Posted at 4:26 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- Booming GDP – Strongest Growth in More than a Decade Is Nonsense 
- Magnitude of GDP Revisions Suggests Unstable Data and Unusual Internal-Reporting Issues at Bureau of Economic Analysis 
- Basic Durable Goods Orders Slowed Sharply in Third-Quarter 2014, On Track for Fourth-Quarter Contraction 
- Home Sales Also Showed Patterns of Stagnation and Renewed Downturn

"No. 684: GDP Revision, November Durable Goods, New- and Existing-Home Sales" 


C.D.C. Ebola Error in Lab May Have Exposed Technician to Virus

A laboratory mistake at the Centers for Disease Control and Prevention may have exposed a technician to the deadly Ebola virus, federal officials said on Wednesday. The technician will be monitored for signs of infection for 21 days, the incubation period of the disease. A small number of other employees, fewer than a dozen, who entered a lab where the mistake occurred will also be assessed for exposure.

The error occurred on Monday when a high-security lab at the C.D.C. in Atlanta, working with Ebola virus from the epidemic in West Africa, sent samples that should have been inactivated to another C.D.C. laboratory, which was down the hall. But the lab sent out the wrong samples, ones that had not been inactivated and that may have contained the live virus. The second lab was not equipped to handle the live virus. The technician who worked with the samples wore gloves and a gown, but no mask, and may have been exposed.

The error was discovered on Tuesday.

The accident is especially troubling because dangerous samples of anthrax and flu were mishandled at the C.D.C. in June, eroding confidence in an agency that has long been one of the most respected scientific research centers in the world. The C.D.C. promised last summer to improve its safety procedures.


Jim Sinclair’s Commentary

The downtrend in the price of oil is not all good for the USA as Financial TV claims continually.

Oil Drillers Are Under Pressure to Scrap Rigs to Cope With Downturn
By David Wethe Dec 24, 2014 12:59 PM ET

Offshore oil-drilling contractors, who last year were able to charge record rates for their vessels, are now under pressure to scrap old rigs at an unprecedented pace.

The recent five-year low in oil prices is threatening an industry already grappling with a flood of new vessels and weakening demand. More than 200 new rigs are scheduled to be delivered in the next six years. That’s a 25 percent jump from the number currently under contract.

To cope, many rig owners will try to keep revenue up by culling older vessels to balance supply and demand.

“The older assets, particularly those built before the 2000 time period, are really less desired by the industry,” James West, an analyst at Evercore ISI in New York, said in a phone interview. Those vessels “are only causing the customer base to use those rigs against higher quality rigs to get pricing lower.”

Oil Prices

About 140 older rigs would need to be scrapped to make way for the new vessels scheduled for delivery by 2020, according to Andrew Cosgrove, an analyst at Bloomberg Intelligence. That pace would double the number scrapped in the previous six years and even eclipse the 123 vessels retired since 2000, according to data compiled by Bloomberg.

Booming offshore exploration earlier in the decade encouraged a flurry of rig orders. That’s now leading to a potential market crash in a global industry pegged to generate revenue of $61.5 billion this year. Low oil prices are compounding the problem, alarming investors.


Excited Puppy Starts To Dance After Spotting Its Owner
The Huffington Post | By Jade Walker

2015 Will Be A Year Of Surprise, Panic, Desperation & Radical Change

Today one of the greats in the business warned King World News that 2015 will be a year of panic, desperation, and radical change for the world.  He also said 2015 will be a year of surprises that will have an incredible impact not only people but also major markets and economies around the globe.

Egon von Greyerz:  “As we approach 2015 the world is on the cusp of a deflationary collapse.  Central banks around the world are fighting trying desperately keep their economies afloat.  Zero percent interest rates are no longer helping, so negative interest rates have been introduced in an attempt to create inflation….


Posted at 3:32 PM (CST) by & filed under

By Greg Hunter’s

Dear CIGAs,

Financial writer Bill Holter says the record stock market does not reflect reality.  Holter explains, “This will go on until it doesn’t.  Very quietly, this past week, they postponed the “Volcker Rules” for the banking system.  The reason they did that is they can’t allow the Volcker Rule to come into place.  That would require increased capital ratios.  It would bring mark to market back.  We live in a financial fantasy land, and they need to continue the fantasy to prevent collapse.”

The recent spending bill passed by Congress, which puts taxpayers on the hook for more than $300 trillion in future derivative losses, is another ominous sign financial trouble is coming.  Holter contends, “It tells me that they know something.  They know something we suspect, and they know something they don’t want to tell us.  They know a crash is coming and they are preparing.  For the Republicans to vote “yes” on this after they won a landslide election is throwing the voters under the bus.  People voted for change and we got change, but it was change into a greater direction of taxpayers being screwed.”

So, how long can this “financial fantasy” last?  Holter, who has more than 30 years experience on Wall Street and finance, says, “I have no idea.  I say I have no idea because I would have thought a complete credit contraction and collapse would have and should have already occurred.  The Federal Reserve with QE (money printing) and the Plunge Protection Team manipulating basically all markets have held it together.  It is being held together with confidence and confidence alone.  So, when will the wheels fall off of this thing?  It could be tomorrow morning; it could be January 5th, the first trading day of 2015.  It could be anytime, but it’s going to happen.”

On the new so-called trading “collars” on gold and silver prices, Holter says it is another tipoff on where the precious metals prices are going.  Holter thinks, “It’s to prevent a disorderly rise and not a disorderly collapse in prices.  How far can it go from here?  It is $6 to $8 below the cost of production.”


Posted at 2:34 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

I’m in India for Christmas. I have been coming to India for 30 years and never tire of it. I try and make an annual spiritual pilgrimage to refresh and rejuvenate.

Hope you’ve had a good year.

Below is a skit with a UK comedian and Max Keiser. Unfortunately it is all too true especially now that bail in has been legalized globally.

Have a wonderful Christmas and new year.

Best wishes,
CIGA Satya

Posted at 3:53 PM (CST) by & filed under In The News.

"Isolated"? China Officially Offers Help To "Irreplaceable Strategic Partner" Russia
Tyler Durden on 12/22/2014 12:12 -0500

Just a week ago we detailed how China was preparing to bailout Russia’s liquidity crisis via the 150 billion yuan swap line the two nations agreed in October. Today, as Bloomberg reports, we got confirmation as two Chinese ministers offered support for Russia. China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying; and Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia. The Global Times (mouthpiece for the Comunist Party) wrote in an editorial this weekend, "Russia is an irreplaceable strategic partner on the international stage." Isolated?

A week ago we noted the movements and tone from China suggested a ‘bailout’ was coming for Russia, and it appears the market is starting to realize that Russia is not so isolated…

It seems CNBC and the mainstream media are oddly quiet about the 31% surge in the value of the Ruble in the last 6 days…

Which is not entirely surprising as, for those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.



Bankers See $1 Trillion of Zombie Investments Stranded in the Oil Fields
By Tom Randall 2014-12-18T05:52:36Z

A disused mining machine is displayed in front of an oil sands extraction facility near the town of Fort McMurray, Alberta, Canada.

There are zombies in the oil fields.

After crude prices dropped 49 percent in six months, oil projects planned for next year are the undead — still standing upright, but with little hope of a productive future. These zombie projects proliferate in expensive Arctic oil, deepwater-drilling regions and tar sands from Canada to Venezuela.

In a stunning analysis this week, Goldman Sachs found almost $1 trillion in investments in future oil projects at risk. They looked at 400 of the world’s largest new oil and gas fields — excluding U.S. shale — and found projects representing $930 billion of future investment that are no longer profitable with Brent crude at $70. In the U.S., the shale-oil party isn’t over yet, but zombies are beginning to crash it.

The chart below shows the break-even points for the top 400 new fields and how much future oil production they represent. Less than a third of projects are still profitable with oil at $70. If the unprofitable projects were scuttled, it would mean a loss of 7.5 million barrels per day of production in 2025, equivalent to 8 percent of current global demand.


Exposing The Deception: How The US Economy "Grew" By $140 Billion As Americans Became Poorer
Submitted by Tyler Durden on 12/23/2014 11:12 -0500

This is simply stunning.

Regular readers will recall that last month, at the same time as the US Bureau of Economic Analysis reported was a far better than expected 3.9% GDP (since revised to 5.0% on the back of the previously noted Obamacare spending surge), it also released its Personal Spending and Income numbers for the month of October, or rather revised numbers, because as we explained exactly one month ago "Americans Are Suddenly $80 Billion "Poorer"" thanks to (upward) revised spending data and (downward) revised income. What this meant a month ago is that as a result of a plunge in the imputed US savings rate, some $80 billion in personal savings was revised away from the average American household and right into the US economy.

After all, something had to grow the US GDP by a massive amount in order to give the Fed the green light it needs to hike rates eventually, just so it can then ease when the global dry powders from all the other central banks is used up.

And sure enough, this is how just one month ago, personal income was revised lower…


… Even as personal spending was revised higher:


Jim Sinclair’s Commentary

The cold war can easily go hot.

Ukraine’s parliament ends non-aligned status, will work to join NATO

Moscow (dpa) – The Ukrainian parliament voted by overwhelming majority Tuesday to drop the country‘s non-aligned status, a major step toward joining NATO, local media reported.

The legislation was submitted by President Petro Poroshenko, who has promised to hold a referendum on NATO membership once the country fulfills conditions set by the Western military alliance.

The vote in favour of ending Ukraine‘s official neutrality, which had been adopted in 2010, had been expected. The step was agreed to by Ukraine‘s new governing four-party coalition, which took office earlier this month.

The coalition agreement includes aims for NATO membership, but Poroshenko has said it could take at least six years to meet demands set by NATO and the European Union.

More than 4,00 people have been killed in the fighting between pro-Russian rebels and government forces in eastern Ukraine. The crisis has set off alarm bells in Eastern European countries like Poland and the Baltic states, which also host big Russian minorities.

Moscow has condemned the eastern expansion of NATO for not taking into account Russian interests, and has warned against a Western monopoly on security in Ukraine and the broader region.


Posted at 12:47 PM (CST) by & filed under Jim's Mailbox.

Dear CIGAs,

For the second time in a week, on December 17, 2014, the OCC (regulator of nationally-chartered banks), issued a Press Release containing some pretty alarming statements regarding credit risk among U.S. banks. The Release, titled "OCC Highlights Key Risks Facing National Bank and Federal Savings Associations," described key findings from the OCC’s just-published, Semiannual Risk Perspective for Fall 2014 ("RP Report").

Highlights of the Press Release included:

"The [RP Report] noted declining revenues and profitability in OCC-supervised institutions contributed to the increasing credit risk within the banking sector."

"Competition for limited lending opportunities is intensifying, resulting in loosening underwriting standards, particularly in direct and indirect auto lending, leveraged lending, asset-based lending, commercial real estate lending, and commercial and industrial loans. Increased risk layering is also occurring in commercial loans."

"The prolonged low interest rate environment continues to lay the foundation for future vulnerability. Banks that extend asset maturities to pick up yield, especially if relying on the stability of non-maturity deposit funding in a rising rate environment, could face significant earnings pressure and capital erosion depending on the severity and timing of interest rate moves…"

"Many banks continue to re-evaluate their business models and risk appetites to generate returns against the backdrop of low interest rates."

This is an excellent illustration of Jim’s point that the Monetary Authorities always telegraph ahead of time what they’re intending to do. We have already seen broad-based Position Papers indicating that the next financial crisis will be met with "bail-ins" like in Cyprus, where bank depositors were considered junior creditors and suffered the worst of the losses. Now, we have a major bank regulator announcing twice in one week that credit conditions are beginning to look as bleak as they did in 2006.

The Monetary Authorities are not concerned with the effect these kinds of information releases have on the general public because the Authorities know an obedient, well-trained Mainstream Press will take the information no further. However, those of us who have learned to pay attention cannot afford to ignore these kinds of warnings.

The full OCC Press Release can be found at:

Sincerely yours,
CIGA Richard Belfanti



New Jersey is poor with equally poor finances. Now they are jumping on the "bail out" bandwagon. What are they thinking?

Looks like every major entity in the world will get bailed out of their fiscal irresponsibility… except the public!

CIGA Wolfgang

New Jersey to bail out Atlantic City with short-term loan
By Hilary Russ

Dec 23 (Reuters) – Atlantic City, New Jersey’s struggling gambling hub, will get a short-term $40 million loan from the state rather than try to borrow the money in the capital markets this year, a city official said on Tuesday.

Even the city’s originally planned $40 million note sale, now squashed, was itself a scaled back version of a larger bond issuance that was delayed amid uncertainty over the city’s next financial steps.

The city must repay the loan by March 31 at a 0.75 percent interest rate, according to the loan agreement, signed on Dec. 18 by Mayor Don Guardian and the state.

Atlantic City still hopes to issue at least $140 million of bonds in the first quarter of 2015, revenue director Michael Stinson told Reuters. That will help pay down property tax appeals won by casinos.


Posted at 9:22 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Do you think the EU has figured out they have committed financial suicide by sanctioning Russia?

UK, French, German Citizens Wish to See EU Policy More Independent From US
© REUTERS/ Emmanuel Dunand/Pool
16:02 19.12.2014(updated 16:50 19.12.2014)

MOSCOW, December 19 (Sputnik) — Forty-six percent of European Union citizens argue that the 28-member bloc should act more independently from the United States, while only 28 percent think that Brussels is independent enough in its actions, a poll conducted by ICM Research exclusively for the Sputnik news agency revealed. The ICM Research questioned over 3,000 people in Germany, the United Kingdom, and France. Telephone interviews with adults in the three countries were conducted in December 2014.
According to the poll, the vast majority of German citizens, 62 percent, think that Brussels should become more independent from Washington, while only 15 percent of Germans believe that the European Union has already been acting independently enough from the United States.



Philly Fed index falls to 24.5 in December
Published: Dec 18, 2014 10:05 a.m. ET

WASHINGTON (MarketWatch) — The Federal Reserve Bank of Philadelphia’s monthly index on regional manufacturers fell to 24.5 in December from 40.8 in November, which was the highest reading in almost 21 years, according to data released Thursday. Economists polled by MarketWatch had expected the Philly Fed gauge to pull back to 25 in December. Any reading above zero indicates that a net share of respondents saw an increase in the level of general business activity. Gauges of new orders and current shipments "weakened," and there was "deterioration" in the labor market, according to the report.


Russia Busts "Gold-Selling" Rumors, Reports It Bought Another 600,000 Ounces Taking Gold Holdings To New Record High
Submitted by Tyler Durden on 12/19/2014 09:40 -0500

Yesterday, when we reported the latest rumor of Russian gold selling, this time out of SocGen, we said that "it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before, "Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet" which also sent SocGen’s default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it."

Moments ago, as if to deter further speculation that Russia is indeed converting hard money earned from real resources for fiat paper, the Russian monetary authority made it quite clear, that at least in November, Russia not only did not sell any gold, but in fact bought another 600K ounces in the month of November.



So we can now add another 600K to Russia’s most recent holdings:



Posted at 11:48 AM (CST) by & filed under In The News.

China Prepares To Bailout Russia
Submitted by Tyler Durden on 12/17/2014 23:17 -0500

Earlier this evening China’s State Administration of Foreign Exchange’s (SAFE) Wang Yungui noted "the impact of the Russian Ruble depreciation was unclear yet, and, as Bloomberg reported, "SAFE is closely watching Ruble’s depreciation and encouraging companies to hedge Ruble risks." His comments also echoed the ongoing FX reform agenda aimed at increasing Yuan flexibility which The South China Morning Post then hinted in a story entitled "Russia may seek China help to deal with crisis," which which noted that Russia could fall back on its 150 billion yuan ($24 billion) currency swap agreement with China if the ruble continues to plunge, that was signed in October. Furthermore, two bankers close to the PBOC reportedly said the swap-line was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

As Bloomberg reported, earlier in the evening, China’s Wang Yungui noted




Adding that China plans sweeping reforms to promote FX flexibility.

And then The South China Morning Post hints,

Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge.

If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.

"Russia badly needs liquidity support and the swap line could be an ideal tool," said Bank of Communications chief economist Lian Ping.

The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the US dollar.

Two bankers close to the People’s Bank of China said it was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.


IMF Now Ready To Slam The Door On The U.S. And The Dollar [2014 = 7]
Submitted by Tyler Durden on 12/17/2014 – 22:25

This is it, folks; this is the endgame right in front of our faces. The year of 2014 is the new 2007, with all the negative potential but 100 times more explosive going into 2015. Our nation has wallowed in slowly degrading financial conditions for years, hidden by fake economic statistics and manipulated stock prices. All of it has been a prelude to a much more frenetic and shocking event. We expect a hailstorm of geopolitical crises over the next year to provide cover for the shift away from the dollar. Ultimately, the death of the dollar will be hailed in the mainstream as a “good and necessary thing.” They will call it “karma.” They will call it “progress.” They will even call it “decentralization” and a success for the free market. But it will not feel like a positive development for the American public, who will suffer greatly as the dollar crumbles.


Posted at 10:56 AM (CST) by & filed under Jim's Mailbox.

Dear CIGAs,

The Office of the Comptroller of the Currency ("OCC") issued a Press Release today entitled "Underwriting Standards Continue to Ease, OCC Survey Shows," that should be of significant interest to those of you who share Jim’s concerns about bail-in and the need to GOTS. The OCC is the federal regulator for nationally-chartered banks — the ones with N.A. after their names, like Bank of America, N.A., Citibank, N.A., JP Morgan Chase, N.A., etc.

The most pertinent statements I saw in the Release were as follows:

" ‘This year’s survey showed a continued easing in underwriting standards, with trends very similar to those seen from 2004 through 2006,’ said Jennifer Kelly, Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner."

"The underwriting survey showed national banks and federal savings associations (banks) continued to adapt to changing economic conditions and competition by adjusting underwriting. Examiners noted that banks have eased underwriting standards and increased levels of credit risk in response to competitive pressures, abundant liquidity, and desire for yield in the low interest-rate environment. Large banks, as a group, reported the highest share of eased underwriting standards. Leveraged loans, indirect consumer, credit cards, large corporate loans, and international loans experienced the most easing in standards and continued the trend from last year."

"Trends very similar to those seen from 2004 through 2006." If memory serves, that did not end particularly well.

The entire release is available at:

Sincerely yours,
CIGA Richard