Financial Market Report for Monday April 14, 2014.
Volatility, XVZ, rose as Greece, The National Bank of Greece, and the Eurozone Small Cap Dividends are leading the Eurozone Stocks lower, as is seen in the ongoing Yahoo Finance Chart of Greece, GREK, Eurozone Small Cap Dividends, DFE, European Financials, EUFN, and the National Bank of Greece, NBG, communicating the failure of European Credit, EU.
Investors are deleveraging out of EUR/JPY currency carry trade investments as is seen in the ongoing Yahoo Finance chart of EURJPY and the Eurozone Stocks, EZU, such as ALU, VE, ASMI, RYAAY, AIXG, AER, PHG, CRH, SI, and the Eurozone Nations, such as EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, PGAL, GREK, with the European Financials, EUFN, and the National Bank of Greece, NBG, leading lower.
Open Europe relates Kathimerini Kathimerini 2 Reuters report Poul Thomsen, head of the IMF's mission to Greece, told Mega TV, "In our view, [Greece's bailout] is not fully financed the whole way to 2016 and one would need...to find some more money." Separately, Greek Prime Minister Antonis Samaras wrote in Kathimerini yesterday that "the country's return to the markets rebuffs [speculation]" about the need for a third bailout."
The failure of credit in the US, VTI, is seen in Retail, XRT, US Infrastructure, PKB, Consumer Services, IYC, Small Cap Consumer Discretionary, PSCD, such as the Automobile Dealers, the Credit Service Companies, MA, V, AXP, DFS, Asset Managers, BLK, AMG, Regional Banks, KRE, Stockbrokers, IAI, Investment Bankers, KCE, the Too Big To Fail Banks, RWW, and the Russell 2000, IWC, trading lower from their highs.
The Small Cap Growth, RZG, and the Large Cap Growth, JKE, are leading the Small Cap Value, RZV, and the Large Cap Value, JKF, lower, as is seen in their combined ongoing Yahoo Finance chart. And Utilities, PUI, XLU, such as GXP, BKH, NEE, UGI,NI, VVC, MDU, D, and NYLD, are topping out on the trade lower in the Interest Rate on the US Note, ^TNX, to 2.62%, on Friday April 11, 2014, and its close now higher on Monday April 14, 2014 to 2.64%.
Eddy Elfenbein reports Best Retail Sales Report in 18 Months. While Atif Mian and Amir Sufi of House of Debt post The Consumer As A Shadow Of Its Former Self. Retail, XRT, bounced only slightly higher today, as did other ETFs, that had sold off most strongly last week. These included the Workplace Equality ETF, EQLT, which is comprised of companies that have a social mission to support workplace equality for lesbian, gay, bisexual and transgender employees; it is comprise of 164 companies that have scored 100% on the Human Rights Campaign Corporate Equality Index. The ETF follows in the line of socially responsible funds that are currently on the market; these products take into account social, environmental, and governance characteristics. The ETF has been a leading loss leader as Intuit relates that it is comprised of a number of large cap consumer discretionary, financial service stocks, and technology stocks such as GME, EA, MGM, WYNN, DIS, AAL.
Junk Bonds, JNK, bounced higher, taking Aggregate Credit, AGG, slightly higher to a new rally high as International Treasury Bonds, PICB, traded lower manifesting a massive dark cloud covering candlestick chart pattern in its weekly chart confirming the failure of credit. Infrastructure Municipal Bonds, RVNU, popped 1.1% higher in short sell covering. Reuters reports RVNU focuses exclusively on municipal bonds issued to fund federal, state and local infrastructure projects, including water and sewer systems, public power systems and toll roads and bridges.
Thursday, April 10, 2014, marked a pivotal economic change in mankind's history. The failure of credit commenced as popular currency carry trades unwound trading in Small Cap Nation Investment, IFSM, and Nation Investment, EFA, as the ECB failed to come forward with any new credit stimulus, and turned World Stocks, VT, Global Financials, IXG, lower. The failure of equity investments can be followed with this Finviz Screener of Equity ETFs.
Another word for credit is trust. Investors no longer trust in the monetary policies of the world central banks to stimulate global investment growth. Said another way the world central banks' monetary policies have crossed the rubicon of sound monetary policy and have made "money good" investments bad.
The failure of credit, commenced on Thursday, April 10, 2014, is the most remarkable turning point in economic history; and is seen in Call Write Bonds, CWB, trading lower from their March 2014 high, and is defined by the see saw destruction of equity investments (such as World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Financial Investments, IXG, and Dividends Excluding Financials, DTN) and credit investments, AGG, which began to trade lower in May 2013.
Investors no longer trust in the monetary policies of the world central banks to stimulate investment growth, despite TradingFloor reporting Global Manufacturing PMI Tracker Shows Growth Robust In March. One can follow the destruction of credit investments with this Finviz Screener of Credit ETFs.
The failure of credit is established by Distressed Investments, such as those traded by Fidelity Investments, FAGIX, and by Junk Bonds, JNK, trading strongly lower on Thursday April 10, 2014 and Friday April 11, 2014. It was the Distressed Investments, that the US Fed took in and traded out "money good" US Treasuries in 2008 and 2009, as part of QE1 to regenerate the US and World Financial System. Regional Banks, KRE, lost 5% of their value last week, and thus document the failure of credit. Look for a strong destruction of Popular Notes And Bonds, such as SHY, EMCD, TLT, ZROZ, FLOT, QLTA, VCLT, PICB, BWX, MBB.
Bespoke Investment Group reports Sovereign Yields Continue Lower. Yet, look for Aggregate Credit, AGG, to very soon, once again, trade lower as Corporate Bonds, LQD, Long Duration Corporate Bonds, BLV, International Corporate Bonds, PICB, and World Treasury Bonds, BWX, which are seen peaking out, turn lower, commencing the failure of currencies.
Debt Deflation will be driving Major World Currencies, DBV, and Emerging Market Currencies, CEW, lower. Said another way, bond vigilantes calling the Benchmark Interest Rate higher, $TNX, from 2.62% on Friday, April 11. 2014, and on steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, from 38.67, on the exhaustion of the world central banks' monetary authority. Spectacular competitive currency devaluation will cause unwinding liberalism's currency carry trades and debt trades worldwide. One can follow the destruction of currencies with this Finviz Screener of Currency ETFs.
The pursuit of yield is history. Global ZIRP is history. The failure of credit is terminating risk driven investors, such as those invested in High Yield Debt, JNK, VCLT, EU, EMB, HYXU, EMLC, HYMB, QLTB, EMCD, RVNU, and those invested in Biotechnology, IBB, Social Media, SOCL, Small Cap Pure Value, RZV, and Small Cap Pure Growth, RZG, as well as fixed income investors, invested in Dividends Excluding Financials, DTN, and other Popular Yield Bearing ETFs, DFE, GRID, SEA, FIW, PUI, PSP, KBWD, IST, DBU, as well the high yielding Dividend ETF, DVYL, which is 200% leveraged the S&P High Yield Dividend Aristocrats Index.
As of Black Thursday April 10, 2014, the day credit died, as evidenced by World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, trading lower, the investor is no longer the centerpiece of economic activity. He is being replaced by the debt serf, as Robert Stevens of WSWS reports Greek Parliament Approves New Attacks On Workers. The latest agreement between the European Union led Troika and the Greek government includes measures to limit the right to strike.
Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, such as Real Estate Company, Blackstone, BX, yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening, and short term interests rates will be rising, causing 1 to 3 Year US Government Note, SHY, to plummet.
As the Benchmark Interest rate rises from 2.62%, popular real estate investments Global Real Estate, DRW, Office REITS, FNIO, Mortgage REITS, REM, Residential REITS, REZ, and Retail REITS, such as General Growth Properties, GGP, will plummet.
Money market funds will break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US, the Bank's Excess Reserves will be captured, so as to speak, by the US Fed.
Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, KRE, such as BOFI, SIVB, HBAN, and RF, the Too Big To Fail Banks, RWW, seen in this Finviz Screener, will be integrated into the banks and be known as the Government Banks, or Gov Banks.
Money has been in an awesome bubble ever since it was underwritten by credit of the US Fed in taking in Distressed Investments, such as those traded by the Fidelity Mutual Fund, FAGIX, and in trading out money good US Treasuries, TLT, to underwrite faith in Regional Banks, KRE, and the Too Big To Fail Banks, RWW, under the Paulson Gift and Ben Bernanke Stimulus of QE1.
The investor is going extinct: the failure of credit is an extinction event, that pivots the world economy out of liberalism, that is the paradigm and age of investment choice and credit, and into authoritarianism, that is the paradigm and age of diktat and debt servitude, which features the debt serf, is the centerpiece of economic activity.
With the trade higher parabolically higher in Nickel, JJN, the rally in Commodities, DBC, DYY, is likely over. Bloomberg reports Oil Climbs to Five-Week High on Ukraine-Russia Tension.
Buy and hold stock investing was an economic principle of the bygone era of credit. The greatest bear market of history has commenced: it will totally destroy all fiat investments where they be equities such as VT, EFA, IXG or DTN, or credit, AGG. One could use these Inverse Market ETFs as collateral for short selling: STPP, XVZ, JGBS, GLD, EUO, YCS, OFF, HDGE, SAGG, TYBS, DNO, PPLT, KRS, REK, SBB, SBM, DDG, EFZ, YXI, SZK, SDP.
Gold, $GOLD, traded higher to $1,327, on a slightly higher US Dollar, $USD, UUP. The chart of the Gold ETF, GLD, shows that it entered an Elliott Wave 3 of 3 Up in January 2014; and now is technically overbought. Short Side Of Long posts Gold Has Outperformed Other Asset Classes In First Quarter 2014. In the age of the failure of credit, wealth can only be preserved by purchasing and taking possession of and safely storing gold bullion.
Libertarian Richard Eleling writes in EPJ The Free Market vs. the Interventionist State What people call the "free market" in the United States and around the world, is in fact the regulated economy -- the Interventionist State. I explain the defining characteristics of a truly free market economy, as defined for example by the Austrian economist, Ludwig von Mises. And I contrast this with the meaning of the Interventionist State under which we all live. The Interventionist State distorts the economic activities of all those in society in various ways.
The Interventionist State featured the Banker Regime, that is the Creature from Jekyll Island, and its cohort, democratic nation state rule, which featured inflationism, coming from the three economic dynamos of creditism, corporatism, and globalism, under policies of investment choice and schemes of liberal credit.
The bond vigilantes are effecting a global economic coup d'etat, transferring sovereignty from democratic nation states to sovereign regional leaders and sovereign regional bodies, such as the ECB, by calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, and thus are powering up the singular dynamo of regionalism to establish regional security, stability, and sustainability, to deal with the destructionism of unwinding currency carry trades and debt trades.
Out of a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, the Beast Regime will rise to replace Banker Regime, where policies of regional economic governance and schemes of totalitarian collectivism will establish regional gulags of debt servitude.
Under liberalism, the speculative investment community provided seigniorage through money manager capitalism, Under authoritarianism, regional leaders provide seigniorage through the word, will and way of their diktat .
Specifically out of Eurozone sovereign, banking and corporate insolvency, leaders will meet in summits to renounce national sovereignty and announce pooled regional sovereignty, where regional framework agreements will provide the legal basis for regional economic fascism enabling leaders from Brussels and Berlin to rule in diktat establishing Europe as the preeminent world power. Johannes Stern of WSWS writes German Government Planning Major Military Build-up. The German government is using the mounting conflict between NATO and Russia to massively rearm the army.