Jim,
Regarding Pretend and Extend on commercial RE properties posted today:
It’s different if you are a bank and you can hold (on the books) on to a commercial real estate property using phony sanctioned accounting, but if you are a little to midsized RE holder how do you make money holding on to buildings without tenants, with falling rents due to competition and saturation? Try going to the bank with your hobbled RE portfolio and try getting a loan for a business plan. The banks will not loan or will only set up terms that are over the top.
No wonder these guys are booing. It’s a loser for them and the industry – hanging on and pretending is like pouring molasses in a gas tank. The engine seizes, but really isn’t that what our government does best? Give incentives to do the wrong thing and then take working order vehicles in trade (clunkers, but still with life left) and pour a can of engine killer down the oil fill? Like healthcare to follow, restrict care to those with some life left, yet keep alive monoliths of waste, bloat and fraud (Fannie, GM, AIG etc.).
Volcker may be the smart one after all. Forget markets, forget all this insanity, get a nice lady’s company before he croaks, and spend some time smelling the flowers. Everything else just smells
CIGA Ken "with certs in hand."
Dear Ken,
My wife told me many times that if I even looked at another lady, should anything happen to her, she would return and haunt the hell out of me.
I can’t follow Volcker’s lead on this one.
Believe me, you would not want "German" Barbara haunting you.
Regards,
Jim
Jim Sinclair’s Commentary
CIGA Ken is on a roll today!
Jim,
I am getting this feeling in the pit of my gut that we are close to some sort of big move/big event. I can’t explain it but all the theatres we look at seem to be at termination junctures:
S&P rally tired
End of year
End of decade
Israel at end of rope (saw someone else on JSmineset read that ambassador recall)
Iran in turmoil
China at end of patience with US
Obama tired
Consumers tired
Unemployed giving up
Gold and the dollar are waiting for something to happen so they both can stop running in place and resume their trends.
Mope takes a lot of energy. Eventually no one buys the medicine man’s claim, and the wagon moves on to the next town with Colonel Adams’ magical thinking and economic healing elixir.
Is it time to get in the bunker? Maybe only once in a blue moon!
CIGA Ken
Devaluation’s effect on coinage
Wednesday, December 30, 2009
CIGA Eric
Why is point lost on all but coin collectors?
When Nero debased the silver standard of Rome, he did not simply clip the coins. He left the denarias pure silver on the outside, and copper/silver inside. He hid his activities much like the fact that we are not to know what took place in the bailout of the financial industry.
Simply review the coinage history of the United States. Gold & silver were once highly concentrated in our coinage. After 1933, gold was removed. After 1964, silver was all but removed. After 1970, precious metal content was removed from all coins and replaced with copper/nickel clad. After 1982, copper pennies became mostly zinc. Recent coin introductions include a mixture of zinc/copper/magnesium/nickel. What’s next?
As currency devaluation intensifies, it gets harder and harder to find an alloy mixture in which the face value is greater than the intrinsic melt value. This in large part explain the growing push for a credit or cashless society.
Dear Eric,
What is next? Maybe phony gold bars in the exchange warehouses and central banks reserves.
Regards,
Jim
Jim,
JR obviously has been reading JSMineset this week! He now is sure he is going to lose money going long the dollar. In fact, after carefully reading JSMineset, he believes he deserves to lose money for his efforts.
Now when it come to Gold, no messing around here, he is not selling under any circumstances!!!
Best,
CIGA Bernie
From Jim Rogers Blog:
DECEMBER 29, 2009 — SHORT TERM TRADES AND MARKET TIMING
"It’s interesting, I am long the dollar right now, more then I have been for 2 or 3 months. I am sure I am going to lose money. Whenever I try a short term trade, a call on market timing, I nearly always lose money. So, I am sure, I deserve to lose money for trying it again."
in CNBC
DECEMBER 28, 2009— GOLD: I DON’T THINK THIS IS THE TOP
"During the course of the bull market gold is going to go much higher, it is certainly not a bubble yet. I don’t think this is the top, I’m not selling under any circumstances."
in Money Morning.com
Jim,
Another way to say it is this is how China deals with what the Chinese view as fraud by those who sell them derivative contracts.
Monty Guild
www.GuildInvestment.com
"A number of months back you may remember that the Chinese government mentioned offhand that it would back state-owned companies in any legal action against foreign banks that sold them derivatives contracts that had gone sideways. Well, here’s the first case. "A small Chinese power generator on Tuesday rejected demands from a Goldman Sachs unit to pay for nearly $80 million lost on two oil hedging contracts, part of a long-running dispute over how China deals with derivatives losses."
Click here to read the full article…
Talk is cheap, Follow the Money
Wednesday, December 30, 2009
CIGA Eric
We still have Faber and Biggs quoted every 20 minutes on F-TV as dollar bulls. F-TV calls this a rally with legs. I respectfully disagree. The rally is a MOPE rally that was decided upon by money managers at many luncheon discussions about the carry trade.
Source: http://jsmineset.com/
A response to Jim,
People talk ad nauseam about trends they cannot change. The trading axiom follow the money was born from this reality. If the dollar rally had legs as suggested by F-TV, why do money flows continue indicate fade rather than support the assertion?
Commercial traders have increased their short position as a percentage of open interest (as % OI) to 69% in combined futures and option market as the dollar has rallied. They have decreased their long positions as % OI below 10% into the strength. This is a classic example of fading the rally. The last time commercial long positions as % OI fell below 10% was 02/17/09. The DXY stood at 87.81 on 02/17/09. Three months later the DXY has fallen 82.30. Six-months later, it had fallen to 77.77.
COT F&O Money Flows:
Dear Jim
For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.
Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.
CIGA Udor
Bankers Get $4 Trillion Gift From Barney Frank: David Reilly
Commentary by David Reilly
Dec. 30 (Bloomberg) — To close out 2009, I decided to do something I bet no member of Congress has done — actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill.
Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.
I quickly discovered why members of Congress rarely read legislation like this. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog. And yes, I plowed through all those pages. (Memo to Chairman Frank: “ystem” at line 14, page 258 is missing the first “s”.)
Jim,
Let’s see if I’ve got this right…
1) Israel’s ambassadors and consuls generals from all over the world have been summoned to attend a conference to be held over global challenges facing Israel. "This is the first time a conference for all of Israel’s heads of missions has been held." (not even done in the six-day war/1967)
2) Iran is de-stabilizing internally by the day.
3) Ayatollah Khamenei preparing to fly out of country? (sounds like Khomenei’s trip to Paris in 1978/9)
4) Gold just sits there….snoozing
5) Can we declare the "efficient market hypothesis" officially dead?
Best,
CIGA Pedro
Dear Pedro,
You forgot the newest media focus, Yemen and of course Afghanistan and Pakistan.
That entire place can blow up one minute from now.
Regards,
Jim
