Jim Sinclair’s Commentary
My porch with three more days of snow predicted.
![clip_image002[5]](http://www.jsmineset.com/wp-content/uploads/2015/03/clip_image0025.jpg "clip_image002[5]")
![clip_image004[5]](http://www.jsmineset.com/wp-content/uploads/2015/03/clip_image0045.jpg "clip_image004[5]")
Jim Sinclair’s Commentary
Do these two gentlemen look happy? This picture was taken yesterday after a frank discussion.
Jim Sinclair’s Commentary
Chair Yellen: Are you paying attention as your economic recovery looks poor?
ISM Manufacturing Tumbles To 13-Month Lows, Employment Slumps, Construction Spending Plunges
Submitted by Tyler Durden on 03/02/2015 10:08 -0500
Despite a collapse in US macro data in February, Markit somehow managed to conjure a better than expected 55.1 print for US Manufacturing PMI. Under the covers employment creation was the slowest since July and inflationary pressures loom as selling prices rose notably. ISM Manufacturing printed 52.9 – a small miss vs 53.0 expectations – down for the 4th month in a row to 13-month lows, with employment at its weakest since June 2013. Construction spending’s modest rebound in (seemingly un-weather-affected) December (after dropping in November) has been destroyed with a 1.1% drop in January (against expectations of 0.3% rise) for the biggest drop in 8 months.
Spot The Odd One Out – one of these is a soft survey… the other summarizes US macro hard data into one variable…
Doesn’t exactly look like a ‘recovery’ in manufacturing based on the jobs created…
Jim Sinclair’s Commentary
GOTS means get out of the system while you still can.
"Spectacular Developments" In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole "Discovered"
Tyler Durden on 03/01/2015 19:59 -0500
Slowly, all the lies of the "recovery", all the skeletons in the closet, and all the bodies swept under the rug are emerging.
Moments ago, Austrian ORF reported that there have been "spectacular developments" in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta’s balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said.
As a result, according to Reuters, the bad bank that was created in the aftermath of the Hypo collapse, is itself about to be unwound, as the bad bank itself goes bad!
"Austria’s Financial Market Authority stepped in on Sunday to wind down "bad bank" Heta Asset Resolution and imposed a moratorium on debt repayments by the vehicle set up last year from the remnants of defunct lender Hypo Alpe Adria."
In short: Austria just cut off state support of what was until this moment a state-backed, wind-down vehicle and a key pillar of trust in what was already a shaky financial system.
Jim Sinclair’s Commentary
Now this is downright tempting for a man that made 35 OTC markets in 1954.
Meanwhile, Over At The "New York" Stock Exchange… Lasers
Tyler Durden on 03/02/2015 07:22 -0500
The last time we looked at the most important tower in the world, about 4 months ago, it looked as follows:
The tower in question is the primary microwave relay into the ill-named "New York" Stock Exchange which actually is located just off MacArthur Boulevard and Route 17 in Mahwah, New Jersey, and in our opinion is the "most important tower" in the world, because without it, the financial industry, which these days means a few hundred thousands HFT algos and their math PhD creators, would grind to a halt as suddenly trading would revert back to the "caveman days" of 2007, when one actually traded not just to frontrun a whale order in some dark pool half way around the world, but actually cared about such things as "fundamentals" and "reality" (oh, and there wasn’t some $12 trillion in cental bank created liquidity supporting every asset class).
Jim Sinclair’s Commentary
A picture is worth a thousand words. If that is the case, then thanks to WilliamBanzai7 this is worth 10,000 words.
David Stockman Warns "It’s One Of The Scariest Moments In History"
Submitted by Tyler Durden on 03/01/2015 22:45 -0500
"The Fed is out of control," exclaims David Stockman – perhaps best known for architecting Reagan’s economic turnaround known as ‘Morning in America’ – adding that "people don’t want to hear the reality and the truth that we’re facing." The following discussion, with Harry Dent, outlines their perspectives on the looming collapse of free market prosperity and the desctruction of American wealth as policymakers "take our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades." The Fed, Stockman concludes, "is a rogue institution," and their actions have led us to "one of the scariest moments in our history… it’s a festering time-bomb and we’re not sure when it will explode."
Full Discussion:
Key Excerpts from the detailed interview:
David Stockman: People don’t want to hear the reality and the truth that we’re facing. But I think there is an enormous appetite out in the country to get a different perspective than what you have from the media day in and day out, so I say the fed is out of control. Its balance sheet is exploded. It’s printing money like never before.
Zero interest rates for 70 months have basically destroyed the pricing function in the financial markets. I said that as a result of this, Wall Street has become a huge casino which basically rewards gamblers, but it is not functioning as a capital raising, capital allocating instrument, which really is what the financial markets should do in a free market system. I warned about the size of the federal debt. I’m an old budget director from the Reagan days. We had a trillion dollar national debt, a 3 trillion economy when I started. Today, it’s 18 trillion. Eighteen fold gain in the last 35 years versus maybe a fourfold gain in the economy. So all of these trends are taking our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades.
Jim Sinclair’s Commentary
Pensions are a great target for all governments with too much debt, the USA included. That is to borrow from them which means assets out, and government paper in.
As Greek Default Fears Return, Government Considers "Borrowing" Pensions To Repay IMF
Submitted by Tyler Durden on 03/02/2015 14:54 -0500
Greek short-term default risk jumped over 300bps today putting the odds of a restructuring at 50-50 within the next year as the warnings we issued last week with regard Greece’s imminent default on its IMF loan loom. Seeking to reassure its lenders (and avoid yet more capital flight), Reuters reports the Greek government said it was "exploring solutions," including delaying payments to suppliers or try to raise up to 3 billion euros by borrowing from state entities such as pension funds.
As Reuters reports, Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its bailout by four months. Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner.
"The Greek government has been exploring solutions … to ensure there won’t be a single problem with repaying the IMF loan, or its funding obligations in March," Government Spokesman Gabriel Sakellaridis told Greek radio.
So far, Athens’s other funding options have stumbled upon problems. Transferring 1.9 billion euros worth of profits the European Central Bank made on buying Greek bonds will not be allowed until Greece has completed promised reforms.
Another option is the issuance of additional Treasury bills, but Athens’s EU/IMF lenders have set a 15 billion euro cap on such debt and it has already been reached.
On Wednesday, Athens will go ahead with a regular six-month T-bill auction of 875 million euros to refinance a maturing issue, in a sale that will be closely watched as the government faces a possible funding gap.
Jim Sinclair’s Commentary
It is simply nuts to speak about voluntarily raising interest rates when there are systemic problems of this nature.
California Rental Armageddon: Nearly half of Los Angeles adults doubling up, working class moving out, or you have the option of simply living in poverty.
California like the rest of nation has gained a large number of rental households. Many of these households were formed from the ashes of the 1 million completed foreclosures. Over the last ten years the nation has lost 1 million net homeowner households and has gained a whopping 10 million rental households. L.A. County with roughly 10 million residents is predominately a renter county. Over the last ten years the large gain in California households has come in the form of rentals. Maybe you find living with roommates deep into your 30s and 40s as awesome or maybe you enjoy living a Spartan lifestyle just so you can pay your monthly rent while hearing helicopters overhead in your hipster neighborhood. Every piece of research simply shows that people are being pushed into spending more money on housing. Some say move out. Well guess what? Many middle class Californians are doing just that. The rental and housing market has gone into full on financial Armageddon mode yet in typical California fashion, the sun keeps glowing brightly. Ironically over time people think it is normal to dump every nickel you have into housing. Let us look at three trends impacting the rental market in California.
Moving out
The urge to buy real estate is a deeply rooted American concept, although Millennials might be changing their tune. For the majority of the country, buying a home is a simple endeavor. With your typical house costing $200,000 and with low interest rates, simply having the median household income is good enough to not have your home consume every penny of your income. But in California, we have $700,000 crap shacks that look as if a two-year old developed it in their first art experiments. In the last couple of years, there is a vocal group saying “hey, if you can’t make it in California get out!” Apparently some people are listening to this:
