Dear CIGAs,

So far this Friday 3 banks have been closed.

Bank Closing Information – December 11, 2009 http://www.fdic.gov/ ^[1]
These links contain useful information for the customers and vendors of these closed banks.

SolutionsBank, Overland Park, KS ^[2]
Valley Capital Bank, NA, Mesa, AZ ^[3]
Republic Federal Bank, NA, Miami, FL ^[4]

Jim Sinclair’s Commentary

The level of central bank activity is greater than anything I have seen in my career.

On balance it is definitely a dollar diversification enterprise.

Russia c.bank to buy Gokhran gold next week –source
Friday December 11, 2009 12:02:14 AM GMT
By Polina Devitt and Robin Paxton

MOSCOW, Dec 11 (Reuters) – Russia’s state repository will sell 30 tonnes of gold worth $1 billion to the central bank next week, a source at the body said on Friday, keeping the metal inside Russia after rethinking a plan to sell it on the market. Central banks worldwide are building up their gold reserves as the metal trades near record highs. Gokhran, the Russian repository, cancelled plans to sell the gold on the open market after information about the sale leaked.

"The primary aim is to make sure this gold doesn’t hit the market and influence prices," said Olga Okuneva, metals and mining analyst at Deutsche Bank in Moscow. "It’s also a way for the Russian central bank to diversify more into gold."

Russia had planned to sell between 20 and 50 tonnes on the open market to help plug a budget deficit incurred during its first recession in a decade. The economy has since shown some signs of early recovery, in line with a rebound in oil prices.

With gold trading at record highs of $1,226.10 per ounce last week, boosted by a weaker dollar, analysts said Russia would be reluctant to sell the metal abroad or to push prices down by releasing a large quantity to the market.

More… ^[5]

Jim Sinclair’s Commentary

Business is booming according to the applause on the floor of the nut house.

More banks in Maryland getting ‘cease-and-desist’ orders
K Bank, Waterfield ‘below’ adequate in capitalization, federal regulators find
by Kevin James Shay | Staff Writer
Friday, Dec. 11, 2009

As bank failures nationally continue to increase, almost twice as many Maryland banks have been slapped this year by federal regulators with cease-and-desist enforcement orders than last year for inadequate capital levels and other reasons.

Two of those state institutions, K Bank of Randallstown, with eight branches, and Waterfield Bank of Germantown have seen their ratio of total capital to risky assets — a key measure of financial health that regulators closely monitor — decline below adequately capitalized levels in the past year.

The ratio of K Bank, the tenth largest bank headquartered in Maryland with state deposits of $564.8 million, dipped to 5.88 percent in September from 10.98 percent a year ago.

A bank has to maintain a total risk-based capital ratio of at least 10 percent to be considered well-capitalized by the Federal Deposit Insurance Corp. Between 8 percent and 10 percent is adequately capitalized, below 8 percent is undercapitalized and under 6 percent is significantly undercapitalized. If the ratio drops below 6 percent, the FDIC can change that bank’s management and force other corrective actions.

In its order to K Bank last spring, the FDIC noted that the institution was operating with inadequate capital "in relation to the kind and quality of assets" and had an "inadequate loan review program."

More… ^[6]

Jim Sinclair’s Commentary

Retail sales rise as the nation starves, while the rate of unemployment and those who are unemployed and are out of benefits is 17.4%.

This is not the beginning of a great recovery. This is bouncing along a bottom.

Most likely it will be the Banksters buying their help a stable of Rolls at higher list prices than last year.

I look forward to Eric’s and www.shawdowstats.com ^[7] commentary on these statistics.

"Pretend and Extend"

Food Stamps Go to a Record 37.2 Million, USDA Says
By Alan Bjerga

Dec. 8 (Bloomberg) — A record 37.2 million people, or about one out of every eight Americans, received food stamps in September, as the recession drove a surging jobless rate, according to a government report.

Recipients of the subsidy for retail-food purchases climbed 18 percent from a year earlier, according to a statement posted today on the U.S. Department of Agriculture’s Web site. Participation has set records for 10 straight months.

The government boosted food aid as unemployment soared, heading to a 26-year high of 10.2 percent in October. The jobless rate cooled to 10 percent last month, the Labor Department said on Dec. 4.

“We’ve been working to get that money out the door” to families that need assistance, Deputy Agriculture Secretary Kathleen Merrigan said last week in an interview.

Nevada had the biggest increase in food-stamp participation rates from a year earlier, surging 54 percent, followed by a 46.5 percent jump in Utah, according to the USDA. Texas had the most recipients at 3.1 million, followed by California with 2.9 million and New York with 2.6 million.

More… ^[8]

Jim Sinclair’s Commentary

Smells like the lenient treatment by bank examiners of bad loans carried at full value until the Grim Reaper can no longer be hidden.

If you think "Pretend and Extend" is going to bring on an economic recovery of any significance off the bottom you are whistling Dixie.

Colonial failure may cost the FDIC twice as much
Birmingham Business Journal – by Crystal Jarvis Staff
Friday, December 11, 2009

Colonial BancGroup Inc.’s collapse in mid-August could cost the Federal Deposit Insurance Corp. more than double the amount it originally projected.

Colonial, which was deemed the sixth largest bank failure in U.S. history after its seizure four months ago, had a current net worth of negative $5.8 billion by the end of the third quarter. That’s far worse than its original estimate of $2.8 billion to its insurance fund, according to recent data released by the FDIC.

“It basically says Colonial was a lot worse off than everybody thought it to be,” said Bert Ely of Alexandria, Va.-based bank consulting firm Ely & Co.

Also, the FDIC possesses more than $4.2 billion of the Montgomery-based bank’s assets currently in liquidation. However, the FDIC also expects to loss more than $3.1 billion on those assets, according to a balance sheet posted by the FDIC.

More… ^[9]

Jim Sinclair’s Commentary

How they have escaped this for so long is a testament of the sheeple as pussy cats.

Bankers might be feeling public’s wrath — literally
By Daniel Tencer
Thursday, December 10th, 2009 — 4:13 pm

A Los Angeles lawyer who had represented a failed subprime mortgage lender is found dead outside his home, having been shot in the head.

Three men allegedly invade the home of a former subprime lender, and are arrested after reportedly injuring three people inside.

Vandals target the home of the former CEO of the Royal Bank of Scotland, smashing windows in the banker’s home and car.

Those are just three notable incidents of violence aimed at people who were in some way linked to the financial crisis that has unfolded over the past year. And while in many of those cases it’s unclear whether the incidents were politically motivated, or motivated by financial issues, or just a coincidence, the cases fit into a pattern of escalating crime and violence in the wake of the recession.

Matthew Padilla of the Orange Country Register reports on a series of violent incidents in California in some way linked to the financial collapse.

More… ^[10]

Jim Sinclair’s Commentary

Down under has a poor opinion of the economic recovery and the thesis of "Pretend and Extend."

The question right now is which place is Oz?

Joyce warns of US ‘Armageddon’
MARK DAVIS AND PHILLIP COOREY
December 11, 2009

THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an ”economic Armageddon” which will make the recent global financial crisis pale into insignificance.

Senator Joyce said yesterday he did not mean to alarm the public but there needed to be a debate about Australia’s ”contingency plan” for a sovereign debt default by the US or even by a local state government.

”A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is where are we in that,” Senator Joyce said.

His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist by highlighting his strong opposition to Chinese sovereign investment in Australia.

The Treasurer, Wayne Swan, said it was a cause for concern that Senator Joyce had been elevated ”from the reactionary fringe of our economic debate to the second-most senior economic policymaking job in the alternative government”.

More… ^[11]

Jim Sinclair`s Commentary

This is going to open some interesting debate as we see the Treasury’s response.

Paul Introduces Legislation Requiring Congressional Approval of Treasury Gold Dealings

Washington, DC: Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The "Monetary Freedom and Accountability Act" restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.

"The Constitution grants authority over monetary policy specifically to Congress alone, not to the executive or the administration," Paul stated. "Yet Congress has neglected its duty for decades, and now our foolish fiat money system is run without challenge exclusively by unelected Treasury and Fed bureaucrats. As a result, the Treasury has been able to engage in the buying and selling of gold to manipulate the worldwide market price. Gold is very important to markets and investors in America and across the globe, and Congress should not allow the administration to interfere in the gold market behind closed doors."

The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets. The group has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold. Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s.

"The Fed wants all of us to think the stock market is not overvalued, and that credit and monetary expansion can create lasting prosperity," Paul concluded. "My bill will make it harder for the Fed and the Treasury to manipulate gold prices, which should always serve as an unbiased indicator of the true health of world markets."

More… ^[12]

Jim Sinclair`s Commentary

The foundation of WHY gold anywhere in the world can be encapsulated in two words – Federal Mismanagement.

Federal budget deficit for November hits $120.3B
By MARTIN CRUTSINGER (AP)

WASHINGTON — The federal deficit for the first two months of the new budget year is piling up faster than last year’s record imbalance.

Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.

The November deficit totaled $120.3 billion, the Treasury Department said Thursday. That’s less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit.

Even with the improvement, the deficit is 5.7 percent higher than the first two months of the 2009 budget year when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.

In a sign of the recession’s depth, the government said individual income tax collections totaled $63.9 billion in November, less than the $70.5 billion the government collected in Social Security taxes and taxes for Medicare and disability insurance programs.

More… ^[13]

Jim Sinclair`s Commentary

Why does it seem a little strange to read this and better retail sales on the same day?

Texas sales tax receipts plunged in October
Posted Thursday, Dec. 10, 2009

Texas sales tax collections plunged in October over the same month in 2008, the state comptroller said.

Fort Worth’s collections were off 17.3 percent, Arlington’s 4.7 percent, Hurst’s 11.8 percent and Southlake’s 13.9 percent. Sales tax receipts are a major source of income for municipal budgets, and cities have already cut deeply.

The comptroller estimates that Texas’ gross state product will decrease 1.7 percent this year.

"Texas is feeling the effects of the worldwide recession," Susan Combs, the state comptroller, said in her weekly economic update.

More… ^[14]

Jim Sinclair`s Commentary

It is time for the Euro to gain strength by doing a great body shake.

Ireland, Greece May Leave Euro, Standard Bank Says (Update2)
By Bo Nielsen

Dec. 11 (Bloomberg) — Greece and Ireland are among countries in an “intolerable” economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc.

The absence of a mechanism to permit so-called fiscal transfers within the 16-nation region may undermine the exchange-rate system, said Steve Barrow, head of Group of 10 foreign-exchange strategy at the bank in London. Concern some nations will need to be rescued may drive the premium investors demand to hold 10-year Greek debt instead of benchmark German bunds to 400 basis points next year, from 214 basis points today, he said. The Irish premium may also jump, he said.

“Countries like Ireland and Greece may not be able to grow out of the current crisis,” Barrow said in a telephone interview today. “With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU may happen next year.”

The Irish Finance Ministry called the suggestion it might leave the euro area “uninformed comment,” and Greece said there was no chance it would leave.

More… ^[15]