moral corruption, and evil of every type; many psychopaths and their girlfriends live here; such be alpha males and their alpha females, who go around biting, ripping, and devouring whoever they may; these have used me many times as a fire hydrant to piss on; and I can assure you it is a most unpleasant experience. There is no law against intimidating or harassing people. I have come to appreciate The Third Man, a film noir; yes it really appeals to me. Distance Learning presents The Five Rules of Film Noir
AMC Filmsite relates Film noir genre films (mostly shot in gloomy grays, blacks and whites) thematically showed the dark and inhumane side of human nature with cynicism and doomed love, and they emphasized the brutal, unhealthy, seamy, shadowy, dark and sadistic sides of the human experience. An oppressive atmosphere of menace, pessimism, anxiety, suspicion that anything can go wrong, dingy realism, futility, fatalism, defeat and entrapment were stylized characteristics of film noir. The protagonists in film noir were normally driven by their past or by human weakness to repeat former mistakes.
Fog’s Movie Reviews relates The Third Man is set in Vienna, in the aftermath of WWII. The film was shot on location there, and the recovery is still evident. Rubble and wreckage are often present, as are scaffolding and repair efforts. The city is policed by multi-national security forces. The locals suspicious and untrusting. It’s a destabilized world.
Enter Holly Martins. He’s an author of pulp novels who’s a bit down on his luck. He’s been offered a job by his college friend, Harry Lime. When he arrives in Vienna, however, he discovers his friend Lime is dead. He was struck by an automobile and killed just prior to Martins’ arrival.
While attending Lime’s funeral, he is shocked yet again. He’s informed that Lime was an unscrupulous war profiteer. A notorious black market racketeer.
Harry Lime is not dead at all. In legendary movie moment, a light suddenly turned on from a window above illuminates a man hiding in the shadow of a doorway. It’s Harry Lime. His death was faked.
Now that he’s revealed himself to Martins, Lime also reveals his motivations. In an infamous scene, Martins and Lime ride a ferris wheel and discuss his crimes. It’s a chilling scene. The smug, cold-blooded Lime espouses his self centered world view, demonstrating no remorse whatsoever for his victims. Instead, he shows a callous disregard for human life, even boasting that his profits came without income tax. He alternately threatens and attempts to bribe Martins to join him.
Geri Jeter writes Z is For Zither Composed for the zither by Anton Karas, who also played the solo instrument, The Third Man score often is described as a stellar example of the film composer’s art.
According to a November 1949 Time magazine article: “The picture demanded music appropriate to post-World War II Vienna, but director Reed had made up his mind to avoid schmalzy, heavily orchestrated waltzes. In Vienna one night Reed listened to a wine-garden zitherist named Anton Karas, [and] was fascinated by the jangling melancholy of his music.” Roger Ebert wrote, “Has there ever been a film where the music more perfectly suited the action than in Carol Reed’s The Third Man?”
If one were to ask Anna Schmidt, “Why were you passionately in love with Harry Lime?” The answer would come back, “I loved the rebel”. There are some women who before the age of fiveteen, who have crossed the rubicon of morality so many times, that they come to love only evil men, and give themselves passionately to them in every way, mentally, sexually, and emotionally. Nothing should be done to help these women, as nothing can be done to help them; they live in emotional quicksand. The only thing one can do is refer them to Donna Anderson who writes Why You Can Become Addicted To A Sociopath/Psychopath.
The bad thing about their love addiction is that in their passion, they lose all moral perspective and become incapable of virtuous speech and behavior, as well as incapable in manifesting in good ethical regard for others.
I know a number of women like Anna Schmidt; and they consistently tell me “I am free”’; to which I say nothing, but very much want to say, “no you are a slave to sin”. And I know some women, who are so Godly, that I have come to believe, they were made God’s child in the womb. Some might say they had no adult conscience, and have not reached the age of reason, and could not have been born again. I reply what constitutes reason? Some women, are nudged by God in the womb, and respond with an “uh-huh”, and thus are born again at that time, and emerge into the world, God’s child. Such be the election of grace.
3D) … Who is a libertarian? What is Libertarianism
Victor J. Ward posts in Economic Policy Journal Libertarian-Socialism = Righteous-Wickedness. He writes “I agree with everything mentioned in the post: It’s Here: Libertarian-Socialism. But I wanted to comment on one section of Will Moyers’ article.
Moyers says: How can we combat racism? Property rights and non-agression. How should humans approach sexuality and gender? Property rights and non-agression. What is the place of hierarchies in society, whether it’s families or workplaces or financial classes? Property rights and non-agression. What role — if any — should religion and superstition play in society? Property rights and non-agression.
And to Moyers, I say: Yes, that’s correct. Moyers writes in an attempt to say that libertarians have an extremely limited answer to some of life’s most pressing questions. In truth, however, continue reading”
I am not a libertarian; I am a christian; one cannot be both; I am beginning to understand, that under libertarianism, there is individualism and no public anything; no public roads, no public transportation, no public schools; no public statue, not even of Murray Rothbard. The flag of the libertarian is Don’t tread on me; and the banner of the libertarian reads The Individual way is the right way. For libertarians, justice is freedom from public ownership.
3E) … Are you a feminist? Do you need feminism?
Economic Policy Journal posts I Don’t Need Feminism Because
3F) … WSWS posts Bulgaria suspends construction of South Stream pipeline.
The EU and US have forced Bulgaria to halt construction of a pipeline that would allow Russian gas supplies to Europe to bypass Ukraine
3G) … Democracy fails in Iraq.
The WSJ reports Iraq’s Top Shiite Cleric Calls for New Government. ‘Effective’ Government Needed That ‘Avoids Past Mistakes’.
Zero Hedge post Iraq Fighting Intensifies, Battle For Refinery, PM On The Rocks.
Dan Sanchez posts in Lew Rockwell Cheney Launched A War That He Knew Would Be Futile And Catastrophic Simply To Establish Republican Rule.
3H) … Mankind seeks the sovereign experience of God, that is to create human life. Bible prophecy relates that as it was in the days of Noah, so it shall be in the days of the coming of the Son Of Man, Matthew 24:37-39. Back in Noah’s time, fallen angels had sex with women, as an attempt to modify the gene pool, and corrupt the lineage of the forth coming Messiah and Redeemer of mankind. Today, scientists seek the sovereign authority of God, that is to create human life.
Technology Review posts Genome Editing. The ability to create primates with intentional mutations could provide powerful new ways to study complex and genetically baffling brain disorders.
NPR posts The Transhuman Future: Be More Than You Can Be How is it that we define a human? Is it our body? Our genome? Our behaviors? Our self-awareness? Our compassion? Our minds? All of these and then something more? What now may be obvious to most people about being human will become less so as we become progressively more integrated with technology both inside and outside our bodies. Transhumanism, according to the dictionary on my Apple laptop, is defined as “the belief or theory that the human race can evolve beyond its current physical and mental limitations, especially by means of science and technology.”
3I) … As described in Daniel 2:25-45, God is a empire builder.
And He labors in dispensation, that is in the household stewardship of the economy of God, to perfect every age, bringing it to completion, much like a ship’s captain completes the manifest before setting sail, as is described in Ephesians 1:10.
Investment mania produced peak moral hazard, what is properly described as an Empire of Debt, on Thursday June 19, 204.
Elaine Meinel Supkis posts Obama Sends More Troops, Drones, Bombs To Iraq.
Her article describes the empire building activity of God, which was foretold in the second year of the reign of Nebuchadnezzar by the prophet Daniel in the interpretation of the King’s Statue of Empires dream as presented in Daniel 2:25-45, where two iron legs would rise to rule the world in hegemonic power; these have been the British Empire and the United States.
Now with the end of the US Dollar as the international reserve currency, and disinvestment out of debt trades and deleveraging out currency carry trades, the global kick ass, might makes right, final Global Hegemon, is literally dust blowing in the wind.
Ms Supkis misportrays the future relating “Europe is going to get yet another lesson in Realpolitik, Antiwar reports Russia Halts Ukraine Gas Shipments. This will wreck the economy in Western Europe and include a flood of criminals pouring out of Ukraine to exploit open borders and the devolution of Europe dissolving into fragments will continue while the British Royals parade multiple babies about the planet, crowing about ruling the remnants of their old empire”.
Modern wars are rarely, if ever, fought over resources, despite what the mainstream gatekeepers might tell you. If a powerful nation wants oil, for instance, it lines the right pocketbooks, intimidates the right individuals, blackmails the right officials or swindles the right politicians. It has no need to go to war when politicians and nations are so easily bought. Modern wars, rather, are fought in order to affect psychological change within a particular country or population. Wars today are fought to cover up corrupt deals and create desperation. Oil is used as an all-encompassing excuse for war, but it is never the true cause of war.
In reality, oil demand has become static and is even falling in many parts of the world, while new oil and gas-producing fields are discovered on a yearly basis. Petroleum is not a rare resource — at least, not at the present. And the propaganda surrounding the “peak oil” Armageddon scenario is pure nonsense. Oil prices, unfortunately, do not rise and fall according to supply – instead they rise and fall according to market tensions and, most importantly, the value and perceived safety of the U.S. dollar. Supply and demand have little to do with commodity values in our age of fiat manipulation and false investor perception.
A very real danger within energy markets is the undeniable threat that the U.S. dollar may soon lose its petrodollar status and, thus, Americans may lose the advantage of relatively low gas prices they have come to expect.
The U.S. dollar’s world reserve status is nearing extinction. Multiple major economies now trade bilaterally without the use of the dollar; and with foreign conflicts on the rise, this trend is going to become the norm.
In the past week alone, Putin adviser Sergey Glazyev recommended to the Kremlin that a coalition of nations be formed to end the dollar’s reserve status and initiate a form of economic warfare to stop “U.S. aggression”. Of course, anyone familiar with the escapades of international banking cartels knows that it is the money elite that dictate U.S. aggression, just as they dictate the policy initiatives of Russia. I would note that there is only one currency exchange structure that could be used at this time to shift global forex reserves away from the dollar system, and that is the IMF’s Special Drawing Rights.
The argument has always been that the IMF is a U.S. controlled institution, however, this is a faulty assumption. The IMF is a Global Banker controlled institution, a front organization for the Bank of International Settlements, which is why the recent refusal by the U.S. Congress to vote on new capital allocations for the IMF has resulted in the world’s central bank threatening to remove U.S. veto power.
The IMF is owned by a cartel of banksters and it is ready to replace the USD with SDRs, as is seen in their PDF report.
Aside from the potential impact on oil prices which will compound on the growing global inflationary pressures, a regional conflict will destabilize global trade, as Benson te has written; and will be a genesis factor in the rise of regional economic governance.
Bible prophecy of Revelation 13:1-4 foretells that out of waves of Club Med sovereign, banking and corporate insolvency, the Beast Regime is rising to replace the Banker Regime. There will be no exit by any nation from the Eurozone. Leaders will meet in summits to renounce national sovereignty and announce regional pooled sovereignty where regional fascist leaders will work in policies of diktat and schemes of control to establish regional security, stability and sustainability. The EU will serve as a model for regional integration, for all of the world’s ten regions, where totalitarian collectivism unifies people in gulags of debt servitude.
Germany will once again rise to be a military power. Peter Schwarz writes in WSWS The German President’s Call To Arms. At the end of a three-day visit to Norway, the German president reiterated his call for a more aggressive German foreign policy. And Johannes Stern writes in WSWS The Crisis In Ukraine And The Return Of German Militarism. And Johannes Stern writes German Militarism And The US Debacle In Iraq. The German bourgeoisie is responding to the debacle of US imperialism in Iraq by intensifying its campaign for militarism and war. Ulrich Ripper writes in WSWS German Foreign Minister Steinmeier Agitates For War. The demand for a German leadership role in Europe and the world has never been so shamelessly and forcefully raised.
Shipping Stocks, SEA, traded decisively lower, on Wednesday, June 17, 2014, evidencing the rise of the region of Eurasia, as Bloomberg reports China Blocks European Shipping Pact, Sending Maersk Down. China blocked the formation of a global alliance by the world’s three biggest shipping lines in a surprise move that ignored Western approval of the plan and sent AP Moeller-Maersk A/S MAERSKB shares tumbling the most in two years.
God will soon fulfill his word of prophecy of 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.
3J) … The stage is being set for the rise of a King of the North … as well as for the rise of a King of the South.
Will Egypt’s Sisi rise to be the prophesied King of the South? Johannes Stern of WSWS reported in March 2014 Egyptian Coup Leader al-Sisi Announces Presidential Candidacy. Sisi is a US backed dictator prepared to use fascistic methods to suppress the working class at the behest of its imperialist patrons and international finance capital.
Or will an Islamic Caliphate from the nation of ISIS, rise to be the prophesied King of the South? Blessed Economist posts Isis Iraq
Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming Sovereign, presented in Revelation 13:5-10, who is the Prince who is to come, that being the Prince of the people.
Daniel 11:11 “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy.”
Daniel 11:40 “At the time of the end the king of the South shall attack him; and the king of the North shall come against him like a whirlwind, with chariots, horsemen, and with many ships; and he shall enter the countries, overwhelm them, and pass through.”
Scott at Prophecy Update wrote in August 2013 EU Convenes Emergency Meeting On Egypt: EEAS Back In The News. We know from Daniel 9:27 that the coming antichrist will “confirm” the covenant with the many, and part of any confirmation of a peace deal in the Middle East will include some kind of peace-keeping forces. It requires some degree of speculation, but it seems obvious that any plan will have to consider a combination of border control forces and forces on the streets to maintain peace. The EEAS was formed for this very purpose, and the fact that this group was born in the revived Roman Empire becomes a compelling story for a prophecy watcher. If the EEAS is considering involvement in Egypt it is very easy to see similar maneuvering whenever the covenant of Daniel 9:27 is confirmed. This story is worth watching closely.
3K) … The creation of the debt serf is underway in France. Pierre Mabut of WSWS posts Socialist Party Government Ignores Mass Protest To Attack French Culture Workers’ Jobless Benefits Ten thousand entertainment industry workers protested outside the Ministry of Culture in Paris on Monday as part of strike action throughout France.
Anthony Torres of WSWS posts Workers Speak Out Against Privatization Of French Railways. Approximately 1,000 demonstrators gathered in Paris on June 17 to protest the Socialist Party government’s planned privatization of the French railways.
3L) … Elaine Meinel Supkis posts Obama Claims Unilateral War Powers Thanks To Bush Jr. War On Terror Act
3M) … Business InsiderMark Cuban Warns That A Housing Bubble-Like Bust Is Coming To America’s Colleges.
3N) … Pagan Events and Festivals for the Summer Solstice
Bad Witch posts Pagan Events and Festivals for the Summer Solstice.
Facebook posts Crop Circles And UFO Community. Matthew Williams provides us his latest wonderful short aerial Youtube Video on yesterdays crop circle near Alton Barnes, Wiltshire, UK, Woodborough Hill Crop Circle 20-6-2014.
Please consider that Stonehenge was built in circular form, as a landing site for UFOs piloted by fallen angels. Bible UFO posts There Are Ten Bible Verses That Describe Chariots As Vehicles. And Bibliotecapleyades posts Ezekiel’s Wheel
It was the pre-Christians, who over the centuries, warred with the Druids, who were judges, doctors, diviners, sages, and mystics, and who worshipped the fallen angels; the pre-Christians finally succeeding in tearing down the “Altar to the Gods”. Druidry fosters love of the land, earth and the wild, Stonehenge relates; of course Christianity fosters love of God and others.
The University of North Carolina Chapel Hill posts Fall Of The Druidesses. The introduction of the Christian religion was the final blow that ended the egalitarianism of Celtic society.
4) … Conclusion: The extinction of the investor is underway, as the Mario Draghi ECB Mandate Of June 5, 2014 And The Announcement Of June 21, 2014, serve as the EU Economic Manifest, that is the Charter, Call, and Club, for Eurozone Regional Governance.
Outside of the embrace by President Nixon of Milton Friedman’s Free To Choose concept of floating currencies, in 1971, the June 5, 2014, Mario Draghi Mandate of NIRP and TLTRO, together with The June 21, 2014, Mario Draghi ECB Press Announcement of Unlimited Liquidity Through 2016 And Quantitative Easing To Include Not Only Government Bonds, But Also Private Sector Loans, As Well As A Call To Surrender Of Some Sovereignty, is the singular most important event of modern economic history, as some investors are coming to the realization that the monetary policies of the world central banks have crossed the rubicon of sound monetary policy and have made traditional “money good” investments bad, and as such have sold out of European Small Cap Dividends, DFE; this at a time when Spain, EWP, and its bank, Banco Santander, SAN, have been trading to new rally highs, as demand for European Credit, EU, has remained strong.
Global ZIRP birthed the investor as the centerpiece of economic activity. Central bank monetary policies of credit liquidity funneled money to the investor for investment gain.
Zero Hedge reports Global Millionaires Increase By Most Since Dot Com Bubble, Control Record $52 Trillion In Wealth. In similar presentation, Keven Warsh and Stanley Druckenmiller of the WSJ post The Asset-Rich, Income-Poor Economy. The Fed’s balance-sheet recovery hasn’t stirred business investment, an opportunity killer for workers.
The Great Financial Recovery produced peak moral hazard the week ending June 20, 2014, as Total Credit likely flowed to its grand finale high.
Beginning June 2, 2014, the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.49% to 2.62%, and are yielding this Bow of Economic Sovereignty to effectively establish coup d etats globally, enabling the currency traders to introduce competitive currency devaluation, causing some investors to derisk out of debt trades, such as Shipping, SEA, and others to deleverage out of currency carry trades, such as European Small Cap Dividends, DFE, resulting in a see saw destruction of fiat wealth, that is destruction of both Equity Investment, and Credit Investments, such as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, and the US Ten Year Notes, TLT, which are leading Aggregate Credit, AGG, lower. World Stocks, VT, are no longer able to leverage higher over World Debt, AGG, as is seen in the combined chart, VT:AGG, flowing lower.
Dissolution of the Banker regime is underway as investors are selling out of Nation Investment, in particular the Gulf States, MES, Argentina, ARGT, Egypt, EGPT, Turkey, TUR, Indonesia, IDX, IDXJ, and the Philippines, EPHE.
The dynamos of the age of credit and the era of currencies, are winding down on the failure of credit and the death of currencies, these being creditism, corporatism, and globalism; and are starting to cause the extinction of the investor, which will be similar to the extinction of the wooly mammoth, who was frozen instantly in place, by a rush of freezing air an/or water, as presented By John D. Keyser in Earth Rings and Frozen Mammoths.
The singular dynamo of the age of diktat and the era of debt servitude, is winding up on the derisking out of debt trades and deleveraging out of currency carry trades, this being regionalism, and together with the emergence of Eurasia, through the Russia-China Energy Compact, as well as the June 5, 2014, Mario Draghi Announcement of NIRP and TLTRO, and The June 21, 2014, Mario Draghi ECB Press Announcement of Unlimited Liquidity Through 2016 And Quantitative Easing To Include Not Only Government Bonds, But Also Private Sector Loans, As Well As A Call To Surrender Some Sovereignty, like a spring of warm water, has birthed the debt serf for debt servitude.
Just as the Magna Carta is seen to be a seminal document of English history, so the Russia-China Energy Compact and the two June 2014 Mario Draghi ECB Announcements are seminal announcements that serve as the EU Economic Manifest, that is “Charter, Call and Club”, for Eurozone regional economic governance, which will be replicated in every one of the world’s ten regions, and in totalitarian collectivism unifying all of mankind’s seven institutions, establishing The Beast Regime, out of waves of Club Med sovereign, banking, and corporate insolvency, in fulfillment of bible prophecy of Revelation 13:1-4.
Josh Snyder posts in Economic Policy Journal Anarcho-Capitalism – In One Lesson. While reading Lew Rockwell’sAgainst the State: An Anarcho-Capitalist Manifesto, I encourage you to re-read 1984.
It’s clear that we need a revolution, not of violence but of words. The pen is truly mightier than the sword and the real checks and balances on perpetually expanding government across the world are not the Magna Cartas and the Constitutions, it’s books like Lews, ones that spread the reality and expose the State for what it truly is – a malevolent entity, hellbent on enriching itself at the expense of the rest of us. Lew reminds us of this throughout, this is NOT the theoretical foundation of the movement,For a New Liberty and the Ethics of Liberty are the groundwork, but this is a brilliant “Lesson” on why this movement is necessary and growing by providing real examples of how the current American regime is so tortuous and so disastrous for the world that there is only one survivable alternative Anarcho Capitalism
Frankly there is no survivable alternative; there is only one hopeful outcome, that being reliance upon the Oikonomia of Jesus Christ.
Lew Rockwell, in building on Libertarians concepts of Rothbard, Spooner, Molinari, Hans Hoppe, and others, has failed to build on the Greek word Oikonomia, from which we derive economics, and which implies a financial component to intentional kinship options, where a steward, who acis in dispensation, that is in management of all things, for the completion of every age, brings all things therein to completion, as presented by the Apostle Paul in Ephesians 1:10.
Furthermore Mr Rockwell, has failed to build on the Gospel, that is the Good News, of The Revelation of Jesus Christ, that is the unveiling and manifestation of Jesus Christ, as presented by the Apostle John, who in his 90s, while living in exile, on the Isle of Patmos, was given a dream by angels of end time events, specifically, “Those things which must shortly come to pass”, as presented in Revelation 1:1.
And Mr Rockwell has failed to build on the Bible prophesied, dissolution of the US Dollar Hegemonic Empire; and its replacement by the Ten Toed Kingdom of Regional Economic Governance, featuring ten regions of toes of iron diktat and clay totalitarian collectivism, as presented in the Statue of Empire prophecy of Daniel 2:25-45.
The Oikonomia of Jesus Christ, provides a life experience of holiness, meaning divinity, upon which one grows in grace, meaning resource, and in truth, meaning that which is reliable for belief, or which is a trustworthy promise.
A gold rally developed on June 20, 2014, as risk assets peaked out in value. A number of investors fear that the June 5, 2014, Mario Draghi Mandate of NIRP and TLTRO, has crossed the rubicon of sound monetary policy and has made traditional “money good” investments bad. And hence an investment demand for gold arose on Thursday June 19, 2014, as is seen in the chart of the Gold ETF, GLD, blasting higher.
Spot Gold, $GOLD, closed high at $1,320, as the US Dollar, $USD, UUP, closed lower at $80.40. With the rise in the Benchmark Interest Rate, ^TNX, from 2.49%, in June 2014, to 2.62%, which is going to destroy all fiat money and feat wealth, Gold has commenced its Elliott Wave 3 of 3 higher; these are the most dynamic and powerful of all up waves, and they produce the bulk of the wealth increase on the way up to their Elliott Wave 5 High. In the age of debt servitude, the physical possession of gold bullion, and the diktat of regional fascist leaders will be the only form of enduring wealth.
The currency traders in selling the world’s leading sovereign currencies, following the bond vigilantes, in calling the Benchmark Interest Rate, that is the Interest Rate on the US Ten Year Note, ^TNX, higher from its October 23, 2013, value of 2.49% to 2.62%, and in steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening from its June 2, 2014, low, have underwritten the currency traders in commencing the final phase of the business cycle, that being Kondratieff Winter.
Risk-on investing is over; risk-off investing is the new investment normal. Risk assets, having been inflated by Global ZIRP’s pursuit of yield, have topped out in value, and is driving the wily to derivative contracts and to take physical possession of safe assets, these being gold bullion and some silver bullion.