1) .... On Monday July 7, 2014, The see saw destruction of Fiat Wealth got strongly underway as European Stocks led stocks worldwide lower, as investors assessed equity valuations following the biggest rally since March.
Just after last Friday's July 3, 2014, Bespoke Investment Group report Big Tick Higher in Bullish Sentiment, on Monday, July 7, 2014, risk-on investing turned to risk-off investing, as investors deleveraged out of Euro Yen Carry Trade, that is out of EUR/JPY carry trades, such as RYAAY, AER, TI, SNY, VE, ING, FLTX, ICLR, ASMI, ERIC, MNK, LUX, ORAN, NVO, LYB, STM, EEFT, which drove Eurozone Stocks, EZU, FEZ, and the Eurozone Nations, EWO, EWI, EWP, GREK, PGAL, EWQ, EWG, EWN, EIRL, and EFNL, lower, which led Nation Investment, EFA, lower.
The Global Growth Nations, Germany, EWG, Denmark, EDEN, and South Korea, EWY, traded lower. The credit sensitive, US Small Caps, IWM, IWC, traded lower; their trade lower documents the failure of credit.
Israel, EIS, traded lower as Zero Hedge reports More Powderkegs: Israel Prepares For Gaza Escalation, Boosts Troops On Gaza Border.
Emerging Europe, ESR, traded lower as Zero Hedge reports Russia Rushes To Seal Ukraine-Bypassing Gas Pipeline: Lavrov Pays Bulgaria A Visit. And as AP reports Bulgaria, Russia Push For South Stream Pipeline Blocked By EU.
In an epic socio-economic change inflationism turned tod destructionism, as risk appetite turned risk aversion, as investors Volatility, ^VIX, trade by XVZ, derisked out of the debt trade in The National Bank of Greece, NBG, Ireland's Bank, IRE, and Banco Santander, SAN, which led European Financials, EUFN, lower; Argentina's Bank, BBVA, and India's Bank, IBN, HDB, led Emerging Market Financials, EMFM, lower; Regional Banks, KRE, Nasdaq Banks, QABA, and Stockbrokers, IAI, led Financial Services, lower; all of which led Global Financials, IXG, lower; this as Zero Hedge reports European Banks Are In Trouble.
Global Producers, FXR, such as GPK, GRA, DOW, SEE, and LYB, traded lower.
Investors sold out of the riskiest of Risk Assets. Rental and Leasing Companies, such as HEES, and URI, led Small Cap Pure Value Stocks, RZV, lower. And Building Materials, led Small Cap Pure Growth Stocks, RZG, lower.
Global Infrastructure, UTF, led Closed End Funds, GCE, lower.
Aluminum Companies, such as AA, and Metal Manufacturing Companies, XME, traded lower.
In the Defensive Sectors, Global Energy, IPW, traded lower, as Bloomberg reports Defense Trade Coming Undone in $2 Trillion S&P 500 Rally
In the Yield Bearing Sectors, AMJ, EMLP, MLPJ, FIW, SEA, IDOG, IGF, IST, PSP, traded lower.
Dividends Excluding Financials, DTN, led by Dow Chemical, DOW, traded lower.
Natural Gas, UNG, UNL, Cotton, BAL, Nickel, NINI, Sugar, SGG, Wheat, WEAT, and Corn, CORN, led Commodiites, DBC, DJP, lower; it appears that Agricultural Commodities, RJA, have hit support, after having gone through a strong sell off, now Base Metals, DBB, will be trading lower on diminished outlook for global growth and trade.
Ed Yardeni posts The Four Phases Of The Bull Market.
FT reports Short selling drops to lowest level since Lehman. In the Inverse Market ETFs, MLPS, RWM, MYY, EFZ, SEF, YXI, DOG, PSQ, EUM, XVZ, traded higher; these could under close supervision serve as the basis of collateral for a short selling strategy. as the S&P 500, $SPX, SPY, has traded lower from its Elliott Wave 5 High.
The Proshares 200% Bear Market ETFs, SQQQ, SSG, SKF, EPV, SCC, SZK, DUG, EFU, traded higher. And The Direxion 300% Bear Market ETFs, ERY, FAZ, SOXS, GASX, DPK, YANG, EURZ, traded higher. Their turn higher evidences that the world stock market has turned from a bull stock market to a bear stock market.
The world is pivoting through peak credit. Popular Notes and Bonds, SHY, EU, TLT, EDV, FLOT, LQD, LWC, PICB, BWX, and MBB, bounced higher from last week's sell off, as the Benchmark Interest Rate, ^TNX, traded slightly lower from its recent high of 2.65%, to 2.62%; its likely objective is 2.53%
With the failure of credit on July 1, 2014, seen in Aggregate Credit, AGG, trading lower in value as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.49%, the world is moving through a historic economic inflection point.
The world is pivoting through peak wealth. Fiat Wealth, defined as World Stocks, VT, Global Financial Institutions, IXG, Nation Investment, EFA, and Yield Bearing Investments, DTN, together with Aggregate Credit, AGG, is is literally being sawn asunder by the failure of trust in the world central banks' monetary authority to continue to provide investment gain, and global economic growth, as is seen in the Bloomberg report European Stocks Drop With Treasuries as Commodities Fall, and as is seen in the Zero Hedge report Peak Abenomics.
The Business Cycle is one of investing, and its nascent entrance into its final phase, that is Kondratieff Winter, is seen in trade lower in European Financials, EUFN, on June 24, 2014, which is the result of a trade lower in the Euro, FXE, beginning in early May 2014, and its full entrance with the failure of credit, seen in Aggregate Credit, AGG, trading lower in value on July 1, 2014. Formerly, investment was the way of life; now disinvestment is the way of life.
Economics is based upon a number of isms; the economic foundation of liberalism is giving way to authoritarianism.
The very nature of economics changed with the trade lower in Credit Investments. that is Aggregate Credit, AGG, on July 1, 2014. It was an extinction event, that terminated the debt investor; and the trade lower in Equity Investments, that is World Stocks, VT, Nation Investment, EFA, Global Financial Institutions, IXG, and Yield Bearing Investments, DTN, on July 7, 2014, terminated the equity investor.
With investors going extinct, on the failure of credit, and the soon coming death of currencies, liberalism's dynamos are powering down, and authoritarianism's dynamos are powering up.
The three dynamos of creditism, globalism and corporatism developed the Banker Regime Seigniorage of fiat money that coined fantastic fiat wealth in Equity Investments, VT, Yield Bearing Investments, DTN, Nation Investment, EFA, Banking Investments, IXG, and most importantly Credit Investments.
Debasement of the coinage of fiat wealth commenced on July 7, 2014; debasement of the coinage of fiat money, specifically debt deflation, is still yet to come, the reason being as WSJ report Currency Reserves Swell in Asia.
Out of failure of trust in the Banker Regime's monetary policies of investment choice and schemes of credit liquidity, the Beast Regime will rise to rule economics with new monetary policies of diktat and schemes of debt servitude.
The singular dynamo of regionalism will develop the Beast Regime's seigniorage of diktat money, which will coin awesome mandated poverty, where austerity is one's economic experience.
The Bond Vigilantes, are in control of the Bow of Economic Sovereignty, and in calling the Interest Rate on the US Ten Year Note, ^TNX, from 2.49% have effected an investment coup d etat, destabilizing sovereign authority in the Eurozone, and in the US. They will be increasingly successful, in calling the Benchmark Interest Rate progressively higher, producing a new sovereignty and a new seigniorage.
Fiat Money defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, will soon literally burst apart at the seams. The failure of Credit came on June 1, 2014, with the trade lower in Aggregate Credit, soon the Sovereign Currencies, will trade lower in value; the death of currencies is at hand; and as John Rubino writes in USA Watchdog, The Money Bubble Will Pop.
2) .... On Tuesday July 8, 2014, fears over the solvency of Greece, GREK,and sustainability of its Bank arose, as The National Bank of Greece, NBG, Ireland's Bank, IRE, Banco Santander, SAN, as well as Lloyds Banking Group, LYG, drove European Financials, EUFN, lower, as Bloomberg reports Greece Resists Troika on Third Bailout as Mario Draghi Protests Delays.
In addition to the trade lower in the European Financials, EUFN, Nomura Holdings, NMR, Banco Santander Brazil, BSBR, Argentina Bank, BBVA, Bank of America, BAC, Regional Banks, KRE, led Global Financials, IXG, lower, evidencing the failure of credit which commenced on July 1, 2014,with the trade lower in Aggregate Credit, AGG.
The trade lower in Stockbrokers, IAI, Investment Bankers, KCE, such as MS, GS, and the Asset Managers, such as BLK, EV, communicates that the age of securitization and financialization, to coin fiat wealth, which was built on trust in the monetary policies of the world central banks,for investment gain is over, through, finished and done. The era of the investor is relegated to the dustbin of history.
A new age of trust in the mandates of regional fascist leaders to coin totalitarian collectivism for regional security, stability and sustainability is underway. The era of the debt serf has come of age.
The trade lower in the City of London, Lloyds Banking Group, LYG, from the middle of a broadening top pattern, communicates the capitulation of the UK's David Cameron, to the monetary authority of the ECB, and to the economic sovereignty of the EU.
The monetary policies of the Banker Regime no longer stimulate global economic growth and trade, as is seen in Nation Investment, EFA, trading strongly lower on the trade lower in the UK, EWU, EUUS, as Shaun Roberts reports Slow Down In The UK's Rate Of Economic Growth, The Office for National Statistics released this data: Total production decreased by 0.7% between April 2014 and May 2014; Manufacturing was the largest contributor, decreasing by 1.3%. He adds, In the three months to May 2014, production and manufacturing were 11.3% and 7.2% respectively below their figures reached in the pre-downturn GDP peak in Q1 2008.
Norway, NORW, and Sweden, EWD, traded lower as the Eurozone Financials, EUFN, Eurozone Stocks, EZU, FEZ, European Small Cap Dividends, DFE, and European Nations, led by Greece, GREK, continued lower. India, INP, SCIN, Israel, EIS, and the US Small Caps, IWC, IWM, traded lower. Electric Utility, HNP, and China Technology, CQQQ, led China, YAO, lower; as Bloomberg reports Sensex Falls Over 500 Points The BSE Sensex and Nifty slumped more than 2 percent on Tuesday, marking their biggest single-day fall in over 10 months and retreating from record highs hit earlier in the session, after the railway budget raised worries the government would slash spending.
Nation investment in New Zealand, ENZL, traded to a new rally high as Brown Brothers Harriman reports The New Zealand Dollar Rose To A New Multi Year High Just Above $0.88. Fitch lifted the outlook for the country's AA rating to positive from stable. The central bank meets on July 23 and is expected to hike rates again. A 25bp hike would be the fourth hike this year and would put the cash rate at 3.25%.
In Yield Bearing Investments, Leveraged Buyouts, PSP, Shipping Stocks, SEA, and International Telecom, IST, traded lower. Dividends Excluding Financials, DTN, were led lower by the debt trade Verizon, VZ.
A trade lower in the Risk Assets, that is the High Beta ETFs, TAN, SOCL, FDN, PNQI, CQQQ, IBB, IGV, IGN, PJP, RZV, RZG, PBS, CARZ, FONE, XRT, PPA, QQQ, FPX, forced World Stocks, ACWX to trade lower. Data Storage Devices, traded strongly lower.
On Tuesday, July 8, 2014, fiat wealth, that is, the coinage of the Banker Regime, traded lower in value as fears of Greek Insolvency arose, as Mario Draghi pressed Greece for reforms in exchange for a Third Greek Bailout.
Aggregate Credit, AGG, bounced slightly higher, but resides below its January 2014, through July 1, 2014 rally high as Popular Notes and Bonds, such as SHY, EU, TLT, EDV, LQD, LWC, PICB, BWX, and MBB, continued to bounce higher from last week's sell off, as the Benchmark Interest Rate, ^TNX, traded slightly lower from its recent high of 2.65%, to 2.57%, on its way lower to a likely support at 2.53%. Junk Bonds, JNK, traded lower with stocks.