Posted at 11:50 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The events of today brings the War of Terror to Canada.

Ottawa shooting: A day of chaos leaves soldier, gunman dead
Downtown Ottawa remains in lockdown as police conduct searches around parliamentary precinct
Posted: Oct 22, 2014 10:02 AM ET Last Updated: Oct 22, 2014 8:39 PM ET

Parliament Hill came under attack today after a man with a rifle shot and fatally wounded a soldier standing guard at the National War Memorial in downtown Ottawa, before seizing a car and driving to the doors of Parliament Hill’s Centre Block nearby.

The slain soldier is Cpl. Nathan Cirillo, 24, a reservist from Hamilton.

Moments later, MPs and other witnesses reported 30 to 50 shots fired inside the main Parliament building.

It was confirmed later the gunman was shot dead inside the building, felled by the House of Commons sergeant-at-arms and RCMP, according to MPs’ accounts.

Prime Minister Stephen Harper offered condolences for Cirillo’s family, and for the family of Patrice Vincent, another soldier who was killed in an attack earlier this week, in his brief statement.

"For the second time this week, there has been a brutal and violent attack on our soil," he said, adding an attack on Canada’s institutions are an attack "on our country, on our values, on our society, on us Canadians as a free and democratic people who embrace human dignity for all."

"But let there be no misunderstanding — we will not be intimidated, Canada will never be intimidated."

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Swiss gold referendum: Early opinion poll strikes fear
The first opinion poll regarding the Swiss gold referendum suggests the ‘Yes’ campaign has started in the lead.
Author: Lawrence Williams
Posted: Wednesday , 22 Oct 2014

LONDON (MINEWEB) – The first Swiss opinion poll regarding the country’s gold referendum, which takes place at the end of November, will have struck fear into the country’s establishment, giving those in favour of the changes a lead. The poll was taken before the Yes campaign has even presented its case to the people in any detail, which it will do in a press conference tomorrow. The establishment, on the other hand, is totally against the proposal, saying that the passing of the referendum would stifle the future financial management options of the country’s economic policy makers.

The poll proposal was started by Swiss People’s Party MP Luzi Stamm and two other MPs, with the 100,000 signatures required for a referendum obtained by early 2013. The Swiss People’s party is described as a national conservative and right-wing populist political party and is the largest party in the Federal Assembly, with 54 members of the National Council and 5 of the Council of States.

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Referendum results – chart from King World News

The key points to be put forward in the referendum proposals include repatriation of foreign held Swiss gold, a moratorium on selling future gold holdings and perhaps most significantly to purchase sufficient gold to bring the precious metal held up to 20% of the country’s gold and currency reserves from the current 7.7%. This latter aim would involve, according to the writer’s calculations, the purchase of nearly 1,650 tonnes of gold to bring the nation’s holdings to around 2,700 tonnes, which would put it in third place amongst the world’s gold holding nations. It is suggested that such a purchase programme could put a rocket under the gold price, even if phased in over several years.

There is obviously plenty of time left for the Swiss elite to try and put their case across but, as was seen in the runup to the Scottish independence referendum, if they don’t play the media right they could help the anti-establishment cause, rather than turn things around in their favour. In Scotland, the Yes vote for independence gained momentum according to the polls throughout the campaign, and the more that the establishment spelt out what they saw as the disadvantages of independence (the ‘No’ campaign) the stronger the ‘Yes’ campaign performed.  In the event the Yes campaign failed but the difference here is that it was coming from a long way behind, while in Switzerland it seems that its ‘Yes’ campaign may be starting as the front runner.

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Jim Sinclair’s Commentary

Hopefully this will lighten up a very dark day at least a bit.

Dog’s reaction to a walk.
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Cat’s reaction to a walk.
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Ottawa Shooter Identified As Canadian National Michael Zehaf Bibeau, Recently Designated A "High-Risk Traveller"
Submitted by Tyler Durden on 10/22/2014 17:27 -0400

Moments ago CBS News reported, citing Law enforcement and U.S. Government sources, that the shooter in today’s tragic Ottawa incident was Michael Abdul Zehaf Bibeau, born in Canada in 1982. One source says he sometime dropped the name Michael and went by Abdul Zehaf Bibeau. At other times he apparently dropped the Abdul. In a report from the Muslim Issue, Zehaf-Bibeau is said to be reportedly of Algerian descent.

Zehaf-Bibeau is the alleged shooter who killed soldier at the national War Memorial before entering the Centre Block and firing off more shots. Epoch Times reporter Matthew Little says that the shooter got as far as the library before Sergeant-At-Arms shot him dead.

Earlier, a Canadian parliament official described the gunman to BBC as looking “Arabian” with “long hair and a small beard.”

According to Montreal reporter Domenic Fazioli, Bibeau was arrested five times in the city. He has three possession charges dating back to 2004 (marijuana and PCP). His two other arrests were for parole violations.

Witnesses said they saw Bibeau wearing a black coat with blue jeans, reports CBC. The same report says gun used in the attack was a double-barrel shotgun. Alberta Labor Minister Ric McIver told the Ottawa Sun that Bibeau was driving a “brown Toyota Corolla with no license plate.” He added that the car “roared up the street and screeched to a halt.”

The Globe and Mail adds that he was recently designated a “high-risk traveller” by the Canadian government and that his passport had been seized – the same circumstances surrounding the case of Martin Rouleau-Couture, the Quebecker who was shot Monday after running down two Canadian Forces soldiers with his car.

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Terror grips Canada: Soldier shot, gunman reportedly storms Parliament
By Phillip Swarts – The Washington Times – Updated: 11:27 a.m. on Wednesday, October 22, 2014

A Canadian soldier was shot at the Ottawa National War Memorial Wednesday, and a gunman reportedly fled into the nation’s Parliament building, raising fears the attacks could be part of “lone wolf” campaigns being carried out by Islamic extremists.

A member of the Canadian parliament, Bernard Trottier, tweeted that a gunman had been shot and killed. Witnesses reported hearing gunfire inside Parliament Hill, which is under lockdown.

Witnesses said people fled the Parliament building by climbing down scaffolding that had been set up for renovations.

Paramedics took the wounded soldier away in an ambulance, and the soldier’s current condition is unknown.

The incident comes just two days after two Canadian soldiers were hit by a car in Quebec driven by a man with jihadist sympathies. One of them was killed.

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Saxobank CIO Warns "Another Shock Drop Is Coming.. And It’s Coming Soon"
Tyler Durden on 10/22/2014 11:35 -0400

Saxo Bank’s Chief Economist Steen Jakobsen is predicting another ‘shock drop’ in the markets within a few weeks. With debt and low inflation continuing to create a nervous atmosphere behind most markets, Steen argues that we will hit fresh lows in mid-November. Steen takes the view that central bank policy is creating a ‘fantasy land’ for investors and he points out that the recent ‘day dive’ in markets was a closer reflection of reality. Steen outlines his suggestions for trading ahead of another dip in mid November with targets for the S&P 500 around 1810 and the Dax at 8000 – 7800.Be long fixed income as it is "a free put on the equity market.. and the economic cycle is not yet ready to adapt to a rising interest rate."

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Jim Sinclair’s Commentary

An excellent article that speaks of why lower gold is not in the Federal Reserves best interest.

Richard Russell – Expect An Avalanche Of Fiat Money Creation

Today the Godfather of newsletter writers, 90-year old Richard Russell, warned that the world should now brace itself for the creation of a veritable avalanche of fiat currencies.  The 60-year market veteran also covered gold, silver, stocks, China, the U.S. dollar and more.

Russell: “In the early days of the US, the dollar was trusted. The reason it was trusted was that the dollar was backed by physical gold. Those were the days when the dollar was considered “good as gold.” The obvious reason was that a person could take his dollars into any bank, and exchange his dollars for gold.

This changed in 1933 when Americans were forbidden by law to own gold. As far as Americans were concerned, they were now dealing with paper and could no longer exchange their paper for gold.

So in 1933, Americans were no longer on the gold standard. But foreigners who were creditors of the US would settle their accounts in gold. If the US had a debt with a creditor, the creditor could settle his debt by calling in a quantity of gold.

This changed in 1971 when, in the face of an outpouring of US gold, President Nixon slammed the gold window shut. This took the US, both domestically and internationally, off the gold standard. The dollar was simply a piece of paper, comparable to Monopoly money. Following the US’ example, the rest of the world abandoned the gold standard.

Recently every nation has wanted a cheaper currency to aid in its exports. With almost all world currencies depreciating, money has flowed to the US dollar. This is because the US, alone, appears to have a thriving economy. Of course the strong dollar will retard US exports and make foreign goods appear to be bargains.

The strong dollar puts pressure on gold. So far gold has held up remarkably well in the face of world deflationary pressures and the collapsing price of oil. In the face of these global deflationary pressures, the question is – Will the Federal Reserve fight deflation by calling off its tapering and opening its money spigots wide?

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Posted at 11:16 AM (CST) by & filed under Jim's Mailbox.

Jim,

Governor of the Central Bank of China, Zhou Xiaochuan, speaks positive about Gold.

Excerpt:

…Gold market is an important and integral part of China’s financial market. We are now the largest gold producer, as well as the biggest gold importer and consumer in the world.

Click here to read the full article…

Wouldn’t catch Yellen doing that!
Thanks,
CIGA Perry

Posted at 1:46 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Good market comment based on the balance sheet of the Fed.

The Fed “IS” the Problem!
Bill Holter for Miles Franklyn

As I wrote yesterday, markets have become schizophrenic and volatility has exploded.  It is obvious the uncertainty regarding “QE” (monetization) is at the heart of this renewed volatility.  I do want to mention and remind you of past crashes and vicious bear markets, they ALL have seen big volatility (in both directions) prior to the collapse.  1929, 1987, 2000, 2008 …they all experienced big swings in the market prior to the big declines, this is what I believe we are experiencing now.

Before getting to my topic “the Fed IS the problem,” I want to remind you how we have gotten here.  Back in 2008, we had both fiscal and monetary stimulus as the policy response to dysfunctional markets and a shrinking economy.  You might remember Hank Paulson talking about his “bazooka” TARP plan while the Fed was lowering rates furiously and even lending $16 trillion secretly.  They threw the proverbial kitchen sink at the problems.  The problems did not go away nor were they fixed, they were only postponed.  The postponement date now seems to be upon us as the end of another QE nears …or another round must begin.  Can the U.S. Treasury pump more fiscal stimulus without spooking the bond market and exposing insolvency?  Who will buy another “1 off” stimulus plan?  If the answer is “no one” then it will fall solely on the shoulders of the Fed.  Do you see where this goes?

The Fed is literally backed into a corner.  They have to reflate the system yet they themselves are stretched more than any monetary entity in history.  They are levered at nearly 80 to 1.  This means the Fed can only withstand a 1.25% loss on total assets before their capital is wiped out.  I have a question for you, do you really believe the Fed has not ALREADY lost 1.25% on total assets?  Please remember, they “absorbed” the “crappy” assets after the 2008 debacle.  They were buying bonds from banks in order to get the assets off of the books of the banking system …so that the system itself could pretend to still be solvent.  Do you remember when some of these assets were offered for sale and the auctions immediately pulled because the bids were coming in UNDER .20 cents on the dollar?  Do you suppose on their entire book of business there actually is any equity left?

The answer of course is no, the Fed is most probably already insolvent and has been since their last white knight, “lender of last resort” exercise.  What I am trying to point at here is there cannot be another crisis like 2008 because there is no longer anything left big enough to reflate the system.  The Treasury doesn’t have the might and neither does the Fed.  Herein lies the problem, everyone has looked to the Fed since 2008 to save the system.  Everyone has relied on the Fed to create “the bid” so to speak, the saying “the Fed’s got your back” comes to mind.  But here they are with a severely crippled balance sheet, a history of 4 rounds of QE (plus the secretive $16 trillion) and …the markets are beginning to test them again.

Understand what I mean by “testing.”  The markets are throwing a temper tantrum and want “more” liquidity, can the Fed really do it?  Yes, technically yes they can but only by wrecking an already wrecked balance sheet.  The next question is what happens if it doesn’t work?  What happens if the selling does not abate?  What happens if the markets actually realize that QE has done very little to reflate the real economy and all of the accounting tricks have been used up?  What happens if speculators go on the attack and call the Fed’s bluff?  Who will step up and save the Fed?

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Russia Is Going On A Gold Reserve Buying Spree To Counteract Sanctions
Nigel Wilson, International Business Times
Oct. 21, 2014, 11:04 AM

Russia has increased its gold holdings in recent months as its economy feels the heat from the unresolved crisis in eastern Ukraine.

Amid declining relations with the European Union and the United States that could hurt its substantial dollar and euro reserves, Russia has instead focused on expanding purchases of gold bullion and the Chinese yuan currency.

Since Russia annexed the Black Sea peninsula of Crimea from Ukraine in March, drawing international condemnation and a raft of economic sanctions from Western powers, Russia’s gold reserves have soared beyond those of Switzerland and China. Its gold holdings stand at the highest level for more than two decades and are currently the fifth largest reserves in the world.

Its holdings increased to 35.769 million ounces at in August, according to International Monetary Fund data. By the same data, that would mean reserves have almost tripled since 2005.

The latest surge has coincided with a period of economic volatility, with Western powers restricting Russia’s access to global financial markets in response to Russia’s behaviour in eastern Ukraine. Sanctions have also targeted specific Russian companies and even entire sectors of the economy. A shaky ceasefire between pro-Russian rebels and government forces has held for weeks.

Yet, Moscow’s increased spending on gold in 2014 fits in with the country’s long-term investment strategy, according to Eugen Weinberg, head of commodities research at Commerzbank AG.

"Russia has been the largest official buyer for years," Weinberg told Bloomberg. "It’s part of a long-term strategy of amassing gold reserves and diversifying its foreign-exchange reserves."

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Posted at 4:14 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

With friends like these who needs enemies.

Saudi Arabia steps up beheadings; some see political message
By Angus McDowall

RIYADH (Reuters) – Immediately after his sword falls, the Saudi Arabian executioner steps backwards to avoid soiling his clothes with the blood of the condemned man, whose headless body can be seen slumping over backwards in the shaky online film.

After perfunctorily checking the white folds of his robe for flecks of red, the executioner wipes his blade with a tissue, which he drops onto the corpse and walks away.

A sudden surge in public executions in Saudi Arabia in the last two months has coincided with a U.S.-led bombing campaign against Islamic State. This has led to inevitable comparisons in Western media between Islamic State’s beheadings and those practiced in Saudi Arabia.

Defenders of the Saudi death penalty say beheadings, usually with a single sword stroke, are at least as humane as lethal injections in the United States. They deplore any comparison between the kingdom’s execution of convicted criminals and Islamic State’s extra-judicial killing of innocent hostages.

But rights activists say they are more concerned by the justice system behind the death penalty in the kingdom than by its particular method of execution. And critics of the Al Saud ruling family say the latest wave of executions may have a political message, with Riyadh determined to demonstrate its toughness at a moment of regional turmoil.

Saudi Arabia beheaded 26 people in August, more than in the first seven months of the year combined. The total for the year now stands at 59, compared to 69 for all of last year, according to Human Rights Watch.

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Jim Sinclair’s Commentary

I am sure that a revelation of the mayhem in metals and currency would at least equal what is known now.

Forex-Rigging Fines Could Hit $41 Billion Globally: Citi
By Richard Partington Oct 20, 2014 12:48 PM ET

Banks could have to pay as much as $41 billion globally to settle probes into allegations traders rigged benchmarks in the currency markets, Citigroup Inc. (C) said today.

Deutsche Bank AG (DBK) is seen as probably the “most impacted” with a fine of as much as 5.1 billion euros ($6.5 billion), Citigroup analysts led by Kinner Lakhani calculated, estimating the Frankfurt-based bank’s settlements could reach 10 percent of its tangible book value, or its assets’ worth.

Using similar calculations, Barclays Plc (BARC) could face as much as 3 billion pounds ($4.8 billion) in fines and UBS AG (UBSN) penalties of 4.3 billion Swiss francs ($4.6 billion), they wrote in a note first sent to clients on Oct. 3.

Authorities around the world are scrutinizing allegations that dealers traded ahead of their clients and colluded to rig currency benchmarks. Regulators in the U.K. and U.S. could reach settlements with some banks as soon as next month, and prosecutors at the U.S. Department of Justice plans to charge one by the end of the year, people with knowledge of the matter have said.

Spokesmen for Deutsche Bank, Barclays and UBS declined to comment on the Citigroup estimates.

The Citigroup analysts made their calculations using a Sept. 26 Reuters report that the U.K. Financial Conduct Authority settlements could include fines totaling about 1.8 billion pounds. They derived their estimates for how high fines could go in other investigations from that baseline, using banks’ settlements in the London interbank offered rate manipulation cases as a guide.

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One-third of working Americans support two-thirds of the population: The hidden figures of those not in the labor force and transfer payments.
Posted by mybudget360 in banks, debt, economy, government

There still seems to be little acknowledgement of the massive army of people now falling into the category labeled as not in the labor force. Some of this growth is predictable like many older Americans hitting retirement age. But this only explains a small portion of the change since many older Americans are needing to work much longer since they have paltry retirement savings. The unemployment rate dropping dramatically has largely been driven by this category expanding and labor force participation is at generational lows. You also have spending growing in the form of military, Medicare, and Social Security that are now eating up a larger portion of the budget. Deficit spending continues to occur in the face of a booming economy. Why? The math shows that one-third of private sector workers are supporting two-thirds of the population. We have over 92 million Americans that are now part of the not in the labor force category. Let us dig into the numbers even further since some tend to think this is only happening because of older baby boomers.

Not in the labor force demographics – not just old people

People tend to think that those in the not in the labor force category are largely older people. That is true but we’ve seen a large growth of those in their prime working years landing in this category. That is not a good thing. We’re also seeing more students go to college which is positive as long as you are not going into massive debt and are pursuing a quality education. Sadly, many are going into deep debt for a mediocre education.

Let us look at the not in the labor force category carefully:

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Source: BLS, Jobenomics Blog

This is a very high number of people not in the labor force. Nearly one-third of the country falls in this category. And what we find is more older people are making up a larger portion of the labor force.

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Jim Sinclair’s Commentary

It is about time that the bond market got a good taste of the "New Normal" algos have forced us to live with for years.

Seeking a Cause After 10-Year Treasury Bond’s Unnerving Move
By Peter Eavis
October 19, 2014 1:00 pm

During the turmoil in global markets on Wednesday, something happened that bond traders will not soon forget.

Soon after 9 a.m., the yield on one of the world’s most-traded bonds, the 10-year Treasury, went into a bizarre free fall. This particular Treasury note is tracked obsessively by Wall Street and is a reference for other interest rates across the wider economy. Investors see it as a haven in times of stress.

On Wednesday morning, stock markets in Europe were sliding, and fears about the strength of the global economy were building. After the Treasury market opened, the yield on the 10-year Treasury, which moves in the opposite direction of its price, plunged far below the 2.2 percent that it had closed at the day before. By 9:36 a.m. on Wednesday, it hit 1.9 percent. Then it snapped right back, and within 15 minutes, was again trading above 2 percent.

Such changes may seem small compared with other securities, but for the Treasury market, which usually moves incrementally, they were huge. The drop in the yield was similar to the move that occurred when Lehman Brothers collapsed.

The white-knuckle move by the 10-year Treasury continues to stun traders and investors. “If you are steeped in bond market lore, you will be telling your grandchildren about this move,” James A. Bianco, president of Bianco Research, said.

In some ways, the wild ride could be shrugged off as one of those inexplicable things that occasionally happen in markets. But the plunge in the Treasury yield could be a sign of structural weakness in the market. And this volatility caught the eye of Wall Street’s main regulator, the Federal Reserve Bank of New York. At an already-scheduled meeting on Thursday with representatives of Wall Street bond-trading firms, Wednesday’s movements in the Treasury market were discussed, according to two people who were briefed on the proceedings but spoke on the condition that they not be identified because they were not authorized to speak about the meeting.

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Jim Sinclair’s Commentary

An insightful comment on IBM’s miss on earnings.

The Canary In Big Blue’s Mainframe: Why IBM’s Q3 Bust Marks A Turning Point
by David Stockman • October 20, 2014

IBM has long been a poster boy for the untoward effects of central bank financial repression. For most of this century the once and faded king of tech has been in a modality of slow liquidation, leveraging up its balance sheet with cheap debt to fund stock buybacks, dividends and accounting-driven two-bit M&A deals. This morning that destructive strategy-pursued by two incompetent CEOs in a row-came to a thundering crash.  IBM is now down by 7% and deserves to go far lower.

Perhaps even the robo-traders have had enough-given that IBM reported its 10th straight quarter of negative revenue growth, a $4.7 billion write-down of its chips business and a huge 12% miss on even the street’s phony “ex-items” earnings number. But the canary in Big Blue’s mainframe was undoubtedly one simple thing, as Zero Hedge cogently noted:

“…..the buyback “strategy” finally hit a brick wall.”

After repurchasing an average of $6 billion shares during each of the past three quarters, buybacks dropped to only $1.7 billion in Q3. And the latter marked the lowest anualized repurchase rate since 2009. Likewise, for the first time in 10 quarters IBM’s net debt also stopped growing.

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But the dismal charts above are only the most recent manifestation of IBM’s self-liquidation. During the 31 quarters since the end of 2006, IBM has spent $111 billion on share buybacks and another $23 billion on dividends. And it goes without saying that this staggering total of $134 billion, which was pumped into the coffers of the fast money traders who rent Big Blues shares and the mutual fund and institutional investors who index them, did accomplish wonders for its stock price. The latter vaulted in nearly a perfect chart climb from $100 to $200 per share before it recent slide.

Here’s the fly in the ointment, however. During this same nearly eight year period, IBM reported net income of only $107 billion. So its paid out 125% of its earnings to shareholders—-and not just for a brief interval when it was deciding on a new business model after its historic hardware business went flat.

In fact, it’s new business model amounted to eating its tail. During the period when it was spending $134 billion on buybacks and dividends it invested just $33 billion in CapEx compared to about $40 billion in DD&A.  In other words, to fund its shareholder distributions and petty M&A deals it was stealing from its depreciation accounts, as well.

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Posted at 2:17 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

A step at a time on a path that will not be diverted from.

Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves
by Simon Black on October 17, 2014
New York, USA

At present, US dollar accounts for roughly 61% of the world’s foreign exchange reserves.

It’s still a safe bet for most, not because the currency is actually strong, but because so many others are already so reliant on it.

Between those with reserves in and pegs to the US dollar, many countries have given their allegiance, and now have a vested interest in the health of the currency.

Due to this common interest, a sort of unofficial, involuntary alliance has been formed between them all.

Together, they’re all playing along, pretending that everything is fine. If the dollar collapses, they’re all screwed, so they’ve got to get each other’s backs.

From the throne of the world’s reserve currency, the Federal Reserve, with the power to print the US dollar, feels dangerously omnipotent.

They can get away with just about anything. For now.

The central bankers get to print dollars and spend them at current prices, before the stuff hits the wider market and diminishes its overall value.

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Jim Sinclair’s Commentary

The IMF war is costly?

Pavel Klimkin: assistance of promised $30 billion insufficient for Ukraine
October 18, 13:48 UTC+4

BERLIN, October 18. /TASS/. Ukraine requires bigger financial support than the $30 billion, which the West promised to Kiev in loans, Ukraine’s Foreign Minister Pavel Klimkin said in an interview with Germany’s Wirtshaftsvohe, published on Saturday.

“Our position is the reduction of GDP will make between seven and eight percent. I believe we shall require much bigger financing,” he said.

The Ukrainian foreign minister explained, enterprises in the Donetsk and Lugansk regions were not working, and consequences from a situation like this could not have been forecasted in spring, where the international support to Kiev was discussed.

In late April, the IMF adopted a two-year credit programme of $17.01 billion to finance Ukraine’s economy. The first tranche of $3.19 billion was transferred in early May. The total financing by IMF, the World Bank, other financial institutions and countries is expected to make $30 billion.

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Jim Sinclair’s Commentary

Part of the dollar value equation

Russia, Ukraine reach agreement on Ukraine’s debts repayment – Gazprom CEO
October 17, 22:10 UTC+4

“Progress has been reached on all key issues to resume gas supplies to Ukraine", Alexei Miller, said on Friday

MILAN, October 17. /TASS/. Russia and Ukraine have reached progress on key issues of gas supplies to Ukraine, including repayment of debts, CEO of Russia’s gas giant Gazprom, Alexei Miller, said on Friday.

“Progress has been reached on all key issues to resume gas supplies to Ukraine: repayment of the current debt of 1.450 billion U.S. dollars, repayment of an overall debt of 3.1 billion U.S. dollars by the yearend, advance payment for monthly gas supplies, and a price of 385 U.S. dollars,” he said.

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Jim Sinclair’s Commentary

And with flights still coming, perhaps we are too.

‘We’re a floating petri dish’: Panic onboard the ‘Ebola cruise’
When a woman who had worked in an Ebola laboratory was found to be travelling on a Caribbean cruise ship, panic ensued, writes Nick Allen and Rob Crilly
By Nick Allen, Dallas and Rob Crilly
5:32PM BST 18 Oct 2014

It was supposed to be an escape to the Caribbean sunshine for a week of partying, relaxation, and sipping champagne while watching gorgeous sunsets from the decks of a luxury cruise ship.

But four days after the Carnival Magic set sail from Galveston, Texas rumours began swirling that all was not well on board.

The ship, complete with a swimming pool, an array of water slides, and a giant cinema screen, inexplicably stopped off the coast of Belize and the whispers began.

"The rumours were going round – we were stuck in the mud. Someone’s been kidnapped," said one passenger.

As the theories got wilder over the clink of cocktail glasses at the bar, no-one imagined they were actually about to be at the centre of an international Ebola scare.

Finally, the captain confirmed on the loudspeaker that, among their number, was a woman who worked as a lab supervisor at Texas Health Presbyterian Hospital in Dallas.

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Jim Sinclair’s Commentary

Fear of Ebola could be worse than Ebola itself.

Nassim Taleb: Here’s What People Don’t Understand About Ebola
Shane Ferro
Oct. 17, 2014, 4:43 PM

Multiplication — that’s what people don’t understand about Ebola, according to Nassim Taleb, the author of "Fooled by Randomness" and "The Black Swan."

More specifically, Taleb explained to Business Insider that many people talking about the disease don’t "have a grasp of the severity of the multiplicative process."

The argument that the US should be more worried about a disease like cancer — which has more stable rates of infection than Ebola does currently — is a logic that Taleb calls "the empiricism of the idiots."

The basic idea: The growth rate of Ebola infection is nonlinear, so the number of people catching it doubles every 20 days. Because of this, you have to act quickly at the source of infections, he says. "The closer you are to the source, the more effective you are at slowing it down … it is much more rational to prevent it now than later."

The problem Taleb sees is that if there is not more urgent action in Liberia, Sierra Leone, and Guinea — to the point of restricting travel and other measures that may now seem like an overreaction — then there will be consequences here.

"If you have to overreact about something, this is the place to overreact," he said.

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Posted at 3:11 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- Third-Quarter 2014 Economic Growth Slowed Sharply 
- Long-Term Stagnation in Housing Starts Continued at Low Level of Activity 
- Social Security COLA Should Notch Slightly Higher from Last Year’s Adjustment, Remaining Far Shy of Common Experience

"No. 667: September Housing Starts, Prospective Third-Quarter GDP " 
Web-page: http://www.shadowstats.com

Jim Sinclair’s Commentary

We might give this logical idea a try.

Belize refuses entry to cruise ship carrying Texas hospital worker who may have handled Ebola victim’s specimen
Lindsey Bever and Fred Barbash, Washington Post | October 17, 2014 | Last Updated: Oct 17 9:01 AM ET

A Texas health-care worker who “may have” handled lab specimens from Ebola victim Thomas Eric Duncan has been isolated in a cabin on board a commercial cruise ship in the Caribbean, according to U.S. Department of State. And Belize Coast Guard won’t let the vessel or any of its thousands of passengers into port.

The Texas Health Presbyterian Hospital employee and a partner boarded the ship Oct. 12 in Galveston, Tex., before the U.S. Centers for Disease Control and Prevention updated the requirement for active monitoring, the State Department said in a statement. Although the worker is showing no symptoms of the disease, the U.S. government is working with the cruise line to get the ship back to America “out of an abundance of caution.”

The employee, who has not been named, did not come into direct contact with Duncan, the first patient diagnosed with Ebola in the United States. However, he or she may have been exposed to his clinical specimens.

“It has been 19 days since the passenger may have processed” Duncan’s fluid samples, State Department spokeswoman Jen Psaki said in a statement Friday morning. “The cruise line has actively supported CDC’s efforts to speak with the individual, whom the cruise ship’s medical doctor has monitored and confirmed was in good health. Following this examination, the hospital employee and traveling partner have voluntarily remained isolated in a cabin.”

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Jim Sinclair’s Commentary

Anna having lunch in the office.

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U.S. Stock Futures Jump on Speculation of More Stimulus
By Sofia Horta e Costa  Oct 17, 2014 8:28 AM ET 

Oct. 17 (Bloomberg) — Strategas Chief Investment Strategist Jason Trennert discusses the global selloff and his investment ideas on “Bloomberg Surveillance.” (Source: Bloomberg)

U.S. stock-index futures rallied on speculation central banks will support economic growth with more stimulus, while Morgan Stanley and General Electric Co. reported better-than-estimated profits.

Futures on the Standard & Poor’s 500 Index (SPX) expiring in December advanced 1.2 percent to 1,872.40 at 8:12 a.m. in New York. The S&P 500 is down 2.3 percent this week, heading for a fourth week of losses. Contracts on the Dow Jones Industrial Average gained 152 points, or 0.9 percent, to 16,167 today.

“The market was clearly oversold and today’s gains are just a rebound,” said Virginie Robert, co-founder of asset-management firm Constance Associes in Paris. “Central banks can provide more support but they can’t do everything. A good earnings season could give us the confidence that the market needs.”

The European Central Bank will start “within the next days” to purchase assets in the new program to support the economy, Benoit Coeure, an executive board member, said today in Riga. St. Louis Federal Reserve Bank President James Bullard said yesterday policy makers should consider delaying the end of bond buying.

The S&P 500 has tumbled 7.4 percent since a record in mid-September on concern a global slowdown will hurt the American economy just as the Fed weighs when to raise interest rates. Pressure is mounting for European Central Bank stimulus such as government-bond purchases as the 18-nation euro area struggles to rebound from a sovereign debt crisis and subsequent austerity measures.

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Jim Sinclair’s Commentary

Every step forward for the Chinese currency is a long term step backwards for the dollar.

Britain issues western world’s first sovereign RMB bond, largest ever RMB bond by non-Chinese issuer
First published: 14 October 2014

The UK government has today successfully issued a sovereign bond in China’s currency, the renminbi (RMB), becoming the first western country to do so and issuing the largest ever non-Chinese RMB bond.

The RMB 3 billion bond, which is equivalent to approximately £300 million, has a maturity of 3 years and delivers on the Chancellor’s announcement at the recent annual UK-China economic summit in London that the government intended to issue an RMB bond.

It is the world’s first non-Chinese issuance of sovereign RMB debt and will be used to finance Britain’s reserves. Currently, Britain only holds reserves in US dollars, euros, yen and Canadian dollars, so today’s issuance signals the RMB’s potential as a future reserve currency.

The bond issuance, which saw strong demand from investors, also further cements Britain’s position as the most important RMB market in the western world, and represents the next step in the government’s long term economic plan to establish Britain as the centre of global finance.

Chancellor George Osborne said:

The UK government’s sovereign renminbi bond issue, the first by a Western country, has been a great success and will deliver value for money to taxpayers.

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MARKET BLOG: Singapore Exchange meets demand for physical gold
BY DAVE LEVENSTEIN, OCTOBER 16 2014, 13:28

The big news of the week, which went unnoticed by the mainstream media, was the launch of the new gold kilogram bar contract by the Singapore Exchange.

The new Singapore Kilobar Gold contract is for 25kg of 99.99% pure gold and began trading on the Singapore Exchange on Monday, introducing centralised trading and clearing of a physically delivered gold contract in Singapore.

The contract is the result of collaboration between International Enterprise Singapore, the Singapore Bullion Market Association, the Singapore Exchange and the World Gold Council.

Asia’s incessant demand for physical gold is the biggest driver for the implementation of a new gold contract trade on the Singapore Exchange. The move comes after the Singapore government in 2012 exempted investment in precious metals from a 7% goods and services levy.

Meanwhile, the Shanghai Gold Exchange was launched in September inside the city’s free-trade zone, offering yuan-denominated contracts backed by gold held in Shanghai.

Furthermore, the recent rally in the dollar is unjustified by the economic fundamentals and will not be sustainable in the long term. Gold, therefore, remains a crucial portfolio diversifier for the potential dangers ahead.

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Before Ebola, New Czar Handled Political Crises
By JULIE HIRSCHFELD DAVISOCT. 17, 2014

WASHINGTON — Ron Klain wanted Senator Joseph R. Biden Jr. to prepare for the worst.

So as he coached Mr. Biden through weeks of preparations for his vice-presidential debates in 2008, he assembled a notebook filled with questions — and calculated the precise percentage chance that each one would be asked.

“Ron could anticipate the questions to be asked of the candidate within a range of about 95 percent,” said Tom Donilon, President Obama’s former national security adviser and Mr. Klain’s partner during that round of debate preparations.

Now Mr. Klain, named on Friday by the president to be the administration’s Ebola response coordinator, will have to put his knack for anticipating worst-case scenarios to work on what has rapidly become not just a public health mess for the White House, but a political one.

A seasoned crisis-response operative and veteran of Democratic administrations and campaigns, Mr. Klain, 53, is charged with managing the federal efforts to monitor and contain the deadly virus that has touched off a wave of anxiety in the United States and raised questions about the competence of Mr. Obama’s administration.

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Posted at 6:06 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’ www.ShadowStats.com.

- Third-Quarter Production Growth Slowed Sharply 
- Falling Auto Production in September More than Offset by Defense Industry Output, Oil and Gas Production and Weather-Related Utility Surge

"No. 666: September Industrial Production" 
Web-page: http://www.shadowstats.com

 

HFT Firm Athena Engaged In Massive Closing Price Manipulation, Called It "Gravy"
Tyler Durden on 10/16/2014 14:12 -0400

Another day, another HFT firm busted for manipulating the market. Today’s participant: Athena Capital, which did what every other algorithmic, HFT firm does – rig the market of course, but at least it had a sense of humor about it: Athena called the market-rigging algorithm that "manipulated the closing prices of tens of thousands of stocks during the final seconds of almost every trading day during the Relevant Period" by the very amusing name "Gravy." But remember: HFTs are really your friend – they just provide liquidity and stuff.

From the filing:

Athena, an algorithmic, high-frequency trading firm based in New York City, used complex computer programs to carry out a familiar, manipulative scheme: marking the closing price of publicly-traded securities. Through a sophisticated algorithm, Athena manipulated the closing prices of thousands of NASDAQ-listed stocks over a six-month period.

Between at least June through December 2009 (the “Relevant Period”), Athena made large purchases or sales of the stocks in the last two seconds before NASDAQ’s 4:00 p.m. close in order to drive the stocks’ closing prices slightly higher or lower. The manipulated closing prices allowed Athena to reap more reliable profits from its otherwise risky strategies. Internally, Athena called the algorithms that traded in the last few seconds “Gravy.”

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GEAB N°88 is available! Global systemic crisis – 2015: The world is defecting to the East

Two important facts emerge from the past four weeks’ news. First, China is becoming the world’s largest economic power, officially overtaking the US, based on GDP measured in purchasing power terms (IMF figures) of $17.61 trillion (compared to $17.4 trillion for the US). If the official media hasn’t raised the slightest eyebrow to this information, our team believes that it’s an historic event: the US is no longer the world’s largest economic power and, inevitably, that changes everything !…

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Jim Sinclair’s Commentary

You can never take gold out of India’s traditions.

Gold imports soar 450% in India
Imports at a new high; September trade deficit widens on gold imports.
Author: Shivom Seth
Posted: Wednesday , 15 Oct 2014

Mumbai (Mineweb) – The Indian government has been proved right once again in not lifting its curbs on gold. Trade deficit has widened the most in 18 months, as imports of the precious metal have surged.

Gold imports jumped about 450% to a new high of $3.75 billion in September (versus $682.5 million y/y). In August 2014, gold imports stood at $2.04 billion.

This as the trade deficit widened to $14.25 billion in September, from $10.84 billion a month before.

Falling inflation might just not be enough, say trade experts. With a muted export performance in September, the trade figures have raised concerns of worsening external account, especially if the global economy continues to remain sluggish.

Exports rose 2.73% in September to $28.9 billion, while merchandise imports climbed nearly 26% year-on-year to $43.2 billion, according to data released by the commerce department. While gold and oil have pushed the import bill up by 26%, exports rose a mere 2.73% in September.

During the April-September period, exports stood at $163.70 billion as compared with $153.75 billion during the corresponding period of the last fiscal. Imports were at $234.10 billion as compared with $230.48 billion last year.

Former finance minister P Chidambaram has also been proved right, yet again. He had vocally advocated against lifting the curbs on gold imports at a recent event, maintaining that the benefits accruing from restrictions would far outweigh problems like the spurt in gold smuggling.

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Jim Sinclair’s Commentary

Our newest import.

Nurses: We Were Told to Call Authorities for Ebola Protocol

A statement from National Nurses United on the treatment of Dallas Ebola patient said that “nurses were asked to call the Infectious Disease Department” to learn the policies on how to treat Duncan. 

The statement, which was played in its entirety on CNN on Wednesday morning, also reports that Ebola training at the hospital was “optional,” “nurses have been left to train each other,” and that nurses who interacted with Duncan simply continued treating other patients.

According to the statement, “there was no advanced preparedness on what to do with the patient. There was no protocol, there was no system. The nurses were asked to call the Infectious Disease Department. The Infectious Disease Department did not have clear policies to provide either.”

The union added that “advanced preparation that had been done by the hospital primarily consisted of e-mailing us about one optional lecture or seminar on Ebola.  There was no mandate for nurses to attend training or what nurses had to do in the event of arrival of a patient with Ebola-like symptoms.”  And “there was no hands-on training on the use of personal protective equipment for Ebola, no training on the symptoms to look for, no training on what questions to ask.” 

The statement further says that trainings that took place after Duncan was diagnosed were “limited,” and did not include training on how to avoid contamination for all nurses.  The union says “nurses have been left to train each other.  Nurses have substantial concern that these conditions may very well lead to further infections of nurses or other patients.”

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Ebola-infected nurse’s dog quarantined at decommissioned US naval base
One-year-old King Charles Spaniel named Bentley has been given comfortable bedding, toys and room to run around
Guardian staff and agencies
theguardian.com, Wednesday 15 October 2014 15.26 EDT

While his owner, Nina Pham, remains hospitalized with Ebola, a one-year-old King Charles Spaniel named Bentley has been temporarily moved to a decommissioned naval air base in Dallas, city officials said.

Bentley has been given comfortable bedding, toys and plenty of room to run around at the former residence of the executive officer at the decommissioned Hensley Field, city spokeswoman Sana Syed said Tuesday.

Bentley was moved Monday from Pham’s apartment to his new home, where he’ll be monitored for 21 days. Syed has been providing updates via social media on Bentley’s care after Dallas Mayor Mike Rawlings vowed to do everything in their power to care for the Texas nurse’s beloved pet.

The Dallas animal shelter, which is caring for Bentley, said on Wednesday he was “bright and alert … Looking good and happy to see us.”

Dallas city hall posted a video of Bentley in his temporary home on their YouTube channel:

There was an uproar in Spain after Madrid authorities euthanized a dog belonging to a nursing assistant sickened by Ebola. Authorities were concerned the dog might be harboring the virus.

The US Centers for Disease Control and Prevention says there have been no reports of pets spreading Ebola to people or other animals.

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CIDRAP: "We Believe There Is Scientific Evidence Ebola Has The Potential To Be Airborne"
Submitted by Tyler Durden on 10/13/2014 21:46 -0400

When CDC Director Tim Frieden first announced, just a week ago and very erroneously, that he was "confident we will stop Ebola in its tracks here in the United States", he hardly anticipated facing the double humiliation of not only having the first person-to-person transmission of Ebola on US soil taking place within a week, but that said transmission would impact a supposedly protected healthcare worker. He certainly did not anticipate the violent public reaction that would result when, instead of taking blame for another epic CDC blunder, one which made many wonder if last night’s Walking Dead season premier was in fact non-fiction, he blamed health workers for "not following protocol."

And yet, while once again casting scapegoating and blame, the CDC sternly refuses to acknowledge something others, and not just tingoil blog sites, are increasingly contemplating as a distinct possibility: namely that Ebola is, contrary to CDC "protocol", in fact airborne. Or as, an article posted by CIDRAP defines it, "aerosolized."

Who is CIDRAP?  "The Center for Infectious Disease Research and Policy (CIDRAP; "SID-wrap") is a global leader in addressing public health preparedness and emerging infectious disease response. Founded in 2001, CIDRAP is part of the Academic Health Center at the University of Minnesota."

The full punchline from the CIDRAP report:

We believe there is scientific and epidemiologic evidence that Ebola virus has the potential to be transmitted via infectious aerosol particles both near and at a distance from infected patients, which means that healthcare workers should be wearing respirators, not facemasks.

In other words, airborne. And now the search for the next LAKE, i.e., a public company maker of powered air-purifying respirator (PAPR), begins.

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Radiation levels at Fukushima rise to record highs after typhoon
Published time: October 16, 2014 06:07

The amount of radioactive water near the Fukushima Daiichi nuclear plant has risen to record levels after a typhoon passed through Japan last week, state media outlet NHK reported on Wednesday.

Specifically, levels of the radioactive isotope cesium are now at 251,000 becquerels per liter, three times higher than previously-recorded levels. Cesium, which is highly soluble and can spread easily, is known to be capable of causing cancer.

Meanwhile, other measurements also show remarkably high levels of tritium – another radioactive isotope of hydrogen. Samples from October 9 indicate that there are 150,000 becquerels of tritium per liter in the groundwater near Fukushima, according to Japan’s JIJI agency. Compared to levels recorded last week, that’s an increase of more than 10 times.

Additionally, “materials that emit beta rays, such as strontium-90, which causes bone cancer, also shattered records with a reading of 1.2 million becquerels, the utility said of the sample,” JIJI reported.

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Jim Sinclair’s Commentary

Fear of is as serious as the fact of.

As Fear of Ebola Spreads, Ohio and Texas Close Some Schools
By MANNY FERNANDEZOCT. 16, 2014

DALLAS — Officials at school districts in Texas and Ohio shut schools on Thursday after they learned that two students traveled on the Cleveland-to-Dallas flight with Amber Joy Vinson, a nurse infected with Ebola, and that an employee may have later flown on the same plane.

The superintendent of the Belton Independent School District, south of Waco, said that a student at Sparta Elementary School and a student at North Belton Middle School were on Frontier Airlines Flight 1143 on Monday.

The superintendent, Susan Kincannon, said in a statement that officials had decided to shut the two schools plus a third, the Belton Early Childhood School, so they could thoroughly clean and disinfect the schools and the buses that served them this week.

The two students were on the flight on Monday and then attended classes on Tuesday and Wednesday, the statement said. Though state and local health officials had cleared the children to return to school, their parents decided to keep them home for 21 days, the maximum incubation period of the virus.

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SEC accuses high frequency trading firm of manipulating closing price of thousands of stocks
CNBC.com staff | @CNBC

The Securities Exchange Commission on Thursday charged a New York-based trading firm of manipulating the closing price of thousands of Nasdaq-listed stocks from June to December 2009.

The investigation found that Athena Capital Research used an algorithm to engage in a practice known as "marking the close," in which stocks are bought or sold near the end of the trading day to impact their closing price, a release said.

"The massive volumes of Athena’s last-second trades allowed Athena to overwhelm the market’s available liquidity and artificially push the market price—and therefore the closing price—in Athena’s favor. Athena was acutely aware of the price impact of its algorithmic trading, calling it ‘owning the game’ in internal e-mails," the SEC wrote in a release.

The SEC claims Athena developed strategies to dominate trade in the last few seconds of a trading day. These trades made up more than 70 percent of the volume of these stocks in the run-up to the close on the Nasdaq.

Without admitting or denying the findings, Athena has agreed to pay a $1 million penalty to settle the case, the SEC’s first on high frequency trading manipulation.

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Isis targets Baghdad with wave of car bombs and mortar attacks killing 150
Islamic State car bombs hit Shia districts of Iraqi capital, with one attack killing 36 and wounding 98 within two hours
Catherine James in Mürsitpinar, Luke Harding and agencies in Baghdad
The Guardian, Thursday 16 October 2014 14.44 EDT

Footage from the attacks shows the extent of the damage

Islamic State militants have targeted the Iraqi capital Baghdad with a wave of devastating car bombs and mortar attacks, killing at least 150 people since Sunday, in an escalating campaign of violence and mayhem.

Four car bombs hit Shia districts of Baghdad on Thursday afternoon. At least 36 people were killed and 98 wounded within the space of two hours, Iraqi officials said. The deadliest attack took place when two parked car bombs exploded simultaneously in the northern Dolaie neighbourhood, killing 14 civilians.

In the eastern suburb of Talibiyah, a suicide bomber rammed his car into a police checkpoint, killing at least 12 people, they added. The dead included seven policemen and five civilians.

These latest attacks follow a series of dramatic advances in Iraq by Isis fighters, who have succeeded in capturing most of the sprawling Anbar province to the west of Baghdad.

In recent weeks the jihadists have taken control of the city of Hit, and have attacked the provincial capital of Ramadi, 70 miles west of Baghdad. Iraqi government troops have fallen back to an air base in the desert outside Hit.

Isis has comprehensively consolidated its grip on the Sunni area, which borders Syria, Jordan, Saudi Arabia and the governorate of Baghdad.

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Posted at 5:07 PM (CST) by & filed under Jim's Mailbox.

Jim,

QE to infinity?

CIGA Craig

Craig,

QE to Infinity, or whatever new name they decide to give it.

Jim

Fed’s Bullard says QE3 could last longer than October
Published: Oct 16, 2014 10:33 a.m. ET

The Federal Reserve should consider extending its bond-buying program beyond October to see how the U.S. economic outlook evolves, said James Bullard, the president of the St. Louis Fed, on Thursday. At the moment, the Fed is buying $15 billion in securities each month. The U.S. central bank has said it expects to end its QE3 program at the end of October, but Bullard noted that the plan was always data-dependent. Bullard said the Fed cannot "abide" the drop in inflation expectations seen in the Treasury Inflation-Protected Securities. "Maybe this is a juncture where we want to invoke this clause that it is data-dependent," Bullard said in an interview with Bloomberg News.

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