Question For The Day:
Even though there has been compelling reasons, how do you feel about Washington’s intervention in the management of public corporations (motors, insurance, financial entities, oil producers)?
Might the thesis of free markets be dead?
Jim Sinclair’s Commentary
I promised you this would happen 7 years ago.
Central banks join gold rush
Foreign banks and investors alike have been flocking to the precious metal over the last year, sending it soaring to record highs.
Jim Sinclair’s Commentary
Come on, let’s be serious. In the midst of an attack by the CDS, ratings agency and IMF comments, who bought those bonds?
I wager you get it right on your first try.
Spain Sells $4.3 Billion of Debt; Bonds, Euro Gain (Update1)
By Emma Ross-Thomas
June 17 (Bloomberg) — Spain sold 3.5 billion euros ($4.3 billion) of bonds, the maximum set for the auction, easing concern that it will struggle to finance looming debt maturities. Stocks and bonds and the euro rallied.
Spain sold 3 billion euros of 10-year debt at an average yield of 4.864 percent, less than the 5.04 percent that the bonds traded at today before the sale. Demand was 1.89 times the amount on offer. It also sold 479.2 million euros of 30-year debt at 5.908 percent, and the bid-to-cover ratio was 2.45, higher than the 1.38 at the previous sale on March 18.
Spain, which faces debt redemptions of 24.7 billion euros in July, is trying to convince investors it can cut the third- largest deficit in the euro region, while propping up the country’s savings banks and lifting the economy out of a two- year slump. Spanish bonds rose after the sale and the yield premium investors demand to buy the debt over German bunds narrowed from a euro-era high yesterday.
“The strong demand for Spanish bonds should help restore confidence,” said Ciaran O’Hagan, fixed income strategist at Societe Generale in Paris. “The good demand was only possible after considerable cheapening of Spanish bonds over the past days.”
Jim Sinclair’s Commentary
The "New Normal" and "Jobless Recovery" are both oxymorons espoused by normal morons.
New jobless claims up sharply as layoffs persist, raising concerns about recovery’s strength
Alan Zibel, AP Business Writer, On Thursday June 17, 2010, 12:02 pm
WASHINGTON (AP) — The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed.
Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month and overshadowed a report that showed consumer prices remain essentially flat.
A rise in first-time jobless claims, combined with this week’s report that said new home construction plunged in May after government incentives expired, highlighted fears about the strength of the economic rebound.
If layoffs persist, there’s a concern that the June employment numbers may show a decline in private-sector jobs after five straight months of gains, said Jennifer Lee, an economist with BMO Capital Markets.
"We’ve definitely seen the economic recovery hit a wall," Lee said.
First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery.
Jim Sinclair’s Commentary
When you consider the majority of repayments of TARP was a product of secondary issues to the public, the landslide majority of banks have not paid back TARP, let alone paid the interest due. The public, not the banks, have made the repayments so loudly pandered by MOPE (Management of Perspective Economics).
More Than 90 Banks Miss TARP Payments
Published: Wednesday, 16 Jun 2010 | 12:36 PM ET
By: Reuters
More than 90 U.S. banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations.
The statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss.
The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November.
SNL Financial’s analysis found 20 banks have missed four or more payments since the program began in 2008, while eight banks have missed five payments.
Under the TARP program, the U.S. Treasury invested in preferred shares issued banks looking for funds. The banks were to make regular dividend payments to the Treasury, and have the right to repurchase the shares at some point in the future.
Jim Sinclair’s Commentary
Soon two intransigent entities are going head to head.
Let us hope neither makes a miscalculation.
Iran Warns to Retaliate against West’s Cargo Inspection
TEHRAN (FNA)- Iranian Parliament Speaker Ali Larijani on Wednesday stressed that Tehran will take retaliatory measures in case Iran-bound air and ship cargoes come under inspection by the West.
"We warn the US and certain adventurist countries that if they are tempted to inspect Iranian air and ship cargos, we will take tough action against their ships in the Persian Gulf and the Sea of Oman," Larijani said in an open session of the parliament here in Tehran on Wednesday.
The Iranian parliament speaker added that the Iranian retaliatory move is part of the country’s policy to defend national interests.
Larijani blasted US President Barack Obama’s remarks against Iran, and underscored that hypocritical moves against the Iranian nation will be against their interests.
Inspection of Iranian cargos is part of the punitive measures cited in a US-sponsored resolution approved by the UN Security Council on June 9.
Jim Sinclair’s Commentary
Come on now, we know the whale died of old age. All that oil on its face means nothing at all.
After death the whale clearly encountered a plume at a 3000 ft. depth.
The good ship "Steve Irwin," has left the Arctic Ocean for the Gulf.
Dead sperm whale found in Gulf
Updated: Wednesday, 16 Jun 2010, 10:50 PM EDT
Published : Wednesday, 16 Jun 2010, 10:50 PM EDT
GULF OF MEXICO – Scientists have spotted a dead sperm whale in the Gulf of Mexico, and are doing tests to see if the oil spill had anything to do with its death.
The whale was found floating 77 miles due south of the Deepwater Horizon spill site.
It is the first dead whale spotted since BP’s rig exploded on April 20.
The whale was not found in oiled waters, but scientists can’t yet say where or how it died.
They say its condition suggests it has been dead for several days to more than a week, and they are taking samples from it to glean information on how and where it died.
It’s estimated that between 1,400 and 1,660 sperm whales live year-round in the Gulf of Mexico. According to NOAA, they spend most of their time in the upper Gulf offshore area.
Jim Sinclair’s Commentary
Prices decline until buyers create more demand than immediate supply.
Armstrong suggests the decline in home prices will go into late 2014 followed by a short few years recovery.
House Prices Still Have Another 10%-20% To Fall, Says Gary Shilling
Posted Jun 16, 2010 11:30am EDT by Henry Blodget
A year ago, house prices finally stopped collapsing after two years of brutal declines. Over the following few quarters, moreover, they actually rose. This led many observers to conclude that the housing bottom had been reached and that we were headed for a v-shaped bounce.
Not Gary Shilling.
Gary Shilling, head of economic research firm A. Gary Shilling & Co., thinks house prices still have another 10%-20% to fall. Just as bad, Gary thinks this fall will happen over the next three years, meaning that house prices won’t bottom until 2013. Most people think prices have already bottomed, or will bottom later this year or next.
Why is Gary so bearish?
Supply versus demand.
Basically, Gary says, we still have way too many houses relative to the number of people who want to buy them. Consumers are under pressure, overloaded with debts and struggling to find work, and the mass-hallucination that investing in housing was a "sure thing" is now a distant memory. These days, many would-be home buyers are moving in with relatives or downsizing or dumping second homes. And the supply-demand balance is so out of whack, in Gary’s view, that even super-low interest rates won’t keep prices afloat.
