Dear CIGAs,
When you receive unsolicited messages do not lose your focus on what insurance is all about, the 2006 Formula.
Jim Sinclair’s Commentary
Six so far this weekend.
Bank Closing Information – January 29, 2010
These links contain useful information for the customers and vendors of these closed banks.
American Marine Bank, Bainbridge Island, WA
First Regional Bank, Los Angeles, CA
Community Bank & Trust, Cornelia, GA
Marshall Bank, Hallock, MN
Florida Community Bank, Immokalee, FL
First National Bank of Georgia, Carrollton, GA
Jim Sinclair’s Commentary
Seeking Alpha was cooking this weekend.
Why Soros Is Probably Buying Gold Now
by Peter Cooper
Given the moves by rival hedge fund managers like John Paulson into the yellow metal, it would be surprising if that living trading legend George Soros is not buying gold at the moment.
Indeed, you should always buy when this man hints he might be selling. His comments at the World Economic Forum in Davos this week seem classic trader double-speak. What does Soros mean when he says gold is the ‘ultimate bubble’ asset class?False prophetsNewspapers like the normally sensible Daily Telegraph fell for his ruse, immediately jumping the gun to a prediction about a massive tumble for the yellow metal. Yet Soros said no such thing.
He merely pointed out what even the most ardent gold bug would concede, namely, that if you study the history of financial crises, then the credit-induced asset price inflation causes them moves from…
Thank GDP It’s Friday!
by Philip Davis
At 12:52 yesterday I officially went long on the markets.
This could be a big mistake (in fact, that’s what I said to Members at the time) but the logic was that Bernanke would be confirmed (he was) and that we’d have a big GDP number today. Now the reason we’re going to have a big GDP number is because we will have a big build in inventories (we discussed this effect on Jan 14th) as manufacturers got all excited and produced goods that nobody bought, and – because it is assumed that goods are only produced in accurate anticipation of demand – this kind of nonsense comes in a positive to our GDP.
Production collapsed during the recession as companies sold from their existing inventories but didn’t order new goods, because…
UBS Launches S&P 500 Gold Hedged ETN: Proceed with Extreme Caution
by Ron Rowland
A new exchange-traded product hit the market yesterday (January 28, 2010): UBS E-TRACS S&P 500 Gold Hedged Index ETN (SPGH). If this sounds like something you might want to buy, I suggest you understand what it really is and compare it to a Do It Yourself (DIY) solution before plunking down your cash.
Here is the official description: UBS E-TRACS S&P 500 Gold Hedged Index ETN (SPGH) seeks to simulate the combined returns of investing equal dollar amounts in the S&P 500 Total Return Index and long positions in near-term exchange-traded COMEX gold futures contracts, and is rebalanced monthly.
I believe that description is very misleading as it sounds like SPGH will have 50% exposure to the S&P 500 Total Return and 50% exposure to gold futures….
Jim Sinclair’s Commentary
There is a defined border between truth and MOPE.
Mexico GDP down 6.8 percent in 2009
On Saturday January 30, 2010, 1:43 am EST
MEXICO CITY (AP) — Mexico’s economy shrank 6.8 percent in 2009, the worst result in at least 30 years, the Treasury Department said Friday.
The decline in full-year gross domestic product outpaced the 6.2 percent fall during Mexico’s currency and debt crisis in 1995.
A bright spot was a 1.2 percent expansion in the fourth quarter of 2009 from the third quarter, although the level of economic output was 3 percent lower than the same period of 2008, the report said.
Still, it was the second consecutive quarter of GDP growth. The economy expanded 2.9 percent in the third quarter.
The report represented something of a comeback from the steep 10.3 percent decline in the second quarter, and officials had previously estimated a full-year 2009 contraction of around 7 percent.
The Treasury Department said it expects GDP to grow about 3 percent for all of this year, while noting "the recent evolution of the economy suggest the probability that growth may be greater than that prediction is considerable."
Jim Sinclair’s Commentary
If bailouts are required, bailouts will be delivered.
You really think the ECU is going to close significant swaps? You have to be kidding!
Greece and EU close ranks, say no bailout
Yesterday, 03:37 pm
Greek and European Union officials closed ranks on Friday, insisting there was no chance of a Greek default or an EU bailout and that Athens would do whatever it takes to cut its burgeoning deficit.
"Solidarity is possible, will exist. A bailout is not possible and will not exist," EU Monetary Affairs Commissioner Joaquin Almunia told Reuters Insider TV.
Greek Prime Minister George Papandreou, also at the World Economic Forum in Davos, promised to do all that was required to cut the deficit and restoring confidence.
"Greece is in a situation where we need to take very strong measures and structural changes in our country," he said. "We’re determined to implement the programme."
The euro zone has pledged to cut its budget deficit this year to 8.7 percent of gross domestic product from over 12 percent and return to the EU’s 3 percent cap by 2012.
Jim Sinclair’s Commentary
Think about this article.
If that advice was given was it wrong? Does this article suggest that China has some obligation to hold its investment forever regardless of value?
Is telling the truth a plot to destroy? Is MOPE a plot to destroy?
Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds
By Michael McKee and Alex Nicholson
Jan. 29 (Bloomberg) — Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.
Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his memoir, “On The Brink.”
The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.
Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.
“The report was deeply troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”
Jim Sinclair’s Commentary
While many of you are searching again for reasons to be wrong in gold, consider why you are RIGHT.
John Embry: Why gold will keep going up for years
Remarks by John Embry
Chief Investment Strategist
Good afternoon. It is once again a great pleasure for me to address a knowledgeable gathering at Joe Martin’s always excellent Cambridge Conference.
When I was here last year gold was around $850 and there was the usual angst among mainstream commentators fearing a drop to $600 per ounce or worse. Today the price is roughly $300 higher and the same individuals continue to try to frighten the public with prophesies of vertiginous falls in the gold price. Despite this ongoing aggravation, I am even more bullish on the prospects for gold than I was a year ago.
However, despite my consistent enthusiasm for the yellow metal once termed a "barbarous relic" by Lord Keynes, I still have the strong feeling that the vast majority of investors outside this room still haven’t got a clue about gold and they are certainly not aware that gold is experiencing a historic bull market with much, much further to go. What we have seen to date is merely a prelude, and the appreciation we are going to see in future years is going to greatly exceed what we have seen to date. This opinion is based on a number of factors I will expand on, but the predominant theme is that gold is re-establishing itself as money.
It has been money for thousands of years, a reality that was succinctly summed up by J.P. Morgan in 1912 when he said, "Gold is money and nothing else." But we go through periods when that reality is obscured, and the decades of the 80s and 90s represent living proof of that. Gold retreated to commodity status in that era, when disinflation was in vogue and the real returns on financial assets were truly remarkable in historic terms.
Gold fell from a peak of $850 per ounce in January 1980 to a low of $252 in July 1999 in an extended bear market. To be fair to gold, it got a significant push to the downside in the latter part of that period from the central banks that were dumping enormous quantities of gold by leasing it through their bullion bank cronies. I would contend that the gold price overshot its economic value by perhaps $150 on the downside. Contributing to this fiasco was the ludicrous auction of half the British gold reserves within 10 percent of the bottom. Today this egregious error is referred to as "the Brown bottom" in recognition of the idiocy of the current British prime minister, who was then finance minister.
Jim Sinclair’s Commentary
Let’s not forget the swaps to bailout non-US redoubt of AIG so the winners can be paid was done by SWAPS not about to be closed (repaid).
Secret Banking Cabal Emerges From AIG Shadows: David Reilly
Commentary by David Reilly
Jan. 29 (Bloomberg) — The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.
Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.
The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.
That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.
Jim Sinclair’s Commentary
A neat way of telling your bankers to take a flying leap.
China rankled over U.S.-Taiwan arms deal
By CBC News, cbc.ca, Updated: January 30, 2010 9:34 AM
China’s defence ministry said Saturday it would suspend military exchanges with the United States and impose sanctions on companies selling weaponry to Taiwan over Washington’s planned $6.4-billion US arms deal with the island.
China took a similar step in 2008 after the former Bush administration announced a multibillion-dollar arms sale to Taiwan — the most sensitive issue in U.S.-China relations.
Beijing claims the self-governing Taiwan as its own territory, while the United States is Taiwan’s most important ally and largest arms supplier.
The United States does not recognize Taiwan as a sovereign nation, but the U.S. government says it’s bound by the 1979 Taiwan Relations Act to ensure the island is capable of responding to Chinese threats. China has more than 1,000 ballistic missiles aimed at Taiwan.
Taiwan to buy helicopters, defence missiles
Under the current arms deal, the United States would sell Taiwan 60 Black Hawk helicopters, worth $3.1 billion, along with communications technology for fighter jets, a pair of Osprey mine-sweeping ships, 114 Patriot air defence missiles, machine guns and ammunition.
Jim Sinclair’s Commentary
Nuclear Pakistan today.
Taliban’s leadership council runs Afghan war from Pakistan
Quetta shura, sheltering over the border and led by Mullah Omar, is strategic arm of Taliban
Declan Walsh in Islamabad
The Quetta shura has long been the aching achilles heel of western efforts to defeat the Taliban.
While the war is fought in Afghanistan, the thinking part of the Taliban ‑ the one-eyed leader, Mullah Muhammad Omar, and a council of about 14 other men ‑ is sheltering on the far side of the border, in the western Pakistani province of Balochistan.
The shura, or leadership council, has multiple functions. It directs the military campaign against western troops and it co-ordinates the political and propaganda campaign that has so successfully undermined the rule of President Hamid Karzai in Afghanistan.
The Afghan war is organised and run out of Balochistan, according to Seth Jones, a senior civilian adviser to the US special forces commander in Afghanistan.
"Virtually all significant meetings of the Taliban take place in that province, and many of the group’s senior leaders and military commanders are based there," he wrote in a newspaper article last month.
Jim Sinclair’s Commentary
Turkey moves further towards the Brotherhood.
"Turkey Has No Patience to Wait More for EU Membership," Ak Party Official
Saturday, 30 January 2010
The deputy chairman of external affairs for Turkey’s ruling Justice and Development (AK) Party said on Saturday that Turkey did not have the patience to wait for another 10-15 years in order to become a full member to the European Union (EU).
Speaking at a meeting in the Swedish capital of Stockholm, Suat Kiniklioglu, AK Party’s deputy chairman of external affairs and the party’s MP from central Anatolian province of Cankiri, said, "officials were talking about a 10 or 15-year process 10 years ago. I find it very disappointing that they are still talking about the same thing in 2010".
Expressing Turkey’s objection to such waiting period, Kiniklioglu said, "in the geo-political sense, Turkey does not have the patience to wait for another 10-15 years".
Commenting on the negotiations aiming at finding a solution to Cyprus problem, Kiniklioglu said it would not be morally or politically right to put the blame on Turkey while the Greek Cypriot administration kept on displaying an uncompromising attitude.
Kiniklioglu said the negotiation process in Cyprus was an issue that affected not only Turkish and Greek Cypriot parties, but also Turkey-EU relations, NATO-EU relations, as well as future of the Balkans, Black Sea, Caucasus, Middle East and East Mediterranean regions.
