On Wednesday, January 22, 2013, currency carry trade investing, and debt trade investing topped out, as the bond vigilantes called the Interest Rate On The US Ten Year Note, ^TNX, higher from 2.83%. Fiat wealth will be trading lower on the failure of credit. The US Dollar Hegemonic Empire will become a dry bone on authoritarianism's Desert Of The Real, as investors derisk and delverage out of fiat wealth investments.
Aggregate Credit, AGG, traded slightly lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening, and as the Interest Rate on the US Ten Year Note, ^TNX, traded slightly higher from 2.83% to close at 2.86%; popular credit investments, SHY, IEF, TLT, EDV, FLOT, GOVT, QLTA, VCLT, PICB, BWX, and JNK, seen in this Finviz Screener, all traded lower.
Peak currency carry trade investing is seen in the Chart of EFA, and EDEN, MES, EWUS, and DFE.
Peak debt trade investing is seen in the Chart of AGG, and JNK, BDCS, VCLT, EU, EMB, HYXU, EMLC, and HYMB.
And peak pursuit of yield investing, that is yield chasing, which came via both currency carry trade investing and debt trade investing, and is seen in the Chart of DTN, and Leveraged Buyouts PSP, Global Telecom, IST, Smart Grid, GRID, Shipping, SEA, and Water Resources, FIW.
The Chart of Shipping Stocks, SEA, rising from 14.50 to 22.00, together with Greece, GREK, and the National Bank of Greece, NBG, communicates the tremendous leverage that came through both currency carry trade investing, and debt trade investing, at the end of the paradigm and age of liberalism, as investors acted in euphoric manner to drive up risk assets of all sorts, acting in liberalism's dynamos of creditism, corporatism, globalism, and clientelism. Now, authoritarianism features the singular dynamo of regionalism.
Tulip mania is the result of money manager capitalism and is seen in the peaking of
European Nation Investments, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, PGAL, GREK
Global Spending Investments, PKB, BJK, IGV, PSCC, SOCL, PPA, CSD, IBB, CARZ, and PSCD
Global Growth Investments, SOXX, TAN, PICK, IPN, FLM, SLX, WOOD, ITB, RZG,and MHK
Consumer Spending Investments, PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, XRT, KXI, and PSCD
Risk Investments, FXR, RZG, PBS, RZV, PSCI, FPX, PJP, XTN, GEX, and IWC
The Too Big To Fail Bank Investments, BAC, WFC, GS, MS, C, BK, JPM, KEY, STI, FITB, RF, STT, HBAN, SNV, USB, PNC, and RWW
One can follow the tremendous unwinding of tail risk from the crack up boom in these investments with of highly leverage shipping stocks.
The chart of Tsakos Energy Navigation, TNP, shows a parabolic rise in value; it is a debt trade investment leader with a debt to equity ratio of 1.48. Investors in such behemoths are like the wooly mammoth of prehistoric times who were caught in an extinction event and were literally frozen in place by catastrophic storms. The chart of Genco Shipping, GNK, shows that this shipper has not been one of the debt trade and currency carry darlings.
The Shipping Industry, SEA, with a PE of 11, as well as the nation of Greece, GREK, where many shippers are based, is going to be very much an epicenter of chaos and conflict, as liberalism's twin sources of investment liquidity have been turned off, as risk appetite turns to risk avoidance. Greece, GREK, and the National Bank of Greece, NBG, are currently seeing strong investment derisking and deleveraging. Many of the ships in operation today will be taken out of operation, as the bond vigilantes and currency traders have commission under economic destructionism to fully engage in debt deflation and competitive currency devaluation.
Under the rule of the libertarian despised Creature from Jekyll Island, mankind experienced the Means of Economic Inflationism, that is the Benchmark Interest Rate, $TNX, driving inflation in both fiat money, defined as Aggregate Credit, AGG, coupled with Major World Currencies, DBV, and Emerging Market Currencies, CEW, as well as fiat wealth, defined as World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, ever higher.
But when the bond vigilantes gained control of the US Ten Year Note, ^TNX, calling it higher from 2.48, on October 23, 2013, fiat money died in deflationary extinction event, that forced AGG, DBV, and CEW lower.
Soon, very soon, fiat money, will die as investors derisk out of debt trade investments,and deleverage out of currency carry trade investments, forcing VT, EFA, and IXG, in another deflationary extinction event.
At that time the world will fully pivot from the paradigm and age of liberalism, into that of authoritarianism, which will be an universe and epoch of economic deflation and economic recession; the likes of which the world has never seen. Agence France Presse reports RWE, Germany's second biggest power supplier said it plans to axe a further 6,700 jobs by 2016; and company said it anticipated a steep drop in profitability.
The new normal of risk-off investing replaces risk-on investing. Inasmuch as the twin spigots of investment liquidity are unable to serve as sources of monetary transmission, the short selling opportunity of a lifetime has emerged. For those into short selling, one might consider the ETFs STPP, HDGE, XVZ, JGBS, EUO, SLV, GLD, and UDN, as a basis for one's margin account.
Reuters reports JPMorgan CEO Dimon says government cases were 'unfair'. Liberalism featured bankers of all types who waived magic wands of wealth creation, in what Doug Noland has termed wildcat finance. Now under authoritarianism, regional leaders waive clubs of diktat as they operate in wildcat governance, biting and tearing one another apart, in their attempt to rise to be top dog leader, and as they enforce debt servitude.
The monetization of debt servitude is now underway through leaders establishing diktat policies of regional governance, where public private partnerships establish regional security, stability, and sustainability. Under liberalism bankers monetized debt and financialized investments for investment gain. Under authoritarianism, regional leaders monetize debt servitude, and secure economic rule. James Brewer reports in WSWS Emergency manager accelerates plans to "monetize" Detroit water department, The plan to put the Detroit Water and Sewage Department under regional control is the first step towards privatization of one of America's largest publicly owned water systems
Liberalism's peak fiat wealth has been attained, as World Stocks, VT, Global Financials, IXG, Dividends Excluding Financials, DTN, and Nation Investment, EFA, have topped out.
This as the Chart of Aggregate Credit, AGG, traded lower, entering what appears to be an Elliott Wave 3 of 3 Down as is seen in its weekly chart. Such waves are the most significant of all economic waves, as they destroy almost all of the investment of the prior five waves on their way down.
Given that the Benchmark Interest Rate, $TNX, is headed higher, Electric Utilities, XLU, leaders, BKH, NEE, UGI, NI, VVC, MDU,D, AES, NYLD, and Real Estate Investments, KBWY, IYR, FNIO, REM, REZ, will be trading lower in value, putting an end to profitable fixed income investing. The fixed income investor is a relic of the bygone era of liberalism.
Peak investing is seen in the combined Yahoo Finance chart, of fiat wealth,VT, IXG, DTN, EFA, and Aggregate Credit, AGG, as well as in the chart of VT:AGG, which communicates that equity investments, are unable to leverage higher over credit investments, as investors fear that the monetary policies of credit stimulus the world central banks have crossed the rubicon of sound monetary policy, and have turned "money good" investments bad.
Inasmuch as investors have derisked out of the Emerging Markets, EEM, such a TUR, EWZ, THD, IDX, EPHE, ARGT, ECH, EPU, and EZA, and have deleveraged out of Emerging Market Currencies, CEW, and have largely sought safe haven investments in US Based Equities, VTI, it is reasonable that derisking out of these, will cause the US Dollar, $USD, UUP, to trade lower from $81.29, and that Gold, $GOLD, will trade higher from $1,236.
The failure of the US Dollar, $USD, means that the US Dollar Hegemonic Empire will soon be relegated to the dustbin of history. Out of waves of sovereign, banking, and corporate insolvency, leaders will meet in summits to renounce national sovereignty, and announce regional pooled sovereignty to establish regional security stability and sustainability.
With the failure of the US Dollar, $USD, the international Reserve Currency System, also known as the Milton Friedman Free to Choose, Floating Currency Regime, regional currencies, such as the Euro, and regional trading blocs, such as the Ukraine and Russia trading union, will emerge to support regional economies, where regional leaders provide diktat policies of regional governance and totalitarian collectivism schemes of debt servitude.
A crisis of trust pivoted the stock market from a bull market to a bear market on the week ending January 17, 1014, as Reuters reported Bond trading stings Citigroup in 4th Quarter, and Global Financials IXG, pivoted lower, as the Too Big To Fail Banks, RWW, were led lower by Citigroup, C.
As the Global Financials, IXG, pivoted lower, the world pivoted from the paradigm and age of liberalism into that of authoritarianism.
Regional economic fascism will be the dynamic of The Great Economic Transformation, where liberalism's investor, morphs to become authoritarianism's debt serf, through the failure of fiat money.
Beginning with the advent of the Euro, and then the repeal of the Glass Steagall Act, and then continuing on with the Alan Greenspan Put, the Ben Bernanke Put, and the Mario Draghi Promise Of Sufficiency, liberalism's foundation and capstone was the investor and fiat money, where the speculative investment community established ever increasing moral hazard all to advance the investor's return, the greatest of which are seen in the investments of Global Industrial Production, FXR, Transportation, XTN, Biotechnology, IBB, Resorts and Casinos, BJK, Solar Energy, TAN, Semiconductors, SOXX, Internet Retail, FDN, Nasdaq Internet, PNQI, Aerospace and Defense, PPA, and Pharmaceuticals. PJP.
Fidelity's Vice Stock Mutual Fund, VICEX, epitomizes the gains of the wily investor; all of which came through Ben Bernanke's QEs, as he established TARP, and traded out money good US Treasuries, TLT, for distressed investments of all types such as those traded in Fidelity's Distressed Investments, FAGIX, mutual fund. Most of the Treasury Debt has made its way back to the US Federal Reserve, and now resides there as Excess Reserves.
Authoritarianism's footprint is that of the debt serf, where the beast regime establishes ever increasing debt servitude through the establishment of diktat money, the aim of which is to advance regional security, stability and sustainability.
One had economic life as an investor, where one trusted in the investment choice policies of democratic nation state sovereignty, as well as trusted in the credit policies of the banker regime sovereignty, enjoying the seigniorage of fiat money.
Now, one has economic life as a debt serf, where one complies in the diktat policies of regional governance sovereignty, as well as in the debt servitude policies of the beast regime, laboring under the seigniorage of diktat money.
Under liberalism, the speculative investment leverage community, was the source of monetary transmission. Fiat money was the element of economic life. Economic life centered around both consumer spending and the investing activity of the investor. It's important to recognize that economic growth was the outcome of the two factors of consumer spending and the investor exercising risk-on investment choice across a broad spectrum of investment opportunities. The engine of economic growth under liberalism was consumer spending and investment choice. liberalism.
For example, leading regional banks, KRE, such as HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, and UCBI, spawned economic growth, as a result of consumer spending and the investment activity of the investor, which carried impact seen in economic metrics such asHousing Starts, GDP Reports, Industrial Production, ADP Payroll, Construction Spending, and the Purchasing Manager's Index. These were not goals, but rather statistical attributes, that is metrics, associated with risk-on investing.
Under authoritarianism, regional leaders are the source of monetary transmission, as they rule in diktat money, which becomes the element of economic life. Economic life centers round the compliance of the debt serf, as the leaders manage the economy to achieve regional security, stability and sustainability.
Out of Club Med waves of sovereign, banking and corporate insolvency, the Eurozone will become the model and template for the rise of economic fascism. ANSAMed News Network, a media partner of the European Commission, reports the statistics of the EU Crisis Greek public debt at 171.8% GDP, followed by Italy (132.9% GDP), Portugal (128.7%) and Ireland (124.8%), Eurostat says)".
Regional property rights supersede those of individual, whose property is taken to secure the stability and sustainability of the region; thus, what was personal property, becomes that of the region.
The chart of the US Dollar's 200% ETF, UUP, shows that the basis the International Reserve Currency has risen to strong resistance, in a downward trend plot that began in August 2013, with the run-up in the Euro, FXE.
In the new economic normal, the only two forms of safe and sustainable wealth are diktat and possession of gold and silver bullion. As investors derisk out of fiat money and fiat wealth, a strong investment demand for gold will arise.
Regional Banks, KRE, will be integrated into the government and be known as the government banks or "gov banks" for short.
As Zero Hedge writes A full blown deflationary episode is coming