Everybody complains about pork, but members of Congress keep spending because voters do not throw them out of office for doing so. The rotten system in Congress will change only when the American people change their beliefs about the proper role of government in our society. Too many members of Congress believe they can solve all economic problems, cure all social ills, and bring about worldwide peace and prosperity simply by creating new federal programs. We must reject unlimited government and reassert the constitutional rule of law if we hope to halt the spending orgy.
–Ron Paul
Jim Sinclair’s Commentary
Announcing less bank closings per week to make things look better has its limitations.
Bank Closing Information – July 16, 2010
These links contain useful information for the customers and vendors of these closed banks
Mainstreet Savings Bank, Hastings, MI
Olde Cypress Community Bank, Clewiston, FL
Turnberry Bank, Aventura, FL
Metro Bank of Dade County, Miami, FL
First National Bank of the South, Spartanburg, SC
Woodlands Bank, Bluffton, SC
Jim Sinclair’s Commentary
How is your bank this week?
Enforcement Actions
Legal actions by the Board and written agreements approved by the Federal Reserve Banks
· July 14, 2010
Written agreement with Pilot Bancshares and Pilot Bank
· July 14, 2010
Written agreement with Bank of Whitman Employee Stock Ownership Plan, Whitman Bancorporation, and Bank of Whitman
· July 13, 2010
Written agreement with Bannister Bancshares
· July 13, 2010
Written agreement with First Olathe Bancshares
· July 13, 2010
Written agreement with Premier Bank Holding Company
· July 12, 2010
Written agreement with A.E. Bancorp
· July 12, 2010
Prompt corrective action directive against Home Valley Bank
Jim Sinclair’s Commentary
Gold is off this Friday AM. Please note the degree of concern in the office today.
Jim Sinclair’s Commentary
Major bonus granting in the financial industry is taking place as the last chance to take a dip from the well, maybe for a decade, is here.
Citigroup Profit Falls 37%
By NATHAN BECKER
JULY 16, 2010, 8:56 A.M. ET
Citigroup Inc.’s second-quarter profit fell 37%, which was better than analyst estimates, as year-earlier results were heavily boosted by a $6.7 billion gain related to the combination of its Smith Barney brokerage operations with those of Morgan Stanley.
Citi reported profit of $2.7 billion, or nine cents a share, down from $4.28 billion, or 49 cents, a year earlier. Revenue dropped 33% to $22.07 billion.
"While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter," Chairman and Chief Executive Vikram Pandit said.
Shares fell 1.7% to $4.09 in premarket trading, even as loan-loss provisions shrank and profit at the company’s Citicorp unit rose 17%, although revenue fell 1.1%. As of Thursday’s close, the stock had risen 37% in the past year.
In April the bank reported its strongest quarterly results in nearly three years as the fallout from the financial crisis settled down—a catalyst for improved results from most big banks. Citi has recently benefited from its ability to reduce its cost for bad loans and has been helped by an improving economy abroad.
More…
Jim Sinclair’s Commentary
Survey economic numbers, for what it is worth. 
Michigan Consumer Sentiment Index Fell in July
By Shobhana Chandra – Jul 16, 2010
July 16 (Bloomberg) — The Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 66.5 in July from 76 a month earlier, below forecasts. Economists surveyed by Bloomberg News had a median projection of 74. Bloomberg’s Mike McKee reports. (Source: Bloomberg)
Confidence among U.S. consumers slumped in July to the lowest level in a year, signaling the biggest part of the economy is losing momentum.
The Thomson Reuters/University of Michigan preliminary sentiment index decreased to 66.5, the lowest since August 2009, from 76 in June. The reading was lower than the most pessimistic forecast of economists in a Bloomberg News survey with a median projection of 74.
More…
Jim Sinclair’s Commentary
QE to infinity builds debt.
How Large is the Outstanding Value of Sovereign Bonds?
by CalculatedRisk on 7/08/2010 11:02:00 AM
CR Note: Reader "some investor guy" has put together some data on sovereign default risk. This is the first in a series of posts.
Debt issued by governments worldwide is immense. According to the Bank for International Settlements, at year end 2009 worldwide sovereign debt exceeded $34 trillion, and is greater than the amount of corporate bonds outstanding.
Japan and the US dwarf most other borrowers. Together they have about half of all sovereign debt worldwide. Still, 23 other countries have over $100 billion of debt outstanding. The other 100+ countries worldwide have a total debt of about $1.4 trillion.
Note: This graph shows the sovereign debt in December 2007 and December 2009.
Due to the recession and increased expenditures to rescue banking systems, total sovereign debts grew by almost 30% in just two years. Sovereigns became the majority of worldwide debt. Several countries doubled their debts from 2007 to 2009 (BIS data).
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