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I am not an investment professional. I do not engage in stock or currency trading. I am a blogger and investor who believes the failure of credit has created an investment demand for gold, and that gold bullion is the sole means of wealth preservation.
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  • The Moneyness Of Freedom Fails … The Moneyness Of Diktat Has Commenced … The Death of Money And Credit Commenced Today ... 0 comments
    Nov 1, 2011 6:59 AM | about stocks: FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, CYB, BZF, FXY, AUNZ, DBV, CEW, CCX, IDX, YAO, EWA, EWY, EWN, EWX, WOOD, SEA, SLX, REMX, KOL, COPX, ALUM, SIL, VROM, PAGG, MOO, URA, UUP, SPY, JJC, FCX, MXI, EUFN, CUT, KBE, SLV, DBC, JJA, USO, RZV, FGEM, CHIX, PSP, IAI, KCE, ACWX, ACWI, EWI, ARGT, CHII, EWG, EWO, EWQ, E
    Financial market report for October 31, 2011

    1) … Stocks trade lower early in the day on rising dollar and rising concerns over Italy, Spain and Portugal
    Rodrigo Campos of Reuters reports Stocks fell at the open on Monday as a spike in the U.S. Dollar, $USD, weighed on commodity prices and dried up bids on other risky assets.

    Further weighing on equities, the euphoria over Europe's plan to contain its sovereign debt crisis cooled and Italian and Spanish bond yields soared, prompting the European Central Bank to buy their debt.

    Despite early losses, the benchmark S&P 500 index, SPY, was still on track for its largest monthly percentage gain since early 1987.

    "We had a massive run because of Europe on the plus side, and there's a question mark on whether what has been put in place is enough to buy Italy and Spain more time," said Peter Boockvar, equity strategist at Miller Tabak in New York.

    The U.S. Dollar, $USD, UUP, shot up to a three-month high against the yen as the government of Japan intervened to curb its currency's appreciation, which is hurting the export-based economy. The higher greenback pressured commodity prices, with copper, JJC, off 3%. Materials, MXI, were the S&P’s worst performer. Shares of Freeport-McMoRan Copper & Gold Inc, FCX, dropped 6 percent but were up nearly 35 percent so far in October.

    "After a solid month of gains, the (higher) dollar is giving traders a reason to shy from the risk trade and take some profits," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

    In corporate news, MF Global Holdings Ltd, MF, were suspended from doing new business with the New York Federal Reserve Bank, and shares of the troubled brokerage were halted as it neared a deal on its future.

    Banks stocks, KBE, were among the worst performing S&P sectors in early trading, loosing 3%.

    Italy stocks fall and its interest rates rise following theEU Leaders’ October summit
    The Telegraph reports Relief at European debt deal fades as Rome struggles at first test since the summit
    And Zero Hedge reports Berlusconi battered as bonds break 6%.

    Between The Hedges reports The Italian/German 10-year yield spread surged another +22.21 bps today to 406.79 bps, which is a new all-time high. The TED spread continues to hit new cycle highs and is at the highest since June 2010. The Libor-OIS spread is still very near the widest since July 2010. The 2-Year Euro Swap spread is still very close to its recent highs, which is also noteworthy considering the recent strong equity advance. China Iron Ore Spot has plunged -38.3% since February 16th and -34.6% since Sept. 7th

    Ambrose Evans Pritchard reports Italy's crisis deepens on bail-out doubts. Italy's borrowing costs have once again surged to danger levels amid growing doubts over the viability of Europe's bail-out machinery, dashing hopes that last week's summit deal would at last contain the crisis.

    Daily Bell reports EU 'solves' crisis as Portugal catches fire and Ambrose Evans Pritchard reports Portugal enters Grecian vortex. Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events.

    2) … Commodities, trade lower as risk appetite turns to risk aversion.
    Timber, CUT, copper, JJC, and Silver, SLV, led commodities, DBC, base metals, DBB, agricultural commodities, JJA, and oil, USO, lower.

    3) … Competitive currency deflation will likely recommence, resulting in ongoing deleveraging out of stocks and commodities, and a derisking out of bonds globally.
    The Associated Press, reports Dollar Leaps Vs Yen after Bank Of Japan Sells Yen The dollar, $USD, is rising sharply against the Japanese Yen, FXY, after the Bank of Japan weakened the yen to help Japanese exporters. The Bank of Japan says it sold yen and bought dollars during Tokyo trading Monday in order to pull the yen down from a post-World War II high against the dollar. The super-strong yen was hurting Japanese exporters by making their goods more expensive for overseas customers. Traders have been buying yen because it is seen as a safe place to store cash. Its biggest rivals, the euro and the U.S. dollar, have been less stable in recent months because of the European debt crisis and the uncertain U.S. economy. The dollar leaped to 77.98 yen at 11:20 Eastern time from 75.75 late Friday. The chart of USD/JPY shows rise form 75.5 to 78.0.

    But Daily FX reports Yen Collapses Past 78.000 Despite No Confirmation of Intervention Despite no confirmation from the Japanese Ministry of Finance or the Bank of Japan, market action shortly after the spike points directly towards an outside party heavily selling yen and targeting dollars. The chart of JPY/USD shows fall from 0.0132 to 0.0128.

    The Yen, FXY, shows a collapse from 130 to 126.6; which caused a collapse in the rally of Japan Stocks, EWJ, and Japan Small Cap Stocks, JSC.

    The currency demand curve, RZV:RZG, manifested bullish engulfing portending a setup for more competitive currency deflation. Money traded lower today as all the currencies seen in this Finviz screener traded lower: FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, CYB, BZF, FXY, BNZ, DBV, CEW, CCX, FXRU.

    4) … The emerging market financials and European financials led stocks lower today, on sovereign crisis concern.
    Emerging market Financials, FGEM, European Financials, EUFN, China Financials, CHIX, Leveraged Buyouts, PSP, Investment Broker, IAI, Investment Bankers, KCE, and the leading carry trade lenders seen in this Finviz Screener led stocks lower today.

    World Shares Excluding the US, ACWX, plummeted as Italy, EWI, Argentina, ARGT, China Industrials, CHII, Italy, EWI, Germany, EWG, Austria, EWO, France, EWQ, Spain, EWP, the EMU Index, EZU, Europe, VGK, Russia, RSX, Turkey, TUR, South Africa, EZA, Indonesia, IDX, China, YAO, Australia, EWA, Switzerland, EWL, Mexico, EWW, South Korea, EWY, Brazil, EWZ, Sweden, EWD, Netherlands, EWN, headed up the list of World Stocks, ACWI, World Small Cap Stocks, VSS, Emerging Market Stocks, EEM, and Emerging Market Small Cap Stocks, EWX, turning lower today.

    Solar, TAN, Clean Energy, ICLN, Shippers, SEA, Steel, SLX, Rare Earth, REMX, Coal, KOL, Steel, SXL, Copper, COPX, Aluminum, ALUM, Silver Miners, SIL, Emerging Market Materials, EMMT, China Materials, CHIM, Automobile Manufacturers, VROM, Agricultural Stocks, PAGG, MOO, Uranium Miners, URA, and Wood Producers, WOOD, led the world sectors lower.

    Taiwan Small Caps, TWON, and China Small Caps, HAO, led the World Small Cap Stocks, VSS, lower.

    Defensive sector Utilities XLU, turned lower while its leader DTE Energy, D, rose. All sectors, led by Small Cap Energy, PSCE, Wildcatters, WCAT, energy, XLE, XOP, and energy service, OIH, and IEZ, fell lower.

    The Morgan Stanlcy Cyclicals Index, $CYC, turned 3% lower. The fall seen in the chart of Tata Motors, TTM, the shippers, SEA, and the junior gold miners, GDXJ, communicates that the risk trade, and the growth trade are history.

    5) … Bonds traded up.
    Bonds, BND, traded up. But junk bonds, JNK, Emerging Market Bond, BWX, and World Government Bond, BWX, traded lower on lower world currencies, DBV, and emerging market currencies, CEW.

    6) … Which is better, shorting stocks or investing in gold.
    One could short stocks, the Russell 2000, IWM, the materials, MXI, the emerging markets, cand china, YAO, or their 200% and 300% ETFs seen in this Finviz Screener: URTY, EET, UYM, XPP, TNA, MATL, EDC, YINN. Personally, I recommend that one buy and take possession of gold bullion.

    7) … Doug Noland writes of Money and the European Credit Crisis
    This week I found my thoughts returning back about 12 years to my earliest Bulletins. Inspired by the great Austrian economist Ludwig von Mises, my introductory article discussed the need for a contemporary Theory of Money and Credit. Not only was modern economics devoid of monetary analysis, there were critical changes unfolding within U.S. Credit that were going completely unappreciated.

    Importantly, Credit creation was gravitating outside of traditional bank lending channels and liability creation. Fannie, Freddie and the Federal Home Loan Bank system had evolved into major risk intermediaries and Credit creators. I began by arguing against the conventional view that “only banks create Credit.” Securitization markets were exploding in volumes, both in mortgage and asset backed securities. I was focused on the lack of constraints on this new Credit mechanism that operated outside of traditional bank capital and reserve requirements. In contrast to the antiquated bank loan and deposit “multiplier effect” explained in economic texts, I referred to this powerful new dynamic as an “infinite multiplier effect.” Borrowing from Murray Rothbard, new "money" and Credit were created out of thin air.

    And the more I studied monetary history the more I appreciated the importance of both money and Credit theory. It became clear to me that money had for centuries played such a profound role in economic cycles (and monetary fiascos). Yet this type of analysis was extinct. Even within the economics community, there was not even a consensus view as to a definition of “money.”

    At its heart, the European crisis is about the escalating risk that the entire region’s debt could lose its “moneyness. Starting with the introduction of the euro, the market perceived that even Greek debt was money-like. Despite massive deficits, a distorted marketplace had an insatiable appetite for Greek, Irish, Portuguese, Spanish and Italian debt. Importantly, the markets believed that European governments and the European Central Bank would, in the end, back individual government and banking system obligations. It proved another historic market price distortion.

    Treasury and Federal Reserve backing restored “moneyness” to Trillions of suspect financial claims back in 2008 – and since then massive federal debt issuance and Federal Reserve monetization have reflated asset markets and sustained the maladjusted US economic structure. The markets enjoyed an incredible windfall, and many these days expect European politicians and central bankers to similarly reflate eurozone Credit and economies.

    European politicians have been desperately seeking some type of structure that would ring fence the sovereign crisis to protect the “moneyness” of, in particular, Italian and Spanish borrowings. Increasingly, the consequences of a loss of “moneyness” at the periphery were weighing heavily upon the European banking system, with heightened risk of impairing “moneyness” at the core. This was critically important, as it was quickly limiting the options available for monetary crisis management. For example, faltering confidence in Italian debt and what an Italian debt crisis would mean to European and French banks was impacting market confidence in French sovereign Credit. So any crisis resolution structure that placed significant additional demands on French sovereign debt risked impairing the “moneyness” of French Credit at the core of the European debt structure. Understandably, the markets feared the crisis was spiraling out of control.

    This week’s grand plan was to bring in parties from outside the region, to use “money” from the IMF, the Chinese, the Bric nations, Japan, global sovereign wealth funds and such to backstop the “moneyness” of European debt. With their support, the European Financial Stability Facility will have the capacity to leverage to, it’s said, $1.4 TN, providing the bazooka backstop that will ensure market confidence in European Credit generally.

    Will it work? I highly doubt it, but it does buy some time, and the markets were content. The critical issue of how to ensure ongoing Italian debt “moneyness” continues to prove elusive. Global risk markets were in virtual melt-up mode this week, yet Italian 10-year yields jumped 13 bps to 6.01%.

    8) … The moneyness of neoliberalism came through freedom … The moneyness of neoauthoritarianism will come through diktat.
    Business Today writes
    Europe agrees to 1 trillion euro fund for new bailout plan.
    European leaders agreed to increase the eurozone's main bailout fund to one trillion euros as part of a package of measures to stave off Europe's spiralling debt crisis. "The eurozone has adopted a credible and ambitious response to the debt crisis," French President Nicolas Sarkozy said at a press conference in Brussels after the meeting on Thursday. The rescue plan also includes a deal reached with private creditors to write off 50 percent of Greece's debt, in a bid to make the country's debt burden sustainable, EU President Herman Van Rompuy said after an emergency summit of EU leaders in Brussels. The eurozone and the International Monetary Fund (IMF) will give debt-burdened Greece another 100 billion euros to help stabilize its economy, Van Rompuy said on Thursday. Rompuy said the new deal will reduce Greece's debt to 120 percent of its GDP in 2020, while under current conditions it would have grown to 180 percent.

    The rescue fund is considering all options for enlargement and is counting on further cooperation with the International Monetary Fund. China may participate in the European Financial Stability Fund, Belgium's Finance Minister Didier Reynders said on Thursday. "Contacts with the Chinese authorities have already been established," he told Twizz radio in an interview. The European Group of EU finance ministers is to prepare a plan for EFSF fund-raising in November.

    The deal requires EU banks to raise more capital to protect themselves against losses resulting from any future defaults. The capitalization level will be raised to nine percent by June 2012, the European Banking Authority reported following the summit. The amount of recapitalisation needed will total 106.447 billion euros, according to the EBA estimates, but that figure may vary depending on the restructuring of Greek debt. Greek banks will require 30 billion euros, Spain 26.2 billion euros, Italy 14.8 billion euros and France 8.8 billion euros, Germany 5.2 billion euros. They must prepare capital raising programmes by the end of the year. British banks will not need additional funding. The EU will also ban banks from paying bonuses to employees and dividends to shareholders until the recapitalisation process is completed, European Commission President Jose Manuel Barroso said.

    The EU countries originally set up the EFSF in May 2010. At an EU summit in July, leaders of the eurozone states decided to enhance the powers of the EFSF by allowing it to buy bonds on the secondary market, recapitalise banks and raise guarantee commitments to 440 billion euros.

    In July, private investors agreed to write off 21 percent of Greek debt, but further write-offs became necessary in August, when the Greek crisis escalated. Eurozone leaders agreed a rescue package for debt-stricken Greece that month. The plan proposed providing an extra 109 billion euros of government money, plus a substantial contribution from private sector bondholders, as a supplement to a 110-billion euro bailout for the country launched by the European Union and the IMF. Private investors were initially expected to write off 21 percent of Greek debt, but further write-offs became necessary in August, when the Greek crisis escalated. Greek debt currently stands at 360 billion euros but keeps increasing due to short-term borrowing.

    Telegraph presents the Joint letter from Herman Van Rompuy and Jose Manuel Barroso to G20: in full

    I relate more borrowing cannot solve the problems created with borrowing despite what Reuters quotes Larry Summers as saying. "The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending." The Merkel Sarkozy Triumph of Greek debt write down of 50%, leveraging of the EFSF, and requirement for bank recapitalization presents global moral hazard.

    Of note, libertarians such as Niel Farage, the leader of the UK's Independence Party, and John Redwood are definitely anachronisms in the age of diktat.

    Economic Policy Journal reports Soros: Eurozone Deal Will Last Only One Day to Three Months, Soros Says "Given the magnitude of the crisis it is again too little too late," Soros said of the deal at a dinner organised by Pi Capital investor network on Thursday, reports The Telegraph. "It will bring relief partly because the markets were so obsessed by the lack of leadership. The mere fact that something was achieved was a major relief and it will be good for any time from one day to three months. "Unfortunately it is not the last crisis because the fundamental issues have not been settled. It is clear that the amount of debt that Greece has accumulated and is accumulating is untenable and the country is effectively insolvent." Soros said that the 50% "haircut" is only on private bond holders and thus would only reduce total government Greek debt by 20%.

    Open Europe reports Schäuble reiterates calls for fiscal union and common budget policies in eurozone.
    In an interview with the FT German Finance Minister Wolfgang Schäuble reiterated his call for greater “fiscal union” for the eurozone in the long run, saying, the eurozone needs “stronger institutions to oversee the implementation of a commonly agreed finance policy.” Schäuble admitted this would require treaty changes, but said that for now they are focusing on small changes, particularly to Article 136, which allows the eurozone to press ahead on issues relating to the single currency.

    At Friday’s auction of ten-year bonds, Italy was forced to pay a 6.06% interest rate, the highest level since the introduction of the euro in 1999, despite on-going ECB purchases of Italian debt. Meanwhile, Il Corriere della Sera reports that Italian Prime Minister Silvio Berlusconi said that he will stick to his commitments to the EU, even if that means putting each of them to a vote of confidence in the Italian parliament.
    Expansión reports that the latest figures from the Bank of Spain show that Spain risks missing its deficit reduction target for 2011 due to a lack of growth. Separately, Les Echos reports that Portuguese Prime Minister Pedro Passos Coelho has said that Portugal will propose “adjustments” to its bailout plan.

    EuroIntelligence reports news of the day. The best of reporting comes at a cost; for those interested in news as it develops, a subscription to Euro Intelligence is recommended.
    Establishment of a secret committee to oversee EFSF operations is deemed unconstitutional. The ruling leaves full budget committee in charge, which effectively precludes any EFSF market operations; full decision expected end-November. A little known preliminary ruling by the German constitutional court on Friday could have important implications for the management of the EFSF, and the eurozone’s so-called comprehensive rescue strategy. On Friday, the court issued an injunction against the Bundestag’s implementation law of the EFSF procedures. Under the now vetoed arrangement, a special secret committee of nine members would have accompanied the executive decisions of the EFSF on a regular basis. The idea was to reduce delays that would result from parliamentary approvals, and keep information about secret EFSF market operations out of the public domain. In its original EFSF ruling, the court stipulated that any decision by the EFSF with an impact on national budgetary appropriations would have to be sanctioned by the Bundestag’s budget committee. Until the court announces its final ruling, expected end-November, EFSF bond purchases would have to pre announced, discussed, and voted on by the full budgetary committee before they can be implemented, which, of course, renders the exercise ad absurdum. The Bundestag will wait until the final ruling before deciding on a new procedure. (The court’s ruling tells us that secondary market operations should really be carried out by the central bank, not the fiscal authorities for the simple reason that fiscal decisions have to take by democratic vote.)

    Kathimerini reports Politicians uneasy over public anger Authorities unnerved after demonstrators mar parades, attacks on MPs continue. Authorities unnerved after demonstrators mar parades, attacks on MPs continue President Karolos Papoulias was forced to leave the dignitaries’ podium in Thessaloniki, as protesters chanted traitor. After leaving the parade, Papoulias called on Greeks to “pause for a moment and collect our thoughts.” Opposition leader Antonis Samaras was quick to blame the government for the social unrest, and for the nationalist party Popular Orthodox Rally, LAOS, this was like manna from heaven.

    Nick Malkoutzis in Kathimerini, Grinding To A Halt? says Greece needs not only a complete economic overhaul, but also a political order and a new social order as well. Kathimerini that the next months require not only an economic but also a political and social overhaul of the system, otherwise the country is doomed to paralysis between voters’ anger and political inertia.

    Gene Frieda in Project Syndicate, article Europe's Dying Bank Model, argues that the joint over indebtedness of European banks and sovereigns will thwart the notion of a leveraged EFSF. He makes two related points in this Project Syndicate column. The first is that the European banking model, consisting of excessive leverage backed by implicit government guarantees, is ending. Europe’s capital ratios may look respectable on the basis of risk-weighted assets, but since government bonds are no longer risk-free, attention must shift to total assets. In France, the capital-to-total-asset ratio is only 2%. The second point relates to the EFSF. As investors are now abandoning the banks, they are now being asked to fund the EFSF, which is not going to work. Here is his conclusion: “Once a leveraged EFSF fails, it should be clear that the eurozone will not last in its current form. The cause is excessive public and private indebtedness, coupled with the absence of an effective bailout mechanism;the effect is collapsing confidence in banks and sovereign debt. “The solution is either a broad and deep debt restructuring that imposes losses on the private sector, or an ever more expensive bailout by taxpayers. The latter would be credible only if carried out by the ECB, at the expense of its mandate. Until this choice is made, no amount of additional capital will assuage the private sectors’ fears.” (I ask has democracy finally come home, don’t bet on it)

    Mario Draghi told bankers in Rome Sovereign states has ceased to be a foregone conclusion And Ambrose Evans Pritchard reports The slow death of Europe's democracies One by one, the democracies of Southern Europe are being broken on the wheel of monetary union.

    Ekathimerini reports Papandreou calls for referendum on EU debt deal Greek Prime Minister George Papandreou has stated his intention to hold a referendum on last week's agreement in Brussels for Greece's bondholders to accept a 50 percent haircut and the country to receive some 130 billion euros in loans from its eurozone partners. Speaking to PASOK MPs, Papandreou also said that he would ask for a vote of confidence in Parliament. This is likely to take place next week. The referendum could happen later this year. Papandreou said he had faith in Greeks making the right decision. “Let us allow the people to have the last word, let them decide on the country’s fate,” he said. He said handing the vote over to Greeks was «an act of patriotism." The premier insisted that calling snap polls, ahead of elections scheduled for 2013, would be “simply dodging the issue.” The vote of confidence - likely to be held next week - would come just over four months after a similar vote that Papandreou sought, and won, to bolster his government ahead of a Parliamentary vote on austerity measures. The premier's bombshell came a day after an opinion poll, carried out by To Vima, found that 60 percent of Greeks regard last Thursday's EU debt deal as «negative» or «probably negative."

    Irish Economy reports Papandreou says “We have faith in our citizens, we believe in their judgment and therefore in their decision,” Mr Papandreou said after rejecting a call for early elections by some socialist politicians. “All the country’s political forces should support the [bail-out] agreement. The citizens will do the same once they are fully informed.”

    Open Europe Blog writes Indulge Your Fantasy: Two very different scenarios for the future of the EU

    Business Insider reports John Hussman Shreds The Latest European Bailout. And Liam Halligan of the Telegraph writes Why the Latest Eurzone Bail-Out is Destined to Fail Within Weeks. The eurocrats, of course, lack the guts to trim back monetary union to a more manageable size. Too much face would be lost. So "euroquake" fears, once viewed as outlandish, are gaining pace. Despite Thursday's deal, and all the reassurances of a "durable solution", the Italian government on Friday paid 6.06pc for 10-year money, up from just 5.86pc a month ago and a euro-era high. Such borrowing costs are disastrous, given that Rome must roll-over €300bn of its €1,900bn debt in 2012 alone. A default by Italy, the eurozone's third-biggest economy, and the eighth-largest on earth, would make Lehman look like a picnic. The eurozone must be consolidated. World leaders should similarly force European banks to disclose their losses, we all take the hit and then we move on. Instead, we are served-up, in ever more complex variants, the same "extend and pretend" non-solutions. I give this deal two weeks.

    The moneyness of freedom has failed … The moneyness of diktat has commenced, as the world stocks , commodities, world major currencies, emerging market currencies, turned lower on fears that the European Leaders plan to resolve the sovereign debt crisis, will fail.

    The failure of seigniorage of Neoliberalism is seen in the ratio of world stocks, VT, falling lower in regard to world government bonds, BWX, that is VT:BWX, turning lower.

    The rise of the seigniorage of Neoauthoritarianism, that is the rise of the seigniorage of diktat, is seen in the write down of Greek debt simply by the edict of the EU leaders, and their call for leveraging of the EFSF monetary authority, as well as the call for bank recapitalizations.

    Neoliberalism was marked by democratic government of sovereign nation state; but Neoauthoritarianism is marked by autocratic rule of sovereign leaders ruling in regional economic government as called for by the Club of Rome in 1974. Sovereignty resides in sovereign leaders as sovereign individuals are a mirage on the Neoauthoritarian desert of the real. Freedom and choice are epitaphs on tombstones oaf a bygone era.

    Both money and credit began their death process today October 31, 2011 when the Yen fell from 130. Diktat has began its rise to become a currency and together with gold, will be the only form of sovereign wealth.

    Freedom and choice are epitaphs on the former Free To Choose floating currency regime. Diktat is the flag on the rising Competitive Currency devaluation regime.

    Neoliberalism was marked by wildcat finance, a Doug Noland term, the rule of law and constitutional law. Neoauthoritarianism is marked by wildcat governance, where leaders bite, rip and tear at one another, and by coup d etats.

    Ambrose Evans Pritchard writes in Italy, Europe, and Red Brigade Terror. Those of us in Anglo-Saxon cultures may find it remarkable that Italy still has laws that make it extremely hard for companies to lay off workers when needed. It is clearly a reason why the country has struggled to adapt to the challenge of China, rising Asia, and Eastern Europe. But that is not the point. Are such changes to be decided by Italy’s elected parliament by proper process, or be pushed through by foreign dictate when the country is on its knees? “Political ownership” is of critical importance. The EU is crossing lines everywhere, forgetting that it remains no more than a treaty organization of sovereign states. Democratic accountability is breaking down. This is dangerous. It is only a question of time before the EU itself becomes the target of terrorist attacks in a string of countries, and then what? Will the Project start to demand coercive powers? Will it acquire them? Eurosceptics have been vindicated. They warned from the start that EMU was a dysfunctional under-taking and that in order to stop it leading to calamitous failure, there would have to be ever deeper intrusions into the affairs of each state and society. This is now happening at a galloping pace. We really will end up an authoritarian supra-national octopus if this goes on much longer.

    Insolvent sovereigns cannot provide seigniorage that is moneyness. Thus the Beast Regime of Neoauthoritarianism is coming to replace the Milton Friedman Floating Currency Regime of Neoliberalism.

    Moneyness under Neoliberalism came via ponzi financing of debt, the securitizatoin of stocks and bonds by Wall Street, rising currencies and carry trade lending. Moneyness under Neoauthoritarianism will come via sovereign leaders, most notably the Sovereign, the EU Overlord, and the Seignior, the top dog European Banker who takes a cut. Their word, will and way will provide a new moneyness, and the people will be amazed and follow after it, and place their allegiance in it.

    9) … The US begins privatization of NASA
    Marcia Dunn, AP Aerospace Writer, reports from Cape Canaveral Boeing leasing shuttle hangar to build new capsule. Boeing, BA, is taking over one of NASA's old space shuttle hangars to build a new capsule that the company hopes will lift astronauts to orbit in four or five years. More than 100 Boeing, NASA and state and federal officials gathered in the massive empty hangar, Orbiting Processing Facility No. 3, for the announcement of the first-of-its-kind agreement allowing a private company to take over the government property.

    The aerospace company expects to create 550 high-tech jobs at Kennedy Space Center over the next four years, 140 of them by the end of next year. That's less than 10 percent of the approximately 6,000 shuttle jobs lost in Florida over the past several years, but Gov. Rick Scott and other lawmakers at the ceremony said they expect additional hirings by the commercial space industry. NASA is counting on companies like Boeing, Space Exploration Technologies Corp. and others to ferry cargo and astronauts to and from the International Space Station in three to five years. Until then, the space agency will continue to shell out tens of millions of dollars per seat on Russian Soyuz spacecraft.

    The Soyuz is the only way to get astronauts to and from the space station, ever since Atlantis returned from the final shuttle flight in July. A Soyuz rocket failure in August highlighted the risk of relying on just one type of craft. During Monday's hourlong ceremony, lawmakers said the commercial industry is America's last hope, anytime soon, for U.S. astronauts to fly on U.S. spaceships from U.S. soil.
    The Obama Administration requested $850 million in NASA's 2012 budget for the commercial space effort. The House slashed that to $312 million, but the Senate got it to $500 million, a reasonable figure given the nation's current economic situation, said Sen. Bill Nelson, D-Fla., a one-time space shuttle flier.
    Boeing expects to start removing shuttle platforms and modifying the hangar to suit its own purposes in the next few months.

    John Mulholland, vice president and program manager of commercial programs for Boeing, said it will be sad to see all the shuttle equipment go. "The shuttle's such an iconic vehicle. These marvelous buildings have a lot of memory," said Mulholland, a former shuttle manager. "But you've always got to be looking forward. So while the shuttle is remarkable, we're looking forward to the next phase of space exploration."
    Boeing wants to ferry astronauts not only to the International Space Station, but to a commercial scientific outpost planned for orbit by Bigelow Aerospace. Each capsule will hold seven people. A test flight is planned by 2015.

    The agreement calls for Boeing to use the hangar for 15 years, with an option to renew for another five. Then it will be up to Boeing to demolish the building, on NASA's get-rid-of list. Boeing is not paying NASA any rent, officials stressed, but rather will cover all operation costs and utilities. The hangar is 197 feet long, 1,650 feet wide and 95 feet high. It was last used to ready the shuttle Discovery for its final launch earlier this year.

    NASA wants to turn the space center, long a government-only local, into a multi-user spaceport. Other buildings are also up for grabs. Space Florida, a state agency, is working on more deals. Tourists, meanwhile, are about to gain entree into areas that were once strictly off limits. On Tuesday, the Vehicle Assembly Building -- where fuel tanks and booster rockets were attached to space shuttles -- will open its doors to public bus tours for the first time since 1978.

    Throughout the ceremony, NASA officials and others stressed that Kennedy Space Center is not going out of business. "Ladies and gentlemen, the dream is alive," Nelson told the crowd. NASA relinquished its shuttle fleet to concentrate on new rockets and spacecraft that will be able to carry astronauts beyond low Earth orbit. An asteroid is the first stop. Mars is the prize.
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