"Justin Oliver"
THE CONNING TOWER
By Keith Conning
Jim Sinclair’s Commentary
Ever ask yourself what the IMF may have invested their reserves in that might be hidden in the loss category? Might as well throw the world Bank into the question as well.
IMF expects G-7 growth to grind to a halt
Bloomberg News
Published: January 28, 2009
WASHINGTON: The global economy will slow close to a halt this year as more than $2 trillion of bad assets in the United States help sink economies from Russia to Britain, the International Monetary Fund said Wednesday.
Bank losses worldwide from toxic U.S. assets may reach $2.2 trillion, the IMF said in a report, more than the $1.4 trillion that the fund predicted in October. World growth will be 0.5 percent this year, the weakest postwar pace, the fund said in a separate report.
The reports signal that write-downs and losses at banks totaling $1.1 trillion so far are only half of what’s to come and that already contracting economies may worsen. Advanced and developing countries need to be "even more supportive" of demand than they already have been, with lower interest rates and fiscal stimulus, the lender said.
"Unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth," the IMF said.
The IMF’s latest forecast revises its estimate of world growth down from 2.2 percent in November.
Jim Sinclair’s Commentary
In geopolitics nothing much changes. Send me the money so I can send it to my private bank in Dubai, oops, I mean so I can fight your enemies for you.
Pakistan to US: Give us more money
Wed, 28 Jan 2009 16:33:14 GMT
Pakistan’s President Asif Ali Zardari says Islamabad’s success in fight against terrorism is pending more financial support from Washington.
"Give us the tools, and we will get the job done," Zardari said in an opinion piece published in The Washington Post on Wednesday.
Zardari said he hoped US President Barack Obama has understood that "for Pakistan to defeat the extremists, it must be stable. For democracy to succeed, Pakistan must be economically viable."
He further called on Obama to push Congress into passing a legislation introduced last year that would give an annual USD 1.5 billion aid to Islamabad for social programs.
Zardari noted that Islamabad had made "remarkable progress" in the past several months in its battle against the al-Qaeda-linked and pro-Taliban militants along the troubled Pakistan-Afghanistan border.
Jim Sinclair’s Commentary
Listening to Grandfather’s advice is a good idea.
Greenlight Founder Takes Grandfather’s Advice on Gold
By Stewart Bailey and Saijel Kishan
Jan. 28 (Bloomberg) — Greenlight Capital Inc. founder David Einhorn is finally taking his grandfather’s advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending.
Since Einhorn was 10 years old, his grandfather has warned him that investing in bullion and gold-mining stocks was the only “sensible” thing to do given the threat of inflation and the risks of so-called fiat currencies, New York-based Greenlight said in a Jan. 20 letter to clients. The firm had never before considered buying bullion or mining-company shares.
“To everyone’s dismay, we believe some of Grandpa Ben’s predictions are playing out,” Greenlight said in the letter, a copy of which was obtained by Bloomberg News. “The size of the Fed’s balance sheet is exploding, and the currency is being debased.”
Greenlight is turning to the centuries-old currency to mitigate the effects of the economic collapse and government efforts to end it. Bullion gained for the eighth straight year in 2008 as governments in Europe and the U.S. rescued banks from collapse.
Greenlight said in the letter that in addition to buying gold, it has added call options on gold and the Market Vectors Gold Miners exchange-traded fund to its other investments. Call options are the right to buy a security or commodity at a set price, within a set period of time. The owner of the call profits when the security rises above the set price.
Jim Sinclair’s Commentary
You can be sure this will not pass under the radar of all governments. This is the macrocosm experience to come, now occurring in the microcosm of Iceland
Iceland’s PM: Government Has Collapsed
Iceland’s prime minister says his ruling coalition has collapsed under pressure from the global financial crisis. Geir Haarde said he will speak to the president, Olafur Ragnar Grimsson, Monday in an effort to dissolve the government.
Mr. Haarde’s government, a coalition featuring his Independence party and the Social Democratic Alliance, has been under mounting public pressure since the crisis hit the island-nation in October.
Last week, the prime minister, who suffers from cancer, called early national elections in May and said he would not run. At the time, analysts questioned whether the government could survive four more months.
The situation worsened Sunday, when Commerce Minister Bjorgvin Sigurdsson quit, citing his role in the economic collapse and growing public demands that the government resign immediately.
Sigurdsson acknowledged that Icelanders have lost faith in their government, and he said he wants to share in the responsibility for the economic collapse.
