The art of economics consists in looking not merely at the immediate hut at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups—Henry Hazlitt
I would not have published today’s action by Team Viagra had it not been for the significant actions by index manipulators behind the scenes
Team Viagra pared down the last minute .71% loss of the Phisix to just .51%. Said differently, .2% of today’s losses in the headline index had been erased through Team Viagra’s “marking the close”.
From the surface, .2% difference would look insignificant.
But when seen from the sectoral basis, the whole picture changes.
There had big moves in both directions for some sectors.
In particular, last minute huge selling on banks had been offset by major pumps on other sectors, led by the services, holding and property.
These are the firms which pushed down the index via "marking the close" led by banks
And in contrast, these are the other major index heavyweights representing different sectors which buoyed the index again through "marking the close"
Had there been NO last minute selling on the banks, Phisix would have closed green!
On the hand, the offsetting actions would seem to have been deliberate. Or in short, index managers perhaps knew or anticipated of the big downside selling actions in banks, so they acted to counterbalance these by pumping up on the other heavyweights.
The extant imbalances in the pricing of Philippine equities will only accrue from such repeated perversions of the marketplace. And such essentially paves way for, or ensures of, the reappearance of market crashes.
Note: figures/images from colfinancial.com, Bloomberg, PSE and technistock.net
More than 100 high-end villas are razed to the ground without permission from local authorities in Heyuan City, south China's Guangdong Province. The real estate developer who built these luxury houses said the houses were pulled down due to a tight budget. The demolition fees were worth some 120 million yuan ($18.5 million). The high-end houses started construction in 2004, covering an area of 60,000 square meters.
It’s been at least 18 years since emerging-market currencies had it this good as the Federal Reserve adopted a gradual approach to its rate-increase cycle, fueling optimism capital inflows can be sustained.
A Bloomberg gauge of 20 currencies gained for a fourth day after Fed Chair Janet Yellen said policy makers would act “cautiously” as they look to raise rates. Stocks rallied, sending shares in Shanghai up the most in a month, while South African equities rebounded from a two-week low and Russia snapped the longest run of losses since 2011. The premium investors demand to hold emerging-market debt dropped from the highest since March 16.
“Yellen’s comments were pretty aggressive and make it clear that rate hike expectations might as well be scratched out for this year,” said Nathan Griffiths, a senior emerging-market equities manager who helps oversee $1.1 billion at NN Investment Partners in The Hague. “This is the perfect backdrop for emerging markets to continue” the rally because positioning remains geared to a rising dollar, he said.
Brazil, South Africa, Russia and Turkey will probably benefit most from a weaker dollar, Griffiths said...
The gauge of 20 developing-nation currencies rose 0.4 percent, the most in since March 17, as of 11:18 a.m. in London. That extended the advance in March to 5.3 percent, heading for the best month since 1998.
Malaysia’s ringgit, the South Korean won topped the daily moves on Wednesday, strengthening 1.6 percent and 1.1 percent each.
EPFR Global data showed $2.9 billion flowed into stocks in developing countries in the week to March 23 alone, the most since July. That’s supported strength in exchange rates, with all of the 24 associated currencies appreciating in March.
The ruble strengthened 0.9 percent on Wednesday, taking its gain in March to 11 percent, the most among emerging markets, as Brent crude rallied 10 percent to just shy of $40 a barrel, up from a 12-year low of about $27 reached in January and helping a Bloomberg index of raw materials to its first monthly gain in nine. Brazil’s real, the second-best performer, is up 10 percent this month.
The Philippine peso joined the party as the USD-Php fell by .7% today to 46.03
Yellen's dovishness seem to dovetail with the implied "Shanghai Accord" that may have possibly been forged by global finance and monetary authorities during the latest G-20 meeting.
And since the Shanghai Accord, the risk ON landscape has bolstered the JP Morgan Bloomberg Asian dollar index (ADXY) by more than 3% since the January meltdown.
The short of this has been that risk ON environment totally depends on sustained actions and guarantees by central banks. It is a question of how long can central bank magic last?
At the Rutherford Institute, Attorney John W. Whitehead writes of the similarities between politicians and sociopaths:
There is no difference between psychopaths and politicians.
Nor is there much of a difference between the havoc wreaked on innocent lives by uncaring, unfeeling, selfish, irresponsible, parasitic criminals and elected officials who lie to their constituents, trade political favors for campaign contributions, turn a blind eye to the wishes of the electorate, cheat taxpayers out of hard-earned dollars, favor the corporate elite, entrench the military industrial complex, and spare little thought for the impact their thoughtless actions and hastily passed legislation might have on defenseless citizens.
Psychopaths and politicians both have a tendency to be selfish, callous, remorseless users of others, irresponsible, pathological liars, glib, con artists, lacking in remorse and shallow.
Charismatic politicians, like criminal psychopaths, exhibit a failure to accept responsibility for their actions, have a high sense of self-worth, are chronically unstable, have socially deviant lifestyle, need constant stimulation, have parasitic lifestyles and possess unrealistic goals.
It doesn’t matter whether you’re talking about Democrats or Republicans.
Political psychopaths are all largely cut from the same pathological cloth, brimming with seemingly easy charm and boasting calculating minds. Such leaders eventually create pathocracies—totalitarian societies bent on power, control, and destruction of both freedom in general and those who exercise their freedoms.
Once psychopaths gain power, the result is usually some form of totalitarian government or a pathocracy. “At that point, the government operates against the interests of its own people except for favoring certain groups,” author James G. Long notes. “We are currently witnessing deliberate polarizations of American citizens, illegal actions, and massive and needless acquisition of debt. This is typical of psychopathic systems, and very similar things happened in the Soviet Union as it overextended and collapsed.”
In other words, electing a psychopath to public office is tantamount to national hara-kiri, the ritualized act of self-annihilation, self-destruction and suicide. It signals the demise of democratic government and lays the groundwork for a totalitarian regime that is legalistic, militaristic, inflexible, intolerant and inhuman.
So why do we keep doing it over and over again?
There’s no shortage of dire warnings about the devastation that could be wrought if any one of the current crop of candidates running for the White House gets elected. Yet where the doomsayers go wrong is by ignoring the damage that has already been inflicted on our nation and its citizens by a psychopathic government.
According to investigative journalist Zack Beauchamp, “In 2012, a group of psychologists evaluated every President from Washington to Bush II using ‘psychopathy trait estimates derived from personality data completed by historical experts on each president.’ They found that presidents tended to have the psychopath’s characteristic fearlessness and low anxiety levels — traits that appear to help Presidents, but also might cause them to make reckless decisions that hurt other people’s lives.”
The willingness to prioritize power above all else, including the welfare of their fellow human beings, ruthlessness, callousness and an utter lack of conscience are among the defining traits of the sociopath.
When our own government no longer sees us as human beings with dignity and worth but as things to be manipulated, maneuvered, mined for data, manhandled by police, conned into believing it has our best interests at heart, mistreated, jailed if we dare step out of line, and then punished unjustly without remorse—all the while refusing to own up to its failings—we are no longer operating under a constitutional republic.
The following serves as wonderful example of how government interventions fundamentally mangle society’s ethical fabric.
Through ZIRP and NIRP or the invisible redistribution/transfers via monetary channels, or the Japanese government’s thrust to inflate her debt away has only led to the crucifixion of Japanese savers.
Destruction of the yen has only shrunk the purchasing power or reduced real income of Japan’s dramatically aging society (yes Japan has a declining to population).
So the expanding paucity of income, such has now spurred many of the elderly to commit crime with the intent to get fed or live by Japan’s prison welfare state.
Japan's prison system is being driven to budgetary crisis by demographics, a welfare shortfall and a new, pernicious breed of villain: the recidivist retiree. And the silver-haired crooks, say academics, are desperate to be behind bars.
Crime figures show that about 35 per cent of shoplifting offences are committed by people over 60. Within that age bracket, 40 per cent of repeat offenders have committed the same crime more than six times.
There is good reason, concludes a report, to suspect that the shoplifting crime wave in particular represents an attempt by those convicted to end up in prison — an institution that offers free food, accommodation and healthcare.
The mathematics of recidivism are gloomily compelling for the would-be convict. Even with a frugal diet and dirt-cheap accommodation, a single Japanese retiree with minimal savings has living costs more than 25 per cent higher than the meagre basic state pension of Y780,000 ($6,900) a year, according to a study on the economics of elderly crime by Michael Newman of Tokyo-based research house Custom Products Research.
Even the theft of a Y200 sandwich can earn a two-year prison sentence, say academics, at an Y8.4m cost to the state.
The geriatric crime wave is accelerating, and analysts note that the Japanese prison system — newly expanded and at about 70 per cent occupancy — is being prepared for decades of increases. Between 1991 and 2013, the latest year for which the Ministry of Justice publishes figures, the number of elderly inmates in jail for repeating the same offence six times has climbed 460 per cent.
The surging rates of crime among the elderly disguise a darker trend than mere contempt for the law, say economists and criminologists. Retiree crime is rising more quickly than the general demographic ascent into old age that will put 40 per cent of the Japanese population over 65 by the year 2060.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
Through rampant use of "Marking the Close", Team Viagra chopped today's headline index losses by half!
The headline index seen from different platforms
The sectors which participated or benefited from the last minute pump
The issues which benefited from the closing session pump.
To repeat, these postings are intended to document on the brazen irregularities at the PSE, with the aim to demonstrate that "There is no such thing as a free lunch; perversion of the marketplace will eventually incite a blowback or will backfire."
Note: figures/images from colfinancial.com, Bloomberg, PSE and technistock.net.
It's a curiosity to see some of mainstream media, whom were once cheerleaders for Abenomics, panic over growing dislocations at the JGB market.
While stocks have been surging, the Bloomberg recently warned on growing signs of instability in Japan's government debt (JGB) bubble: (bold mine)
Signs of stress are multiplying in Japan’s government bond market, which is crumbling under pressure from the central bank’s unprecedented asset-purchase program and negative interest rates.
Bank of Japan Governor Haruhiko Kuroda has repeatedly said his policies are having the desired effect on markets, including suppressing JGB yields. His success is driving frenzied demand for longer-dated notes as investors avoid the negative yields offered on maturities up to 10 years. And as buyers hang on to debt offering interest returns, the BOJ is finding it harder to press on with bond purchases of as much as 12 trillion yen ($106 billion) a month, sparking sudden price swings leading to yield curve inversions that have nothing to do with economic fundamentals.
“We hold a lot, and we’re not selling,” said Yoshiyuki Suzuki, the head of fixed income in Tokyo at Fukoku Mutual Life Insurance, which has $59 billion in assets. “We can get interest income. If we sell, there are no good alternatives.”
The following charts show signs of stress in the market:
Yields on 40-year JGBs dipped below those on 30-year securities Tuesday, and a BOJ operation to buy long-term notes last week met the lowest investor participation on record. Bond market functionality has deteriorated, with 41 percent of respondents last month rating it as “low,” the highest proportion since the BOJ began the quarterly survey more than a year ago.
“It wouldn’t be surprising to see some BOJ operations fail,” said Yusuke Ikawa, a salesperson at UBS Group AG’s Knowledge Network in Tokyo. “The biggest risk of that is in superlong bonds.”
A dearth of liquidity has driven a measure of bond-market fluctuations to levels unseen since 1999.
“The market has gone from having extremely high liquidity previously, to the point where trading by investors can easily show up as volatility in yields,” said Tatsuya Higuchi, chief fund manager in the fixed income investment division at Mitsubishi UFJ Kokusai Asset Management Co. “There is a negative side to the BOJ’s bond buying.”
Demand for JGBs has increased so much since the start of negative-rate policy that it’s flipped the market for repurchase agreements on its head: Dealers who in normal circumstances would pay to borrow overnight cash in the repo market -- offering debt as surety of repayment -- are instead willing to pay to get access to the collateral.
Distortions in the market are poised to become even more pronounced, with almost 90 percent of analysts in Bloomberg’s most-recent survey predicting additional stimulus by the end of July.
The BOJ has already cornered close to a third of the JGB market, more than any other class of investor. That proportion will grow as asset purchases continue -- even without an expansion of easing.
The central bank is also buying negative-yielding bonds in the market, which has an overwhelming majority of the world’s sub-zero debt. The benchmark 10-year JGB yielded minus 0.09 percent on Thursday, after plunging to a record low of minus 0.135 percent on March 18. Positive yields on 40- and 30-year debt jumped about 10 basis points after the BOJ reduced the size of an operation to buy long-term bonds.
The market disruptions raise concerns that the BOJ is nearing the limits of its stimulus, even as Kuroda has said the central bank can do more. There are also questions over whether, if the central bank is forced to exit prematurely, the market can withstand the potential shock.
“How can the BOJ head for the exit?” Dan Fuss, vice chairman of Loomis Sayles & Co., said at an event in Tokyo last week. “If they open the exit door, there’s a fire on the other side.”
Truly awesome developments!!!
Typical political actions have been designed to address short term issues while disregarding long term consequences, so the mainstream only discovers now that "there is a negative side to the BoJ's buying". Duh!
The mainstream is surprised to see people's different or opposite reactions from desperate government policies.
Of course, there is practically no limit to the BoJ's or any central bankers to employ 'stimulus'. If JGBs run out, then the BoJ's buying can spread to directly own equities (rather than just ETFs), corporate bonds, properties (home commercial) or even Ketchup (discussed here)!
The BoJ can embrace Wall Street Journal's recommendation to "buy oil"!
They can even use the nuclear option, instead of helicopter money, they can borrow US B-52s bombers to drop yen from the sky! But since cash will be disallowed, then the BoJ can send yen via postal mail (if no bank accounts) or credit every individual's bank accounts. In essence, the BoJ can create the yen at will!
It is not what the BoJ can do, but the effects of their actions that truly matters.
But for Japan's politicians, the real economy seems not the real concern. The BoJ appears to prioritize the financial markets, specifically, the JGB market and the stock market. And that's because they realize that once the 'animal spirits' dissipate, the government's access to credit will become hard to come by.
And to consider Japan's debt position (as per 2016 budget) where about 25% of total budget is allocated for debt service and that debt service accounts for 41% of tax revenues--the loss of animal spirits will most likely translate to a debt-currency crisis!
So the BoJ wants to own most of the JGBs to prevent any volatility from overindebtedness. But in doing so, their actions have incited the current upsurge in volatility.
In the political spectrum, the BoJ's increasing ownership of the factors of production simply means nationalization of assets or increased embrace of or the slippery slope to socialism.
In the financial markets, the ongoing dislocations at the JGBs have spilled over to corporate bonds where default risks premiums have been surging as previously discussed here.
The untoward effects from interventions only begets more interventions that leads to more unintended and increasingly more complicated consequences. And the mainstream gets surprised for unexpected outcomes.
Understand that these are not just technical issues, rather these are technical dynamics in reaction to the political response on Japan's structural political-economic problems.
And rising stocks won't be able to conceal what has been going on (or the erosion of economic-financial foundations) for long.
And if Japan's fixed income market unravels, global financial markets will suffer from a contagion.
Europe’s welfare spending is out of control, and is on a scale that is both lavish and unaffordable compared with the rest of the world. There is a problem, however. Neither she, nor any other political leader in Europe, has the will to do anything about it.
Eurostat, the statistical agency of the European Union, has this week published updated figures on the total welfare bill across Europe. It is rising, and in some countries is getting up to a quarter of national output. Meanwhile, the percentage of spending on stuff like infrastructure or education, which increase an economy’s potential output, is falling.
So long as that is true, it is very hard to see anything other than a bleak future for any of Europe’s economies.
If you dip into the blogs, there is a mildly entertaining debate about whether Merkel’s often-quoted figures are correct. On close inspection, it turns out that nations that make up the EU currently account for 7.2pc of the world’s population and a shade over a quarter of total output. When the World Bank crunched the numbers on social spending, however, it found that in fact Europe accounts for a massive 58pc of global welfare spending.
What is certainly true is that Europe’s welfare budget has turned into a juggernaut that is careering out of control.
On the World Bank data, the United States accounts for 18.8pc of global welfare spending, as you might expect from the world’s biggest economy. But Germany, around a third of its size, currently spends 12.5pc of the global total. France, a smaller country still, accounts for 9.9pc. The UK racks up close on 7pc. Contrast that with some far bigger, and faster- growing, countries. China, with 20 times our population, accounts for 2.4pc of the total. Russia accounts for 2pc and India just 0.6pc.
According to Eurostat, the total cost of welfare across the EU now amounts to 19.5pc of total GDP, compared with 17.5pc as recently as 2006. If you restrict that to the eurozone countries, the total rises to 20.5pc. In Denmark and France it is now close on 25pc.
For all that the Left complains about austerity in this country, our total spending on social protection is only slightly below the European average at 16.5pc of GDP. In controversial areas such as disability benefits, where the Government has now abandoned some modest cuts, we are in line with the EU average, spending 2.8pc of GDP. (Our welfare bill is only less than average because a fantastic performance on job creation means we spend just 0.2pc of GDP on unemployment, compared with a eurozone average of 1.8pc, and 2pc in a country such as France).
Overall, in almost every country, it is going up. With ageing populations, that is hardly likely to decrease – poverty-stricken Greece is now spending 15pc of GDP on pensions, and Italy 14pc. Europe is literally drowning under the cost of its welfare bills.
One recognizes that the political season is heating up with comments like this. From New York Posts' John Crudele
The upcoming election and, especially, the surprising strength of Donald Trump also make it almost impossible for the Fed to boost rates. If Trump gets elected, the Fed will almost immediately be hit by audits that will reveal lots of secret, sinister things.
So Fed Chair Janet Yellen and her fellow central bankers can’t do anything — like raise the cost of money — that might slow the economy down and give Trump a better shot at winning the presidency.
One of the sunshine industries of the information/digital/third wave age would be robotics. The Visual Capitalist has an effusive overview of the industry:
Domo Arigato, Mr. Roboto
ROBOT MARKET GROWING AT 15%, WITH 1.3 MILLION NEW INDUSTRIAL ROBOT INSTALLATIONS BY 2018
The market for industrial robot installations has been on a skyward trend since 2009, and it is not expected to slow down any time soon. According to the World Robotics 2015 report, the market for industrial robots was approximated at $32 billion in 2014, and in the coming years it is expected to continue to grow at a compound annual growth rate (CAGR) of at least 15%.
That means between 2015 and 2018, it’s anticipated that 1.3 million industrial robots will be installed worldwide. This will bring the stock of operational robots up to just over 2.3 million, mostly working in the automotive and electronics sectors.
For how long can the global robot population continue to grow?
ROBOT DENSITY
Perhaps the most interesting way to peek into the future of industrial robot installations is to look at potential sales in China.
Currently, the world’s most populous nation has a density of robots that is about half of the world average, equal to just 36 robots for every 10,000 manufacturing workers in China.
However, this is changing fast. It’s been the largest market for robots since 2013, and in 2014 the country bought 57,100 robots – the highest quantity ever recorded in a year. By 2018, one in every three robots in operation around the world will be in China.
What will happen if China’s density approaches that of other robot industrial centers?
Highly automated countries such as Germany, Japan, and South Korea all have robot densities that are multiples higher. South Korea, for example, has 478 industrial robots for every 10,000 workers – a ratio that is 13x higher than China’s.
With this kind of potential for growth, it’s clear that this is only the start of the robot story.
The spread of robots would entail not only of investments aspects but of political-economic ones as well. For instance expect the rise of neo-Luddism.
The February-March Risk ON landscape has partly been a function of oversold conditions from the January 2016 meltdown. However, the fall of the US dollar has signified as the primary driver for 'fast and furious' rebound (helped by the global central banks' recentShanghai Accord).
Yet has the US dollar's hiatus (via short covering) ended?
The Bloomberg USD (BDXY) index
The original USD (DXY) Index
The Asian dollar (JP Morgan Bloomberg ADXY) Index
The rise in the USD translates to lower commodities in particular oil.
US WTIC
Europe's Brent
And higher US dollar will mean lower the overall commodity prices: the topping of the S&P GSCI commodity index?
And the correlation of oil with risk assets have only tightened which means if the correlations hold then lower oil equal lower stocks.
Moreover, since the rise of the USD implies tightening of systemic liquidity then it should also mean lower prices for risk assets
They have been so admirably well coordinated, and most importantly very persistent and audacious, such that they have desperately been engaged in serial panic buying mode similar to...
a shark feeding frenzy ....(from CNN)
or like...
zombies scaling up the Jerusalem’s Wall at World War Z
Perhaps they believe that the Phisix will hit 10,000 in a few months.
Today’s slight profit taking was entirely reversed at the closing bell or during the market intervention period. The Phisix was pumped by .32% to close the day in green!!!
In short, 100% of today’s gains came from marking the close pump! So this week's .73% gain has mostly been about manipulation
No profit taking is allowed.
For Team Viagra, the Phisix will GO STRAIGHT UP like a Rocket Blast! And they will do whatever it takes including the sustained defiance of the SEC's mandate.
Except for the mines and the holding sector, last minute pump was seen in four industries: financial, property and commercial industrial
And 5 issues representing these sectors had been used in the seemingly orchestrated pump
It is interesting to observe that this week’s pumping action has shifted from the top 5 biggest to the next largest issues. Based on weekly performance, the leaders have given way to the supporting teammates mostly from the top 12. Last week's best performers can be seen here or in my post here.
In short, Team Viagra appears to have used rotation to pump the index!
Team Viagra seem to believe that the stock market is all about pumping and pushing with fundamentals irrelevant to its significance or to its existence
And similar to the price inflation, the PERs of the PSEi members have vaulted higher from the bidding fear of missing out spree!
The most popular issues have traded with TTM PERs at a stunning 20+,30+, 40+!
Yet Team Viagra believes that such levels are cheap and that 50s ,60s, 70s or even 100s would really make no difference!
Consider SM. This week SM, the PSEi's biggest market cap, closed unchanged. But the firm's PER surged 3.4% which to my guess reveals of last year’s ZERO growth!
This means none of this has been about G-R-O-W-T-H but rather about multiple expansions or manic speculations! Or put differently, rabid pumping in the hope that some greater fool out there will be takers at 50,60,70+ PERs! (Of course such has more than just been about greater fools but about the politically correct image called G-R-O-W-T-H! And G-R-O-W-T-H means free access to the public's money)
Nonetheless, even when the PSEi has still been off the May 2013 highs and 9.4% away from the April 2015 record, already FOUR issues within the top 12 biggest market cap have now closed at fresh records. The four issues: SM, AEV, GTCAP and JGS.
This serves as testament to the concentration of buying activities--all designed to buoy the index.
Moreover, given that SM's share price has been static this week, the rotational pump has shifted to subsidiaries SMPH and BDO. So SMPH now drifts at a stone’s throw from a new record while BDO continues to ascend.
And the reason these issues have been at record highs has been about the ferocity of the pump as seen via the vertical launch or World War Z's zombies!
And JGS should be a wonderful embodiment of current events which serves as my chart of the week…
JGS' chart has gone totally vertical! (Remember BW??? If JGS continues with this then it will be like BW)
And never in JGS' history has this ever happened.Not even during the previous breakouts.
So This Time MUST be Different!!!
....
Or not!!!!
Rampant Marking the close Only in the Philippines!
Charts and table from Bloomberg, PSE, technistock and colfinancial.
