Dear CIGAs,

The cost of the real numbers is a subscription to John William’s www.shadowstats.com. It is a resource I could not be without.

- PPI Showed Broadening Inflation Base
- Durable Goods Orders Suggest Bottom-Bouncing
- Home Sales Remain in Serious Trouble

"No. 293: Inflation Outlook, March PPI, Durable Goods, Home Sales "
http://www.shadowstats.com/ ^[1]

Jim Sinclair’s Commentary

What kind of corporate culture fosters this?

Conflict of Interest for Goldman in Lloyds Deal?
April 23, 2010, 7:39 AM

Goldman Sachs was involved as an underwriter and an investor in Lloyds Banking Group’s £23.5 billion ($36.1 billion) refinancing in late 2009, The Financial Times reported, citing four people involved in the capital raising.

According to the newspaper, Goldman demanded last-minute changes to the structure of the transaction, which ended up benefiting Goldman’s position as a bond investor, even though bankers at Goldman say the company’s ethical walls bar underwriters from knowing how its proprietary traders invest.

Citing people involved in the Lloyds refinancing, the newspaper said Goldman disagreed with a consensus of other banks on the amount of extra interest to be payable on bonds that were to be exchanged for new ones.

It also said Goldman was involved in discussions about which bonds should be prioritized for the exchange offer, and cited four people close to the deal in saying Goldman was a large investor in a 6.9 percent bond that was top-ranked.

The Financial Times reported:

Goldman’s role in the transaction – both the alleged conflict of interest and the allegation that it helped make the terms more expensive – will be sensitive, given the UK government owns 41 per cent of Lloyds. Lloyds would not comment on the advice it received but said: “The final decision on the terms and pricing of this offer was made by the group following the recommendation of the syndicate, and not any one bank.”

More… ^[2]

Jim Sinclair’s Commentary

This article is quite correct along the entire gamut of gold shares.

Make sure you are there on pay day.

Gold miners set to shine on gold price, M&A pick up
Tricia Wright and Harpreet Bhal – Analysis
Fri Apr 23, 2010 2:32pm BST

(Reuters) – Gold mining shares are set to exceed gains from last year, fueled by a bullish outlook for gold prices and a pick-up in merger and acquisition activity, potentially giving the sector an edge over other miners.

Gold miners .XAU jumped almost 36 percent last year, outperforming a near 25-percent rise in gold prices in the same period as investors piled into safe-haven assets. The sector underperformed gains in the precious metal in 2008.

Analysts expect the sector to advance more sharply than gold in 2010. Year-to-date, the gold mining index is up 1.3 percent, against a 4.1-percent gain in the precious metal.

Gold’s advance in 2010 has been helped by investors once again seeking refuge as worries over the fiscal health of Greece and other euro zone economies intensified. Demand has also been fueled by anticipation of a pick-up in inflation following ultra loose monetary policy globally.

"We do think that gold equities will outperform gold itself," said Bradley George, head of commodities and resources at Investec Asset Management.

More… ^[3]

Jim Sinclair’s Commentary

Keep in mind that the Federal $8000 Stimulus results in many of these purchases.

That is not a tax deduction. The $8000 is a tax credit that goes to the bottom line of the 1040 and is another factor of an increasing Federal Deficit.

Many of these sales are in the price category that qualifies for Federal agency financing, putting a fair amount of these deals together with little real money in the deal.

Is this not a duplication of what got Main Street in trouble in the first place? How many of these mortgages will survive one year?

Sales of New Homes in U.S. Climb by Most Since 1963 (Update1)
By Courtney Schlisserman

April 23 (Bloomberg) — Purchases of new homes in the U.S. surged in March by the most in almost five decades as buyers rushed to qualify for a government tax credit and the weather turned milder.

Sales climbed 27 percent, the most since April 1963, to an annual pace of 411,000 that exceeded the highest forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Last month’s purchase rate was the highest since July and followed a record-low of 324,000 in February that was higher than previously estimated.

Demand may remain elevated through this month as Americans take advantage of a tax credit worth as much as $8,000 before it ends at the end of next week. The outlook for the rest of the year hinges on sustained job gains as homebuilders struggle against a wave of foreclosures that is depressing home prices and adding to inventory.

“There’s definitely some life out there in the housing market,” Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York, said before the report. “It’s been bashed so hard during the course of the downturn that we’re due for some payback even to get to a more normal level.”

Economists forecast sales would rise to a 325,000 annual rate in March from February’s previously reported 308,000 pace, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from 300,000 to 362,000.

More… ^[4]

Jim Sinclair’s Commentary

A Jobless Recovery is world class MOPE and a total oxymoron. It is downright mean.

How long should we help the unemployed?
By Tami Luhby, senior writerApril 23, 2010: 7:24 AM ET

NEW YORK (CNNMoney.com) — Two years of unemployment benefits just isn’t enough for some jobless Americans.

Though Congress has extended unemployment insurance to an unprecedented 99 weeks, the safety net is not proving sufficient for hundreds of thousands of people who say they simply cannot find a job in this weak economy.

Up to a million people could find themselves with neither a paycheck nor an unemployment check by year’s end, according to preliminary estimates by one advocacy group.

These folks are begging lawmakers to extend the duration of benefits into the triple digits. Scores have emailed CNNMoney.com, detailing their desperation. But there’s no movement currently in Congress to add more weeks.

"People will endure extreme hardship," said Andrew Stettner, deputy director of the National Employment Law Project. "We can’t just let everyone fall off of this cliff."

More… ^[5]