Financial Market Report for November 14, 2011
1) … Fear of sovereign insolvency turned European financials, banks, and world stocks lower.
European Financials, EUFN, Spain, EWP, Italy, EWI, France, EWQ, and Germany, EWG, led European Shares, VGK, EZU, World Stocks, ACWI, World Small Caps, VSS, Emerging Markets Small Caps, EWX, lower today. Sweden, EWD, Norway, EWN, Poland, EPOL, Ireland, EIRL, Belgium, EWK, and Austria, EWO, followed the lead of Spain lower.
Goldman Sachs, GS, and Morgan Stanley, MS, led Investment Banks, KCE, lower. And Banks, BAC, C, KBE, QABA, RWW, turned lower. Global Financials, IXG, turned lower. Financial Firm, Blackrock, BLK, turned lower as Business Insider reports Italy Pregnant BlackRock Sees Write Downs Of 75-80% For Greece, Portugal And Ireland.
World leading banks STD, BBVA, IBN, ING, GGAL, BMA, BCA, WBK, DB, RBS, LYG, NBG, CS, IBN, UBS,BCS, BK, seen in this Finviz Screener, turned strongly lower..
Egypt, EGPT, fell 4.5% and Vietnam, VNM, 4.0%. New Zealand, ENZL, led Australia, EWA, and Asian shares lower.
Tata Motors, TTM, and India Earnings, EPI, led India, INDY, India Small Caps, SCIF, and SCIN lower.
Residential REITS, REZ, traded lower, turning REITS, RWR, lower. Small Cap Real Estate, ROOF, turned lower.
Sectors falling lower included Solar Stocks, TAN, manufactured housing, CVCO, and wood manufacturing, WOOD with International Paper, IP, trading 2.5% lower.
The defensive sector, XLU, traded lower, turning the leading Utility Stocks, seen in this Finviz Screener, lower.
Consumer stocks, NUS,TUP, HDSN, SFLY, DLB, ACAT, PII, IMAX, WGO, THO, SBUX, RCL, seen in this Finviz Screener turned lower.
Falling Credit Providers, PHH, AXP, NNI, COF, SLM, ECPG, NICK, MA, V, AMT, ADS, CATM, seen in this Finviz Screener, turned the Russell 2000, IWM, lower.
Derisking turned junk bonds, JNK, and Leveraged Buyouts, PSP, lower.
Foreign Utilities, EDN, EOC, EBR, SBS, CIG, and CPL, seen in this Finviz Screener, turned lower.
Southern Peru Copper, SCCO, led copper, COPX, and materials stocks, MXI, lower.
Silver Miners, SIL, seen in this Finviz Screener, SIL, HL, PAAS, CDE, SSRI, turned lower.
Health Care REIT, HCN, HCP, NHI, LTC, seen in this Finviz Screener turned lower.
Small Cap Energy, PSCE, Wildcaters, WCAT, S&P Oil, XOP, led a whole host of rallying energy stocks lower as is seen in this Finviz Screener lower. Leading stocks, QEP, ISO, ENI, RRC, DNR, and EXXI, were sharply lower on the day. Energy partnerships, DPM, KMP, EEP, EPD, seen in this Finviz Screener, rose.
Carry trades unwound as the Japanese Yen, FXY, rose, and World Currencies, DBV, and Emerging Market Currencies, CEW, turned lower. The major currencies seen in this Finviz Screen, FXA, FXE, FXM, FXC, ICN, FXB, FXS, SZR, FXF, BZF, turned lower. Competitive currency devaluation, that is competitive currency deflation is underway as is seen in this ongoing Yahoo Finance Chart. This being confirmed in the currency demand curve, RZV:RZG, manifesting a dark cloud covering candlestick and in the Japan growth ration, EWJ:JSC, manifesting bearish harami. Aggressive currency deflation, that is debt deflation, has been one of the major factors in turning India, India Earnings, and India Small Caps, SCIN, and SCIF, lower. The chart of the USD/JPY shows a trade 77.2 on Friday, up from 77.0 suggesting that the US Dollar, $USD, will be moving higher from its 20 day moving average of 77 to 78.5. The Dollar closed up at 77.57. Action Forex provides a chart of EUR/USD before opening, which is bearish, trading at 1.37. The Euro, FXE, closed lower at 135.72.
Gasoline, UGA, Natural Gas, UNG, Silver, SLV, and Timber, CUT, and Oil, USO, ed commodities, DBC, lower. Debt deflation, that is currency deflation, in commodity currencies, CCX, is taking these speculative commodities lower.
The global government finance bubble has been pricked again as world government bonds, BWX, and emerging market bonds, EMB, turned lower on the falling currency values.
One could consider short selling these 200% and 300% ETFs URTY, EET, UYM, XPP, TNA, MATL, EDC, YINN, DIG, ERX, as is seen in this Finviz Screener, but I recommend an investment in gold bullion.
2) … Nouriel Roubini sees a breakup of the Eurozone
Writing in Project Syndicate, Nouriel Roubini says Down with the Eurozone. The bitter medicine that Germany and the ECB want to impose on the periphery – the second option – is recessionary deflation: fiscal austerity, structural reforms to boost productivity growth and reduce unit labor costs, and real depreciation via price adjustment, as opposed to nominal exchange-rate adjustment.
The problems with this option are many. Fiscal austerity, while necessary, means a deeper recession in the short term. Even structural reform reduces output in the short run, because it requires firing workers, shutting down money-losing firms, and gradually reallocating labor and capital to new industries.
So, to prevent a spiral of ever-deepening recession, the periphery needs real depreciation to improve its external deficit. But even if prices and wages were to fall by 30% over the next few years (which would most likely be socially and politically unsustainable), the real value of debt would increase sharply, worsening the insolvency of governments and private debtors.
In short, the eurozone's periphery is now subject to the paradox of thrift: increasing savings too much, too fast leads to renewed recession and makes debts even more unsustainable. And that paradox is now affecting even the core.
If the peripheral countries remain mired in a deflationary trap of high debt, falling output, weak competitiveness, and structural external deficits, eventually they will be tempted by a third option: default and exit from the eurozone. This would enable them to revive economic growth and competitiveness through a depreciation of new national currencies.
Of course, such a disorderly eurozone break-up would be as severe a shock as the collapse of Lehman Brothers in 2008, if not worse. Avoiding it would compel the eurozone's core economies to embrace the fourth and final option: bribing the periphery to remain in a low-growth uncompetitive state. This would require accepting massive losses on public and private debt, as well as enormous transfer payments that boost the periphery’s income while its output stagnates.
Italy has done something similar for decades, with its northern regions subsidizing the poorer Mezzogiorno. But such permanent fiscal transfers are politically impossible in the eurozone, where Germans are Germans and Greeks are Greeks.
That also means that Germany and the ECB have less power than they seem to believe. Unless they abandon asymmetric adjustment (recessionary deflation), which concentrates all of the pain in the periphery, in favor of a more symmetrical approach (austerity and structural reforms on the periphery, combined with eurozone-wide reflation), the monetary union's slow-developing train wreck will accelerate as peripheral countries default and exit.
The recent chaos in Greece and Italy may be the first step in this process. Clearly, the eurozone’s muddle-through approach no longer works. Unless the eurozone moves toward greater economic, fiscal, and political integration (on a path consistent with short-term restoration of growth, competitiveness, and debt sustainability, which are needed to resolve unsustainable debt and reduce chronic fiscal and external deficits), recessionary deflation will certainly lead to a disorderly break-up.
With Italy too big to fail, too big to save, and now at the point of no return, the endgame for the eurozone has begun. Sequential, coercive restructurings of debt will come first, and then exits from the monetary union that will eventually lead to the eurozone’s disintegration.
3) … The baton of sovereignty has passed from national leaders to leaders with a regional vision.
The baton of sovereignty has passed from national leaders meeting in local capitals to leaders of global vision meeting in summits. Regional leaders now announce regional framework agreements, which waive national sovereignty, and establish working groups and edicts. These sovereigns are establishing regional economic government, as seen in the Chris Marsden WSWS report Major powers successfully dictate regime change in Greece
Freedom and choice are mirages on the Neoauthoritarian desert of the real. Silvio Berlusconi’s People of Liberty party, also known as People of Freedom party, is an anachronism in the age of diktat. A totalitarian collective is forming in the Euro zone: totalitarian collectivism is the EU’s future.
Ron Paul’s agenda for freedom, and the Austrian economic philosophy of free enterprise, such as that by Robert Wenzel Why Germany is Likely to Leave the Euro and Return to the Dmar are dead on arrival in the age of diktat. In a previous article Mr Wenzel cited the Ambrose Evans Pritchard article NEIN, NEIN, NEIN, And The Death of EU Fiscal Union which relates: “As Bundestag president Norbert Lammert said yesterday, lawmakers had a nasty feeling that they had been "bounced" into backing far-reaching demands. This can never be allowed to happen again. He warned too that Germany's legislature would not give up its fiscal sovereignty to any EU body. In a sense, the Bundestag vote was much like the ruling by the Constitutional Court earlier this month. It too said "Yes" to the bail-out machinery, but that was not relevant fact. What mattered was the Court’s implicit warning that Germany had reached the outer boundaries of EU integration, that German democracy is under threat, and its explicit warning that the Bundestag’s fiscal powers could not be alienated to Brussels.”
Please consider that the citizens of Greece were not given an opportunity to vote, and the citizens of German will not be given a choice to leave the EU and print a new New Deutsche Mark. Greeks are not Germans, yet under all very likely will be one, living in a Federal Union and Fiscal Union. EurActiv in article Eurozone Breakup No Longer Taboo, relates that Angela Merkel, speaking at the “Falling Walls” argued that it was time for “a breakthrough to a New Europe”, in which member states would integrate further.
Bloomberg reports Merkel: EU Must Move Toward Closer Union. German Chancellor Angela Merkel said it’s time to move toward closer political union in Europe to send a message to bondholders that euro-area leaders are serious about ending the sovereign debt crisis. Speaking on the eve of her Christian Democratic Union party’s annual congress in the eastern German city of Leipzig, Merkel said that she wants to preserve the euro with all current 17 members. “But that requires a fundamental change in our whole policy,” she said. “I believe this is important for those who buy government bonds: that we make it clear that we want more Europe step by step, that is that the European Union, and the euro area in particular, grows together,” Merkel said in an interview with ZDF television late yesterday. “Otherwise people won’t believe that we can really get a handle on the problems.” Merkel will address her party at about 11 a.m. today after weeks of crisis fighting during which she raised the prospect of ejecting Greece from the euro and joined with French President Nicolas Sarkozy to call on Italy to hold to its budget pledges. After leadership changes in Italy and Greece, the chancellor is turning her attention to shaping the euro and EU’s future. (Hat Tip to Between The Hedges)
A regime change has occurred that will prevent Germany from exercising any national sovereignty.The Milton Friedman Regime featured freedom that resulted in Inflationism, stemming in large part from central banks, and nation states issuing sovereign debt and investors pursuing carry trades in rising currencies, as well as ponzi lending, such as the Wenzhou shadow lending system based upon stockpiles of copper.
The Neoauthoritarian Regime, that is the Beast Regime of state corporatism and regional economic government, features diktat as a means of dealing of Destructionism, specifically with derisking, disinvesting, and deleveraging out of debt, competitive currency devaluation and unwinding carry trades. Credit evaporation together with rising dollar funding costs are a commonplace result of the termination of neoliberalism.
The democratic political capital of the periphery Eurozone is crumbling and is being replaced by technocratic government. New political capital is rising at the EU core with the August 2011 call by Nicolas Sarkozy and Angel Merkel for a “true European economic government”. Sovereign insolvency of Greece and Italy means new sovereign authority is coming to the forefront. The old regime of Neoliberalism is out; and the new regime of Neoauthoritarianism is in.
The patronage and pork of the PIGS will no longer be tolerated. Rachel Donadio of the NYT writes “It’s a historic moment,” said Roberto Napoletano, the editor in chief of the business daily Il Sole 24 Ore, which has been running campaigns to alert Italians that their savings and businesses are at risk without credible leadership. “Italy has to act, but it can do it.” “We have lost a capital of confidence,” Mr. Napoletano said, adding that it was time for the country to “invest politically in a government of people who have the capacity to do what for 20 years no one has done in Italy.”By that, he said, he meant making the structural changes that economists say Italy needs to quicken growth and stay competitive, including making its labor market more flexible, creating a more efficient tax code and tax collection system, and cutting red tape. Since it was re-elected in 2008, the Berlusconi government has done virtually none of those things. While Italy is highly indebted and suffering anemic growth, projected at only 0.1 percent in 2012 and 0.7 percent in 2013, according to the European Commission, it has considerable assets.
The new EU political capital comes from the forfeiture of national sovereignty by both Italy and Greece as is seen in the Peter Schwarz WSWS report European Union presses for change of government in Italy. Following the example of Greece, Italy is also likely to be governed soon by a technocratic government designated by the international banks. And the Christopher Drier WSWS report Greek “left” prepares new trap for the working class. Greece's trade unions and pseudo-socialist parties are advancing the perspective of a bourgeois “left” unity government to smother working class opposition to the new technocratic regime installed by the EU, the IMF and the banks.
The political capital of a EU ECB and IMF Troika ruling the Eurozone is the vision of the 300 elite of the Club of Rome, when in 1974, who called for regional economic government when democratic rule would fail with the collapse of Neoliberalism.
The Economist writes in Is Anyone In Charge? In contrast with Germany’s dispersed power, economic policymaking in France is concentrated in Nicolas Sarkozy’s Elysée Palace. François Baroin, an inexperienced political hack who took over from Christine Lagarde as finance minister when she went to the IMF in July, attends formal meetings with Mr Schäuble. But France’s “real finance minister”, says one insider, is Xavier Musca, the presidential chief of staff. Mr Musca cut his teeth at the French treasury, working for Mr Trichet during the talks that led to the 1992 Maastricht treaty, the foundation of the euro. He is backed by Ramon Fernandez, head of the treasury, and Emmanuel Moulin, Mr Sarkozy’s economic adviser. None is a trained economist.The French president, though, may be about to secure a prize that France has long wanted and Germany has long resisted: European “economic government”. For Mr Sarkozy, this means the 17 leaders of the euro zone meeting separately from the ten non-euro EU members (including Britain) to co-ordinate economic policies. Over time, this might lead to a new bureaucracy separate from the European Commission. In a smaller-core Europe, Mr Sarkozy thinks, France’s voice will be louder. Yet to get this French-inspired institutional structure, Mr Sarkozy has to accept German ideas: peer pressure to promote fiscal discipline and economic competitiveness.
Neoliberalism featured a currency union. Whereas Neoauthoritarianism, features a diktat union.
Seigniorage is the ability of a person, nation, or thing to provide moneyness, that is value. Apple’s Ecosystem provided seigniorage to communication stocks, and ETFs and stocks such as, FONE and Skyworks Solutions, SKYY. Fears of sovereign debt contagion are driving investors out of the Euro and into utility stocks, XLU.
Neoliberalism featured the seigniorage of freedom, that is the moneyness of freedom, where value came from Federal Reserve Policies of credit liquidity, ZIRP, Quantitative Easing I and II, carry trade lending, rising currencies, and the securitization of junk and GSE debt, expanding global trade, and ponzi financing schemes in China where stockpiles of copper were used as collateral for shadow loans. The implementation of QE 2 inflated world stocks, ACWI, but deflated shipping, airline and China small cap stocks as is seen in the chart of ACWI, SEA ,FAA, HAO. The seigniorage of freedom gave rise to inflationism.
Neoauthoritarianism features the seigniorage of diktat, as a means of dealing with destructionism, that is dislocation, disinvestment and deleveraging out of investments made under Neoliberalism. Two examples being the Euracracy mandate that Greek debt be written down by fifty percent, and technocratic government be installed in Greece and Italy.
The New Europe seigniorage will mandate that the accumulated debt of the Eurozone be applied to every man woman and child therein. Greeks cannot be Germans, the former are of the olive state, and the latter are of the industrious state. One is club med, and the other industrious; yet both will be one, living in a New Europe, featuring a Federal Government, a Fiscal Union, a Common Treasury, the nationalization of banks, and the ECB empowered as a bank, with the aim of enforcing austerity measures, structural reforms, pension overhauls, and debt servitude will be de rigueur. The word, will and way of sovereign EU leaders will constitute a new money, and the people will marvel and follow after it, placing their trust and faith in it. The seigniorage of diktat will have the people’s allegiance.
Sovereign insolvency means dramatically lower levels of government spending. Italy and Greece are failed nation states. Having no sovereign authority, these countries have lost their debt sovereignty, and thus their monetary seigniorage. Seigniorage for Italy’s fiscal spending capability comes from what is likely surrogate, that is proxy, ECB lending, where those purchasing its debts are reimbursed or indemnified by the Eurozone’s central bank; and Greece has ongoing seigniorage aid for its fiscal spending
It is likely that in the future, with the seigniorage of freedom gone, that the seigniorage of diktat will provide dole for the fiscal spending capability of the Eurozone. Greece’s fiscal spending cannot continue at its current level, as its debt is not sustainable, and its economy is in a Fisher Depression, which Brian Griffin covers in Seeking Alpha article Irving Fisher on Debt, Deflation, and Depression. Fiscal policy of insolvent nation states will be directed at regional levels where budgetary rules and spending authority comes from a fiscal union and a strong regional economic government.. The 1974 Call of the Club of Rome is clarion, that is clear, distinctive and ringing for regional economic government.
It was Milton Friedman, who had a vision of floating currencies, and proposed the Free To Choose regime known as Neoliberalism. The UK and the US were the defacto world powers for the last 40 years, ever since the US went off the gold standard. These two sovereign nations, were the bedrock and examples of democracy.
The world has passed through an inflection point. Inflationism characterized the prior regime. The economic, political and investment tectonic plates shifted, in July 2011, when investors became aware that a debt union had formed in Europe, and in September 2011, when the US Dollar rose after world currencies, and emerging market currencies, sank. Now destructionism is coming to the fore, causing a shift to the new regime.
Now it is Nicolas Sarkozy and Angela, who are referencing the Club of Rome’s Clarion Call for regional economic government. These sovereigns, and the sovereign EU ECB IMF Troika, are the sovereign authorities of Neoauthoritarianism which holds forth diktat. Soon, the Club of Rome’s vision of a Ten Toed Kingdom of regional economic governments will become reality.
Neoliberalism featured wildcat finance, a Doug Noland term. Neoauthoritarianism features wildcat governance where leaders bite, rip and tear one another. Only the most fierce will come out on top.
Open Europe reports disagreements remain among Italian parties over the mandate and the agenda of the new government. Berlusconi and his party want Monti to stick to the reforms outlined in the letter the Italian government sent to EU leaders ahead of the latest EU summit, and call early elections as soon as these reforms are implemented. Italy’s main opposition party and centre parties want Monti to be given a broader mandate and remain in office until 2013, when the next general elections are scheduled. Open Europe’s Vincenzo Scarpetta appeared on BBC Radio Wales, the BBC World Service’s The World Today Weekend programme and twice on France 24, arguing that a national unity government led by Mario Monti is the wisest choice for Italy at the moment, but risks undermining democracy if the new cabinet comes in without a clear agenda and a commitment to calling early elections. Vincenzo is also quoted twice in the New Zealand Herald, while Open Europe’s briefing discussing Italy’s economic and political situation is quoted by Italian daily La Stampa.
Open Europe reports CDU party congress expected to endorse Merkel’s EU policy. The FT reports that German chancellor Angela Merkel’s CDU party is expected to endorse a resolution that will pledge continued German support for struggling eurozone states, provided they work towards reducing their debt burdens, implement competitiveness boosting reforms, and commit to maintaining balanced budgets in future. The resolution will also call for the European Stability Mechanism (ESM), which is set to succeed the EFSF in 2013, to be turned into a fully-fledged European monetary fund, along the lines of the International Monetary Fund, although it will reject sovereign debt-pooling via eurobonds. However Handelsblatt reports on its front page that "increased euroscepticism" is threatening relations between the German coalition parties, and that the FDP’s internal referendum on the ESM could scupper the coalition if a majority of the party’s members vote against it. Separately, DPA reports that the German Constitutional Court will decide on 29 November whether a special nine-member Bundestag committee will be allowed to make a decision on the design and powers of the EFSF. Earlier the judges had issued an injunction against the proposal.
Open Europe reports FT Editor Andrew Gowers expresses regrets over former enthusiasm for the Euro. In the Sunday Times, former FT Editor Andrew Gowers wrote, “It’s confession time. Exactly ten years ago, I was cheering as the preparations to launch notes and coins for Europe’s bold new single currency reached their climax. In the years that followed, with the euro establishing itself as an instrument of European power and integration, I was one of those celebrating its success and urging Britain to join the party. I now believe I was wrong.”
Bloomberg reports Merkel's CDU Delegates at Party Gathering Support Allowing Exits From Euro. German Chancellor Angela Merkel’s Christian Democratic Union voted to offer euro states a voluntary means of leaving the currency area, for the first time raising the prospect of a move not envisaged under euro rules. CDU delegates meeting in the eastern German city of Leipzig for their annual party congress backed a motion on the euro today that included a clause permitting euro exits without exclusion from the European Union. “We’re not throwing anybody out,” Finance Minister Wolfgang Schaeuble said in an interview from Leipzig with broadcaster Phoenix. “We want Greece to stay in, that everybody stays in,” he said. “But if a country can’t carry the burden or doesn’t want to carry the burden, and the Greek people have to carry a heavy load, then we have to respect the country’s decision.”
Bloomberg reports Prodi Calls for EU Treaty Change To Allow Euro Exit, Focus Says. Former Italian Prime Minister Romano Prodi said European Union treaties must be changed to allow a member country to exit the 17-nation euro region, Germany’s Focus magazine reported, citing an interview. “Nobody has an interest in a collapse of the euro zone,” Prodi told Focus. “But in the long term, we need more cooperation in Europe. That requires two things: an end of the principle of unanimity and a potential way out of the union,” he was quoted as saying.
Zero Hedge reports Italian Austerity Details Appear as Monti Steps Up.
Angela Merkel is the forerunner of the New Europe. The Telegraph reports Europe faces toughest hour since Second World War The leader of Greece's main conservative group Antonis Samaras said on Monday his New Democracy party would not vote for any new austerity measures and said the mix of policies demanded by international lenders should be changed. "We will not vote for any new measures," Samaras told a meeting of his own MPs. He added that he would not sign any letter pledging a commitment to austerity measures, as has been demanded by EU Economic and Monetary Affairs Commissioner Olli Rehn, and that a verbal pledge should be sufficient. Rehn has said the EU and IMF will not release the tranche without written assurances from all Greek parties that they will back the measures.
In a one-hour address to thousands of delegates from her Christian Democrats (CDU), Merkel offered no new ideas for resolving the crisis that has forced bailouts of Greece, Ireland and Portugal, and has stirred worries about the survival of the 17-state currency zone. But she made clear that Germany will have to make more sacrifices. "The challenge of our generation is to finish what we started in Europe, and that is to bring about, step by step, a political union," Merkel told the party congress in the east German city of Leipzig. "Europe is in one of its toughest, perhaps the toughest hour since World War Two," she said
Merkel, who came to power in 2005, does not face an election until 2013, but knows she could easily become another victim of euro turmoil unless she plays her cards right. The CDU is the party of Helmut Kohl, who led Germany into the euro.
But Merkel argued that Germany had a responsibility towards its partners and was vulnerable itself if other euro zone states were dragged into the crisis, reminding the party that 60 percent of German exports go to the European Union . "Irish problems are Slovak problems, Greek problems are Dutch problems, and Spanish problems are our problem," Merkel said. "Our responsibility does not end at our borders."
John McManus, Business Editor of the Irish Times, writes suggesting that Germany wll inevitably face final choice on Euro zone cure. More than ever there is a certain “all roads lead to Frankfurt” inevitability about the solution to the euro zone debt crisis. Which road we go down to get there remains to be decided, but as things stand it looks as if things will have to escalate to the point where a binary choice faces Germany: debase the ECB or see the euro zone break up as market support for Italy or Spain or France evaporates.
Germany, with its strong industrial base, cannot escape the Club of Rome’s Clarion Call for regional economic government, as the Call bears authoritarian imperative. Yet it is conceivable that some nations such as Greece could be excluded from the club so as to speak and have an experience like that of North Korea.
Mike Mish Shedlock relates the report of Luka Gubo, Senior Analyst and Economist, Finančni trgi d.o.o, which indicates that Slovenia is also another failed Neoliberal marvel, Slovenian Economist Emails "Our Banking System is on Brink of Collapse"; Housing Crash and Incompetent Bureaucrats Blamed
Ambrose Evans Pritchard in article Pressure On The ECB Grows As Mario Monti Rides To Rescue
relates Britain's John Vincent Cable, echoed the calls for bolder action, blaming the ECB's passive stand for the dramatic escalation of the crisis last week that pushed Italy's €1.8 trillion to brink of meltdown and spread contagion to France. "The central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse," he told the BBC. Wikipedia relates John Vincent Cable is a British Liberal Democrat politician and economist who is currently the Business Secretary in the coalition cabinet of David Cameron. Cable was the Liberal Democrats' main economic spokesperson from 2003 to May 2010.
BBC reports Former prime minister Tony Blair told the BBC the collapse of the euro would be “catastrophic”, and Europe must get behind it. Mr Blair said he hoped it would not collapse, but European leaders faced “very difficult and painful” choices. A “long-term framework of credibility” was needed, he said, which included “strong fiscal co-ordination”.
There is neither human action nor freedom as perceived by the Austrian economists. Rather, all things are of fate. There are no sovereign individuals, there are only sovereign leaders such as Angela Merkel, and sovereign bodies such as the EU ECB IMF Troika and their diktat. Sovereignty is not of merit, rather sovereignty is of destiny.
CBS News reports Eurozone Crisis A Blow To Democracy Investors welcome Papademos and Monti because they are viewed as fixers. French President Nicolas Sarkozy and German Chancellor Angela Merkel, who hold the reins of the euro zone’s bailout fund, like them for the same reason. The catch is this: Nobody voted for them. They are unelected technocrats called on to do the sometimes messy task of governing
Russian RT News reports Socializing Losses: Trilateral Takeover Of Europe Greece has replaced its prime minister after he dared to say he would put a further round of harsh austerity measures to a referendum vote. The country’s new PM is Lucas Papademos, former vice president of the ECB and of Greece’s own Central Bank, and a member of David Rockefeller’s (JPMorgan Chase/Exxon) powerful Trilateral Commission. And End of The American Dream writes A United States Of Europe. In Greece, George Papandreou is out, and Lucas Papademos has been put into power. Papademos taught at Harvard, and he previously served as governor of the Greek central bank, as a vice president of the European Central Bank and as a senior economist at the Federal Reserve Bank of Boston. He is also a member of the Trilateral Commission.
Elaine Meinel Supkis documents from the Trilateral website The framework of the Trilateral European group is the European Union (formerly the European Community). Thus the country coverage of the Trilateral European group has grown as the European Community has grown. The Trilateral Commission was launched in mid-1973, shortly after the enlargement which brought Denmark, the United Kingdom, and Ireland into the European Community. Spanish and Portuguese groups were formed in the late 1970s, looking toward the entry of Spain and Portugal into the European Community. In more recent years, Austrian, Swedish and Finnish groups have been formed in advance of the entry of these countries into European Union. A Greek group was added. Several additional national groups were formed as the European Union was enlarged to Central and Eastern Europe. The one non-EU country represented in the Trilateral European group is Norway. The consultations that went into the formation of the Trilateral Commission took place before the 1972 referendum which unexpectedly went against Norway joining the European Community.
The 170-member ceiling for the European group is divided into national quotas. Germany has a quota of 20; France, Italy, and the United Kingdom each have a quota of 18; and Spain has a quota of 12. The remaining national quotas range from 6 to 1….
European members beyond their “Trilateral” engagement are also committed to the pursuit of the European unification process.The idea of a unifying Europe playing a larger role on the global stage has been a driving idea in the Trilateral Commission from the beginning. Several of the leaders of the Trilateral European group worked closely with Jean Monnet and have had prominent roles in the building of Europe, including Max Kohnstamm (European Chairman, 1973-76), Georges Berthoin (European Chairman, 1976-92), and François Duchene (European Deputy Chairman, 1974-76). Other former European Deputy Chairmen include Egidio Ortona and Garret FitzGerald.
The emphasis given to a unifying Europe playing a larger role on the global stage makes it therefore important for the European group to meet on its own as well as with North American and Japanese colleagues.
Ms Supkis states It is painfully obvious that NATO is no longer about protecting Europe but rather, is the mainly-US armed and run colonial/looting machine Europe’s Ancient Regime wanted to go into Africa and Asia, looking for wealth. First, Europe needed an empire. They couldn’t resurrect the Reich in Germany nor the Regime in France and the British Crown was broke, so years ago, they latched onto the US taxpayers to recreate their imperial dreams and lo and behold, by simply letting the US borrow as much money as we wished, we got to be the mercenary forces for the Ancient Regimes of Europe and for the Japanese Emperor, to run the world so Europe and Japan’s elites could get richer.
Freedom and choice are simply mirages on the Neoauthoritarian Desert of the Real and that Germany if need be will be ordered by martial law to participate in the New Europe. Fate has directed the rise of kingdoms throughout history, the most recent have been the Roman empire, and for the last 150 years the British Empire and The United States ruling the world.
The 1974 Clarion Call of the Club of Rome, provided sovereign authority for Neoauthoritarianism. It presents the plan for regional interdependence to replace democratic governments. Angela Merkel is a forerunner of one who is coming, one who will be greater. He will be the Prince of the People, a New Charlemagne, ruling a type of revived Roman empire, that is the New Europe. This European kingdom will be one of ten world kingdoms, This Beast Regime, will have seven heads, that is it will occupy in all of mankind’s seven institutions; and it will have ten horns, that is, it will govern in all ten world regions. Thus it is appropriately called the Ten Toed Kingdom.
4) … Under Neoauthoritarianism the only money good will be gold and diktat
Soon, the only “money good” will be gold, and diktat. I recommend that one invest in gold bullion.
5) … The money supply has collapsed in Italy since 2009
Ambrose Evans Pritchard in article The Great Euro Putsch Rolls On As Two Democracies Fall Professor Monti enjoys great goodwill in Rome but it is far from clear that he can put together a durable overnment able to implement Project demands. Antonio di Pietro’s Party of Values has spurned a technocratic regime that lacks democratic legitimacy, saying Italy is "under EU tutelage". La Lega Nord’s Umberto Bossi has denounced the stitch-up.
"The game is getting dangerous," said Il Sole. Some suspect that the Berlusconi camp would not do too badly in snap elections, if allowed, campaigning against the "hated euro and EU bosses". Is that why Brussels is now so afraid of Italy’s voters?
If Mr Monti relies on the Left, how can he comply with EU orders to break the power of the trade unions and impose "Anglo-Saxon" wage-bargaining? A large bloc in parliament will die in a ditch to defend Article 18 of the labour code. Labour minister Maurizio Sacconi warned last week that careless handling of this issue threatens to unleash another round of terrorism in Italy. It is only nine years since Marco Biagi was assassinated by the Red Brigades for threatening the sacred cows of the Sindicatits are included.
In 2009 the European Commission praised Italy’s "spectacular job creation" and its "greater resilience to external shocks". In 2008 it said Italy was making "good progress" on the Lisbon reform agenda. In 2007 it said Italy’s debt sustainability risk was "broadly in line" with France and Germany.
Italy’s four sets of pension reforms were held out as a shinging example. Finance minister Giulio Tremonti was feted in Brussels, lauded for his iron discipline and primary budget surplus.
And now these same EU bodies tell us that Italy’s failure to grasp the nettle of reform and tackle its debts is so egregious that Europe must step in to overthrow an elected government.
Let us end this EU lie - propagated by Berlin’s uber-bully Wolfgang Schauble - that Italy is suddenly guilty of economic crimes and debt debauchery. What has changed is the industrial recession in Italy that began over the late summer and the likelihood of full-blown depression next year. As you can see from this chart below, all three monetary aggregates in Italy have been collapsing for months, a lead indicator of Hell to come.
The ECB could have prevented this monetary implosion in Italy. Instead it tightened further, without a squeak of protest from the governor of the Banca d‘Italia, then Mario Draghi. Europe’s own policies of synchronized fiscal and monetary contraction are surely to blame for this sudden lurch downwards in Italy’s prospects. (See important chart of decline in money supply in M1, M2, and M3)
We all agree that Italy’s economic model is unfit for the 21st Century, but it was also unfit for EMU. The Schumpeterian shock was needed before Italy locked its self into the D-Mark forever.
It is too late now for Italy to claw back 40pc in lost labour competitiveness against Germany within the constraints of monetary union. Any attempt to do so by grinding debt deflation will prove self-defeating for a country with a public debt stock of 120pc of GDP.
Such a policy - already tested to destruction in Greece - will itself cause Italy’s debt dynamics to spiral out of control. There is no possible way at this late stage to reconcile Italy’s needs for massive devaluation with Germany’s hard-money doctrines. One or the other must give.
6) … In today’s news
Between The Hedges reports Economic Observer China's local government debt may be almost $473 billion higher than the figure given by the nation's audit office, if loans taken out by township governments are included, citing Beijing Fost Economic Consulting Company. Local authorities in China, barred from directly selling bonds or taking bank loans, set up at least 6,576 companies to raise money for roads, sewage plants and subways, according to the audit office's report. Duyang, a township in Yunfu city in the southern province of Guangdong, has more than 200 million yuan worth of debt while its annual fiscal revenue is only 500,000 yuan, citing Wu Zhanjiang, a deputy head of the township government. Some townships in Yunfu can't even afford to pay the phone bills of some of their offices and some have failed to pay some workers' salaries.
Reuters reports President Barack Obama told China on Sunday that the United States was fed up with its trade and currency practices, as he turned up the heat on America’s biggest economic rival at an Asia Pacific summit. “Enough’s enough,” Obama said bluntly at a closing news conference at the annual Asia-Pacific Economic Cooperation meeting where he scored a significant breakthrough in his push to create a pan-Pacific free trade zone.
Stockcharts shows the chart of Oil, USO, to be in the middle of a broadening top pattern. Bloomberg reports Crude Oil Declines as Italian Bond Yields Climb, Adding to Europe Concern. “There’s a growing realization that reform in Italy won’t occur overnight,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The Italian economy and political system have been confounding experts for a long time.” Crude oil for December delivery dropped $1.14, or 1.2 percent, to $97.85 a barrel at 1:01 p.m. on the New York Mercantile Exchange. Prices rose 5 percent last week and have increased for six consecutive weeks, the longest run of gains since April 2009. Brent oil for December settlement fell $2.51, or 2.2 percent, to $111.65 a barrel on the London-based ICE Futures Europe exchange.
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