Financial market report for November 5, 2010 by theyenguy
The Yen, FXY, has been the currency, that the currency traders have traditionally sold, while buying the Euro, FXE, the Australian Dollar, the New Zealand Dollar, BNZ, the Brazilian Real, BZF, the Indian Rupe, ICN, the South Africa Rand, SZR, the Mexico Peso, FXM, the Swedish Krona, FXS, and others, to profit from investing long in carry trades.
However, on April 26, 2010, there was a global sell off, of currencies against the Yen, when concern arose over Greek debt, creating what is commonly referred to as the European Sovereign Debt Crisis.
But then roughly six weeks later, came the announcement of the EFSF Monetary Authority, in early June 2010. This helped the Euro, FXE, recover from 129 to its current value just under 140. The US dollar, $USD, because of low-interest rates, became a vehicle for the carry trade. A low US Central Bank Interest Rate, a swelling money supply, and steady outflows against the US Dollar fueled the Dollar as a vehicle for carry trade investing.
Global bankers and currency traders borrowed the Dollar, $USD, while investing in higher dividend paying currencies pocketing the differences. Their bet was that the Federal Reserve would come out with ZIRP and QE 2 to support mortgage-backed securities, MBB, and short duration US Government debt, IEI. They were correct in their expectations, as Ben Bernanke announced a plan to literally print money out of thin air to the tune of $600 Billion to $1 Trillion Dollars. The bet on the dollar carry trade has been profitable for the last six months as stocks, VT, and Bonds, BND, have bloated the global financial bubble out to fantastic proportions.
“Anticipation of QE2 has been the investors heaven”, as stocks in a number of categories, inflated in value:
Airlines: Air Transport Services Group --- ATSG
Consumer Discretionary: Royal Cruise Line --- RCL
Retail: Saks --- SKS
Retail: PETsMART, INC --- PETM
Deflationary: PowerShares Lux Nanotech --- PXN
Hotels: Intermational Hotel Group --- IHG
Nuclear Energy --- NLR
Real Estate: Starwood Property Trust --- STWD
Junk bonds, JNK, are a truly speculative investment; their rise evidences the strength of investment liquidity and the growth of carry trade investing.
I learned of the yen carry trade in 2008 through Elaine Meinel Supkis, who wrote consistently of it, in many of her Culture of Life News articles. Japan has for the last 40 years has fostered a ZIRP and has sourced carry trade loans. This currency depressing policy and excessive lending, is at the root of its deflationary problems. And as the Yen, FXY, has been laddered up in carry trades, to its current high level, exports have fallen in Japan, resulting in the decline of investing in Japan, EWJ, and JSC, and the rise of UltraShort Japan ProFund, UKPSX.
The US Dollar, $USD, is likely going to bounce up, as I expect a sell off of world currencies, DBV, and the emerging market currencies, CEW. Anticipation of QE2 debased the US Dollar and drove up precious metal prics, JPP, such as gold, GLD. Tony C. Dreibus of Bloomberg reports: “Commodities rose to a two-year high after the Federal Reserve said it would expand steps to boost the world’s largest economy, spurring demand for raw materials as a hedge against inflation.”. Historical reports show that monetization of sovereign debt causes tremendous natural resource price inflation.
Stephen Morris and Debarati Roy of Bloomberg report: “Raw sugar, SSG, surged to a 29-year high as dry weather crimps output in Brazil, the world’s biggest producer, and India may cap exports to boost domestic supplies. Output in Brazil’s Center South, the country’s biggest producing-region, tumbled 30% in the first half of October from a year earlier … Stockpiles in India … are about 4 million metric tons, compared with the nation’s preferred level of 10 million tons, according to Rabobank International ... ‘Both Brazil and India are contributing to this frenzy, said Judith Ganes-Chase, the president of J. Ganes Consulting … ‘The prices will remain strong.’ ... Sugar has more than doubled since touching a 13-month low on May 7.”
Luzi Ann Javier of Bloomberg reports: “Cotton futures, BAL, advanced to records on lingering concerns that a production deficit in China, the world’s biggest buyer, may be wider than estimated, boosting the nation’s import needs ... ‘We continue to hear of reports of strong physical demand and concerns about the Chinese cotton crop,’ Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said … ‘It’s a global phenomenon that we’re seeing at the moment, reflective of the fact that global cotton supplies are extraordinarily tight.’ ... Global production is forecast to lag behind demand for a fifth straight year, draining stockpiles to the lowest level in 14 years.”
Leslie Patton of Bloomberg reports: “A doubling of cotton prices since Feb. 1 may mean more expensive clothes, sheets and towels as textile mills … and retailers … pass along higher costs to their customers.”
Luzi Ann Javier and Jay Wang of Bloomberg report: “Textile makers in China, which uses more than 40% of the world’s cotton, face a supply shortage that has sent prices to a record and is ‘endangering’ their survival, an industry group said.”
Risk appetite will change to risk aversion as the bond vigilantes, call the longer out interest rate, that is the Interest Rate on the 30 Year US Government bond, $TYX, higher, and as attention focuses on the European Sovereign Debt Credit Default Swaps, over banking issues in Ireland, EIRL, and other European periphery countries, such as Portugal, Italy, EWI, Greece, and Spain, EWP.
Then the currency investors will become currency vigilantes, and sell the currencies that they invested in, ie the Turkish Lira, the Polish Zloty, and others, causing stock investments in Turkey, TUR, Emerging Europe, ESR, and Poland, EPOL, to fall in value. Gary of Between The Hedges reports “The Western Europe Sovereign CDS Index is now near its record high set May 7th at 174.12 bps, which is a large negative.”
Corporations and those with wealth, have been able to borrow from the Bank of Japan or its proxy banks and agents in major banking centers like London, since the 1970s at 0.25% interest, and then sell it a currency exchange, commodities exchange, bond exchange, or stock exchange that has higher rates, or better return prospects. The amount that they earn in the second currency is in excess of what they are paying in the low-interest currency, thereby generating positive returns on the borrowed money. The low-interest rate, carries, that is leverages, massive returns.
When the carry trade reverses, it can cause big swings in exchange rates, as well as a massive unwinding of investment, as was seen in 2008 with the in the fall of the price of oil, $WTIC, traded by USO and UCO.
After that painful experience, carry trade investors sought out what they “believe to be” less volatile investments in the emerging markets, EEM, and the emerging market financials, EMFN. But, competitive global currency devaluation, that is competitive currency devaluation is on the way; and it will be at the hand of the currency traders. The coming currency war will not be some much as one country against another, but the currency trades against central bankers. This week, emerging markets, EEM, rose 5.1% and Frontier Markets, FRN, rose 4.6%. India, INP, rose 8.8% on a rising India Rupe Yen carry trade seen in the chart of INC:FXY.
The week of November 5, 2010, finished with the 30:10 US Sovereign Debt yield curve, $TYX:$TNX, soaring to close at its highest level ever value of 1.627.
The strong rise in the yield curve drew financial companies higher; these included American Express, AXP, Bank of America, BAC, Banks, KBE, Fortress Investment Group, FIG, Lazard, LAZ, Mortgage Finance, KME, Nasdaq Community Banks, QABA, and the Leveraged Buyouts, that is the LBOs, PSP.
I believe the yield curve will fall lower, only to rise ever higher, as the longer out interest rate, the interest rate on the US 30 year bond, $TYX, soars relative to the Interest Rate on the US Ten Year Note, $TNX. This will cause a strong loss of value in the Zeroes, ZROZ, and the ten to twenty year US government bonds, TLT. It is entirely reasonable to believe that the yield curve will continue to steepen, after a brief pause; yes a steepening yield curve is coming soon. This unfortunately will mean higher borrowing rates for corporations. Those invested in corporate bonds, PICB, will see their total return fall lower.
Some have suggested that the Fed will be buying on the long end of the curve; this is not, repeat not the case, it will be buying on the short end of the curve. If the Fed, bought on the long end, they would be walking right into a huge shredder -- they would be walking into a shot gun blast. They will choose instead to buy into the short end where they will be walking into a derringer blast.
The rising 30 Yea interest rate, $TYX, as well as concern over the value of bonds held at the European Financial Institutions, EUFN, will cause Global Government Bonds, that is the world’s sovereign debt, BWX, and world corporation bonds, PICB, to fall in value.
The ratio of the cap pure value shares, RZV, relative to small cap pure growth shares, RZG, RZV:RZG, is a barometer of carry trade investing. It began to fall from 0.812 on October 14, 2010, as the Interest Rate on the US 30 Year Bond, $TYX, began to rise. This week, as the spigot of investment liquidity from the US central bank was full on, and the US Dollar, $USD falling, there was an explosion of carry trade investing. The RZV:RZG ratio drew back up to hit resistance at 0.810. It has fully recoiled and is ready to fall lower as risk appetite turns to risk aversion. The network effect, that is the bandwagon effect, has reached its full expansion. Small cap pure value shares, RZV, rose 5.5%; its chart shows that on Friday it manifested a dark filled lollipop hanging man candlestick, giving emphasis that its rise is done and over a that this coming week, that is the week of November 8, 2010 through November 12, 2010, will see a fall in global stock value, ACWI.
Numerous charts suggest that a market top is now in:
The New York Composite, NYC, shows a hammer at the top of an ascending wedge.
The Ibbotson Alternative Completion Index, PTO, shows what may be an evening star, it will take a day’s trading to confirm.
The chart of Semiconductors, SMH, shows three white soldiers, a reversal pattern.
The Tax Managed Buy Write Opportunities, ETW, shows a full retracement to its September 14, 2010 high.
Hedged Japan, DXJ, shows full retracement.
International Dividend Payers, DOO, shows a questioning harami at 46.37.
The US small cap shares, the Russell 2000, IWM, have likely reached their maximum expansion; they rose 5.0% this week.
International Discretionary, IPD, shows a massive bearish harami at the top of an ascending wedge.
The euro yen carry trade, that is the EUR/JPY, seen in the chart of FXE:FXY, has been responsible for driving up the European Shares, VGK, European Small Cap Dividend, DFE, and sustaining the value of Spain, EWP, and Italy, EWI, as well as for driving up the value of gold, GLD, and other precious metals, JPP, over the years.
The Fed’s QE 2 stimulus fed risk appetite globally; and drove carry trades spectacularly higher.
The New Zealand Dollar Yen carry trade, BNZ:FXY, has caused New Zealand shares, ENZL, to rise.
Chart of the New Zealand Shares, ENZL.
The Australian Dollar Yen carry trade, FXA:FXY, that is the AUD/JPY, has caused the Australian Small Caps, KROO, to rise.
Chart of the Australian Small Caps, KROO.
A rising Brazilian Real Yen carry trade, seen in the chart of BZF:FXY, caused the Brazil small caps, BRF, to rise strongly this week.
A rising South Africa Rand Yen carry trade, seen in the chart of SZR:FXY, caused the South Africa shares, EZA, to rise strongly as well this week.
A rising Mexico Peso Yen carry trade, seen in the chart of FXM:FXY, caused the Mexico share, EWW, to rise steadily again this week.
Even the Swedish shares, EWD, rose, as being called higher by a rising Swedish Krona Yen carry trade as seen in the chart of FXS:FXY.
Expanding carry trades provide seigniorage, that is they create money, credit and investment liquidity; unwinding carry trades and rising interest rates provide debt deflation. One can follow the major currencies by creating a Finviz Portfolio based on this Finviz screener of FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, CYB, BZF, XRU, FXY, BNZ, DBV, CEW.
Doug Noland reports: “The dollar index declined 0.9% (down 1.6% y-t-d) to 7. For the week on the upside, the New Zealand dollar increased 3.7%, the South African rand 3.3%, the Australian dollar 3.2%, the Swiss franc 2.1%, the Canadian dollar 1.9%, the Taiwanese dollar 1.7%, the South Korean won 1.6%, the Norwegian krone 1.6%, the Mexican peso 1.2%, the Brazilian real 1.1%, the British pound 0.9%, the Swedish krona 0.9%, the Danish krone 0.7%, and the euro 0.6%. On the downside, the Japanese yen declined 1.1%.”
Total Bonds, BND, closed at, 82.96, Aggregate Bonds, at 82.96, AGG, at 108.92 and Lehman Aggregate Bonds, LAG, at 57.96, making for new rally highs. Peak Bond wealth “has likely come in”.
The lollipop hanging man candlestick in the chart of the optimized currency ETN, ICI, suggests that peak currency wealth has been achieved.
The chart of the world stocks shows that we are about to enter an Elliott Wave 3 of 3 Down.
Ben Bernanke in announcing QE2 has established himself as the Global Seignior. The word Seignior comes from Old English, and means top dog banker who takes a cut, as he effects seigniorage. The chairman of the US Federal Reserve has risen to power through globalization and global corporatism, that is an ever-uniting of government and business. The US Federal Reserve is the premier global corporation; it is neither Federal, nor does it have much of any genuine, real, that is tangible reserves like gold or silver. The Federal Reserve is not part of the Federal Government, yet it is the United States central bank that is a private corporation. The Fed Chairman, in announcing QE 2, gave seigniorage to stocks, bonds, currencies and commodities. And, yes the Fed Chairman gets a cut; it is called a salary.
I believe that a Global Seignior, will institute unified regulation of banking globally, as referred to, in the James Politi and Gillian Tett Financial Times article, NY Fed Chief In Push For Global Bank Framework, and that the Seignior will oversee all matters of debt and credit, and implement a global currency system, as many nations such as Portugal, Italy, Ireland, Greece and Spain will have lost their sovereign debt seigniorage.
Evidence of such a possible disaster comes from the Abigail Moses and Kate Haywood of Bloomberg article, Ireland Leads Surge In Sovereign Risk To Record On Budget Woes, which reports that credit default swaps on Ireland rose for a ninth day, soaring 18 basis points to 587, according to data provider CMA and which relates “Peripheral Europe is burning again,” according to Sanjay Joshi, who oversees about $500 million as a money manager at London & Capital Group Ltd.
It may be that these countries in the near future, under the proposed Merkel Ordnungspolitik (that is Governance), be kicked out of the Eurozone currency trading group. EuroIntelligence writes in article Ireland on the brink – we are on the verge of the next hot phase of the eurozone crisis: In his FT column, Samuel Brittan writes that the attempts to save the euro sound eerily familiar to someone who has observed the various sterling crises of the 1960s, as he has. He said the pattern is always the same – international rescue operations, backed up by domestic austerity packages. Things seem to normalise for a while, but then “when few are looking, there is another crisis, another set of international rescues and another set of domestic restrictions. And so on. Eventually the struggle is abandoned, and political and financial leaders work to pick up the pieces.” He says the only question is whether the euro will revert to national currencies, or whether it will break up into two or three currency zones.” Most of our readers will see this as typical British anti-European viewpoint. But that is not true of Samuel. He is profoundly pro-European. What he says is merely consistent with everything we know from economic history, a discipline the euro policy crowd is unfortunately not much aware of. Witnessing one inept policy response after another, we are beginning to converge to his view.
I believe that as sovereign debt in the Eurozone becomes worthless, the Seignior will intervene to provide seigniorage. Eventually all seigniorage will come and go through him. And I believe that The Global Seignior will make the cover of Time Magazine Person Of The Year, as he will have a Unifying Vision for humanity.
In today’s news
1) ... In a Orwellian moment of Doublespeak, Obama Calls India Creator, Not Poacher, Of US Jobs, reports Ben Feller, White House Correspondent for the Associated Press. ... I comment that national sovereignty means nothing to the world’s leaders as they are servants of global corporatism.
Elaine Meinel Supkis comments: “The purpose of the President’s visit was to increase ‘free trade’ with low wage countries seeking to flood us with trade goods or suck up all our office and industrial jobs! Instead, to protect the military system that is now selling weapons to India and to save Boeing, we will have to give up regular jobs held by American citizens and transfer them to India. So the offshoring of our jobs will shoot upwards even more, not drop. Every Boeing job will cost us 10,000 other jobs including office work.”
The outsourcing of US jobs is a continuation of a policy of global corporatism. Speaking at the Council on Foreign Relations, on September 8, 2010, Hillary Rodham Clinton announced the dawn of “A New American Moment,” in which the United States will lead the world in effective and enduring multilateral cooperation. Building on President Obama’s National Security Strategy, she dedicated the United States to building a “new global architecture,” by bolstering traditional alliances, integrating emerging powers, strengthening regional organizations, renovating global institutions, and promoting universal values to address “the weight of new threats.” Also, CFR.org provides the transcript of the September 8, 2010, discussion between US Secretary of State, Hillary Rodham Clinton, and Richard N. Haass, Council on Foreign Relations President, which addresses global governance.
I relate that the Defense and Aerospace stocks have soared under Obama’s National Security Strategy, these include Digital Globe, DGI, Omnicom Group, OMC, Cubic Corpoation, CUB, Esterline Technologies, ESL, Kaman Corp, KAMN, Goodrich Corp, GR, BE Aerospace, BEAV, and Honeywell, HON, as seen in the chart of DGI, OMC, CUB, ESL, KAMN, GR, BEAV and HON
2) ... Graham Ruddick of the Telegraph reports in article Channel Tunnel Rail Link Sale Begins UK’s Big Sell Of: “The great austerity auction of state-owned assets has commenced after a pair of Canadian pension funds splashed out $2.1bn to acquire High Speed One, the UK’s high speed rail line.” ... I comment that the leaders of the UK have waived the country’s sovereignty, and sold out. Global corporatism is now sovereign in the UK.
3) ... Ian Talley and P. R. Venkat of Dow Jones News Wires reports “On Saturday, Treasury Secretary Geithner arrived in Kyoto, Japan for the Asia-Pacific Economic Cooperation (APEC) Meeting of Finance Ministers. In the morning, he attended an informal breakfast with finance ministers of the Association of Southeast Asian Nations, ASEAN, where he spoke on the issues of how deficit and surplus nations should work to cut their imbalances, and what is needed to stabilize "the order of global currencies,"
4) Reuters reports US Policy 'Clueless', German Finance Minister Says. “Europe needs to strengthen economic governance and agree on a permanent crisis resolution mechanism, all the more so given current U.S. economic weakness, German Finance Minister Wolfgang Schaeuble said on Friday. France and Germany should maintain their leadership role in Europe, Schaeuble said, especially in order to harmonise its economic policy and bolster stability given current economic uncertainties.”
“These are being worsened by reckless policy in part from the the United States, Schaeuble said, sharpening his criticism of the Federal Reserve's program to buy an additional $600 billion worth of U.S. government bonds. Pumping more money into the economy will not solve the country's problems, he said, adding that the world needed U.S. leadership that was currently lacking. "With all due respect, U.S. policy is clueless," Schaeuble said. "(The problem) is not a shortage of liquidity. Late on Thursday, Schaeuble said Germany would take up this point critically with the United States both bilaterally and at next week's G20 summit of industrialised and emerging nations.”
5) The Financial Times reports: “China has curtly dismissed a US proposal to address global economic imbalances, setting the stage for a potential showdown at next week’s G20 meeting in Seoul. Cui Tiankai, a deputy foreign minister and one of China’s lead negotiators at the G20, said on Friday that the US plan for limiting current account surpluses and deficits to 4 per cent of gross domestic product harked back “to the days of planned economies”.
“We believe a discussion about a current account target misses the whole point,” he added, in the first official comment by a senior Chinese official on the subject. “If you look at the global economy, there are many issues that merit more attention – for example, the question of quantitative easing.”
6) ... Kevin Grey of Reuters reports that a Florida foreclosure mill lays off hundreds, a lawyer for the firm's owner says: “A Florida law firm once used by mortgage finance giants Freddie Mac and Fannie Mae and now under investigation for its handling of foreclosure cases has laid off hundreds of employees, a lawyer for the firm's owner said on Thursday.
The Florida Attorney General's office is investigating the law offices of David J. Stern in Plantation, Florida, and has publicly released a deposition of one employee alleging workers at the firm forged notarized documents.
Freddie Mac and Fannie Mae have said they have ended their relationship with the Stern law firm because of questionable practices. Jeffrey Tew, a lawyer who represents Stern, said the firm has cut its staff from 1,000 employees to around 400 to 500 in recent weeks "as a result of Fannie and Freddie and some other clients not continuing to send work."
A wave of layoffs came on Thursday, he said. Florida Attorney General Bill McCollum and attorneys general from the other 49 U.S. states are probing allegations lenders like Bank of America, JPMorgan Chase and Co and GMAC Mortgage, among others, failed to properly review foreclosure processes and may have submitted faulty documentation to evict delinquent borrowers. Florida, which has the third-highest foreclosure rate in the United States after Nevada and Arizona, is a base for some of the biggest law firms handling foreclosures. Fannie Mae has identified and issued retention letters to nine new law firms to help manage future foreclosures, according to a recent letter sent to Congress by the company's chief executive, Mike Williams.”
7) Simon Schuster of The Telegraph reports from Moscow in article Millhouse Warns Ireland Of Legal Action Over Irish Nationwide Bail-Out: “Roman Abramovich's asset management company, has lashed out at the Irish government and given warning of “huge reputation loss” and possible legal action if it continues to push it to foot part of the bill to bail out Irish Nationwide Building Society.
The warning comes after Brian Lenihan, the Irish finance minister, said that subordinated bondholders of two state-controlled Irish lenders – Irish Nationwide Building Society, or INBS, and Anglo Irish Bank should make a “significant contribution toward meeting the costs” of a planned government bailout. Mr Abramovich’s asset management company, Millhouse LLC, would be among the first in line to shoulder INBS’s burden if Mr Lenihan gets his way. In August 2009, Millhouse bought an unspecified amount of the £126m in subordinated bonds issued by INBS. The government guarantee on those bonds ran out October 1. In a statement emailed to The Daily Telegraph, a spokesman for Mr Abramovich, the billionaire owner of Chelsea football club, said in Moscow that Millhouse was “extremely concerned” by the recent collapse in the value of these bonds, adding that Mr Lenihan’s statement “did not help the situation”. “We bought [the bonds] because the Irish Government …promised to guarantee these bonds and promised to have a strategy for the bank. A year later, there is no guarantee and no strategy. We now believe that we have been misled and deceived,” the statement said. Millhouse also complained of discrimination, claiming that other investors in INBS received regular updates on the bank’s performance, while Millhouse did not hear anything from management. Although Millhouse has denied reports that it was planning to take its complaints to court, the statement concluded that it was “fully prepared to vigorously defend our position using all possible legal avenues”.
8) Shaun Richard questions Will Ireland Regret Upsetting Roman Abramovich? This may seem a curious question but Mr. Abramovich was one of the investors who are likely to be affected by Ireland’s “cunning plan” for bondholders in Allied Irish Bank.
In the world in which we live where Mr. Abramovich is very wealthy and very well-connected I did wonder if this would turn out to be as cunning as many of the proponents suggested. I now notice that the Russian sovereign wealth fund will no longer invest in Ireland and as it happens Portugal and Spain. I did wonder about the wisdom of such a move and may be wrong as coincidences do happen but if Russia has been selling. Ireland presented her budget yesterday and it turned out in a strategic sense as I reported last week with 15 billion Euros of cuts and an element of front-loading. The real problem with Ireland suffering from a severe outbreak of cronyism will be summoning the will to actually do this particularly as many avenues are blocked by the Croke Park Agreement. However she has not lost her taste for cunning plans and indeed presented one with her budget. Ireland’s government will not pay interest in 2011 or 2012 on promissory notes it is issuing to partly recapitalize three lenders. Essentially, in order to pay no interest for the next two years, the interest now is set to zero but the interest to be paid later on is increased by enough that the net result is the same. Oh and the interest assumed for later is at 4.7% which is around 3% below current market rates. As their credibility plunged the Irish government announced this wheeze had the approval of Eurostat so I guess what credibility it had can plunge with them too. This ruse “saved” about 1.5 billion Euro’s in these two years. The net effect of all this is that Reuters report the ten-year Irish government bond yield is at 7.79% as I type this and this is some 5.42% higher than Germany’s.”
9) Norway may have one the world's best economy as Gelu Sulugiuc of Bloomberg reports: “Norway’s unemployment rate was 3.4% in the August quarter. Chart of the Nordic 30 shares, GXF, shows they have performed well
Disclosure: I am invested in gold bullion
Stocks: UUP, FXE, FXY, FXA, AUNZ, BZF, ICN, SZR, FXM, FXS, MBB, IEI, VT, BND, AGG, BNDS, JNK, CEW, DBV, ATSG, RCL, SKS, PETM, PXN, BJK, IHG, NLR, STWD, EWJ, JSC, JPP, GLD, SSG, BAL, EIRL, EWI, EWP, TUR, ESR, EPOL, EEM, EMFN, FRN, INP, AXP, BAC, KBE, FIG, LAZ, KME, QABA, PSP, PICB, EUFN, BWX, RZV, ACWI, NYC, PTO, SMH, ETW, D