Dear CIGAs,
This "pretty" well covers the subject.
Jim Sinclair’s Commentary
In the 1930s it was bread lines, soup kitchens and apple sellers.
Today’s lines are for "free government money."
Any wonder why the Green back is doomed? If you can’t fix it, paper it over!
Click here to watch the video…
Jim Sinclair’s Commentary
CIGA Vortex confirms the plan:
Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency. "It’s the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened." It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback…
Jim Sinclair’s Commentary
You can count on economic stimulus plan #2 not named plan #2.
Dropping Rents Will Drag House Prices Down with Them
Posted Oct 06, 2009 12:14pm EDT by Henry Blodget
The vacancy rate for rental apartments in the U.S. is now 7.8% and climbing, says the Wall Street Journal. This is the highest vacancy rate in 23 years.
Worse, the vacancy rate is expected to keep climbing through the winter, ultimately hitting the highest rate on record.
This is good news for renters and bad news for landlords. It’s also bad news for anyone who owns and would like to sell a house.
Why are rising rental vacancies bad news for homeowners?
Because rising vacancies put pressure on rents, as landlords have to cut prices to woo a smaller pool of tenants. As rents drop, meanwhile, one of the key measures of house-price value–the price-to-rent ratio–also changes, and not for the good.
All else being equal, when rents drop, the "Housing P/E ratio" — price to rent — increases as rents decrease. This is the same thing that would happen to the P/E ratio of a stock if the company’s earnings began to shrink.
Jim Sinclair’s Commentary
You must admit Mr. Neil Barofsky has courage.
Inspector General: Treasury Secretary Forced Banks to Surrender Ownership Interest to Government
Monday, October 05, 2009
By Matt Cover
(CNSNews.com) – In a new report, Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), reveals that then-Treasury Secretary Henry Paulson and key federal regulators forced the nation’s nine largest financial institutions to take billions in taxpayer bailout dollars in October 2008, threatening that if the banks refused, the government would take their stock shares anyway.
Barofsky’s report, released Monday, examines the circumstances under which the government selected the initial nine participants of its Capital Purchase Program (CPP) bailout. The report found that the government picked the banks because of their size and involvement in the U.S. financial system, not because they needed the money or not.
The inspector general’s report also found that federal officials, including then-Secretary Paulson, Federal Reserve Chairman Ben Bernanke, and current-Treasury Secretary Timothy Geithner all viewed the plan as an offer the banks could not refuse.
“Officials at Treasury, the Federal Reserve, and other federal regulators felt strongly that the nine institutions should not be permitted to reject the government’s capital infusions,” the report says.
Jim Sinclair’s Commentary
The FDIC better get some money fast because they are going to need it.
Recall our discussion of why the Georgia bank went bust and the failure to admit residential and commercial property loans are dead?
Fed Frets About Commercial Real Estate
With Banks Slow to Take Losses, Fears of a Residential-Bust Repeat; ‘More Pain Likely Lies Ahead’
OCTOBER 7, 2009, 4:56 P.M. ET
BY LINGLING WEI AND MAURICE TAMMAN
Banks in the U.S. "are slow" to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation to banking regulators last month.
The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. "Banks will be slow to recognize the severity of the loss — just as they were in residential," according to the Fed presentation, which was reviewed by The Wall …
Jim Sinclair’s Commentary
Part of Stimulus Package #2 that will not be named Stimulus Package #2.
Support Builds for Tax Credit to Encourage Hiring
By CATHERINE RAMPELL
The idea of a tax credit for companies that create new jobs, which the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation.
The proposal has some bipartisan appeal among politicians eager both to help their unemployed constituents and to encourage small-business development. Legislators on Capitol Hill and President Obama’s economic team have been quietly researching the policy for several weeks.
“There is a lot of traction for this kind of idea,” said Representative Eric Cantor of Virginia, the Republican whip. “If the White House will take the lead on this, I’m fairly positive it would be welcomed in a bipartisan fashion.”
In addition to the economists working on the proposal, some heavyweights support the concept, including the Nobel laureate Edmund S. Phelps, Dani Rodrik of Harvard and former Labor Secretary Robert B. Reich.
