Posted at 7:39 PM (CST) by & filed under Jim's Mailbox.

Jim,

What in God’s name are “Non-Lethal” weapons? Squirt guns?

What the hell, just print more and give it to ‘em.

They need about $2 billion to keep Russia from shutting off the gas lines, and they can keep the remaining $1 billion for squirt guns (but I’ll bet it will mysteriously disappear, like their gold).

What a joke this has become.

It’s no wonder that Central Banks and foreigners are buying gold hand over fist, while the US investor is being brainwashed to avoid it like the plague.

I personally don’t trust what is said, but what I see is being done.

CIGA Wolfgang Rech

Ukraine Is “Pressing” Obama For $3 Billion In Financial Aid
Submitted by Tyler Durden on 01/29/2015 – 13:27

It would appear Gazprom has once again come knocking for payment – or else. As Bloomberg reports, Ukraine is pressing the Obama administration to provide political support, as much as $3b in financial aid and “non-lethal weapons,” with the goal of some progress by the end of February, Ukrainian Deputy Foreign Minister Vadym Prystaiko says.

Of course, given Europe’s agreement to further sanction Russia (as EU agrees more “punitive” steps are now possible)President Obama will be happy to lend Ukraine more American taxpayer money (despite the market’s perception that Ukraine’s default probability is over 80% – six year highs).

More…

Posted at 10:31 AM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

One of the reasons for the pressure today on gold, silver, platinum etc. is more MSM gibberish.

Fed Statement: Not Dovish, Not Hawkish—-Just Gibberish
by David Stockman • January 29, 2015

Call it 529 words of gibberish and be done!

All of the FOMC’s platitudes about the economy “expanding at a solid pace”, labor market conditions which have “improved further”, household spending which is “rising moderately” and business fixed investment which is “expanding” are not simply untruthful nonsense; they are a smokescreen for the Fed’s actual intention. Namely, to keep the Wall Street gamblers in free money in the delusional hope that ever rising stock prices will generate a trickle down of “wealth effects” in the main street economy.

But in equivocating still another time about when they intend to get the Fed’s big fat ZIRP thumb off the money market, the denizens of the Eccles Building have shown their true colors. The FOMC is not really comprised of economists or central bankers. It is simply a groupthink posse of spineless cowards who are petrified of a Wall Street hissy fit—–and are therefore willing to dispense whatever spurious word clouds they judge may be necessary to keep the gamblers hitting the “bid” until the next meeting.

After all, how can it possibly be true that notwithstanding all the “solid” economic advances it crowed about in the opening paragraph, the Fed still intends to maintain zero interest rates through mid-year—or for what will be an out-of-this-world 80 months running? As recently as 10 years ago that incredulous juxtaposition—-a solid economy coupled with desperate policy measures—-would have been laughed out of court by even the Fed’s own economists.

In fact, we don’t have a solid economy at all, and the halting advances of recent years have absolutely nothing to do with Fed policy. Instead, the utterly trite macroeconomic commentary contained in its meeting statements is a form of Keynesian ritual incantation based on a delusional conceit. Namely, that left to its own devices the US economy would chronically sink into a recessionary stupor, and that it is only the deft interventions of the central bank which nudge the $18 trillion US economy back onto the path toward full employment and the realization of “potential GDP”.

The very opposite is true. The Fed has become a serial bubble machine. Its fantastic bouts of money printing and the resulting destruction of honest price discovery in the financial markets lead to violent boom and bust cycles in the Wall Street casino—-of which we have had three since the mid-1990s.

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China, Russia, India FMs to meet in Beijing on Monday
January 29, 2015, 6:23 am

The three Foreign Minister’s will also discuss India’s bid to join the Russia-China-led security bloc, SCO [Xinhua]

Chinese officials are preparing for the upcoming RIC (Russia, India, China) Foreign Ministers meet, a Chinese Foreign Ministry spokesperson said. The meet comes close on the heels of a much-hyped Obama visit to India. Chinese state media has cautioned India about US President Barack Obama’s strategy to “split” India’s relations with both China and Russia.

“Obama’s strategy is quite clear. He wants to split the relations between China and India, as well as India and Russia, in an effort to fulfil his strategy of a ‘re-balance’ in Asia,” state-run Global Times said on Wednesday.

Meanwhile, China’s Foreign Ministry spokesperson Hua Chunying said the RIC meeting will be held in Beijing on 2nd February.

Russian Foreign Minister Sergei Lavrov and Indian External Affairs Minister Sushma Swaraj will attend the 13th Foreign Ministers meet at the invitation of their Chinese counterpart Wang Yi.

The mechanism has become an important platform for the three countries to coordinate their positions and seek consensus and cooperation.

RIC, formed more than a decade ago, is focussed on strategic issues of multilateral cooperation and democratic international relations.

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Putin’s Unexpected Victory: Germany Furious That Greece Is Now A Russian Sanctions Veto
Tyler Durden on 01/29/2015 08:57 -0500

Two days ago, Zero Hedge first, and shortly thereafter everyone else, pointed out something stunning: the biggest surprise to emerge so far out of the new anti-Troika/austerity Greek government was not so much its intention to proceed with the first test of “Odious Debt” – this was largely known in advance – but its dramatic pivot away from Germany and Europe, and toward Russia.

As we noted before, not only has Greece already blocked all ongoing privatization processes, a clear snub of Merkel and the Troika which demands the piecemeal blue light special sale of Greece to western buyers as part of the “bailout”, but is also looking at plans to reinstate public sector employees and announce increased pensions for those on low incomes: further clear breaches of the Troika’s austerity terms.

But the most important message that Tsipras is sending to Europe is that (after meeting the Russian ambassador first upon his election) Greece is now effectively a veto power when it comes to future Russian sanctions!

This was first hinted when the Foreign Minister Nikos Kotzias, who arrives in Brussels today to discuss possible additional sanctions on Russia over the conflict in Ukraine, said a few days ago that the Greek government disagreed with an EU statement in which President Donald Tusk raised the prospect of “further restrictive measures” on Russia. As Bloomberg observed before, in recent months, Kotzias wrote on Twitter that sanctions against Russia weren’t in Greece’s interests. He said in a blog that a new foreign policy for Greece should be focused on stopping the ongoing transformation of the EU “into an idiosyncratic empire, under the rule of Germany.”

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Jim Sinclair’s Commentary

The race is on and the long negative odds is gaining.

Yuan Passes Canada Dollar to Rank Fifth for Global Payments

(Bloomberg) — The yuan overtook Canada’s dollar to rank fifth for use in global payments, bolstering the case for the International Monetary Fund to endorse it as a reserve currency.

The proportion of transactions denominated in yuan climbed to a record 2.17 percent in December, from 1.59 percent in October, the Society for Worldwide Financial Telecommunications said in a statement. Later this year, the IMF will conduct the next twice-a-decade review of the basket of currencies in its Special Drawing Rights that members can count toward their official reserves. The basket currently comprises U.S. dollars, euros, yen and British pounds.

“The yuan has a very high chance of being chosen as a reserve currency in the next IMF review,” said Nathan Chow, an economist at DBS Group Holdings Ltd. in Hong Kong. “The yuan could even surpass the yen in the rankings this year.”

China is the world’s second-largest economy, behind only the U.S., as well as the biggest exporter, and the yuan passed the euro in 2013 to become the second-most used currency in global trade finance. The nation is promoting greater usage of its currency by appointing clearing banks in the world’s financial centers and expanding a program that allows yuan held offshore to be invested in its domestic capital markets.

The dollar and the euro remained the two most-used currencies globally in December with respective shares of 44.6 percent and 28.3 percent, according to Swift, a Belgium-based financial-messaging platform. The pound ranked third with 7.92 percent and Japan’s yen was fourth with 2.69 percent.

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Posted at 12:34 PM (CST) by & filed under In The News.

Billionaire Eric Sprott – Entities Wiped Out Overnight As Western Central Banks Near Total Surrender
January 28, 2015

Today billionaire Eric Sprott warned King World News that as entities are being wiped out overnight, Western central banks are nearing the point of total surrender.  This interview takes a trip down the rabbit hole of desperate central banks coming to the realization that it’s nearly game over.

Eric Sprott:  “I find it very ironic that the most volatile asset class these days is currencies.  This seems very strange with global stock markets just treading water here.  Yet we have currencies that are flailing all over the place, including the euro, yen, ruble, and the Canadian dollar.  It strikes me that we are living in a very bizarre financial world as the currency wars continue to rage with various governments and central banks.

Eric, I’ve always wondered, how do we deal with this one quadrillion dollars of derivatives?  These are tied to various instruments, including currencies.  We already saw what happened when the Swiss franc was revalued and companies went broke overnight.

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Jim Sinclair’s Commentary

Russia and China are not buying gold as an investment but rather as a policy. A policy is a form of a plan.

That plan has to do with the reset.

Therefore this move up might be the last hurray for the greenback.

Iran, Russia to create ‘joint bank’ for trade in national currencies – ambassador
Published time: January 28, 2015 03:24

Iran and Russia are planning to switch their bilateral trade to national currencies for which the states will create a joint bank or a mutual account, Iran’s ambassador to Russia, Mehdi Sanaei, has announced.

“Both sides plan to create a joint bank, or joint account, so that payments may be made in rubles and rials and there is an agreement to create a working group [for this],” Ambassador Sanaei told Sputnik on Tuesday.

“In order to do this, meetings need to be held between the deputy heads of the Central Banks of Russia and Iran,” Sanaei said. “I hope this visit will happen soon.”

Sanaei added that bilateral relations “are actively developing” and that 2014 was “a very fruitful year” for both countries.

Noting high tariffs on the exports of Iranian goods to Russia, Sanaei said that Tehran expects to sign an initial agreement with the Eurasian Economic Union in 2015.

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Jim Sinclair’s Commentary

Politics, you have to love it.

Damning report on banking collapse stalled until after UK election
Published time: January 27, 2015 15:41

The Financial Conduct Authority (FCA) has come under fire for delaying the release of a report into the crisis rescue of Halifax Bank of Scotland (HBOS) until after the general election in May.

Senior Labour politicians, bankers and financial regulators are expected to receive damning criticism for their role in the bank’s near-crash in 2008.

Originally scheduled for publication in April 2013, the deadline was pushed back to the end of 2013 last summer and is now unlikely to be published until September at the earliest.

Business Secretary Vince Cable attacked the delay, saying the employees who lost their jobs as a result of irresponsible management at HBOS deserve better.

This latest delay is believed to be caused by a procedure called “Maxwellisation,” named for 20th century British media mogul Robert Maxwell, whereby individuals facing criticism in an official report are allowed to respond before its publication.

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German Bond Auction a Disaster – Little Bid
Posted on January 28, 2015 by Martin Armstrong

Greek elections have dealt a serious blow to the confidence behind the Euro. The press has been touting the “official” position put out by Brussels to stay in their good graces. But this policy has resulted in serious misleading of the institutions who buy bonds. These people are starting to get worried. What happens if the Euro collapses? Many are just starting to comprehend this could lead to a whole other level of the crisis – we call BIG BANG.
The results of the BundesBank’s EUR2 bn 8/46 tap are now out and it was a complete disaster. The possibility a poor result and another technical failure is just starting to sink in. The results really were real bomb. The BundesBank took up a stunning 53.1% of the offer making this the most for any German auction going back to the beginning of the Euro. The total bids were only EUR1.2 bn with an average yield of 1.07%, which was by far a record low, down from 1.77% in October last year. We warned that the trade may be sell the German/buy American.

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Jim Sinclair’s Commentary

You can’t keep the bankers down. I think when buried, their coffins will need to nailed into the ground.

Subprime Bonds Are Back With Different Name Seven Years After U.S. Crisis
by Jody Shenn
6:35 PM MST
January 27, 2015

(Bloomberg) — The business of bundling riskier U.S. mortgages into bonds without government backing is gearing up for a comeback. Just don’t call it subprime.

Hedge fund Seer Capital Management, money manager Angel Oak Capital and Sydney-based bank Macquarie Group Ltd. are among firms buying up loans to borrowers who can’t qualify for conventional mortgages because of issues such as low credit scores, foreclosures or hard-to-document income. They each plan to pool the mortgages into securities of varying risk and sell some to investors this year. JPMorgan Chase & Co. analysts predict as much as $5 billion of deals could get done, while Nomura Holdings Inc. forecasts $1 billion to $2 billion.

Investment firms are looking to revive the market without repeating the mistakes that fueled the U.S. housing crisis last decade, which blew up the global economy. This time, they will retain the riskiest stakes in the deals, unlike how Wall Street banks and other issuers shifted most of the dangers before the crisis. Seer Capital and Angel Oak prefer the term “nonprime” for lending that flirts with practices that used to be employed for debt known as subprime or Alt-A.

‘Dirty Word’

While “subprime is a dirty word” these days, “what everyone is seeing is the credit box has shrunk so much that there’s a lot of good potential borrowers out there not being served,” said John Hsu, the head of capital markets at Angel Oak. The Atlanta-based firm expects to have enough loans for a deal next quarter in which it retains about 20 percent to 33 percent, he said.

Reopening this corner of the bond market may lower consumer costs and expand riskier lending, aiding the housing recovery. The most dangerous slices created from the securitization of loans are also the highest-yielding, offering companies from private-equity firms to real estate investment trusts a way to increase returns as global central banks suppress interest rates to foster economic growth.

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Jim Sinclair’s Commentary

Fatca, like sanctions, will backfire hard and be very costly to the USA as economic power seeks other venues and currency resets.

Russian Banks Cancel US Contracts Over Demands to Reveal Taxpayers’ Data
20:54 28.01.2015(updated 21:33 28.01.2015)

Russian banks have canceled contracts with their US clients because of the Foreign Account Tax Compliance Act (FATCA), the law that requires foreign banks to share information on US citizen’s banking activities. If a bank does not comply, it may be subject to a fine.

NOVOSIBIRSK, January 28 (Sputnik) — Russian banks have been forced to cancel contracts with their US clients due to the Foreign Account Tax Compliance Act (FATCA), law that requires foreign banks to provide information on US citizens’ banking activities, a senior Russian official said Wednesday.

The FATCA, which became law in 2010, requires foreign banks to report information on some US clients. If a bank does not comply, it may be subject to a fine. Moscow and Washington were negotiating a FATCA deal acceptable for both sides until March 2014, when the United States suspended the talks over the Ukraine crisis. “We could not put our national security under risk in this case, this is why a rule was adopted, under which every credit services organization may cancel the contracts with its clients, the US residents, and avoid FATCA regulations this way,” Deputy Director of Russia’s Federal Financial Monitoring Service Pavel Livadny told journalists.

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Is This Crisis About To Send The World Into Turmoil?
January 28, 2015

As the crude oil market continues to struggle and worries about Europe intensify, today one of the legends in the business sent King World News a warning about a developing crisis that could send Europe and the world into turmoil.

Portion of Art Cashin’s note today: Greek Markets In Turmoil – Things in Athens continue borderline chaotic.  The Greek stock market is down the equivalent of 2500 Dow points since Friday.  Here’s a nice synopsis from my friend Peter Boockvar over at the Lindsey Group:

Any thought of pragmatism from the newly elected Greek government is quickly being thrown out the window. But, when you elect Marxists, this I guess is what you get. Greek capital markets are under major stress again today as they are losing faith that the negotiated process from here on with debts and budgets will go smoothly.

The Athens stock market is down by another 8% and lower by 14% in just 3 days. Greek banks are down by 17-20% today alone. The 3 yr note yield is higher by 295 bps to 16.98% vs 10.1% as of Friday’s close. Greek 5 yr CDS is wider by 40 bps and has risen by 400 bps over the past three days. Alexis Tsipras held his first cabinet meeting today and pledged four priorities: 1)a return to dignity for the Greek people, 2)help the economy, 3)renegotiate Greek debt, 4)Get rid of corruption in government.

He also wants to bring back a higher minimum wage just when the Greek economy needs to get more competitive. He wants to hire more government workers just as they have too many and he wants to freeze plans for privatizations just as the private sector is most needed. With respect to what everyone is most focused on, debt renegotiations, Tsipras today said “we do not want an extreme catastrophic clash…we do not want to go to mutually assured destruction but we won’t continue being subservient.”

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Jim Sinclair’s Commentary

Major corporations rig the economic data figures and they get a pass. A kid boosts a car and gets blown away. Something is wrong with that equation.

Fired Before Hired: How Corporations Rigged The Job Market And Killed The American Dream
Submitted by Tyler Durden on 01/28/2015 18:04 -0500

The latest corporate scam is to blame workers for the high unemployment rate. They say there is a skills gap. Even President Obama is in on the joke. In his most recent State of the Union address, Obama called for Congress to make community college free. Because nothing will get you a job more than an associate’s degree from your local college.

The real skills gap is the other way around: too many skills for the low-wage menial jobs that pervade the labor market. The person who makes your coffee or your Big Mac might be able to design the next major bridge or write for The New York Times. Instead of high school kids cooking up your lunch, true professionals are behind the counter, and the future of the country is behind it too. The longer they stay there, the odds increase that America will take a permanent backseat in global power. In one short century, we have gone from superpower to super size me, a plutocracy, a nation that wasted its most valuable resource: the energy and innovation of its own people.

As you send your resume for the latest job ad, do you ever feel like the labor market is rigged against you? The job boards have turned into such black holes that we need Stephen Hawking to come work out the equations for us. You send your resume in, and it disappears.

In 2012, Eric Auld, an unemployed 26-year-old with a master’s degree in English, decided to find out what was on the other side of the black hole. He created a fake job ad as an experiment:

Administrative Assistant needed for busy Midtown office. Hours are Monday through Friday, nine to five. Job duties include: filing, copying, answering phones, sending e-mails, greeting clients, scheduling appointments. Previous experience in an office setting preferred, but will train the right candidate. This is a full-time position with health benefits. Please e-mail résumé if interested. Compensation: $12-$13 per hour.

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Greek Credit Risk Spikes, Default Probability Tops 70%
Submitted by Tyler Durden on 01/28/2015 10:14 -0500

Greek default risk has surged in recent days and today as it becomes clear what Syriza expects from Europe, short-term CDS are at post-crisis highs with 5Y CDS implying a 76% probability of default (based on standard recovery assumptions – which may be a little high in this case). Given the domestic bank dominance in the buying of domestic government debt,Greek banks are getting hammered as everyone’s favorite hedge fund trade is an utter bloodbath. Greek stocks overall are down and GGBs are tumbling once again – back at 16 month lows (given back all the ECBQE hope bounce). Perhaps not surprising moves, given new Greek Finance Minister Yanis Varoufakis reality-exposing comments yesterday, “the problem with the bailout is that it wasn’t really a bailout… it was an extend and pretend, it was a vicious cycle, a debt-deflationary trap, which destroyed our social economy.”

Greek Default Risk is spiking…

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And Greek bonds are tracking that risk…

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Jim Sinclair’s Commentary

No ticket = no shirt.

Ukraine still fails to pay gas bills in full — Gazprom
January 28, 12:30 UTC+3

VIENNA, January 28. /TASS/. Ukraine is still not paying gas bills in full, Gazprom Deputy CEO Alexander Medvedev said at the European gas conference in Vienna on Wednesday.

“Ukraine is still not paying bills in full in accordance with its contractual obligations,” he said.

Russian Prime Minister Dmitry Medvedev said on January 20 that Russia would honor its obligations in gas cooperation with Ukraine only if Kiev repaid its debts for natural gas supplies.

The premier instructed the Gazprom head to seek Kiev’s repayment of its gas debt currently at $2.440 billion and approved Gazprom’s corresponding letter for Ukraine’s Naftogaz national energy company.

“We proceed from the fact that these accords (with Ukraine on gas supplies) can be normally fulfilled only if the existing debt is repaid,” the premier said at a meeting with Gazprom CEO Alexey Miller and Energy Minister Alexander Novak.

Ukraine repaid $3.1 billion worth of gas debts before Gazprom restarted gas supplies to the ex-Soviet republic as part of a winter package agreed between Moscow and Kiev with the EU’s mediation in Brussels late last year, the Gazprom CEO said earlier. “But this is only a part of the debt,” he said.

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Posted at 12:25 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Like you said a couple of years ago, throwing Iran out of the SWIFT system was a big mistake. Now throwing Russia out would be a very great mistake.

CIGA Richard

If SWIFT gets weaponized, an alternative system is absolutely realistic’
Published time: January 28, 2015 04:33

While the West may try to slap Russia with more sanctions, the SWIFT banking payment system will try to stay out of political crossfire, economist Max Fraad Wolff told RT, adding that if it eventually gets weaponized, an alternative will emerge.

RT: Do you think Russia will be blocked from SWIFT, or is this just an idle threat?

Max Fraad Wolff: So far it seems like it is mostly talk. But this has been threatened. We have seen it come up a few times. The rumor mill suggests it came up around comments by VTB Bank and the folks associated with that large Russian bank in and around Davos. Obviously the Russian sanctions were a major conversational piece in Davos most recently. And we have seen the escalation of sanctions.

However, that move – cutting of Russian banks from the SWIFT system, maintained out of Brussels – would make life significantly more difficult for Russian businesses around the world and would likely occasion a very stern response from Russian banks and possibly the Russian government.

RT: We have also heard talk about Russia and China last year discussing plans to launch their own international payment system, possibly as a rival to SWIFT. How realistic is that?

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Jim,

Some people are worried about hyperinflation and some are worried about severe deflation. The two “Masters” in this discussion are Von Misus and Exter (developer of the Exter Pyramid).

Insofar as gold is concerned, it doesn’t really matter which scenario materializes.  They both will affect gold the same way, simply because the underlying fiat currency will be destroyed (Ron Paul).

The article below describes this very well.

Exter believed that a fiat money system would end up in a massive deflation, while von Mises believed it would end up in hyperinflation. I think Ron Paul’s suggestion to me one time is correct—that the difference between these two views is more a matter of semantics than of reality, because in the end, the currency or the currency system are destroyed in either event.

CIGA Wolfgang Rech

If Prices Are Collapsing, Then Why Is Gold Going Up?
Thursday January 22, 2015 16:19

Most people have been trained by the Keynesian propagandists to think of gold as just another commodity. Gold is not a commodity. It is money! And that is why, as anxiety increases now about the global monetary system, gold is on the rise even as commodities plummet.

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The inverted pyramid shown on your left is a concept created by the brilliant monetary economist named John Exter, who was a mainstream economist, Harvard professor and a Federal Reserve Board member. He was also a member of the elite Rockefeller-directed Council on Foreign Relations. And he was a friend of the great Austrian economist Ludwig von Mises. Exter reportedly had a constant debate with von Mises on the issue of inflation or deflation. Exter believed that a fiat money system would end up in a massive deflation, while von Mises believed it would end up in hyperinflation. I think Ron Paul’s suggestion to me one time is correct—that the difference between these two views is more a matter of semantics than of reality, because in the end, the currency or the currency system are destroyed in either event.

When the monetary system expands through fractional reserve banking, prices rise and the items at the top of the inverted pyramid rise most dramatically. Items at the top are speculative, get-rich-quick items and items of luxury, not items required for sustaining life.

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Dear Jim,

The investment of South Stream pipeline would have been fully paid for by Gazprom and would have benefitted economies like Bulgaria with a lot of revenue. Due to the brilliant politicians of the EU they have to pay for the gas pipelines themselves.

CIGA Richard

Gas supplies to bypass Ukraine from 2019 — Gazprom
January 28, 12:21 UTC+3

VIENNA. January 28. /TASS/. Re-directing Russia’s gas supplies to Europe bypassing Ukraine from 2019 is a decided matter and the European Union has little time to prepare sufficient infrastructure, Chairman of the Gazprom Board of Directors Viktor Zubkov said on Wednesday.

“Considering the decision made on re-directing supplies from 2019, European partners do not have so much time (for infrastructure preparation),” he said at the European gas conference in Vienna.

A decision to supply Russian natural gas via the Turkish route bypassing Ukraine was made by the country’s top political leadership, Zubkov said on Wednesday.

“The decision on the construction of the Turkish Stream gas pipeline was made by the country’s highest political leadership,” Zubkov said in reply to TASS’ question about whether the decision to supply gas bypassing Ukraine from 2019 was final. The Turkish Stream project will fully substitute the volume of gas currently pumped to Europe via Ukraine, he said.

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Posted at 5:22 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- Durable Goods Orders Contracted in Fourth-Quarter 2014, Both Before and After Commercial-Aircraft and Inflation Considerations
- Existing-Home Sales Declined in Fourth-Quarter 2014
- Trend of Unstable New-Home Sales Reporting Continued in Stagnation
- Consumer Liquidity Stresses Still Pummeling Residential Real-Estate Activity and Consumer Spending

“No. 690: December Durable Goods Orders, New- and Existing-Home Sales, Consumer Liquidity”
Web-page: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

There is a Bull hiding in the bushes. It is the junior gold shares that have recently been attacked and decimated by market terrorists. These algos and operators are no better than ISIS.

They attack at periods of weakness with the intention to kill, more than even profit They coordinate with internet trolls, and bloggers to beat the bushes in print while they wail away at the bid. When will you recognize that the trolls pretend to have your interest in mind when they do their evil deed?

Clearly they do not care about your welfare as they claim, unless they are self destructive, which they are not.

Investing is now full out war. No prisoners are taken. The tide is turning when the destroyers will be themselves destroyed. It has always been so in war.

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Jim Sinclair’s Commentary

I don’t think any of this is surprising.

1 in 3 on Disability Have Mental Disorder; 42.9% in D.C.
January 27, 2015 – 9:54 AM
By Ali Meyer

(CNSNews.com) – One in three, or 35.2 percent, of people getting federal disability insurance benefits have been diagnosed with a mental disorder, according to the latest data from the Social Security Administration (SSA).

Washington, D.C., the seat of the federal government, ranked in the top-ten list of states where disabled beneficiaries were diagnosed with mental problems.

In 2013, the latest data from SSA show there were 10,228,364 disabled beneficiaries, up 139,625 from 2012 when there were 10,088,739 disabled beneficiaries.

Disabled beneficiaries have increased 49.7 percent from a decade ago in 2003 when there were 6,830,714 beneficiaries; and the number is up 14.3 percent from the 8,945,376 beneficiaries in 2009, the year President Obama took office.

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Jim Sinclair’s Commentary

The government would fabricate? That is harsh.

Seven Consecutive Downward Reivisions To New Home Sales Data Place Serious Doubts On Report Accuracy
Submitted by Tyler Durden on 01/27/2015 10:17 -0500

You will pardon us if we don’t “buy” the latest attempt by the Census Department to telegraph housing euphoria with the just reported number of 481K new December home sales, a surge of 11.6% compared to November, an increase which was expected by the consensus to be only  2.7%. In fact, the 481K print is now the “highest” since June of 2008.

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The reason for our disbelief? Because as we have been tracking for the past 6, and now 7 months, every single such euphoric print since May of 2014 has been revised substantially lower after the fact (and after the headline-scanning algos promptly gobbled up stocks on the initial “beat”), and sure enough, the November print of 438K, was also just “revised” downward to 431K.

Putting today’s “highest in 7 years” new home sales print in context: consider that in May 2014 the same data series was originally reported at 504K… only to be revised to 458K!

In other words, there has now been 7 consecutive downward revision to the New Home Sales data!

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Jim Sinclair’s Commentary

Three CIGAs get even?

Trio of Suspects Ram SUV Into Wells Fargo Museum in San Francisco, Steal Gold Nuggets: Police
By Stephanie Chuang and  Lisa Fernandez

Three people wearing ski masks and armed with at least one gun robbed San Francisco’s Wells Fargo History Museum Tuesday morning after they rammed an SUV into the building and stole an undisclosed amount of gold nuggets.

The robbery took place at about 2:30 a.m. at 420 Montgomery St., where the front of the building was left with shattered glass and swarms of police officers surveying what happened and what was stolen, a police investigator told NBC Bay Area.

A dark Chevy Suburban was towed away just before 7 a.m. Officer Grace Gatpandan said that the three suspects had ditched the Chevy, their faces covered, and held the security guard at gunpoint before taking gold nuggets in the display case.

The trio made off in a second vehicle, described only as a four-door sedan. Gatpandan said she does not know if this getaway car was waiting for them with another driver inside, or if it was strategically parked somewhere. She says the Chevy was stolen from San Bruno.

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Jim Sinclair’s Commentary

Please note the size of the eaten spindle seems to shrink daily. Mr Beef claims innocence. I think a sign of shame is coming.

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Jim Sinclair’s Commentary

It is a zero sum game run by humans devoid of the humanity gene.

Evidence Grows Showing Wall Street as a Negative Economic Force
By Pam Martens and Russ Martens: January 27, 2015

Earlier this month, Jim Clifton, Chairman and CEO of Gallup, published a stunning indictment of Wall Street as a job creating engine. Clifton reported that the U.S. now ranks 12th among developed nations in business startups with countries such as Hungary and Italy having higher startup rates. Of equal concern writes Clifton, “American business deaths now outnumber business births.”

Clifton has a theory on why America’s crisis in creating new businesses is a well-kept secret. He writes:

“My hunch is that no one talks about the birth and death rates of American business because Wall Street and the White House, no matter which party occupies the latter, are two gigantic institutions of persuasion. The White House needs to keep you in the game because their political party needs your vote. Wall Street needs the stock market to boom, even if that boom is fueled by illusion.”

A key function of Wall Street is to bring promising new companies to market to ensure that the U.S. remains competitive in new industries and good jobs and innovation. This process is called Initial Public Offerings or IPOs. But the nation was put on notice as far back as 2001 that Wall Street was more snake oil salesman than the locomotive for new business launches. The largest investment banks were calling the startups they were peddling to the public on the Nasdaq stock market “dogs” and “crap” behind closed doors while lauding their virtues in publicly released “research” announcements.

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Posted at 1:40 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

Seriously important especially where mismatches financially are discussed.

“It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation.  With speculators massively short the now steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we’re seeing an abundance of what we call “leveraged mismatches” – a preponderance one-way bets, using borrowed money, that permeates the entire financial system.   With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch.”

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Putin Draws Line In The Sand As West’s Major Oil Companies Push For War
January 26, 2015

After back-to-back weeks of historic announcements that rocked the global markets, today a 41-year market veteran sent King World News an incredibly powerful piece that warns Russian President Vladimir Putin has drawn a line in the sand, as the West’s major oil companies are pushing for war.

By 41-Year Market Veteran Bill Haynes

January 26 (King World News) – Almost unreported in the United States is talk of shutting Russia out of the SWIFT banking payment system.  This would be the harshest sanction for Russia’s support of the separatist rebels in Ukraine.  SWIFT is the means by which banks move money around the world….

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Jim Sinclair’s Commentary

Relations with our ally in the Middle East go South. Is that logical under present circumstances?

Israel’s President Refuses To Meet With Obama
Submitted by Tyler Durden on 01/25/2015 22:29 -0500

While Obama is doing everything in his power to show that when it comes to commiserating with the Saudis, he is first in line, the US relationship with that “other” US ally in the region, Israel, is in a fast and furious state of “crash and burn.”

Recall, that it was yesterday when it was revealed that President Obama will forgo a visit to the Taj Mahal during his visit to India in order to pay respects in Saudi Arabia after the death of King Abdullah, the White House announced early Saturday morning. Vice President Biden was initially scheduled to lead the U.S. delegation, but he will instead now remain in Washington and Obama will add the stop onto his return from India, where Obama is concluding his trip to “foster economic ties with the nation.”

This, in turn, takes place a day after Obama announced he would not meet Israel’s prime minister when he visits Washington in March, the White House said on Thursday, after being blindsided by the Republicans’ invitation to Benjamin Netanyahu to address the U.S. Congress on Iran.

Bernadette Meehan, spokeswoman for the White House National Security Council, said Obama was withholding an invitation for Oval Office talks with Netanyahu because of Israel’s March 17 elections.

“As a matter of long-standing practice and principle, we do not see heads of state or candidates in close proximity to their elections, so as to avoid the appearance of influencing a democratic election in a foreign country,” Meehan said in statement.

“Accordingly, the president will not be meeting with Prime Minister Netanyahu because of the proximity to the Israeli election, which is just two weeks after his planned address to the U.S. Congress.”

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Jim Sinclair’s Commentary

How long do you really believe that China will stick to the peg? My take is not too long.

Chinese Currency Plunges To Peg Limit Against USDollar, Strongest Against Euro In 14 Years
Submitted by Tyler Durden on 01/25/2015 21:47 -0500

The drop in the Yuan over the past 2 days is the largest against the USDollar since Nov 2008 as USDCNY nears its highest (CNY weakest) since mid-2012. What is more critical is that for the first time since the new 2% CNY peg bands, USDCNY is trading at the extremes – 11.5 handles cheap to the fix. At the opposite end of the spectrum, the EURCNY just dropped below 7.00 for the first time since June 2001 with the biggest 2-day strengthening of the Chinese currency against the Euro in almost 4 years. It appears the consequences of ECB QE, SNB volatility, and now Greek concerns continue to ripple through the rest of the world.. and at a time when China faces its ubiquitous new year liquidity squeeze, that is not a good sign.

Biggest 2-day drop in the Yuan against the USDollar since 2008

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With USDNCY puishing against its 2% peg band for the first time…

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“Unambiguously Good”? Dallas Fed Collapses To 20-Month Lows As Orders Plunge
Tyler Durden on 01/26/2015 10:39 -0500

Who could have seen this coming? Well apparently all but one economist (TD Securties Greene and Mulraine had a -5.0 est) as the -4.4 print is almost a 4 standard deviation miss from extrapolator’s and hockey-stickers’ dreams. Following December’s drop and miss, the Dallas Fed Manufacturing index is now at its lowest since May 2013. All components dropped, apart from inventories as 11% of firms reported layoffs and wage pressures eased.

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Ugly…

Some of the details are extremely worrisome…

The shipments index plunged from 20.8 to 6, due to a much higher share of respondents noting a decline in shipments in January than in December.

Wage pressures eased, while input and selling prices declined in January. The raw materials price index came in at -1.7, its first negative reading in more than five years.

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The finished goods price index fell 11 points to -6.7, after posting positive readings during the past 17 months.

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Jim Sinclair’s Commentary

Will Chair Yellen panic? Yes!

Fear And Dread Of Deflation—-The Keynesian Big Lie At Work
by David Stockman • January 26, 2015

The fear of deflation has become the cornerstone of Keynesian economic thought. A lack of inflation has been used to explain periods of economic weakness from the Great Depression of the 1930’s, to the Great Recession 2008-2009. And now, that philosophy has been adopted as gospel by those that control the Federal Reserve and virtually every central bank on the planet. In reality deflation is cathartic, and a necessary condition to heal the economy. If deflation were allowed to naturally run its course, as it did in the brief Depression of 1920-21, depressions would be sharp but fairly short in duration. And the economy would find itself on firm footing fairly quickly. However, Keynesians view deflation as the source of a destructive cycle in which; asset prices plunge, companies cut jobs, spending plummets, and a permanent recession sets in. Therefore, the prevailing current view maintains that deflation is something that needs immediate intervention of massive monetary stimulus–you can say they have become deflation phobic.  This is why I find it fascinating that Keynesians, who proliferate in central banks and in the financial media, are relentlessly cheerleading the recent spate of deflationary data. And, just to be clear, deflation has not been limited to the New England Patriots’ footballs–it is everywhere you look.

However, it is the height of hypocrisy that Keynesians use the specter of deflation to frighten us into believing we need to endlessly dilute the value of our currencies and take the rate on our savings to zero percent. But then, at the same time, take every data point that points to falling prices as another reason to be bullish on markets and the economy. Their mantras are: Lower commodity prices–a boost to the consumer, plunging interest rates–an increase in mortgage refinancing, I actually heard a commentator suggest crumbling copper prices were a boon to minting pennies–he obviously didn’t realize pennies have been minted mostly with zinc since 1983.

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Jim Sinclair’s Commentary

Do you really believe that Chair Yellen is a hawk? Her time is coming, and I wager she is a dove big time.

2015: The global economy’s ‘sink or swim’ moment
By Alanna Petroff   @AlannaPetroff January 24, 2015: 2:48 PM ET
DAVOS, Switzerland (CNNMoney)

Let’s be blunt: The central banks have done all they can, and now it’s ‘sink or swim’ time for the global economy.

This week the European Central Bank unveiled a massive stimulus program — worth $1.3 trillion — to lift the region out of its economic malaise.

It was the latest in a long line of stimulus measures from central banks around the world. But it will only work if everybody else follows through.

European politicians and policy makers must now make decisive moves to increase productivity, investment and growth, which can involve reforming labor market rules, promoting entrepreneurship and tweaking tax codes.

“We all have a job to do,” said ECB member Benoit Coeure during a panel discussion on Saturday at the World Economic Forum in Davos. “We have done our part. Others have to do their part.”

The stimulus certainly buys more time for European governments to press ahead with economic reforms.

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Posted at 1:23 PM (CST) by & filed under Jim's Mailbox.

Jim,

I am sure this will not reflect negatively in the unemployment figure.

Miraculously they, the number crunchers, will overcome the down slide in employment.

CIGA Larry M.

International Business Machines Corp. (IBM) To Layoff Over 100,000 Employees
Forbes reports that IBM will be laying off 26% of its employees next week
By: Martin Blanc
Published: Jan 25, 2015 at 9:26 am EST

It has been reported that International Business Machines Corp. (NYSE:IBM) will be laying off 26% of its global workforce next week. According to Robert X. Cringely, a contributor at Forbes, IBM is set to launch a transformation project – code named “Project Chrome” – to reorganize the company,

The transformation has come after the company reported weak performance in its earnings result this week. In the fourth-quarter earnings for fiscal year 2014 (4QFY14), IBM posted declining revenue for the eleventh consecutive quarter.

IBM intends to improve its financial performance in the upcoming quarters. The project is deemed to help the company create new business units for Global Technology Services, Research, Security, Commerce, and Analytics.

Mr. Cringley warns customers and employees that the company will be making significant changes in its structure, and that not all of these changes will strike as good news. A little more than a quarter of IBM’s global employees are expected to be notified about their dismissal soon and will be unemployed by February. IBM’s mainstream and storage business are likely to see deep cuts. The figure comes to over 100,000 redundancies, much greater than the 10,000 and 1,700 layoffs in 2013. IBM followed a similar layoff program in 1993 when the company sacked around 60,000 employees.

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Jim,

Surely there must be a way to identify them. Back in the early 70s when I was interning at Piper Jaffray and Hopwood, the guy that handled all the borrowing of shares for short selling sat in an office a few feet away from me. I learned that there were (maybe the operative word is “were”) laws that required the borrowing of shares to be sold short AND that BROKERAGE FIRMS have records of ALL Fails To Deliver and WHO FAILED!!!!

Can’t we go after the FAILS???  It is FRAUD! There IS a record of WHO failed! If not the individual… then the company that handled the transaction. Couldn’t a class go after the firm that failed to enforce the delivery fail?

Just a thought.

CIGA Buz

Buz,

There are laws, but in today world who cares. You have to protect yourself. Nobody is going to do it for you.

Make sure your shares are not by mistake in your margin account even though you do not have any margin on them. Do certification or direct registration to be sure or remain at risk of loss of the opportunity gold shares offer.

Respectfully yours,
Jim

Posted at 2:03 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The financial business has become dangerous not only to financial but to mortal health.

“Cheerful” Dutch Financier Becomes 4th ABN Amro Banker Suicide
Tyler Durden on 01/24/2015 21:15 -0500

Following the deaths of 36 bankers last year, 2015 has got off to an inauspicious start with the reportedsuicide of Chris Van Eeghen – the 4th ABN Amro banker suicide in the last few years. As Quotenet reports, the death of Van Eghen  – the head of ABN’s corporate finance and capital markets -”startled” friends and colleagues as the 42-year-old “had a great reputation” at work, came from an “illustrious family,” and enjoyed national fame briefly as the boyfriend of a famous actress/model. As one colleague noted, “he was always cheerful, good mood, and apparently he had everything your heart desired. He never sat in the pit, never was down, so I was extremely surprised. I can not understand.”

As Niburu details, friends and colleagues were startled by the news that Chris van Eeghen had committed suicide.

He worked in Amsterdam for ABN / AMRO in the position of “head of syndicate and corporate finance markets.”

Again, there is again a familiar pattern, namely that there is no indication that Van Eeghen had plans to take his life.

Ostensibly a successful banker, coming from what was described as an illustrious family. Chris was also a familiar sight in Amsterdam’s nightlife scene and enjoyed national fame as possible new boyfriend of Tatjana Simic (a famous Croatian-Dutch model, singer, actress).

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Greece election: Radical Syriza party heading for big win
25 January 2015 Last updated at 14:56 ET

Anti-austerity left-wing party Syriza is heading for a substantial victory in Greece’s general election, official projections say.

The party is projected to win about 150 seats, just one short of an absolute majority, though officials say that number could change.

The ruling New Democracy party is projected to come a distant second.

Syriza’s Alexis Tsipras has pledged to renegotiate Greece’s debt arrangement with international creditors.

He has also vowed to reverse many of the austerity measures adopted by Greece since a series of bailouts began in 2010.

The result is being closely watched outside Greece, where it is believed a Syriza victory could encourage radical leftist parties across Europe.

Earlier, exit polls indicated that Syriza took between 36% and 38% of the total vote, with the ruling New Democracy party a distant second with 26%-28%.

Partial results from Greece’s election commission showed a clear Syriza lead.

‘Historic victory’

Syriza hailed the exit polls as “a return of social dignity and social justice”.

“What’s clear is we have a historic victory that sends a message that does not only concern the Greek people, but all European peoples,” spokesman Panos Skourletis told Greek television.

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Did We Just Get Confirmation That Economist John William’s Dire Prediction Is Now Unfolding
January 24, 2015

The last two weeks have been filled with historic announcements that have rocked global markets.  With that chaotic backdrop in place, just days ago economist John Williams issued a dire warning about the United States.  Remarkably, it appears that his ominous prediction may already be unfolding.

On Friday shares of UPS, which is one of the largest shipment and logistics companies in the world, plunged 10 percent.  What was even more worrying was the fact that Friday’s volume was 633 percent higher than the 200-day average volume.  During the panicked trading on Friday, a staggering 19.25 million shares of UPS traded hands (see massive red volume spike on the chart below).

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Jim Sinclair’s Commentary

Next MSM focus.

Conversation with Paul Craig Roberts: The Greek crisis
23.01.2015

Greece is in the grip of a very strong economic crisis trend for five long, eternal years. Like Argentina of the immediate post-dictatorship, so Greece has proved itself as a zealous student of the International Monetary Fund and ready to acknowledge its requests and economic recipes.

Those of the IMF and those of the European Central Bank. But the policies implemented by the government to rationalize the Greek state budget have produced results contrary to expectations. There was no economic recovery, no development, no balanced budget. The only growth was in the number of suicides, in that of the joblesses and miserable, in the number of bankrupt companies, in that of the Greeks emigrated abroad in search of a new future. Yet not one of “those who matter” really seems to consider the possibility of changing approach to the problem or at least soften their intransigence of thought.

The people? Indignant. What’s more, the heart fills with anger. Because we see what Greece is now but remember what she was, what she gave to Humanity.

What lessons can we draw from the Greek tragedy that unfolds before our eyes?

We asked Paul Craig Roberts to share with us some of his views on the subject, based on his past experience as economic adviser of the former US President Ronald Reagan.

Q) Dr. Roberts, could you briefly explain what is the supply-side economics that President Reagan sought to implement?

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Jim Sinclair’s Commentary

QE everywhere in the Global Economy even if it is called Monetary Stimulation.

Central bank prophet fears QE warfare Pushing World Financial System out of Control
by Ambrose Evans-Pritchard at The Telegraph • January 22, 2015

The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world’s financial system going into 2015.

Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well, corrupted by the leakage from quantitative easing (QE) in the West.

“We are in a world that is dangerously unanchored,” said William White, the Swiss-based chairman of the OECD’s Review Committee. “We’re seeing true currency wars and everybody is doing it, and I have no idea where this is going to end.”

Mr White is a former chief economist to the Bank for International Settlements – the bank of central banks – and currently an advisor to German Chancellor Angela Merkel.

He said the global elastic has been stretched even further than it was in 2008 on the eve of the Great Recession. The excesses have reached almost every corner of the globe, and combined public/private debt is 20pc of GDP higher today. “We are holding a tiger by the tail,” he said.He warned that QE in Europe is doomed to failure at this late stage and may instead draw the region into deeper difficulties. “Sovereign bond yields haven’t been so low since the ‘Black Plague’: how much more bang can you get for your buck?” he told The Telegraph before the World Economic Forum in Davos.

“QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market,” he said.

“Even after the stress tests the banks are still in ‘hunkering down mode’. They are not lending to small firms for a variety of reasons. The interest rate differential is still going up,” he said.

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Jim Sinclair’s Commentary

I would say it is a trend among those that are not enamored with the USA.

Iran Joins Growing List of Countries to Ditch Dollar in Foreign Trade
13:56 24.01.2015(updated 14:40 24.01.2015)

Deputy governor at Iranian Central Bank stated that Iran no longer uses the US dollar in foreign trade transactions, replacing it with other currencies.

MOSCOW, January 24 (Sputnik) – Iran no longer uses the US dollar in foreign trade transactions, replacing it with other currencies, the deputy governor at Iranian Central Bank told the Tasnim News Agency Saturday.

“In trade exchanges with the foreign countries, Iran uses other currencies, including Chinese yuan, euro, Turkish lira, Russian ruble and South Korean won,” Gholamali Kamyab told the news agency.

The official added that Iran was considering bilateral currency swap agreements, allowing partners to exchange one foreign currency for the equivalent in the other currency.

In early 2014, Justin Yifu Lin, the former World Bank Chief Economist, blamed the dominance of the US dollar for global economic crises and said it should be eliminated as the world’s reserve currency.

According to Lin, the solution would be to replace the national currency with a global currency.

Several countries have been avoiding the US dollar in foreign trade, including Russia, China, India and Turkey, often paying for products in gold or other agreed on currencies.

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Jim Sinclair’s Commentary

All three attendees are sick.

“Apocalyptic cold” gatecrashes Davos
John Gapper
Jan 25 11:34

Davos is full of security barriers and screening to keep out intruders who might threaten the world’s leaders of governments and companies, but one managed to sneak through without a badge – the common cold.

By the end of the week of events at the World Economic Forum, many of the attendees were complaining of a streaming nose, a cough, and a nasty headache. The “Davos apocalyptic cold” was how one sufferer described it darkly.

It turns out that frenetic networking at meetings and parties, complete with hand-shaking, back-slapping and kissing in the cheek carries perils as well as being good for the contact book. Once inside, the Davos cold spread, well, virally.

Perhaps it was rough justice for the one percent, gathered in tight proximity in an elite enclave. You can form an exclusive club all you like – but a virus can still gate crash.

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Jim Sinclair’s Commentary

Amazing broad-based economic recovery and job production.

More homeless camps are appearing beyond downtown L.A.’s skid row

Evicted four months ago from their Highland Park apartment, Louis Morales and his 18-year-old stepson, Arthur Valenzuela, live half-hidden by brush along the nearby Arroyo Seco riverbed.

Morales, 49, keeps a framed bible verse and a stuffed monkey in his tent. Water hauled by bike from a park heats up on the camp stove.

Next door, their friend Johnny Salazar fixes bikes and shattered computer screens on the cheap for people who live in the neighborhood. A brother and sister Morales has known for years live up the river, and three couples stay down by the bridge.

“Everybody here is from Highland Park,” Valenzuela said. “We don’t allow other people.”

Over the last two years, street encampments have jumped their historic boundaries in downtown Los Angeles, lining freeways and filling underpasses from Echo Park to South Los Angeles. The Los Angeles Homeless Services Authority, a city-county agency, received 767 calls about street encampments in 2014, up 60% from the 479 in 2013.

Some residents believe the city is exporting its downtown homeless problem to their neighborhoods. But social service agencies and volunteers say it isn’t that simple. They say that although downtown development and skid row cleanups are squeezing out some homeless people, many camps are filled with locals.

Soaring rents, closed shelters and funding cutbacks are pushing residents from neighborhoods such as Highland Park and Boyle Heights into the streets, where they cling to familiar turf.

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