Jim Sinclair’s Commentary
With a feeding frenzy to point out how the biggest of the big can be major turkeys, no one has asked the inviting question, what did he do with the money? It is hard to spend billions on oneself.
Top banks admit huge losses in Wall Street ‘pyramid’ fraud
Dec 15 09:11 AM US/Eastern
Top world financial groups on Monday revealed massive potential losses from an alleged scam run by Wall Street trader Bernard Madoff, admitting they were fooled by a classic pyramid investment fraud.
British, French, Japanese and Spanish banks and funds said investments totalling billions of dollars (euros) could be wiped off their balance sheets by a scandal that is set to affect some of the richest people in the world.
Royal Bank of Scotland said it could lose about 400 million pounds (598 million dollars, 444 million euros), joining a growing list of banks and investors in Europe, Asia and the United States struck by the scandal.
Shares in Santander, the biggest bank in Spain and the second largest in Europe after HSBC , plunged after the lender said it had an exposure of more than three billion dollars to Madoff Investment Securities in New York.
France’s Natixis investment bank, already brought low by subprime losses, put its maxiumum exposure at 450 million euros (606 million dollars). Retail banking giant BNP-Paribas revealed potential losses of 350 million euros.
Jim Sinclair’s Commentary
Where is the money?
Wall Street ‘fraud’ victims continue to rise
December 15, 2008
The list of institutions and individuals set to lose billions of pounds after investing in a fund run by Bernard Madoff, the Wall Street broker and former Nasdaq chairman, is growing by the hour.
The list of institutions and individuals set to lose billions of pounds after investing in a fund run by Bernard Madoff, the Wall Street broker and former Nasdaq chairman, is growing by the hour.
Royal Bank of Scotland (RBS), the bank majority-owned by the Government, today admitted that it had an exposure of £400 million to the $50 billion alleged fraud.
It joins Man Group, the world’s largest listed hedge fund manager, HSBC and Santander, the Spanish group that owns Britain’s Abbey, Alliance & Leicester and Bradford & Bingley, which are exposed to Mr Madoff’s business.
Jim Sinclair’s Commentary
The moment these non US entities dumped Fanny and Freddie and jumped into practically no interest US Treasuries for safety, the US dollar rally crumbles and kicks those geniuses in the rear.
Foreign investors fled agencies, bought T-bills
Monthly inflows hit record as investors sought safety from U.S. troubles in U.S. assets
By Laura Mandaro, MarketWatch
Last update: 1:47 p.m. EST Dec. 15, 2008
SAN FRANCISCO (MarketWatch) — Foreign investors shed their holdings of Fannie Mae and Freddie Mac debt after the U.S. government’s takeover of the floundering mortgage institutions, and instead piled into short-term Treasury bills, October data released Monday show.
The rush to safety lifted monthly inflows of net foreign investments in U.S. securities to a record high of $286.3 billion, said the U.S. Treasury in its monthly Treasury International Capital, or TIC, report.
The upshot was that foreigners increased their holdings of U.S. dollar assets even after the U.S. financial system delivered a list of historic failures and near-misses, including the September bankruptcy of Lehman Brothers, and then had its worst October for stock trading since 1987. See article on October trading records.
"For now, the U.S. dollar has reassumed its reserve-currency primacy," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Foreign private investors, central banks and other overseas institutions sold a net $50.2 billion in Fannie Mae and other government agency bonds in October, a reversal from the $6.2 billion in net purchases made in September, the U.S. Treasury said.
The rush for the exits followed the U.S. government’s decision to seize formal control of Fannie Mae and Freddie Mac after the government-sponsored enterprises – which had operated as independent, publicly traded mortgage financers with the implicit backing of the U.S. government – skirted near bankruptcy.
Jim Sinclair’s Commentary
Oh what beautiful morning. Those that flamed the planet with their OTC derivatives and gold bearishness are becoming a bad chapter in world history.
Citadel joins rush to lock up funds
By Henny Sender in New York
Published: December 14 2008 19:00 | Last updated: December 14 2008 19:00
Citadel Investment Group has joined the rush of hedge funds suspending redemptions to investors, a development that is in effect locking up hundreds of billions of dollars in cash during a volatile period in global markets.
Ken Griffin, Citadel’s founder, sent a letter on Friday to investors in the group’s flagship Kensington and Wellington funds telling them that the group had decided to hold on to their money at least until March.
Citadel has about $15bn under management after suffering big recent losses.
Citadel trades in many of the markets hardest hit by recent volatility – including convertible bonds, corporate bonds, credit derivatives and so-called “pipes”, or private investments in public equities.
Citadel did not respond when called for comment.
Citadel joins a growing list of hedge fund groups – including Tudor, Farallon and DE Shaw – that have imposed restrictions on the ability of investors to withdraw money.
Jim Sinclair’s Commentary
Kerry forgot to add to his statement the Pakistani Intelligence, the Pakistani Military Leaders, Pakistani Military Grunts and a significant amount of Pakistani civilians.
I imagine the Washington Post meant a great deal of the Pakistan population makes up the bad guys this article suggests be killed forthwith.
The more of this rhetoric, the closer we come to some entity with support from the US, Great Britain and others sending in troops. This will come after a major PR campaign to color the place all bad, making them all fair targets.
U.S.’s Kerry urges Pakistan to control spy agency
Mon Dec 15, 2008 8:05am EST
NEW DELHI, Dec 15 (Reuters) – The Pakistan military’s powerful spy agency must be tightly controlled and not allowed to act independently, U.S. Senator John Kerry said on Monday after meeting Indian leaders to discuss the deadly Mumbai attacks.
India has blamed last month’s attacks that killed 179 people on the banned Islamist militant group Lashkar-e-Taiba, which analysts say has long had ties with the Pakistan military’s Inter-Services Intelligence (ISI) spy agency.
New Delhi has also demanded Islamabad do more to stop such militant groups from using Pakistani soil to launch attacks on Indian cities.
The Mumbai attacks have renewed suspicion in India and elsewhere about ties between Lashkar and the ISI, ratcheting up tensions between the nuclear-armed neighbours.
"In the United States, our intelligence agency is obviously held accountable, not just to the administration that runs it but also to the United States Congress and, through the Congress, to the people," Kerry told reporters in New Delhi after meeting Indian Prime Minister Manmohan Singh.