Posted at 8:00 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- Expectations Shift Towards Recession
- September Payrolls Gained Just 83,000, Net of August Revisions;
Annual Payroll Growth Dropped Below 2.0%, to a 15-Month Low
- September Labor Force Plunged by 350,000, with the
September Unemployment Rate on the Cusp of Rounding Lower by 0.1%
- Yet, Headline Monthly Labor Data Remained Almost Worthless
- September 2015 Unemployment: 5.1% (U.3), 10.0% (U.6), 22.9% (ShadowStats)
- Construction Spending Gain Mostly Reflected Downside Revisions
- Latest Money Supply M3 and Monetary Base Took Unusually Large Hits 

“No. 756: September Labor Conditions, Money Supply M3, August Construction Spending ”


“They’re Hopping Mad In The US And Saudi Arabia”: Russian Strikes In Syria Spark Epic Western Media Propaganda Blitz
Submitted by Tyler Durden on 10/02/2015 16:01 -0400

We are now two days into Russia’s air campaign against anti-regime forces in Syria and both Moscow and the West are rushing to spin the narrative. 

The frantic attempt from both sides to shape public opinion has been truly amazing to behold and the sheer amount of coverage speaks to what we said on Thursday about just how important the conflict really is for the Mid-East balance of power.

For the US, portraying Russian airstrikes as supportive of a murderous regime and as an imminent threat to civilians is key, as it allows Washington to explain away the fact that the US and its allies haven’t coordinated their efforts with Moscow. Take the following from CNN for instance, who reports that Russia has made a “strategic blunder” and that by opening an air campaign, Russia risks raising the spectre of the Soviet-Afghan war in the minds of potential jihadists who will supposedly rush into Syria to join the fight:

There is no ambiguity now about Russia’s current tactics in Syria — they are seeking to take over the airspace in the region and be the agenda-setting force on the ground, several senior administration officials told CNN.

“Yesterday’s demarche to the U.S. by Russian officials in Baghdad was clear in its intent,” one senior administration official said. “Make sure you don’t have anyone around ISIS targets and get out of the air.”

And while U.S. officials have no plans to cede Russia any ground, they also said it appears that Russian President Vladimir Putin made a dramatic chess move that the Russians have not thought through — one official even called it a “strategic blunder.”

Had the Russians been clear that they are providing support in Syria to prevent Syrian President Bashar al-Assad regime’s collapse — a scenario that would benefit ISIS — they might have gotten some credit on the world stage.

But their very first strikes in the region hit CIA-backed anti-Assad rebel forces, Arizona Republican John McCain, chairman of the Senate Armed Services Committee, said Thursday on CNN’s “New Day.”

And U.S. officials note that every bomb against a non-ISIS Sunni target puts them more in bed with Iran and Hezbollah, which are Shiite. U.S. allies in the Persian Gulf warn that this could set off a huge sectarian conflict and that the deeper the Russians get into this, the harder officials believe it will be to get a diplomatic process with the Saudis and others restarted.

“It is going to be hugely tempting for the Saudis to start financing their guys again,” another senior administration official said. “Syria will be a magnet for every jihadi, who will rush to fight the Russians, just like they did in Afghanistan. The problem is while this will cause problems for the Russians, it will also mean trouble for the Gulf, when the jihadists come home.”



David Stockman On CNBC: ‘We’re On The Fiscal Titanic”
by CNBC • October 1, 2015

Click here to watch the video…

A government shutdown would force Congress to address fiscal issues before they reach unmanageable levels, a former Reagan administration official contended Wednesday.

“We’re on the fiscal Titanic and we’re going to hit something hard and immovable one of these days,” said David Stockman, director of the Office of Management and Budget from 1981 to 1985, in a CNBC “Closing Bell” interview.

The House of Representatives and Senate on Wednesday passed a last-minute stopgap spending bill that will keep the federal government open through Dec. 11 pending President Barack Obama’s signature. But another budget battle will likely ensue then, as Congress remains divided over federal funding for women’s health organization Planned Parenthood.

Read MoreHouse passes legislation to avoid shutdown

Many in Congress have opposed a shutdown, as a government closure can put some federal employees temporarily out of work or delay their pay. Stockman contends it could have a positive effect by making lawmakers address spending and debt issues.

He called for entitlement and defense spending reform. He also argued that easy monetary policy from central banks has made lawmakers less likely to address the deficit.

Still, Stockman did not clearly outline why a shutdown would force lawmakers to make significant budget changes.


Posted at 7:38 AM (CST) by & filed under In The News.

China Bought Gold With Proceeds From Record Sale Of US Treasurys

Tyler Durden on 09/30/2015 09:59 -0400

Two months ago, when China stunned the world in announcing it had officially “bought” 604 tons of gold for the first time since 2009 (this was untrue: China merely admitted to the world what we had reported for years, namely that it had been patiently accumulating gold via untraceable accounts and only now decided to reveal a fraction of its total holdings), we said that, contrary to the wrong “one-and-done” pundit assessment, China would continue “adding” to its gold holdings. To wit:

… now that the seal has been finally broken after so many years, and since today’s update indicates that Chinese gold numbers are clearly goal-seeked with a specific policy purpose – to boost confidence - we await for the PBOC to start leaking incremental gold holding data every month (and especially in months when the market crashes) which will bring us ever closer to what China’s true gold holdings are.

One month ago, we were proven correct when China indeed announced it had “added” another 19.3 tons of gold in July – even as it was dumping record amounts of Treasurys at the time as we previously reported.

Then, overnight, we got a second confirmation when the PBOC announced that China’s official gold holdings had risen again in August, increasing by 520,000 troy ounces, or 16.2 tons (which is more than 3 times the entire registered gold inventory in the Comex vault system), and bringing the new total to 54.5 million ounces, or 1,694 tons of gold. In dollar terms, Chinese gold holdings rose from $59.2 billion at the end of July to $61.8 billion. 

However, even as China is “buying” gold, it is still doing so at half the pace of neighbor Russia, which as reported several days ago added 1,000,000 ounces or about 31 tons in the same month, bringing its total to 42.4 million ounces, or 78% of China’s holdings.  Between China and Russia, some 47 tons of gold were purchased in the open market in past month.

Naturally, as has been the curious case for the past several months, the confirmation that China keeps buying gold merely served to push gold lower, and as of this moment gold was down to $1,117/ounce: the lowest level in two weeks.

A Commerzbank analyst had this to say about China’s ongoing gold buying spree: “Given the size of Chinese currency reserves and the extent of its domestic gold production, even higher gold purchases might have been assumed. That said, the decrease in currency reserves may have put the brakes on buying interest of late, in August, currency reserves declined to a two-year low of $3,557.4 billion.”

This is almost correct. The real message here is that in a month in which China (together with its Euroclear-held Belgium holdings) sold a record $83 billion in Treasurys…



Jobs Report Is Lackluster, Raising Concern on Economy’s Course
OCT. 2, 2015

Employers added 142,000 jobs in September, the Labor Department said on Friday, suggesting that the American economy is losing momentum after a similarly lackluster report for the previous month.

The official unemployment rate held steady at 5.1 percent, and hourly wages for private sector workers were flat after jumping by a relatively robust 0.4 percent in August.

The report for August was revised sharply downward, showing the economy created only 136,000 jobs, well below the 173,000 originally estimated.

Friday’s report came just two weeks after the Federal Reserve decided that the recovery was still too frail to risk lifting interest rates from their near-zero level. While the Fed chairwoman, Janet L. Yellen, later suggested that the Fed was still likely to go ahead with a rate increase before year’s end, the latest evidence of a weakening economy may push any such increase into next year.

Diane Swonk, chief economist at Mesirow Financial, noted in an analysis before the report’s release that “it would be more reassuring if we could see a point where the economy is truly firing on all cylinders for a change.”

Other reports suggest that while the overall American economy remains sturdy, it has lost steam on several fronts in recent months. The manufacturing sector has been hit by the strong dollar and weak global demand; the oil industry has cut back sharply on investment in response to low prices; and farming has taken a hit because of slumping commodity prices.



Jim Sinclair’s Commentary

It was always that way from day one.

HFTs Have Devolved To Two-Bit Criminals Straight Out Of “Office Space”
Tyler Durden on 10/01/2015 19:01 -0400

Back in October 2011, Zero Hedge was first to point out something previously unknown: a small, then-unheard of firm, managed to upstage none other than Goldman Sachs when it comes to total weekly program trading volume on the NYSE.

Since then Latour, an affiliate of Tower Trading, has emerged as one of the pre-eminent HFT powerhouses in NYC. As we subsequently learned, Tower Research – which is run by Mark Gorton of LimeWire fame – is a member of the upstart Modern Markets Initiative, a lobby firm whose stated purpose is focused on “demonstrating the benefits of algorithmic or quantitative trading, often referred to as high-frequency trading, in today’s modern markets.”

It has failed to do that.

Instead, it has demonstrated, twice in the span of one year, that HFTs are nothing but two-bit, small-time criminals, intent on breaking all the rules, frontrunning clients, and otherwise abusing market ethics and norms.

In short: HFTs rig markets constantly, and what’s worse: they are now getting so behind the curve, the SEC is catching them in the act on an almost daily basis.

Which brings us back to Latour and September 2014, when one year ago the SEC – in its first enforcement action against a high-frequency trading firm – charged Latour Trading for using faulty calculations in complex trading strategies that let it buy and sell stocks without holding enough capital. The firm at times accounted for 9% of all U.S. stock trading, according to the SEC’s order.

As the WSJ reminds us, Latour, which didn’t admit or deny wrongdoing, agreed to pay $16 million to settle the case, the largest penalty for a violation of the so-called net capital rule, the SEC said.

The net capital rule provides various methodologies that broker-dealers need to follow to make sure they are adequately taking account of the risk they are exposed to from their market activities. Latour routinely violated those requirements from 2010 through 2011, the SEC said.

Latour said it had “fully remediated the problems described in the Commission order, and we are pleased to put them behind us.”



Big layoffs may signal end of expansion: Challenger
Tom DiChristopher

The number of announced layoffs by U.S.-based companies surged in September from the previous month, and Hewlett-Packard’s outsized cuts raise a red flag, John Challenger, CEO of Challenger, Gray & Christmas, told CNBC’s “Squawk Box” on Thursday.

“It’s interesting that we are beginning to see some big layoff announcements this year,” he said. “One of the things you start to see as you get near the end of a period of expansion, but before it really turns, is you start to see major layoffs occurring, big mega-layoffs like we’re seeing now.”

U.S.-headquartered companies put 58,877 jobs on the chopping block last month, up 43 percent from just more than 41,000 in August and the third highest monthly total this year, Challenger’s global outplacement firm reported.

Challenger said the computer sector led all other industries in layoffs in September. Hewlett-Packard accounted for nearly all of the 32,500 reductions.

Last month, Hewlett-Packard announced it would cut 25,000 to 30,000 positions as part of its restructuring, which will split the company into one firm focused on enterprise services and one dedicated to its legacy hardware business.

Challenger said the HP cuts were not necessarily an indicator that overall layoffs would continue to increase substantially month to month. Instead, he said, they may be a sign that companies having a more difficult time will begin shedding workers.

The first day of October saw further cuts from big companies.

Reuters reported that Wal-Mart is planning to lay off hundreds of people at its headquarters in Arkansas as part of the retail giant’s efforts to pare costs. Fewer than 500 employees are expected to lose their jobs, and an announcement could be made as early as Friday, according to one of sources told Reuters.



World set for emerging market mass default, warns IMF
Higher US interest rates will expose weaknesses in emerging market corporations which have gorged themselves on cheap debt, IMF warns
By Szu Ping Chan
6:50PM BST 29 Sep 2015

The International Monetary Fund (IMF) has issued a double warning over higher US interest rates, which it said could trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity evaporates. 

The IMF said corporate debts in emerging markets ballooned to $18 trillion (£12 trillion) last year, from $4 trillion in 2004 as companies gorged themselves on cheap debt. 

It said the quadrupling in debt had been accompanied by weaker balance sheets, making companies more vulnerable to US rate rises.

“As advanced economies normalise monetary policy, emerging markets should prepare for an increase in corporate failures,” the IMF said in a pre-released chapter of its latest Financial Stability Report.

It warned that this could create a credit crunch as risks “spill over to the financial sector and generate a vicious cycle as banks curtail lending”. 

In a double warning, the IMF said market liquidity, or the ease with which investors can quickly buy or sell securities without shifting their price, was “prone to sudden evaporation”, particularly in bond markets, when the Federal Reserve started to raise interest rates. 

It said a steady growth environment and “extraordinarily accommodative monetary policies” around the world had helped to maintain a “high level” of liquidity. However, it warned that this was not the same as “resilient” liquidity that could support markets in time of stress.


Posted at 12:13 PM (CST) by & filed under In The News.

Mid-East Coup: As Russia Pounds Militant Targets, Iran Readies Ground Invasions While Saudis Panic
Submitted by Tyler Durden on 10/01/2015 12:05 -0400

Back in June, the commander of Iran’s Quds Force, Qasem Soleimaini, visited a town north of Latakia on the frontlines of Syria’s protracted civil war. Following that visit, he promised that Tehran and Damascus were set to unveil a new strategy that would “surprise the world.” 

Just a little over a month later, Soleimani – in violation of a UN travel ban – visited Russia and held meetings with The Kremlin. The Pentagon now says those meetings were “very important” in accelerating the timetable for Russia’s involvement in Syria. The General allegedly made another visit to Moscow in September. 

The timeline here is no coincidence. Iran has long provided covert and overt support to the Assad regime via financial transfers, logistical support from the Quds, and via the involvement of Hezbollah in the Assad government’s fight to regain control of the country. 

As we’ve documented extensively over the past several weeks, what appears to have happened here is that Iran, unable to simply invade Syria in support of Assad (because doing so would obviously be a disaster in terms of preserving the optics around the P5+1 nuclear deal), turned to Moscow which has in the past used Russia’s Security Council veto to block the referral of the war in Syria to the Hague and which is a known ally of both Tehran and Damascus. 

While it’s unclear exactly what the pitch was to Putin, Russia clearly saw an opportunity to advance The Kremlin’s geopolitical agenda at a key time in history. Moscow is keen to put on a brave face amid the most contentious standoff with the West since the Cold War (as a result of the conflict in Ukraine and the annexation of Crimea) and amid the related effort to preserve Gazprom’s market share in Europe. 

In short, Putin looks to have viewed this as the ultimate geopolitical win-win. That is, Russia gets to i) expand its influence in the Middle East in defiance of Washington and its allies, a move that also helps to protect Russian energy interests and preserves the Mediterranean port at Tartus, and ii) support its allies in Tehran and Damascus thus preserving the counterbalance to the US-Saudi-Qatar alliance. 

Meanwhile, Iran gets to enjoy the support of the Russian military juggernaut on the way to protecting the delicate regional nexus that is the source of Tehran’s Mid-East influence. It is absolutely critical for Iran to keep Assad in power, as the loss of Syria to the West would effectively cut the supply line between Iran and Hezbollah. 

The same dynamic is playing out in Iraq. That is, Iran is fighting ISIS via various Shiite militias just as it’s fighting the Saudi-led coalition in Yemen via the Shia Houthis. It is thus extremely significant that Baghdad has agreed to share intelligence with Syria and Russia, as that effectively means the Iran-backed Shiite militias battling for control of Iraq will enjoy the support of the Russian military. 



This Is The Endgame, According To Deutsche Bank
Submitted by Tyler Durden on 10/01/2015 12:53 -0400

DB’s Jim Reid lays out the “endgame” scenario, one which this website first said is inevitable back in 2009. With Citi and Macquarie already on board, expect what was once merely the figment of a “deranged tinfoil conspiracy-theory blog’s” imagination, to become global monetary policy. And yes, the real endgame is the one we have said from day one: total fiat (and conventional economics) collapse.

* * *

From Deutsche Bank’s chief credit strateigst

Our thesis over the last few years has basically been that the global financial system/economic fundamentals are so bad that its good for financial assets given it forces central banks into extraordinary stimulus and for them to continue to buy assets in never before seen volumes. The system failed in 2008/09 and rather than allow a proper creative destruction cleansing, policy makers have been aggressively propping it up ever since. This has surely led to a large level of inefficiency in the system which helps explain weak post crisis growth and thus forces them to do even more thus supporting asset prices if not the global economy.

However since the summer this theory has been severely tested by China’s equity bubble bursting, China’s small ‘shock’ devaluation and the start of a rundown in reserves for the first time in over a decade. We’ve also seen associated commodities and EM woes, endless unsettling speculation about the Fed’s next move and more recently the idiosyncratic corporate scandal around VW and funding concerns around Glencore. The hits keep on coming. Is it now so bad it’s actually bad again?

The most recent leg of the sell-off begun after the Fed held rates steady two weeks ago as the narrative focused on either this reflecting worrying economic concerns or a Fed that is a slave to financial markets and losing credibility. So do we think we’re now entering a period where central banks are increasingly impotent? The answer is that they have been for a while on growth so not much has changed. However they can still buy more assets and continue to keep policy loose. Although we don’t think QE and zero interest rates does much apart from prop up an inefficient financial system it’s all we’ve got until we have a huge policy sea change which probably only happens in the next recession (more later).

So for now we think central banks are trapped into continuing on the same high liquidity path. The BoJ and the ECB are likely to do more QE in my opinion and the Fed is going to have a real struggle raising rates this year which has been our long-term view. Indeed we have sympathy with DB’s Dominic Konstam that they may also struggle in 2016. At the moment central banks are fortunate that they have the conditions to do more as virtually all are failing on their mandate to keep inflation close to or at 2%. The real problem would be if inflation was consistently looking like breaching 2%. Then central banks would generally be going beyond their mandate by printing money and keeping rates close to zero. So in short the ‘plate spinning’ era continues for a number of quarters yet and certainly while inflation is so low.

We think the end game is that when the next global recession hits, then QE/zero rate world will be re-appraised. Perhaps the G20 will get together and decide to try a different approach. In our 2013 long-term study we speculated how we thought the end game was ‘helicopter money’ – ie money printing to finance economic objectives (tax cuts, infrastructure etc). While it has obvious flaws and huge risks (eg political manipulation and inflation), one can argue it will always have more economic impact than QE in its current form. However that’s perhaps a couple of years away still.

For now, a lot depends on whether the turmoil accelerates the next recession quicker than we think. If 2016 is a recessionary year for the US and the global economy with China growing notably south of 6% then risk assets will fall significantly further. However if the global economy stumbles on in positive territory then risk assets will likely recover, especially if the ECB and BoJ do more and the Fed continues to hold or as a minimum reduces the dots a fair degree on any small hike. That’s our base case for the moment and fortunately our main asset class – namely credit – is starting to get to levels where we have only been wider during recessions or during the existential Euro crisis of 2011/12. So the risk reward looks decent. VW and Glencore have sucked Euro IG into the problems that US credit has been dealing with all year but I’m not sure they’re symptomatic of a wider DM corporate governance issue in the VW case or a precursor for similar funding concerns elsewhere in the case of Glencore.


Posted at 3:42 PM (CST) by & filed under In The News.

Dear CIGAs,

Both Bill and I have two days of meetings concerning the ground business in Africa. We will both make our best effort to post, but please understand there is a lot of travel involved with these meetings, and time is limited.



World set for emerging market mass default, warns IMF
Higher US interest rates will expose weaknesses in emerging market corporations which have gorged themselves on cheap debt, IMF warns
By Szu Ping Chan
6:50PM BST 29 Sep 2015

The International Monetary Fund (IMF) has issued a double warning over higher US interest rates, which it said could trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity evaporates.

The IMF said corporate debts in emerging markets ballooned to $18 trillion (£12 trillion) last year, from $4 trillion in 2004 as companies gorged themselves on cheap debt.

It said the quadrupling in debt had been accompanied by weaker balance sheets, making companies more vulnerable to US rate rises.

“As advanced economies normalise monetary policy, emerging markets should prepare for an increase in corporate failures,” the IMF said in a pre-released chapter of its latest Financial Stability Report.


Posted at 6:00 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

Two huge pieces of news hit Monday like a one-two punch!  First; UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal followed by; Saudi Arabia withdraws overseas funds Gold and Oil both affect the dollar, and this is happening while global liquidity is drying up. The soon to be catch phrase for October will be “lack of liquidity”!

First, the Swiss investigation into the gold market has got to be a scary one for shorts both legal or naked. The investigation will not be a whitewash similar to the CFTC silver investigation where “nothing actionable” was found. Please understand the key word there was “actionable”. I ask you this, if something was found to have occurred but was in the “interest of national security” …would it be “actionable”? It is also key to understand the suppression of gold prices also act to support the value of both dollars and Treasury bonds. In other words, the dollar can be seen to be more valuable than it really is and also allow interest rates to be lower than they otherwise would be.

As for the oil news, for Saudi Arabia to pull capital back home is a natural reaction as they now are running huge deficits and obviously an effect from the lower oil prices. It also has another effect, probably a large portion of the $73 billion withdrawn were in dollar denominated assets. It also means the Saudis are not a source of demand for dollars. Please also keep in mind from a geopolitical standpoint they have signed multiple trade deals with both Russia and particularly China, it is a good bet these will not be transacted in dollars.

Lastly thrown into the mix is the disaster called Glencore. They are a huge commodity firm with huge leverage and derivatives outstanding. Current CDS rates suggest (and it is not JUST Glencore …. they have a better than coin flip chance of bankruptcy. Should this occur, you must understand it as a “credit” event rather than a commodity event. Yes of course unwinding their commodity positions will be a nightmare, the implications to the overall credit structure of the system are however MUCH GREATER!

This is happening at a time when liquidity has and is drying up all over the world. Whether you look at dollars, euros, yen or yuan, liquidity is just not there. Please view this link showing liquidity in the U.S. S+P 500 over the last eight years, it is basically GONE! What this means is if you are a large holder of positions, there is no exit and you are trapped! This is what I believe we will find out very shortly.

The lack of liquidity will create vacuums beneath asset prices, stocks, bonds, commodities and will culminate in a currency/credit crunch. This is very easy to see and anticipate if you are willing to see it. The “light switch” moment is near. Should we see a day where the Dow loses 700-1,000 points followed by another disaster day …it will be game over. Should the PPT lose credibility, neither the Fed “put” nor PPT “put” will be in place and it will be every man for himself. We are very close to the moment in time where the only solution to halt the selling will be to “pull the plug”!

Standing watch.

Bill Holter
Holter-Sinclair collaboration
Comments welcome [email protected]

Posted at 5:57 PM (CST) by & filed under Jim's Mailbox.


I was watching The Donald’s speech yesterday in NYC. He stated that the unemployment statistics out of the government were fantasy stats at best.  Probably the most unbelievable numbers there are.

When people are unemployed, but seeking work, they are considered “employed”! Incredible. When no longer seeking work, they are removed from the workforce. More incredulity. Part Time work is considered employment.

His economists lead him to believe the unemployment rate to be about 20-24% (roughly).

Some economists state it’s between 30-35%, with the highest estimate to be around 42%.

Trump does his Donald thing in an interview with Time:

You’re talking about 10% of California’s workforce, maybe 13% …

Don’t forget in the meantime we have a real unemployment rate that’s probably 21%.

It’s not 6. It’s not 5.2 and 5.5. Our real unemployment rate–in fact, I saw a chart the other day, our real unemployment–because you have ninety million people that aren’t working. Ninety-three million to be exact.

If you start adding it up, our real unemployment rate is 42%.

He stated in his tax platform that all single workers earning under $25k and all married couples earning under $50k pay zero taxes.

My question to you, Jim: What if he miscalculates and GDP doesn’t grow by 6%, and there’s not enough money to fund the government and pay the interest on government debt? You can’t simply retroactively collect taxes. Would there be a massive monetization of new debt? I know he abhors the idea of $19 trillion in government debt and growing. But he would only cause that to spike exponentially if he is wrong. (I’ll stick with gold, in spite of my admiration for his tenacity in getting things done).

His heart and ideas are in the right place, (saving Social Security, lower taxes, no inheritance tax, repatriate jobs) but unfortunately… it’s a bit too late.

Furthermore, he should address the corruption in the oversight agencies on Wall Street. In fact, ALL oversight agencies.

Investigate the Comex and it’s lack of adherence in monitoring highly leveraged speculative positions in gold and silver, margin debt, the “infamous” Center for Disease Control in Atlanta, the FDA, etc

Now, I have a proposals to support future housing growth, savings growth, liquefy banks, and attack abused social programs he hasn’t even heard of. All done while sterilizing the money supply growth in the interim. I hope I can someday provide some suggestions to him. A leader’s door should always be open to his constituency.

I wish him the best of luck in his endeavor to right the wrongs in our country.

I only ask one thing of him… when dealing with Congress and the formidable resistance he can expect to receive, make a speech to the US public enlightening us (and shaming the legislatures if warranted) as to their true motives in office.

CIGA Wolfgang Rech

CIGA Wolfgang,

In today’s world if you do not get your 6% it would be his turn to add controlled street drugs and prostitution to the GDP to get it to whatever level they wanted.



Good Morning Jim,

The Conference Board data is not quite as trust worthy as U.S. Bureau of Labor Statistics data. Who would have thought.

CIGA Bernie

Consumer Confidence Spikes Near 8-Year High Amid Global Turmoil But “Hope” Fades
Submitted by Tyler Durden on 09/29/2015 10:09 -0400

For the second month in a row, US Consumer Confidence (according to The Conference Board) soared in September. Printing 103.00 (smashing expectations of 96.8) in September, this is just shy of January’s high going back to August 2007. The biggest driver of this seemingly odd exuberance (amid global escalation in financial and physical wars) is the Present Situation (up from 115.8 to 121.1) while “hope” dropped from 91.6 to 91.0.


As The Conference Board explains…


The Conference Board

The organization is now considered an unbiased “trusted source for statistics and trends, second only to perhaps the U.S. Bureau of Labor Statistics”.

Posted at 5:50 PM (CST) by & filed under In The News.


Jim Sinclair’s Commentary

Old Faithful salutes the final Blood Moon until 2033. History suggest significant changes in all market directions.



Obama has turned Putin into the world’s most powerful leader
By Benny Avni
September 29, 2015 | 1:21am

The baton was officially transferred Monday to the world’s new sole superpower — and Vladimir Putin willingly picked it up.

President Obama (remember him?) embraced the ideals espoused by the United Nations’ founders 70 years ago: Diplomacy and “international order” will win over time, while might and force will lose.

Putin, too, appealed to UN laws (as he sees them), but he also used his speech to announce the formation of a “broad international coalition” to fight ISIS in Syria and Iraq.

“Similar to the anti-Hitler coalition, it could unite a broad range of forces” to fight “those who, just like the Nazis, sow evil and hatred of humankind,” he said.

And who’d lead this new coalition? Hint: Moscow has always celebrated the Allies’ World War II victory as a Russian-led fete.

Oh, and if anyone wondered which Syrian players the coalition would rely on as allies, Putin made it clear: “No one but President [Bashar al-]Assad’s armed forces and Kurd militia are fighting the Islamic State.”

That, of course, isn’t Obama’s view. America’s president said he opposed the “logic of supporting tyrants.” After all, Assad “drops barrel bombs on innocent children.”

But Putin has troops in Syria, is arming Assad to the teeth and signed a pact of anti-ISIS intelligence-sharing with Assad, Iran and the leaders of Iraq (the ones America fought to put in power).

And after meeting Obama for the first time in two years Monday, he spoke vaguely about future “joint air attacks on ISIS.” But no agreement on Assad was reached in the 90-minute meeting.

Meantime, if Obama has any realistic Syria plan of his own — beyond having Assad magically “transitioned” out of the country and simultaneously fighting ISIS — he failed to present it during his UN speech. Or any other time.

Instead, he scolded an “isolated” Putin for using force to annex Crimea and other parts of Ukraine. “Imagine if, instead, Russia had engaged in true diplomacy,” said Obama. “That would be better for Ukraine, but also better for Russia, and better for the world.”

Then again, imagine if Obama’s eloquence were backed by, say, American-led NATO. Would Putin so easily be able to eat up Ukraine and take over Syria? Not likely.

But even as he chided Russia, China and even Iran for being steeped in the policies of the past, it was Obama who at times sounded like a throwback to days of yore.


Posted at 6:29 PM (CST) by & filed under In The News.



UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal
Submitted by Tyler Durden on 09/28/2015 12:22 -0400
With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators – some 10 years behind the curve as usual – finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.

That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany’s Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).

Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

Here are the details that should come as a surprise to nobody:

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks. Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

Switzerland’s WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

“It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned,” WEKO said in a statement.



Glencore Could Trigger A Global Derivatives Nuclear Meltdown
September 28, 2015

The middle class in America is like the housewife who knows her husband is cheating on her but she chooses to ignore it and pretend it will stop.   – Anonymous FOD – Friend of Dave’s

The system has been totally hijacked.  Make NO mistake about it, gold was hit hard when the paper trading in London cranked up after the SGE had turned off its lights for the day. The reason:  Glencore.

Anyone remember Enron?  Probably not.  Most people have already forgotten, mostly, that their taxpayer dollars were used by ex-Goldman CEO Henry Paulson to bail out Goldman Sachs in 2008 when he was Treasury Secretary.  His primary motive was to preserve the value of the $250 million in warrants he still owned after he got to unload $500 million in stock – tax-free.  Recently Zerohedge found a snapshot of Paulson laughing about the entire matter.

Glencore is going to make Enron look like a polite tea and cake break.  Gold was smashed when paper London opened because the Fed, BoE and ECB can not under any circumstances let the price of gold spike up – like it should be doing – and thereby alert the world that there’s a big problem in the world of derivatives related to Glencore, among other “things” (Emerging Market FX contract, energy, Biotech ETFs, etc).

The issue with Glencore, since we all saw it coming which means the Central Banks saw it coming, is the degree to which the CB’s have been able to “brace” for its impact.  The problem, however, is that just like Enron and the big banks before it, there is  100% probability that Glencore upper management has:  a)  lied about the market value of its assets, both on and off balance sheet;  b)  has lied about the true amount and nature of its derivatives exposure;  c) has been lied to by rank and file who are in charge of accounting and reporting the data to upper management (trust, me I know this goes on because I saw it first-hand at Bankers Trust;  and foremost, e)  has NO idea the true nature of its total exposure to the full lunar eclipse world of OTC derivatives.





Bernanke & Yellen Have Engineered A Financial Markets Neutron Star
Submitted by Tyler Durden on 09/28/2015 14:50 -0400

Submitted by Tim Price via The Cobden Centre,

As a child I was fascinated by the concept of a neutron star. A neutron star is the tiny but immensely dense thing that’s left after a massive star explodes. Imagine something eight times as massive as our sun packed into a 12 mile diameter sphere. Gravity compresses the surviving material so profoundly that its protons and electrons are squashed into neutrons. Just how dense ? A single teaspoon’s worth of a neutron star would weigh a billion tons. That presupposes you could actually get close enough to extract a teaspoon’s worth. In reality, the gravitational pressure would reduce your body to a very thin smear on the surface of the star. Very little escapes the gravitational force of a neutron star.

I never expected to encounter a neutron star but Messrs Bernanke and Yellen at the US Federal Reserve have been kind enough to engineer one for us. Like CERN it’s been something of an international collaboration – Messrs Carney and Draghi have also pitched in to do their bit. The hybrid of Quantative Easing (QE) and Zero Interest Rate Policy (ZIRP), our current monetary neutron star has succeeded in collapsing the yields of just about every financial asset. The tractor beam of ZIRP in particular is difficult to evade. Just ask Janet Yellen. After one of the most widely anticipated FOMC meetings in history, she has boldly decided to do precisely nothing.

Today’s investors are not exactly a lucky generation. Assuming they’ve survived two precipitous declines in stock markets in the course of a decade, they’re now faced with overpriced stocks, overpriced bonds, overpriced everything. The Economist cites a Deutsche Bank study pointing out that for 15 countries going back as far as 1800, the average prices of equities, bonds and residential property stand at an all-time high. In terms of investment yield, very little escapes the monetary policy neutron star.

Assuming prices matter, the implications for future returns are somewhat grave. “This is most obvious,” writes The Economist, “in the case of bonds: a yield of 2% means the nominal return if you hold the bond to maturity will be 2%. The real return may even be negative if inflation rises.” Gilt investors today dream of even 2% nominal returns: 5 year UK government paper struggles to reach a nominal yield of 1.3%. 5 year US Treasuries offer a munificent 1.4%.

“Worse still, there is always the chance that profits or valuations will return to their historical norms. If that happens, Deutsche reckons the average real return from equities over the next ten years will be negative. The same is true for Treasury bonds, European corporate bonds and American residential property.”

Deutsche are not alone – just more honest than most investment banks these days.The asset managers GMO recently published their own 7-year average annual real return asset class forecasts. For US large cap stocks, US small cap stocks, international small cap stocks, US bonds and international bonds, those annual return forecasts are all negative.



These Are Perilous Times And A Great Shock Is Coming

With the Dow currently down 230 points, today a 50-year market veteran warned King World News that these are perilous times and a great shock is coming.

September 28 (King World News) – John Embry:  “It is business as usual in the precious metals market after a flurry last Thursday when gold rose 2 percent and was immediately met with a wall of selling.  I laughed when I saw Kitco attributed to the rally to short covering, only to see that theory destroyed when open interest rose over 8,000 contracts that day…

“The U.S. authorities must be petrified behind the scene as they see their economy weakening noticeably — a fact that is at odds with their bogus economic releases.  The U.S. stock market is also under pressure once again and more and more countries are talking about eliminating the dollar from international transactions.