1) .. A number of the seigniorage stocks, that is the moneyness stock,s of the former regime of Neoliberalism rallied; steel and mining companies also rose.
Credit services stocks PHH, AXP, NNI, COF, SLM, NICK, MA, CATM as seen in this Finviz Screen rose.
Leading mining companies FCX, VALE, BHP, CLF, AA, SCCO, POT, CF, RIO seen in this Finviz Screener rose … Steel, SLX, and Basic Materials, COPX, KOL, URA, ALU, SIL, EMMT, rose.
Investment Bankers, KCE, and Banks, KRE, rose.
Small Cap Pure Value, RZV, rose strongly and country shares rising considerably included, RSX, EWO, THD, IDX, TUR, YAO, HAO, CAF, CHiX, CHIM, EEM BIK, EWX, and DGS.
Between The Hedges relates Despite European equity gains today, the Italian 10-year yield was flat at 6.19%. The TED spread continues to trend higher and is near 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 making another new cycle high today, which is also noteworthy considering the recent strong equity advance. China Iron Ore Spot has plunged -37.25% since February 16th and -33.48% since Sept. 7th.
2) … Two of the three legs of the EU Leaders European Sovereign Debt Crisis Plan are broken.
Bloomberg reports EFSF Delays 3 Billion-Euro Bond Sale on Market Volatility. Europe’s bailout fund is delaying a 3 billion-euro ($4.1 billion) bond sale after Greek Prime Minister George Papandreou’s request for a referendum on the rescue pact for his country roiled markets. The European Financial Stability Facility is putting off the 10-year issue “due to market conditions,” according to Luxembourg-based spokesman Christof Roche. The fund may wait for the outcome of the Nov. 3-4 Group of 20 summit in Cannes, France before selling the bonds, according to a person with knowledge of the matter. “The developments around the G-20 in Cannes will have a big impact on the pricing of any issue,” said Christophe Herpet, a Paris-based fund manager at AXA Investment Managers, which oversees about $735 billion of assets. Credit markets whipsawed after Papandreou surprised European leaders with his referendum plan. A benchmark credit- default swaps index soared the most ever yesterday as investors sought to protect their investments.
Bloomberg reports EU Bank Recapitalization Plan Has 'Problems': IIF. The European Union’s plan for recapitalizing banks has “serious problems” that will hurt economic growth and make it harder for some nations to borrow, the Institute of International Finance said. There is a “clear need” to restore confidence in Europe’s banks, IIF Managing Director Charles Dallara said today in a letter to the Group of 20 nations on the eve of a summit in Cannes, France. Yet the extra capital requirements at the center of the EU’s strategy will come with “considerable cost” because of a flawed scope and approach, he said
Business Insider reports French Yields Just Exploded. And Zero Hedge reports Game Over Berlusconi? Italian Anti-Crisis Bill Fails.
European Banks May Need $550 Billion Capital Boost, Neptune Says. Europe’s banks may need to boost capital by as much as 400 billion euros ($550 billion) to provide an adequate cushion against losses on government bonds, four times the increase estimated by the industry, according to Neptune Investment Management Ltd.
This leaves the third leg, that of bank writedowns, remaining.
3) … The Greek cabinet approved George Papandreou’s proposal for a referendum, but he faces two further tests with yet uncertain outcome: a confidence vote on Friday, and a parliament vote on the referendum itself.
Open Europe reports The Independent reports that 81 Conservative MPs who voted for a referendum on the UK’s EU membership last week have established a new group the ‘81 Group’ to counter the Government’s EU policy. The Telegraph reports that the group is planning “two or three” interventions in Parliament before Christmas, including an attempt to block the approval of the EU’s budget plans.
Paul Krugman in Eurodämmerung says the eurozone’s end game has commenced and it will proceed through a series of bank runs.
Wolfgang Schäuble said in an interview with Financial Times Deutschland that he wants the Europeans and the IMF to maintain their assistance for Greece. “I have always said if Greece s taking upon itself the burden of the assistance program and reforms, if Greece wants to stay within the eurozone, then we will support her”,
Reuters reports France and Germany demand a quick decision on the Euro. By far the best news reporting is from Euro Intelligence; I recommend that one purchase its newsletter which relates Horst Kohler says France and Germany should have a referendum continuing Troika loans. The shock of the Greek decision was illustrated by the fact that Frankfurter Allgemeine Zeitung’s political, economic and cultural editors Berthold Kohler, Holger Steltzner and Frank Schirrmacher, commented the referendum in separate and contradicting editorials. If the Greek can decide by a popular vote whether or not they want to be saved with a multi-billion bail-out, why should the Germans not decide by referendum whether or not they want themselves and their children to be burdened with the corresponding multi-billion guarantees, Kohler asks. Steltzer argues that the eurozone must not let itself be manoeuvred into a position where it can be blackmailed by Greece. “In order not be dependent on Greece any longer, a plan be must be decided now: Greece’s exit from the euro”. Schirrmacher laments that Papandreou’s decision is portrayed as a betrayal of the summit decisions. He calls it incoherent for Germany to insist on a Bundestag vote on each bail-out-decision while criticizing the Greek prime minister for consulting his people. Papandreou is doing the right thing, Schirrmacher argues, and the criticism of his decision is a loss of republican values.
4) … An inquiring mind asks will the EU be a union of choice?, or on the other hand, is a diktat union now forming in the EU? … Might diktat emerge as the Eurozone's new money?
In a world of collapsing sovereign authority, will Germany manifest as a sovereign nation state? Or will anarchy manifest, which will eventually enable sovereign individuals to fully become free to practice free enterprise. Or will EU leaders meet in summits and waive national sovereignty and appoint a sovereign leader and a banker to rule over a totalitarian collective?
As to the Greek Referendum, can democracy, provide the people of Greece, seigniorage, that is money? If the Greeks turn their back on the Troika’s seigniorage loans, will they be able to issue sovereign debt to support a New Lira? Of course not. The only money they have for fiscal spending is from continuing “loans” from the Troika. The nation of Greece, has no sovereign authority, and as a result has no debt sovereignty, and thus has to rely of decisions made in Brussels, Belgium, and Berlin for its fiscal spending? Greece was once the cradle of democracy, but now a eurocracy is rising to express its sovereignty, with it comes the seigniorage, that is the moneyness of diktat.
The global investment, economic and political tectonic plates have shifted, with the result that the Milton Friedman Free To Choose Floating Currency Regime, has perished, and is being replaced by the Beast Regime of Neoauthoritarianism. Choice and freedom are mirages on the Neoauthoritarian Desert of the Real.
The seigniorage, that is moneyness, of Neoliberalism came through freedom of investment choice. The seigniorage of Neoauthoritarianism, comes through diktat. Neoliberalism featured global expansion that came via leverage. But Neoauthoritarianism features global contraction that comes with disinvesting, derisking, and deindustrialization. Tyler Durden provides the Global PMI data and report from Markit Economics which relates "Conditions in the global manufacturing sector remain broadly stagnant in October. Levels of production & new orders fell slightly over the month, while new export orders declined at the quickest pace for almost two-and-a-half years."
Will the people of Greece be able to vote in a referendum, or might events intervene to preclude a presentation of a referendum? Mike Mish Shedlock writes, the list of leaders “terrified of democracy is nearly endless.”
- French President Nicolas Sarkozy said in a rare televised address on the steps of the Elysee palace in Paris. "The plan ... is the only way to solve Greece's debt problem." (Reuters)
- Daniel Knowles writing for The Telegraph has this story headline - Peace in Europe lasts just five days as Greece turns to blackmail
- Dutch Prime Minister Mark Rutte said he would try to prevent the referendum plan, saying he would "attempt to see that it doesn't happen." (NYSE:AP)
- Socialist deputy Hara Kefalidou said "I cannot back a referendum which is a subterfuge by a government that appears unwilling to govern." (AP)
- French lawmaker Christian Estrosi said on France-Info radio that the move was "totally irresponsible." "I want to tell the Greek government that when you are in a situation of crisis, and others want to help you, it is insulting to try to save your skin instead of assuming your responsibilities," Estrosi said. (AP)
- Nicolas Sarkozy’s spokesman described Papandreou’s announcement as “irrational and dangerous” (Telegraph)
- Constantine Michalos, the president of the Athens Chamber of Commerce, called the proposal “an act of political blackmail” (Telegraph)
- Antonis Samaras, the leader of New Democracy, vowed – with splendid disregard for his party’s name – to prevent a referendum “at all costs” (Telegraph)
Der Spiegel writes Greek Exit From Euro Zone Just A "Matter Of Time." Should Greek voters, frustrated by round after round of deep austerity measures, reject the bailout deal, it could result in an uncontrolled national bankruptcy. Markets will likely remain nervous until the results of the ballot are in, meanwhile the euro will move even closer to the abyss. As if to highlight the dangers, German banks on Wednesday announced they were postponing their acceptance of the Greek debt haircut until after the referendum. Without voluntary bank approval, Greece faces a disorderly bankruptcy which could accelerate contagion throughout the euro zone. Papandreou's decision, said European Commissioner for Energy Günther Oettinger, "puts the euro in even greater danger."
We are witnessing the beginning of the end of democracy in Europe, as Steven Erlanger of the NYT reports "They have to speak with one tongue, not 17, or so", says Kurt Hubner of European Studies at the University of British Columbia Vancouver. This will never happen, as Greeks cannot be Germans, One is industrious, and is of the industrious state. The other is club med, and is of the olive state.
Associated Press reports Papandreou as saying: "I felt that it was important that the Greek people make a decision on these important developments," Papandreou said. "It is their democratic right and the Greek people, I believe, are mature and wise to make the decision that is to the benefit of the Greek people and the country." G-Pap is very likely the EU’s last democratic leader.
Soon out of Sovereign Armageddon, a credit bust and global financial breakdown, One Leader, the Sovereign, and his banker, the Seignior, will arise to speak for and to the Eurozone, which will be transformed into a Federal Europe as leaders meet in summits and wiave national sovereignty, and implement a Fiscal Union, empower the ECB as a bank, which will also act to monetize debt, and develop a common European Treasury.
One leader will rise to power and will provide one way forward in a one euro government. The word, will and way of the Sovereign, and the Seignior, will replace sovereign nations and sovereign debt, to provide new sovereign authority. Diktat, austerity measures, and structural reforms will provide seigniorage, that is moneyness. The people having experiencing currency debasement, will be amazed by this, and place their faith and trust in it; they will give their full allegiance to it.
The Sovereign may be Herman Van Rompuy, and the Seignior might be Mario Draghi. Associated Press reports Draghi urges speedy reforms to spur growth, or Italy will be swept into debt crisis. And Bloomberg reports Draghi urges Italy to implement austerity to avert spiral. And The Telegraph reports Mario Draghi fears Italy risks a debt spiral without drastic steps to cut spending and restore confidence in public finances.
Structural reforms will be made to national labour law. The Constitutional right to not be terminated from a state job in Greece will be abrogated. Renee Maltezou of Reuters write Constitutional Crisis Looms: Greece to tackle difficult task of firing state workers.
Bank reorganization will be the order of the day: banks will be nationalized, that is integrated with the government and be known as the government bank or gov bank for short.
Under Neoliberalism, fiscal sovereignty came from sovereign nations issuing sovereign debt. But under Neoauthoritarianism, where nations have lost their sovereign debt authority, the Sovereign and the Seignior will have fiscal sovereignty. Credit will not come from the securitization of debt; but rather from the diktat of sovereigns and stakeholders appointed from industry and government. Lending will only go firms that are key to the region’s security and prosperity. Moneyness, that is seigniorage, will come via diktat.
I’ve consistently recommended that one buy and take personal possession of gold bullion as a means of wealth accumulation and preservation. Frank R. Suess writes in Mountain Vision Beware Of Big Brother Tantrums. What we are observing today is a flood of government bureaucracy and intervention that, while offered under a cloak of ‘economic rescue and consumer protection´, is but an increasingly aggressive drive for tax money and power by fundamentally socialistic and desperate politicians. They will not be stopped by any constitution or law. If need be, they will ignore or change the law to achieve their goals. As a free individual and as an investor, you must be aware of and considerate of this trend.
5) … Summary
The 300 elite leaders of the Club of Rome in 1974, called for a Ten Toed Kingdom of regional economic government. Their call is clarion, that is ringing, clear and distinctive. It comes with authoritarian imperative. Angela Merkel and Nicolas Sarkozy have heard and headed its trumpeting, and in August 2011, called for a true European economic government. In October 2011, leaders van Rompuy, Merkel and Sarkozy, announced and enforced a fifty percent write down in Greek Debt, and the markets roared, completing a five week rally. Diktat and gold will soon be the only money good; these are rising as sovereign wealth. Diktat will rise to be the world’s most common currency. Diktat is rising to be the new currency. Diktat is the new money. The unveiling of the seigniorage of diktat is imminent. Diktat will be the glue that binds the Eurzone together. The EU will soon be known as the diktat union; and diktat will be the currency of the Euro zone. The Eurozone will exist as a Totalitarian Collective. Democracy, freedom and choice, are experiences of the bygone era of Neoliberalism. Fate is coming like a terminator, which can't be bargained with and can't be reasoned with. Fate is coming to destroy national sovereignty, as well as all current forms of economic life, such as Greek Socialism and European Socialism. In the age of leverage Europeans benefited from their common currency. But in the age of deleveraging, no one wants to bear responsibility for past excesses. So the new currency of diktat must arise and will arise, to address conflict. Diktat will establish a new political, economic, and social order. New money is coming from new sovereign authority, and it will be known universally as diktat.