Dear CIGAs,
Here is a warning for you this evening:
Prechter is at it again. This time he is going low budget on YouTube. Next will come spam.
Jim Sinclair’s Commentary
Pretend and Extend.
U.S. Foreclosures to Reach 3.9 Million in Second Record Year
Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. Said
By Dan Levy
(Bloomberg) — Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.
This year’s filings will surpass 2008′s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.
"We are a long way from a recovery," John Quigley, economics professor at the University of California, Berkeley, said in an interview. "You can’t start to see improvement in the housing market until after unemployment peaks."
Foreclosure filings exceeded 300,000 for the ninth straight month in November, RealtyTrac said today. A weak labor market and tight credit are "formidable headwinds" for the economy, Federal Reserve Chairman Ben S. Bernanke said in a Dec. 7 speech in Washington. The 7.2 million jobs lost since the recession began in December 2007 are the most of any postwar economic slump, Labor Department data show. Unemployment, at 10 percent last month, won’t peak until the first quarter, Quigley said.
Loan-modification programs and an expanded government tax credit for first-time homebuyers are helping slow the monthly pace of filings and "keeping a lid" on further foreclosures, James Saccacio, RealtyTrac’s chief executive officer, said in the statement.
Jim Sinclair’s Commentary
True, but when bank regulators overlook overvalued assets or accept non performance as performance defaults come late and with a greater vengeance.
For regulators to act this way is another example of "Pretend and Extend."
The Coming Wave Of Debt Defaults
Sam Rovit and David Sweig, 12.08.09, 05:29 PM EST
The worst is not yet past. Be prepared.
The trouble in the commercial real estate markets is getting ugly, as the precarious situation of Dubai World has made all too clear.
Expect many more unpleasant situations like that one. Speculative-grade debt issuers are bracing for the default rate to hit 12% to 14% by the end of 2009, according to our projections at Bain & Company. The last time the U.S. economy experienced default rates of that magnitude was 28 years ago. The current long-term average default rate is 4.5%; as recently as 2007, it was just under 1%. These failures are not limited to small or marginal firms; they are happening at large companies with at least $100 million in assets, and have, after all, already hit legendary businesses like General Motors, Lehman Brothers and General Growth Properties.
What’s significant is not just that big, high-profile companies have defaulted–by missing a payment, making a distressed exchange with lenders to buy time or filing for bankruptcy–but that virtually every sector of the U.S. economy has been touched, including automotive, home building, industrial products, entertainment, media and financial services. Now watch for commercial real estate.
In aggregate, default rates will probably peak this year, but above-average default rates will last through 2011, since defaults historically lag changes in gross domestic product by 12 to 18 months. Like depth charges, defaults will continue to explode as cash positions sink, even as the economy recovers. By the end of this year, we will have seen nearly 300 speculative-grade issuers default on their debt in 2008 and 2009; only 116 did in the four years between 2004 and 2007. Yet as many as 300 more companies are likely to default by the end of 2011, and that could increase if current GDP expectations prove too optimistic. This could hit commercial real estate particularly hard since cash flows there are tightly linked to employment growth, making prolonged high unemployment an additional challenge on top of other economic woes.
Jim Sinclair’s Commentary
The deluge of Gold bears, silent for a while now, are raising a great cacophony
The gold market is alive and well!
Jim Sinclair’s Commentary
To those that believe that you can profit in the dollar market with total dependence on technicals and rank disregard for fundamentals, I suggest the following:
Jim Sinclair’s Commentary
Which would you prefer, an ETF that clearly states it is NOT required to hold physical bullion (GLD) or an ETF strictly limited to physical gold (PHY)?
That is a no brainer.
New Quasi-Competition For Gold Trust ETF (GLD, PHYS)
Posted: December 9, 2009 at 2:50 pm
It looks like the SPDR Gold Shares (NYSE: GLD) is about to get some new competition, albeit far a far smaller trading vehicle. A F-1 filing at the SEC was made today by Sprott Physical Gold Trust, which is going to be selling units via an initial public offering. Be advised that this is a Canadian trust established as an Ontario trust, and it was created to invest and hold substantially all of its assets in physical gold bullion. In short, it wants to compete against the “GLD.” While no terms beyond a $10.00 offering price are formally listed, it noted in the filing that it will sell up to $575 million in this IPO.
The filing noted that the initial public offering price will be $10.00 per unit to investors who are prepared to invest a minimum initial subscription amount of $1,000.00. The trust intends to file an application to list its units on the New York Stock Exchange for the ticker “PHYS” and the Toronto Stock Exchange under the ticker “PHY”.
Underwriters are listed as Morgan Stanley and RBC Capital Markets. As far as how this compares in size, The SPDR Gold Trust has a market cap somewhere north of 50-times that of this new filing.
You can join our open email distribution list to hear more news on ETF and commodity trends, key analyst calls, day trader alerts, mergers and acquisitions, Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.
Jim Sinclair’s Commentary
This is the pot calling the kettle black.
Former BOE Official Buiter Says Greece May Be First EU Default
By Svenja O’Donnell and Elliott Gotkine
Dec. 9 (Bloomberg) — Former Bank of England policy maker Willem Buiter said Greece may be the first major country in the European Union to default on its debts since the aftermath of World War II.
“It’s five minutes to midnight for Greece,” Buiter, who will join Citigroup Inc. as its chief economist next month, said in a Bloomberg Television interview today. “We could see our first EU 15 sovereign default since Germany had it in 1948.”
The EU’s economic affairs commissioner said late yesterday that officials are ready to help Greece with its budget deficit after concerns about its public finances sparked a rout in Greek government bonds. Fitch Ratings cut its rating on the nation’s debt yesterday to BBB+ and two other major ratings companies are threatening to follow.
“Default is not unavoidable,” Buiter said. “But unless there are radical fiscal actions, lasting cuts in spending and tax increases of at least 7 percent of GDP, the writing is on the wall” for Greece.
There’s “absolutely” no risk Greece will default, Finance Minister George Papaconstantinou said in an interview today with Bloomberg Television. Greek banks are “fundamentally sound” and Greece will not seek an EU aid package, he said.
Jim Sinclair’s Commentary
More and more of this will be happening.
As a society will we soon be shooting to kill for the theft of a loaf of bread?
Think about that and then think about how OTC derivative manufacturers and distributors are rewarded by making them 100% whole.
Accused Stamford bank robber told police he needed money for rent
Suspect admits in statement to ‘terrible decision-making’
By Jeff Morganteen
Posted: 12/09/2009 09:40:23 PM EST
Updated: 12/10/2009 06:16:01 AM EST
STAMFORD — Just before 4 p.m. on a Tuesday afternoon last month, Jesse Lee Dinius sat in his landlord’s car on Morgan Street and mulled over what to do about his rent. He owed his landlord $1,000 and was one and a half months behind in paying her. He had been unemployed for the past two and a half months after getting laid off from an advertising agency.
Before getting into the car, he took his roommate’s BB gun, which resembled a Beretta pistol, from his Oak Street apartment, only a few blocks from the KeyBank on Bedford Street. He wrote a note in the kitchen. It read: "I have a gun! Give me cash now! 15 seconds — stay quiet or die."
Dinius, 26, a Fairfield University graduate from a wealthy Boston suburb, never used the note. Police stopped him outside the bank, found the note and BB gun, and arrested him on felony attempted robbery charges. He was held in lieu of $250,000 bond that a judge eventually lowered to $175,000.
On Wednesday, police also charged Dinius in the attempted robbery of a Wachovia bank in Glenbrook and the successful holdup of a Bank of America branch in Springdale, both from the fall. He faces felony robbery and larceny charges in these incidents.
Dinius told police he needed money for rent, food and bills. For the first time in his life, he was scrounging for money, he said, so on three separate occasions this fall, police believe he grabbed his roommate’s BB gun and looked to hold up a Stamford bank, court documents show.
Jim Sinclair’s Commentary
1. Israel makes a major miscalculation
2. Pakistan goes Taliban
3. Turkey is a victim
Iran can build nuclear bomb today’
The international community’s efforts to head off Iran before it could build a nuclear weapon have failed, said Gen. Yossi Baidatz, head of the research division of Israel’s Military Intelligence.
In a briefing to the Knesset Foreign Affairs and Defense Committee on Monday, Baidatz said that Iran now has all the technical capability to build a nuclear warhead, and has enriched over 1,800 kilograms of uranium, enough for at least one bomb.
Baidatz suggested that he believes the only reason Iran hasn’t built a bomb yet is because it is focusing on upgrading its missile delivery systems. The Islamic Republic recently tested a new locally-produced ballistic missile that can reach all of Israel and much of Europe.
Prime Minister Benjamin Netanyahu also addressed the committee and said that over the past year, "two things have happened: Iran has advanced its military nuclear program, and the international community has lost its legitimacy."
