World Enters Great Depression 2
Wednesday, 21. May 2008, 06:30:59
I. Stocks sold off in the US and globally as well
Both US Stocks, VTI, and world stocks, VEU, sold off.
Japanese shares, EWJ, turned lower on news that the subprime crisis and consumer credit issues have finally hit Japan's largest bank Mitsubishi UFJ.
Lester Pimentel of Bloomberg reports that Iceland got its credit rating lowered; its Krona fell 0.9 percent today to 115.69 per euro. The decline came before the Moody's announcement. The Krona has lost about 20 percent against the dollar since Nov. 7, 2007. The country's three biggest banks have combined assets of 11.4 trillion kronur, or nine times the size of the economy. At Kaupthing Bank Hf, the biggest lender, foreign currency holdings make up 87 percent of assets. Iceland's banks, based in a $19 billion (financialization) economy, have funded lending and an expansion in the U.K. and the Nordic region by relying mainly on the money markets rather than customer deposits. And Jody Clark writes that this tiny country, home to a mere 300,000 people, has somehow created a financial system nine times the size of its GDP.
Corey Rosenbloom writes that after failing twice at its 200 day moving average, the US Stock Market indexes tested lower levels, and do so with a sharp sell-off.
Increased risk aversion caused Fannie Mae, FNM, Ambac, ABK, homebuilders, ITB, banks, KBE, the financial sector, IYF, and real estate, IYR to lead stocks lower.
JP Morgan, JPM, fell to 43.70, which is below the middle of a pennant which formed at 44. Capitalism as we know it today, that is in the post Glass Steagall age came via JP Morgan and Citigroup; it's failure today is one of the factors leading to a ruinous stock and bond market decline, and the rise of state corporatism. It was JP Morgan, that received Federal Reserve assistance in the buyout of Bear Stearns, and today, its fall demonstrates the ongoing weakness and toxicity of the capital market providers.
The risk aversion comes from an awareness:
1) that the homebuilders inventory of homes is now beyond a two year supply and growing, while prices are falling off the cliff, yet they keep building to pay their executives salaries,
2) that the bank's so called asset base of leveraged mortgage backed securities cannot be repaid, that this irredeemable debt will have to eventually have to be liquidated,
3) that financial institutions can no longer generate income and earnings from securitization, that is financialization,
4) that the banks are going to have to raise borrowing rates and cut the amount of credit available to consumers by half,
5) and that the the consumer's sentiment is sour terrifically limiting future retail and discretionary sales.
Stagflation is seen in rising headline inflation and falling real estate, profitability from operations and employment and manufacturing production.
Today stagflation deleveraged and deflated the semiconductors: Intel, INTC, lost 3%, which turned the Nasdaq, QQQQ, and the Nasdaq 100, QTEC, parabolically lower. Stagflation is also seen in this weeks rapid sell off of retail, consumer discretionary and telecommunications.
The yen carry trade operated in reverse to effect a sell off, that is a disinvestment, in the BRICS, EEB, which fell 1%.
II. Commodities rose
The Commodity ETN, RJI, which is the tradeable measure of the CRB, $CRB rose 1% to an all time high.
Gold, as seen in the gold ETF, GLD, traded up today, with the cash market place price being $909.
Chartist Jack Chan gave a buy signal on gold, last Friday, that is May 16, 2008 when gold was trading at $891
Gold is in breakout; with the following ratios documenting that an 'investment demand for gold' has arisen.
Gold to stocks GLD:VTI
Gold to US Treasury bonds GLD:TLT
Gold to oil GLD:USO
And Gold to to the world currencies ETF,GLD:DBV indicates gold is superior to currencies.
III. General Commentary
The US Dollar, $USD, fell sharply to 72.41, as the "gold driving currencies", the Yen, FXY, the Euro, FXE, the Australian Dollar, FXA, and the Swiss Krona, FXS, rose today.
The EUR/JPY, FXE:FXY, which is the defacto standard and measure for the yen carry trade, held steady at 1.629.
Volatility, $VIX, has risen now for the third day in a row from the level of early October when the Citigroup, CDO Bust, took stocks lower; and Jeff Clark writes this bullish chart is bearish for the stock market.
Canadian aerospace and plane maker Bombardier, BBD/A.TO, rose, being driven higher by its participation on the resource laden Toronto Stock Exchange, where some 3,393,088 traded hands today. The Oil Sands Sector Fund, OSF/UN.TO, and COS/UN.TO Canadian Oil Sands Trust closed at all time highs.
Exxon Mobil, XOM, and the energy shares, XLE, closed at all time highs. Exxon Mobil pays a $1.60 per share dividend which is 1.80%. Market capitalization is 499.63 Billion and 5,6026,901,798 shares traded.
LTC Properties, LTC, a health care reit, closed at down 0.6% at 26.23; it pays 1.56 per share which is 5.80%; the lollipop candlestick in its daily chart says the days of profiting from the long term care of elders is over.
The basic materials ETF, IYM, closed up 0.48%, rising on commodity prices' coattail which rose 0.94%.
Leading investment advisor, Blackrock, BLK, fell 3% for the day, and 5% for the week through the middle of a broadening top pattern.
The interest rate on the 30 Year US Treasury Bond, $TYX, fell, and 30 Year Bonds, $USB, rose, as some of the funds coming out of stocks, VTI, flowed into bonds.
IV. An investment sea change is underway: the eight week long Fed-And-Yen-Carry-Trade-Rally has ended, stocks and bonds to fall terrificaly in value.
The two deleveraging dynamos, increasing risk aversion and stagflation, have turned off the two great spigots of fiat wealth, with the first being Federal Reserve lowering of interest rates and provision of TAF, PDCF, and TSLF facilities, and the second being the Yen Carry Trade provided by the bank of Japan, BOJ, lending at 0.5% interest.
Look for stock and bond values worldwide to deflate rapidly in price, with liquidity flowing into commodities, RJI, agricultural products, DBA, gold, GLD, and oil, USO ... the CRB will be inflating higher ....wealth is to be garnered and accumulated by investing in gold rather than the fiat assets of stocks and bonds.
Although many currencies rose today, it is entirely possible that over time, all currencies will tumble in a death spiral lower together; the EUR/JPY, FXE:FXY, will continually decrease from 1.630, effecting an unwinding of the Yen Carry Trade.
Look for regional trading alliances, and new regional currencies to emerge.
As economic, stock, bond and credit markets deteriorate, an emergency will arise due to any number of causes, such as Treasury Repo Fails, or a credit gridlock where corporations are unable to secure the funds to refinance debt coming due this year. In a financial emergency, the provisions of the Security and Prosperity Partnership of North America, the SPP, will be enforced. The North American Competitiveness Council, the NACC, with the three leaders of the continent would likely appoint stakeholders to oversee, direct, marshall and manage the continent's natural resources, as well as the investment, finance, commerce and trade infrastructure for strategic continental needs. USNORTHCOM would serve at the leaders direction to maintain public order and safety; military intervention in emergencies is being planned for as documented in Truthout's report that the Homeland Security-ICE immigration raid explains use of fairgrounds by military, which is a compilation of articles by Spencer S. Hsu of the Washington Post and Pat Kinney of the WCF Courier.
A financial emergency would lead to a further sell of in the Dollar. Given such a likely scenario, its wise to be invested in gold: I recommend that one dollar cost average invest in gold at BullionVault.com over the next three weeks, which I believe is superior to a short selling as outlined below.
One could sell short the these ETFS as they have a lot of "down potential" as seen in today's charts for the following ETFs.
BDH Broadband -2.9%
FXI China -4.1%
IYF Financial -1.9%
ITB Homebuilding -3.4%
IYR Real Estate -2.1%
IYZ Telecom -1.7%
KBE Banks -2.3%
KCE Investment Bankers -1.8%
QLD Nasdaq -1.8%
QTEC Nasdaq 100 -1.5%
TUR Turkey -3.5%
RWR Reits -1.2%
RZV Small Cap Value -1%
XLY Consumer Discretionary -1.5%
XRT Retail -1.9%
XSD Semiconductor -2.4%
PEY Hi Yield Dividend Payers -1.9%
RCC Small Cap Dividends -0.9
BJK Gaming And Vice -2.7%
One could go long the Proshare bear market ETFs as suggested by Jack Chan who gave his buy signal on DXD, the Proshares 200% inverse of the DOW 30; his chart shows how rapidly short sellers benefited the last time he gave his buy signal on this bear market investment.
Or, one could consider SELLING these BULL MARKET from my database listing of five 200% -- Bullish ETFs as they provide specific market sector coverage:
UYG Financials, DXD Industrials, QLD Nasdaq 100, URE Real Estate, UWM Russell 2000,
Or one could go long these these five Proshares 200% Bear Market ETFs: TWM, SKF, SRS, DXD, and QID.
For those interested in selling individual stocks, here is one database listing stocks to sell,
And here is yet even another database of other short sell opportunities
Off all the short selling opportunities that exist today, I most definitely recommend the semiconductors, as these are going to move very quickly, greatly rewarding those who are short.
Both US Stocks, VTI, and world stocks, VEU, sold off.
Japanese shares, EWJ, turned lower on news that the subprime crisis and consumer credit issues have finally hit Japan's largest bank Mitsubishi UFJ.
Lester Pimentel of Bloomberg reports that Iceland got its credit rating lowered; its Krona fell 0.9 percent today to 115.69 per euro. The decline came before the Moody's announcement. The Krona has lost about 20 percent against the dollar since Nov. 7, 2007. The country's three biggest banks have combined assets of 11.4 trillion kronur, or nine times the size of the economy. At Kaupthing Bank Hf, the biggest lender, foreign currency holdings make up 87 percent of assets. Iceland's banks, based in a $19 billion (financialization) economy, have funded lending and an expansion in the U.K. and the Nordic region by relying mainly on the money markets rather than customer deposits. And Jody Clark writes that this tiny country, home to a mere 300,000 people, has somehow created a financial system nine times the size of its GDP.
Corey Rosenbloom writes that after failing twice at its 200 day moving average, the US Stock Market indexes tested lower levels, and do so with a sharp sell-off.
Increased risk aversion caused Fannie Mae, FNM, Ambac, ABK, homebuilders, ITB, banks, KBE, the financial sector, IYF, and real estate, IYR to lead stocks lower.
JP Morgan, JPM, fell to 43.70, which is below the middle of a pennant which formed at 44. Capitalism as we know it today, that is in the post Glass Steagall age came via JP Morgan and Citigroup; it's failure today is one of the factors leading to a ruinous stock and bond market decline, and the rise of state corporatism. It was JP Morgan, that received Federal Reserve assistance in the buyout of Bear Stearns, and today, its fall demonstrates the ongoing weakness and toxicity of the capital market providers.
The risk aversion comes from an awareness:
1) that the homebuilders inventory of homes is now beyond a two year supply and growing, while prices are falling off the cliff, yet they keep building to pay their executives salaries,
2) that the bank's so called asset base of leveraged mortgage backed securities cannot be repaid, that this irredeemable debt will have to eventually have to be liquidated,
3) that financial institutions can no longer generate income and earnings from securitization, that is financialization,
4) that the banks are going to have to raise borrowing rates and cut the amount of credit available to consumers by half,
5) and that the the consumer's sentiment is sour terrifically limiting future retail and discretionary sales.
Stagflation is seen in rising headline inflation and falling real estate, profitability from operations and employment and manufacturing production.
Today stagflation deleveraged and deflated the semiconductors: Intel, INTC, lost 3%, which turned the Nasdaq, QQQQ, and the Nasdaq 100, QTEC, parabolically lower. Stagflation is also seen in this weeks rapid sell off of retail, consumer discretionary and telecommunications.
The yen carry trade operated in reverse to effect a sell off, that is a disinvestment, in the BRICS, EEB, which fell 1%.
II. Commodities rose
The Commodity ETN, RJI, which is the tradeable measure of the CRB, $CRB rose 1% to an all time high.
Gold, as seen in the gold ETF, GLD, traded up today, with the cash market place price being $909.
Chartist Jack Chan gave a buy signal on gold, last Friday, that is May 16, 2008 when gold was trading at $891
Gold is in breakout; with the following ratios documenting that an 'investment demand for gold' has arisen.
Gold to stocks GLD:VTI
Gold to US Treasury bonds GLD:TLT
Gold to oil GLD:USO
And Gold to to the world currencies ETF,GLD:DBV indicates gold is superior to currencies.
III. General Commentary
The US Dollar, $USD, fell sharply to 72.41, as the "gold driving currencies", the Yen, FXY, the Euro, FXE, the Australian Dollar, FXA, and the Swiss Krona, FXS, rose today.
The EUR/JPY, FXE:FXY, which is the defacto standard and measure for the yen carry trade, held steady at 1.629.
Volatility, $VIX, has risen now for the third day in a row from the level of early October when the Citigroup, CDO Bust, took stocks lower; and Jeff Clark writes this bullish chart is bearish for the stock market.
Canadian aerospace and plane maker Bombardier, BBD/A.TO, rose, being driven higher by its participation on the resource laden Toronto Stock Exchange, where some 3,393,088 traded hands today. The Oil Sands Sector Fund, OSF/UN.TO, and COS/UN.TO Canadian Oil Sands Trust closed at all time highs.
Exxon Mobil, XOM, and the energy shares, XLE, closed at all time highs. Exxon Mobil pays a $1.60 per share dividend which is 1.80%. Market capitalization is 499.63 Billion and 5,6026,901,798 shares traded.
LTC Properties, LTC, a health care reit, closed at down 0.6% at 26.23; it pays 1.56 per share which is 5.80%; the lollipop candlestick in its daily chart says the days of profiting from the long term care of elders is over.
The basic materials ETF, IYM, closed up 0.48%, rising on commodity prices' coattail which rose 0.94%.
Leading investment advisor, Blackrock, BLK, fell 3% for the day, and 5% for the week through the middle of a broadening top pattern.
The interest rate on the 30 Year US Treasury Bond, $TYX, fell, and 30 Year Bonds, $USB, rose, as some of the funds coming out of stocks, VTI, flowed into bonds.
IV. An investment sea change is underway: the eight week long Fed-And-Yen-Carry-Trade-Rally has ended, stocks and bonds to fall terrificaly in value.
The two deleveraging dynamos, increasing risk aversion and stagflation, have turned off the two great spigots of fiat wealth, with the first being Federal Reserve lowering of interest rates and provision of TAF, PDCF, and TSLF facilities, and the second being the Yen Carry Trade provided by the bank of Japan, BOJ, lending at 0.5% interest.
Look for stock and bond values worldwide to deflate rapidly in price, with liquidity flowing into commodities, RJI, agricultural products, DBA, gold, GLD, and oil, USO ... the CRB will be inflating higher ....wealth is to be garnered and accumulated by investing in gold rather than the fiat assets of stocks and bonds.
Although many currencies rose today, it is entirely possible that over time, all currencies will tumble in a death spiral lower together; the EUR/JPY, FXE:FXY, will continually decrease from 1.630, effecting an unwinding of the Yen Carry Trade.
Look for regional trading alliances, and new regional currencies to emerge.
As economic, stock, bond and credit markets deteriorate, an emergency will arise due to any number of causes, such as Treasury Repo Fails, or a credit gridlock where corporations are unable to secure the funds to refinance debt coming due this year. In a financial emergency, the provisions of the Security and Prosperity Partnership of North America, the SPP, will be enforced. The North American Competitiveness Council, the NACC, with the three leaders of the continent would likely appoint stakeholders to oversee, direct, marshall and manage the continent's natural resources, as well as the investment, finance, commerce and trade infrastructure for strategic continental needs. USNORTHCOM would serve at the leaders direction to maintain public order and safety; military intervention in emergencies is being planned for as documented in Truthout's report that the Homeland Security-ICE immigration raid explains use of fairgrounds by military, which is a compilation of articles by Spencer S. Hsu of the Washington Post and Pat Kinney of the WCF Courier.
A financial emergency would lead to a further sell of in the Dollar. Given such a likely scenario, its wise to be invested in gold: I recommend that one dollar cost average invest in gold at BullionVault.com over the next three weeks, which I believe is superior to a short selling as outlined below.
One could sell short the these ETFS as they have a lot of "down potential" as seen in today's charts for the following ETFs.
BDH Broadband -2.9%
FXI China -4.1%
IYF Financial -1.9%
ITB Homebuilding -3.4%
IYR Real Estate -2.1%
IYZ Telecom -1.7%
KBE Banks -2.3%
KCE Investment Bankers -1.8%
QLD Nasdaq -1.8%
QTEC Nasdaq 100 -1.5%
TUR Turkey -3.5%
RWR Reits -1.2%
RZV Small Cap Value -1%
XLY Consumer Discretionary -1.5%
XRT Retail -1.9%
XSD Semiconductor -2.4%
PEY Hi Yield Dividend Payers -1.9%
RCC Small Cap Dividends -0.9
BJK Gaming And Vice -2.7%
One could go long the Proshare bear market ETFs as suggested by Jack Chan who gave his buy signal on DXD, the Proshares 200% inverse of the DOW 30; his chart shows how rapidly short sellers benefited the last time he gave his buy signal on this bear market investment.
Or, one could consider SELLING these BULL MARKET from my database listing of five 200% -- Bullish ETFs as they provide specific market sector coverage:
UYG Financials, DXD Industrials, QLD Nasdaq 100, URE Real Estate, UWM Russell 2000,
Or one could go long these these five Proshares 200% Bear Market ETFs: TWM, SKF, SRS, DXD, and QID.
For those interested in selling individual stocks, here is one database listing stocks to sell,
And here is yet even another database of other short sell opportunities
Off all the short selling opportunities that exist today, I most definitely recommend the semiconductors, as these are going to move very quickly, greatly rewarding those who are short.
WIDGETIZE