Tanzania oust Kenya to host World Economic Forum
By OLIVER MATHENGE Posted Friday, September 18 2009 at 17:56
Kenya will after all not be the first East African Country to host the World Economic Forum on Africa next year after organisers on Friday settled for Tanzania.
The World Economic Forum announced that Tanzania will host the 2010 World Economic Forum on Africa in Dar es Salaam from May 5 to 7, 2010.
“The World Economic Forum on Africa is an important opportunity to take the pulse each year of the most influential of Africa’s stakeholders. We look forward to holding the meeting in Tanzania at a time when the whole East Africa region is expected to experience stronger growth,” said Andre Schneider, Managing Director, World Economic Forum.
President Jakaya Kikwete of Tanzania echoed his enthusiasm: “It is an honour for Tanzania to host the 2010 World Economic Forum on Africa. We are looking forward to welcoming the community, which I am confident will continue to make important contributions in our collective quest for a better world.”
Optimism has been high in Kenya Prime Minister Raila, who led the country’s delegation to the 18th World Economic Forum on Africa in South Africa earlier this year, said Kenya had accepted an invitation by the organisers to host the forum.
Jim Sinclair’s Commentary
John Cocarine, from the Chicago School of Economics, said on F-TV today that "No one could see the crisis coming."
Now there is a case of serious denial.
Jim Sinclair’s Commentary
There is not a lot of time left to rescue the rescuer.
FDIC to consider ways to replenish deposit fund
Fri Sep 18, 2009 1:17pm EDT
By Karey Wutkowski
WASHINGTON (Reuters) – U.S. bank regulators are considering tapping a line of credit with the U.S. Treasury Department and may explore other lesser-known options to replenish the dwindling fund that safeguards bank deposits.
Federal Deposit Insurance Corp Chairman Sheila Bair said on Friday that the agency would meet at the end of the month to discuss options to rebuild the fund, which has been significantly drained by a sharp increase in bank failures.
"We are carefully considering all our options, including borrowing from Treasury," Bair said, referring to the agency’s $500-billion line of credit with the Treasury Department. She was speaking at a global finance conference in Washington.
But regulators are still reluctant to tap the line of credit because they want to avoid temporarily using taxpayer money to clean up the banking mess, she said.
Bair said the FDIC also had lesser-known alternatives for replenishing the fund, such as prepayments of assessments on banks and issuing a note. She did not give further details on those options.
Jim Sinclair’s Commentary
The MOPE operation is "What you cannot stop you adopt."
The dollar’s in the dumpster, and nobody’s worried — for now
September 18, 2009 | 7:30 am
"A strong dollar is in America’s best interest," the Bush and Obama administrations have repeatedly assured us.
And yet for most of this decade the dollar has been sliding. Now, the greenback again is one of the world’s currency weaklings. But global financial markets, and governments, seem to be taking it in stride.
The dollar has taken a renewed pounding over the last two weeks, driving the DXY index — which measures the buck’s value against six other major currencies — to nearly a one-year low.
The euro has been the big winner as the U.S. currency has lost ground. The euro was at $1.47 on Thursday, its highest level since last September and up from $1.42 on Sept. 1.
But the dollar’s troubles haven’t set off alarm bells in Washington. Nor have the Chinese raised a new stink about the buck’s weakness and the devaluation threat it poses to their American asset holdings.
Jim Sinclair’s Commentary
There are two main points here:
1. Sales efforts before G 20 to insure discussion of the subject.
2. Of course it would not bring damage to the US. The US has already bought the farm by itself.
Putin: New Global Reserve Currencies Wouldn’t Harm US – Report
LONDON (Dow Jones)–Russian Prime Minister Vladimir Putin has said agreement is needed on several global reserve currencies, and said such a move wouldn’t damage the U.S., RIA Novosti reports Friday.
Speaking at an investment forum in the Russian Black Sea resort of Sochi, Putin said the imbalance of money supply in the U.S. compared with the rest of the world was one reason for the current financial crisis, Novosti reports.
"There is only one solution ??? a long-term agreement on common rules of conduct or on several global reserve currencies," Putin said. "To my mind this poses no threat to the U.S. economy, which would only benefit from it in the future."
Earlier this week an aide to Russian President Dmitri Medvedev said talk of replacing the dollar as international reserve currency was "irrational," but said a…
Jim Sinclair’s Commentary
Note that key people in China are using the rare word from that level, ANGRY.
You will recall I mentioned this to you back in July.
China scorns focus on imbalances
By Krishna Guha in Washington and Geoff Dyer in Beijing
Published: September 17 2009 19:50 | Last updated: September 17 2009 19:50
China expressed scepticism on Thursday about a US and European push to launch an effort to tackle global economic imbalances at next week’s G20 summit in Pittsburgh.
Zhou Wenzhong, China’s ambassador in Washington, said: “People should not focus on only one thing, that is balancing the economy.” The International Monetary Fund should concentrate on doing a better job of monitoring the build-up of financial risks.
He said China – which reacted angrily to US moves to slap countervailing duties on tyre imports this week – wants the G20 to make a strong commitment to avoiding protectionism.
Mr Zhou’s comments, echoed by officials in Beijing, came as the White House and European nations move to try to agree in Pittsburgh a framework for tackling global imbalances – big gaps between savings and investment rates among countries, reflected in big current account surpluses and deficits.
“We hope to reach agreement on a framework for balanced growth, for agreeing on how to address the imbalances that led to this crisis and on some process for holding each other accountable,” Michael Froman, the US’s deputy national security adviser for international economics, said on Wednesday.
Jim Sinclair’s Commentary
Once you have opened Pandora’s Box of quantitative easing there is no practical way to close it without blowing the economy off the map. QE to infinity is in our future.
"Option" mortgages to explode, officials warn
Thu Sep 17, 2009 7:49pm EDT
By Lisa Lambert
WASHINGTON (Reuters) – The federal government and states are girding themselves for the next foreclosure crisis in the country’s housing downturn: payment option adjustable rate mortgages that are beginning to reset.
"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama’s administration to discuss ways to combat mortgage scams.
"That’s the next round of potential foreclosures in our country," he said.
Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures.
In Arizona, 128,000 of those mortgages will reset over the next year and many have started to adjust this month, the state’s attorney general, Terry Goddard, told Reuters after the meeting.
Jim Sinclair’s Commentary
"Rescuing the Rescuer" guarantees QE to infinity. That implies a much lower US dollar.
Gov’t home loan agency faces cash squeeze
Federal Housing Administration faces cash squeeze, insists no taxpayer bailout needed
By Alan Zibel, AP Real Estate Writer
On Friday September 18, 2009, 2:04 pm EDT
WASHINGTON (AP) — The Federal Housing Administration said Friday that its financial cushion will sink below mandatory levels for the first time in its 75-year history, but officials insisted the agency won’t need to be rescued.
"Under no circumstance will any taxpayer bailout be needed," said David Stevens, the FHA’s commissioner. He also said the agency doesn’t expect to raise fees for borrowers, or curtail the number of loans it insures.
Amid the collapse of the subprime lending market, the government has taken up the slack. The FHA has insured nearly a quarter of all new loans made this year, and about 80 percent of that business is from first-time homebuyers.
But the agency has faced mounting concerns on Capitol Hill that it will soon need a taxpayer bailout. As of this summer, about 17 percent of FHA borrowers were at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.
Plummeting home prices, Stevens said, are the main reason its financial reserves are dwindling. While an earlier analysis had assumed prices would hit bottom this year, the agency now is assuming prices will fall through next spring.
Jim Sinclair’s Commentary1
Price will follow monetary inflation as sure as night follows day.
Massive Inflation Has Already Arrived in the U.S.
Fri Sep 18, 2009 12:28pm EDT
FORT LEE, N.J., Sept. 18 /PRNewswire/ — The National Inflation Association today released the following statement to its http://inflation.us members:
"On March 5th with the U.S. Dollar Index at a multiyear high of 89, we wrote an article entitled, "The World is Awashed with Dollars" and said, "It’s a real shame that those who lost most of their money in the stock market and Real Estate bubbles, and are now finally selling out after these markets have already collapsed, are positioning themselves to get wiped out all over again through massive inflation."
On March 26th we wrote another article entitled, "Don’t Be Last Person Out of the Dollar" and said, "They (the politicians in Washington) will soon learn that you can’t reinflate a bubble as Americans start to wake up and begin pouring their Dollars into real, hard assets like Gold and Silver."
Since then, the U.S. Dollar Index has fallen practically straight down to a new 52-week low of 76, while gold has risen to a new 18-month high of $1,025.80 per ounce and silver has risen to a new 13-month high of $17.63 per ounce. Meanwhile, several of our gold and silver stock suggestions have gained over 100%.
Ben Bernanke said this week that the recession is "very likely over." Yes, the recession may be over in nominal terms, but massive inflation has just begun and prices of stocks and real estate will continue to plummet when valued in real money, gold and silver. You can’t just print your way out of a recession without increasing production. Sure, if you print enough money prices of stocks and real estate will rise when priced in dollars, but that won’t mean a thing when it costs $10,000 to fill your refrigerator with food.
Jim Sinclair’s Commentary
Two of the greatest traders in history, Jesse Livermore and Bert Seligman, said: "As goes Motors so goes the USA."
Unfortunately, post Cash for Clunkers, this remains true if only as a barometer. "QE to Infinity" is the future.
US car sales a ‘disaster,’ says CEO of Chrysler/Fiat Sergio Marchionne
Thursday, September 17th 2009, 4:00 AM
Chrysler is giving a gloomy picture of auto sales with the government’s Cash for Clunkers program now just a fond memory.
The Detroit automaker newly run by Fiat said U.S. sales industrywide are off 19% so far this month.
"We are going to see harsh reality in September," Sergio Marchionne, CEO of Fiat and Chrysler, said on Wednesday. He called the U.S. sales results a "disaster."
The CEO of General Motors, Fritz Henderson, said the market is "very weak" this month.
Chrysler sales are being pinched beyond the industry decline because of a lack of cars and trucks on dealers’ lots, said Peter Fong, Chrysler’s lead sales executive. Fong said Chrysler dealers have 83,000 vehicles on hand, about a quarter of what they had a year ago.
"For Chrysler, our story is a lack of inventory. It’s the lowest level that anyone can remember," he said, although he added: "I think it’s likely that car sales will bounce back next month."
Light-vehicle sales in the U.S. last September ran at a seasonally adjusted annual rate of 12.5 million, which was the lowest since March 1993. A 19% decline would equate to a 10.1 million annual rate, higher than any of the first six months of 2009.
Jim Sinclair’s Commentary
"QE to Infinity," and the recovery reports that are 90% MOPE are covered from the following excellent Leap2020 report.
Global systemic crisis: In pursuit of the impossible recovery
- Public announcement GEAB N°37 (Septembre 16, 2009)
Before this summer, LEAP/E2020′s team announced that there would be no recovery in sight in September 2009, and not until summer 2010 in any event. Well indeed, contrary to the claims of the media, and financial and political circles, we confirm our anticipation.
The slowdown in the speed of collapse of the global economy, at the origin of all the « good news » (1), is only due to the world’s enormous public financial effort of the last twelve months (2). But the « time saved » using taxpayers’ money around the world should have been dedicated to redesigning the international monetary system at the heart of the current systemic crisis (3). Yet, besides a few cosmetic considerations (4) and huge gifts to US and European banks, nothing serious has been undertaken, and, when it comes to the future, the « every man for himself » rule prevails (5).
Now, as summer 2009 comes to a close, and as the three rogue waves start impacting the global economy hard (unemployment (6), bankruptcies (7) and monetary shocks (8)), the time to mend the system, or to prepare for a soft transition towards a new global system, is over (9). The first signs of a major decoupling (10) are beginning to appear: the rest of the world is rapidly moving away from the Dollar zone. As shown by the chart below, there is a 95 percent chance that 1,000 billion new USDs will be printed in a very near future… not very attractive for the Dollar zone
Jim Sinclair’s Commentary
Increasing unemployment puts the whammy on consumers, housing and autos.
US growth looking for an engine will rely on convoluted exotic paper vehicle manufacturers and distributors in Wall Street.
Jobless rate tops 12% in 5 states
California, Nevada and Rhode Island hit record-high unemployment rates, Labor Department says.
By Julianne Pepitone, CNNMoney.com staff reporter
Last Updated: September 18, 2009: 1:44 PM ET
NEW YORK (CNNMoney.com) — Five states posted jobless rates above 12% in August, according to federal data released Friday.
California, Nevada and Rhode Island each hit record-high rates, the Labor Department said.
Michigan led the nation in unemployment, with a rate of 15.2%, while Nevada was next at 13.2% and Rhode Island was third at 12.8%. California and Oregon were tied for the fourth spot, each with unemployment at 12.2%.
"The losses tend to be heavy in states that have a high concentration of manufacturing jobs or were hit hard by the housing bust," said Mark Vitner, economist at Wachovia.
In August, 27 states and the District of Columbia recorded month-over-month unemployment rate increases, while 16 states posted a decrease in unemployment and seven saw rates hold steady.
The total number of nonfarm jobs fell in 42 states and the District of Columbia, while 8 states saw an increase.
Jim Sinclair’s Commentary
Borrow to guarantee, now there is a sound financial move.
The West has bought the farm and is in total denial.
FDIC Considers Borrowing From Treasury to Shore Up Deposit Insurance
By JESSICA HOLZER
WASHINGTON — Federal Deposit Insurance Corp. Chairman Sheila Bair said Friday her agency may tap its $500 billion credit line with the U.S. Treasury to replenish its deposit insurance fund, though she appeared cautious about doing so.
"We are carefully considering all options" including borrowing from the Treasury, Ms. Bair said Friday after a speech in Washington.
Ms. Bair has already warned banks that they may face an assessment increase to bolster the fund. Friday, she said there are also other little-known options available to the agency, including requiring banks to prepay assessments. The FDIC board of directors will meet at the end of this month to consider how to replenish the fund, she said
Jim Sinclair’s Commentary
Flash trading in terms of seeing orders before they are placed is not the same as how the same program is easily modified to beat a short sale rule that is an "above the bid" transaction.
Flash Trading Halt Backed for Nasdaq, Bats as SEC Proposes Ban
By Whitney Kisling and Jesse Westbrook
Sept. 18 (Bloomberg) — Nasdaq OMX Group Inc. and Bats Global Markets’ decision to prohibit flash stock orders was affirmed by the Securities and Exchange Commission, which proposed banning the practice yesterday.
SEC commissioners unanimously voted to seek public comment on a rule barring exchanges and trading platforms from giving clients access to information about share orders a fraction of a second before the market. The decision may force Direct Edge Holdings LLC, the only equity network still allowing the practice, to stop offering the service to clients.
“Nasdaq and Bats correctly assumed that the regulatory decision was going to go against flash,” said Sang Lee, a market analyst at financial-services consultant Aite Group LLC in Boston. “At this point, certainly all of the pressure is on Direct Edge because they haven’t abandoned their effort.”
Flash orders are a subset of so-called high-frequency trading in which hedge funds and other Wall Street firms use advanced computers to buy and sell thousands of shares a second. While they make up a small fraction of high-speed strategies, they have drawn the most criticism from investors, traders and politicians, who say they give some investors an unfair edge.
The orders grew to 2.8 percent of stock traded in the U.S. in July, three years after Direct Edge began the practice as a way of increasing the odds an order would be filled, according to data compiled by New York brokerage Rosenblatt Securities Inc. That’s an 18 percent increase from the previous month. Rosenblatt said the percentage should fall this month after Nasdaq and Bats shut down their systems on Sept. 1.
Jim Sinclair’s Commentary
Israel is in a very serious squeeze play.
IAF chief: We must stop S-300 delivery
By YAAKOV KATZ
Sep 18, 2009 0:16 | Updated Sep 18, 2009 11:40
Israel needs to make every effort to stop the S-300 missile defense system from reaching countries where the air force may need to fly, IAF commander Maj.-Gen. Ido Nehushtan has told The Jerusalem Post in an exclusive interview.
"The S-300 is a Russian-made surface-to-air missile system that is very advanced, with long ranges and many capabilities," Nehushtan told thePost in the interview, which appears in our Friday Magazine.
"We need to make every effort to stop this system from getting to places where the IAF needs to operate or may need to operate in the future," he said.
The S-300 is one of the most advanced multi-target antiaircraft missile systems in the world and has a reported ability to track up to 100 targets simultaneously while engaging up to 12 at the same time. It has a range of about 200 km. and can hit targets at altitudes of 90,000 feet.
While Russia and Iran signed a deal for the sale of the system several years ago, according to latest assessments in Israel, it has yet to be delivered.
Jim Sinclair’s Commentary
Now that the SURGE is over, the Taliban returns, digs up their guns and ammunition and gets back to work.
1. Pakistan goes Taliban.
2. Israel makes a miscalculation.
3. Turkey becomes a victim.
Carnage in Pakistan market attack
At least 33 people have been killed and dozens injured in a suicide car bomb attack at a village market in north-west Pakistan, police say.
The explosion is said to have taken place at a busy intersection close to the garrison town of Kohat.
Most of the dead are said to be members of the Shia Muslim minority. The area has a history of sectarian tension.
A little-known militant group calling itself Lahskar-e-Jhangvi al-Almi says it carried out the attack.
It says the attack was in revenge for the death of a prominent religious leader, Maulana M Amin, who was killed in Hangu in June.
Correspondents say the group is likely to be linked to Lashkar-e-Jhangvi, a Sunni extremist group which has links to the Taliban.
Jim Sinclair’s Commentary
Another insurer that provides rescue will have to be rescued. The implications are QE to infinity and a lower US dollar.
Housing Agency’s Cash Reserves Will Drop Below Requirement
By Dina ElBoghdady
Washington Post Staff Writer
Friday, September 18, 2009
The Federal Housing Administration has been hit so hard by the mortgage crisis that for the first time, the agency’s cash reserves will drop below the minimum level set by Congress, FHA officials said.
The FHA guaranteed about a quarter of all U.S. home loans made this year, and the reserves are meant as a financial cushion to ensure that the agency can cover unexpected losses.
"It’s very serious," FHA Commissioner David H. Stevens said in an interview. "There’s nothing more serious that we’re addressing right now, outside the housing crisis in general, than this issue."
Until now, government officials have warned that the agency could be forced to ask Congress for billions of dollars in emergency aid or charge borrowers more for taking out FHA-insured loans if the reserves fell below the required level, equal to 2 percent of all loans guaranteed by the agency.
