Dear CIGAs,
Below are the FDIC numbers. There is no practical means of draining liquidity from the monetary system of the West. Absolutely none!
The FDIC had $10.4 Billion in its fund at the end of June. These funds are there to protect more than $6.2 trillion in member bank deposits.
Some well respected authorities anticipate the failure of hundreds of banks in the next 12 months.
Jim Sinclair’s Commentary
Insulate Wall street and flush the good folks.
Jim Sinclair’s Commentary
The culture of greed and destruction which hates those that build and contribute remains. OTC derivatives continue to grow while in the real economy one out of ten people are redundant.
Problems are far, far from over contrary to media and G20 hype.
"The heart of financial regulatory reform is centered on the implementation of leverage by our largest financial institutions. The leverage is exercised in a wide array of activities, both on and off-balance sheet. The capital utilized by the banks in these activities is credit that has not and will not flow directly through to the economy. Why? The banks believe that they will generate a greater return on the capital via proprietary activities rather than facilitating client business and addressing customer needs."
Volcker Unleashes Another Volley on the Wizards in Wall Street and Washington
By Larry Doyle|Sep 24, 2009, 1:00 PM
I find it interesting, but not surprising, that former Fed Chair Paul Volcker’s testimony to Congress this morning has received little to no coverage by major media outlets. Why? With few exceptions, the financial media plays along with the financial industry which pays the bills while relegating investors and the American public to the bleachers.
Recall that just a week ago I wrote “Volcker Launches Bombshell on Wall Street and Washington.” I highlighted Volcker’s direct hit:
While the insiders on Wall Street and Washington pander about real financial regulatory reform, former Fed chair Paul Volcker yesterday hit ground zero on this hotly debated topic.
The heart of financial regulatory reform is centered on the implementation of leverage by our largest financial institutions. The leverage is exercised in a wide array of activities, both on and off-balance sheet. The capital utilized by the banks in these activities is credit that has not and will not flow directly through to the economy. Why? The banks believe that they will generate a greater return on the capital via proprietary activities rather than facilitating client business and addressing customer needs.
Today, Volcker locks and loads and unleashes another volley on the wizards in Washington and their incestuous brethren on Wall Street. Whatever you may think of Volcker as a central banker, I hold him in high regard for elevating the debate at this critical point in our country’s economic history. Regrettably, President Obama’s adviser, Mr. Larry Summers, has taken Mr. Volcker’s chair away from the table. Yes, this is the same Mr. Summers who The New York Times described this past April as having received A Rich Education . . .
Jim Sinclair’s Commentary
No one is draining anything with these conditions.
U.S. Economy: Sales of Existing Homes Unexpectedly Decline
By Bob Willis
Sept. 24 (Bloomberg) — Sales of existing U.S. homes unexpectedly fell last month for the first time since March, signaling the housing recovery will be slow to gain speed.
Purchases dropped 2.7 percent in August to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said today in Washington. The median price dropped 12.5 percent from August 2008. A government report showed unemployment claims declined.
Stocks fell on concern the housing market remains dependent on government tax credits and purchases of housing debt by the Federal Reserve. The central bank yesterday said it would extend its program to buy $1.25 trillion in mortgage- backed securities, as well as $200 billion in agency debt, through March while noting that “housing-market activity has increased.”
“The improvement in the housing market is not going to be a smooth rise, but a choppy, upward trend,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York, who projected sales would fall. “The real test will be if the market can weather the end of government stimulus.”
The Standard & Poor’s 500 Index was down 1.1 percent to 1,049.02 at 12:35 p.m. in New York. Treasury securities rose.
Jim Sinclair’s Commentary
Coordinated drain of international monetary expansion has no practical means and will not occur under these conditions.
Be serious, please.
Housing Crash to Resume on 7 Million Foreclosures, Amherst Says
By Jody Shenn
Sept. 23 (Bloomberg) — The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.
Helping to stoke speculation the housing slump has ended, an S&P/Case-Shiller index for 20 U.S. metropolitan areas showed the first month-over-month increases in values since 2006 in May and June, reducing the drop from the peak to 31 percent. Echoing other mortgage-bond analysts including those at Barclays Capital Inc., Amherst cautioned that a change in the mix of foreclosure and traditional sales over different parts of the year lifted prices in the period, as the distressed share shrank.
“The favorable seasonals will disappear over the coming months, and the reality of a 7 million-unit housing overhang is likely to set in,” they said.
The amount of pending foreclosed-home supply has been boosted by more borrowers going into default, fewer being able to catch up once they do, and longer time periods to seize properties because of issues such as loan-modification efforts and changes to state laws, the New York-based analysts wrote.
Jim Sinclair’s Commentary
Have you noticed the unprecedented speaking activity of economic and political leaders saying everything is in accordance with what I informed you was requested at the meeting in mid July between China and the US?
The problem is that there is no way these statements can be implemented without a planetary economic implosion. No such thing will occur due to that very reason.
Dollar under scrutiny at G20 summit
by P.Parameswaran P.parameswaran – Thu Sep 24, 7:45 am ET
PITTSBURGH, Pennsylvania (AFP) – The embattled US dollar is expected to come under scrutiny at a summit of developing and industrialized nations following China-led calls to review its role as a reserve currency.
The dollar issue is bound to surface at the two-day meeting in Pittsburgh as US President Barack Obama and other leaders of the Group of 20 economies debate a new framework for tackling the so called global "economic imbalances" blamed for fuelling the latest financial crisis.
"Though not clear how the plan would be enforced, it would involve measures such as the US cutting its deficits and saving more, China reducing its reliance on exports and Europe making structural changes to boost business investment," analysts at French bank Societe Generale said in a report.
Some argue that the financial crisis resulted from imbalances between savings and investment in major economies, which have led to large current deficits, as evident in the United States, and surpluses, as enjoyed by China.
Beijing was the first to call for a new global currency as an alternative to the US dollar as the US deficit rocketed — the White House estimates it could reach nine trillion dollars over a decade.
Jim Sinclair’s Commentary
Debt is how we got here. Debt is not a means of getting out of here.
U.S. sees debt, deficit everywhere one year after economic crisis
www.chinaview.cn 
2009-09-24 15:08:57
WASHINGTON, Sept. 23 (Xinhua) — One week before the U.S. fiscal year 2009 ends on Sept. 30, top U.S. officials may not volunteer the unsettling news on the federal budget deficit and America’s record-breaking public debt at the G20 Summit in Pittsburgh.
According to the White House’s own estimate, the federal government’s deficit for the fiscal year 2009 would reach 1.84 trillion U.S. dollars, roughly 13 percent of the estimated GDP. This would be the highest level since 1945 when the United States was involved in a world war.
The total amount of national debt will reach nearly 13 trillion dollars – an almost unimaginable number that is bigger than every country’s annual GDP except that of the United States.
The debt to GDP ratio rose sharply from 70 percent in 2008 to over 90 percent this year, and is still growing. By contrast, China’s debt to GDP ratio is below 20 percent.
Some Americans contend that since the U.S. economy is much larger than that of any other country in the world, it doesn’t need to worry a lot about the accumulation of public debt. But William Gale, budget deficit expert at the Brookings Institution, begs to differ.
Jim Sinclair’s Commentary
In this climate nothing is going to be drained from anywhere.
Luxury Hotels in U.S. Risk Default as $850 Rooms Remain Empty
By Nadja Brandt
Sept. 24 (Bloomberg) — Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing.
Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.
“All segments are showing signs of distress but the luxury segment carries much higher loan balances and is more clearly affected,” Frank Innaurato, managing director of CMBS analytical services at Horsham, Pennsylvania-based Realpoint, said in a telephone interview.
Lodging owners are struggling after adding rooms and properties at the peak of the CMBS market from 2004 to 2007, when $83.4 billion in hotel-backed securities was issued. Occupancy among chains with the costliest rooms fell to 60 percent in the first half from 70 percent a year earlier, according to Smith Travel Research. The decline was the industry’s largest for that period.
“Luxury hotels have been aggressively financed during the peak CMBS issuance years,” David Loeb, an analyst at Robert W. Baird & Co., said in a phone interview. “That’s why luxury hotel loans crowd these watch lists.”
Jim Sinclair’s Commentary
There is no practical means to withdraw any liquidity from this economic climate.
‘Age of Austerity’ Awaits G-20 as Debt Haunts Rogoff (Update3)
By Simon Kennedy
Sept. 24 (Bloomberg) — Global leaders may be saddled with the weakest recovery since World War II if they are to pay off the $9 trillion tab they ran up rescuing the world economy from the deepest financial slump in seven decades.
U.S. President Barack Obama and his counterparts from the Group of 20 nations meet in Pittsburgh today warning that the recovery is still too weak to start reversing lifelines to banks and the broader economy. Their next challenge will be to reduce the resulting debt before it sparks higher bond yields and erodes their governments’ creditworthiness.
“There’s no question that the most significant vulnerability as we emerge from recession is the soaring government debt,” said Harvard University Professor Kenneth Rogoff who is a co-author of a new history on financial crises. “It’s very likely that will trigger the next crisis as governments have been stretched so wide.”
Unwinding the borrowing will probably require leaders to raise taxes and cut spending, ushering in what HSBC Holdings Plc Chief Economist Stephen King calls an “age of austerity” that saps growth prospects for years to come even amid recovery.
Jim Sinclair’s Commentary
There is not a snowball’s chance in hell of withdrawing this liquidity and accomplishing this.
It will in fact be larger than $7 trillion
U.S. issues $7 trillion debt, supply to stabilize
Wednesday September 23, 2009, 12:45 pm EDT
By Burton Frierson
NEW YORK (Reuters) – The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.
Though markets and the economy are improving, efforts to provide a firm foundation for recovery will require increases to the U.S. Treasury’s conventional bonds going forward, as well as debt securities that are indexed to inflation.
However, this expansion may take place in an environment where investors consider leaving the safe-haven Treasury market for riskier assets, and debt issuance is likely to level off mid next year, said Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan.
"In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance — that’s in a 12-month period," Ramanathan told a financial markets conference in New York.
"This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year," he added.
Jim Sinclair’s Commentary
I can’t believe anyone could say this with a straight face.
Geithner supports strong dollar
By MARTIN CRUTSINGER
AP Economics Writer
(AP:PITTSBURGH) Treasury Secretary Timothy Geithner says the United States has a a special responsibility to preserve the role of the dollar as the world’s primary reserve currency.
Geithner said that a strong dollar is very important to the United States and the Obama administration is committed to doing everything necessary to preserve the dollar’s standing in global currency markets.
Geithner, talking in Pittsburgh, said as part of this effort the administration was committed to bringing down the soaring U.S. budget deficit once an economic recovery is firmly in place in the United States.
Jim Sinclair’s Commentary
It is a start.
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Jim Sinclair’s Commentary
This not simply Ford Canada, it is systemic where pensions are concerned.
There is no room at all and therefore there is no practical method to drain any monetary stimulus from the present economic world. On the hand, much more monetary stimulus will be required in a short time.
Massive pension shortfall hits Ford
Greg Keenan
Globe and Mail Update Last updated on Thursday, Sep. 24, 2009 03:10AM EDT
Ford Motor Co. of Canada Ltd. is facing a $1.8-billion shortfall in its pension plan – a demonstration that the healthiest of the Detroit Three auto makers in Canada has been unable to avoid one of the biggest financial problems that caused its closest competitors to seek government financial help.
While Ford and its parent Ford Motor Co. (F-N7.33-0.03-0.41%) did not seek a bailout by taxpayers in either Canada or the United States, the Oakville, Ont.-based company wants the Canadian Auto Workers union to provide it with the same pension relief it gave to the Canadian units of General Motors Co. and Chrysler Group LLC.
“Prudent management of Ford’s pension plans is important to the future success of Ford in Canada and cash conservation is more important than ever,” Ford said in a letter to employees and retirees.
The pension plan held assets of $2.91-billion as of Dec. 31, 2008, which would cover just 62 per cent of the liabilities if the plan were wound up, the letter said. Those figures mean the liabilities in the plan are about $4.7-billion.
While rising stock markets will help shrink the deficit, the pension shortfalls faced by Ford and many other industrial companies highlight a risk to the recovery in the manufacturing sector – the cash drain of paying benefits to a big contingent of older and retired workers.
Jim Sinclair’s Commentary
You know all of this over the top stuff has to engender some concern among the sheeple.
Has the world traded away all its freedoms and rights to Big Brother for some concept of false protection?
Where have all these cowards come from? What happened to knowing that "Bravery was saddling up even when you are scared" — John Wayne.
This is simply unacceptable. Silence is acceptance. Silence is cowardly. How many of you will be shocked, yet silent?
I choose not to be a coward. Death before dishonor is the only code of conduct that makes men free. Dishonor before discomfort binds men to eternal servitude.
EU funding ‘Orwellian’ artificial intelligence plan to monitor public for "abnormal behaviour"
The European Union is spending millions of pounds developing "Orwellian" technologies designed to scour the internet and CCTV images for "abnormal behaviour".
By Ian Johnston
Published: 9:08PM BST 19 Sep 2009
A five-year research programme, called Project Indect, aims to develop computer programmes which act as "agents" to monitor and process information from web sites, discussion forums, file servers, peer-to-peer networks and even individual computers.
Its main objectives include the "automatic detection of threats and abnormal behaviour or violence".
Project Indect, which received nearly £10 million in funding from the European Union, involves the Police Service of Northern Ireland (PSNI) and computer scientists at York University, in addition to colleagues in nine other European countries.
Shami Chakrabarti, the director of human rights group Liberty, described the introduction of such mass surveillance techniques as a "sinister step" for any country, adding that it was "positively chilling" on a European scale.
The Indect research, which began this year, comes as the EU is pressing ahead with an expansion of its role in fighting crime, terrorism and managing migration, increasing its budget in these areas by 13.5% to nearly £900 million.
The European Commission is calling for a "common culture" of law enforcement to be developed across the EU and for a third of police officers – more than 50,000 in the UK alone – to be given training in European affairs within the next five years.
Jim Sinclair’s Commentary
Events, comments and facts are accelerating in the Iran threat.
National security adviser says Iran advancing in making medium-range missiles
Sunday, September 20, 2009
By Bill Gertz
White House National Security Adviser James L. Jones says President Obama’s decision to abandon a long-range missile defense site in Eastern Europe was driven by U.S. intelligence concerns that Iran is further along than previously thought in developing medium-range missiles that could strike Western Europe and the Middle East with nuclear warheads.
"We think they are heading toward weaponiz[ing] these missiles, which obviously we want to dissuade them from doing," the retired four-star Marine general told The Washington Times, explaining why U.S. officials dramatically shifted from years of focus on guarding against longer-range intercontinental ballistic missiles (ICBMs).
Gen. Jones also acknowledged that the policy shift announced on Thursday will pay "an ancillary benefit" to U.S. efforts to improve relations with Moscow, taking issue with a statement by White House press secretary Robert Gibbs that the change was "not about Russia."
"The fact is, there is clearly a relationship here in all of these issues," he said. "We are trying to reset the relationship with Russia, based on one of mutual respect and mutual interest."
In a wide-ranging interview Friday afternoon in his West Wing office, Gen. Jones said the government’s top national security leaders met about 50 times since March before unanimously agreeing to scrap a 2006 Bush administration plan to put 10 long-range, ground-based interceptor missiles in Poland and a related radar tracking site in the Czech Republic. They are to be replaced by ship-based radar and interceptors better able to protect Europe from shorter-range missiles, he said.
