Dear CIGAs,
Goldman Sachs reported a significant miss in earnings. The rest of the financials are looking as if their earning will stink as well.
Do you need any more proof that the financials’ earnings were in the great majority paper profits produced by the FASB’s capitulation to political pressure to allow crap to be blessed as valuable?
Profits from a marked up position constituted most of the earnings via the trading department in terms of reporting. Do you need more proof that the outrageous bonuses were created because this is a generational last dip at the profit well?
Now that the derivative gang has ruined the world (see today’s illustration) they are cannibalizing their own firms. They kill everything they touch.
Jim Sinclair’s Commentary
Ireland, Spain and Greece debt sales saw solid demand today. Now the question is who were the buyers, and how are the advertised trillion dollar rescue funds being used?
Jim Sinclair’s Commentary
"Wall Street gets rescued 110% but Main Street can go to hell in a hand basket."
–CIGA JB Slear, our gold delivery man
Senate breaks deadlock on jobless benefits
By Andy Sullivan
WASHINGTON | Tue Jul 20, 2010 4:14pm EDT
WASHINGTON (Reuters) – The Senate on Tuesday cleared the way to extend long-term unemployment benefits, breaking a partisan stalemate that has caused 2.5 million jobless Americans to lose the weekly checks that help them stay afloat.
Minutes after he was sworn in, Senator Carte Goodwin cast his first vote to give his fellow Democrats the 60 votes they needed to overcome a Republican procedural hurdle and move toward restoring the lapsed jobless benefits.
"It shouldn’t take the slimmest of margins to do what’s right," Democratic Senator Harry Reid said at a news conference.
The Senate is expected to hold a final vote later in the day on the bill that Republicans criticized for deepening the federal deficit.
The House of Representatives is expected to approve the measure on Wednesday and send it President Barack Obama to sign into law.
With congressional elections looming in November, the Senate had been locked in a partisan standoff for weeks over how to pay for extending benefits for those who have been out of work the longest.
Jim Sinclair’s Commentary
Here is the nuts and bolts of the Formula. Mis-focused and ineffective intervention was applied by saving the Fat Cats
You don’t get a person with a drug addiction a haircut if you want to help them solve their problem.
The downward spiral of the Formula grinds on to bankruptcy of states and government. Since a government by definition can never go bankrupt, it simply prints and reschedules the debt. That is what bankrupts the marketplace.
Payrolls Fall in 27 U.S. States, Led by California
By Courtney Schlisserman – Jul 20, 2010
July 19 (Bloomberg) — Walter "Bucky" Hellwig, a senior vice president at BB&T Wealth Management, talks with Bloomberg’s Mark Crumpton about the possibility that the U.S. economy may fall back into recession. Hellwig also discusses the outlook for the U.S. labor market and stocks. Bloomberg’s Joe Brusuelas and Dominic Chu also speak. (Source: Bloomberg)
Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based.
Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses.
The U.S. lost 125,000 jobs last month as the government cut temporary workers conducting the 2010 census and private payrolls rose a less-than-forecast 83,000, according to Labor Department figures issued July 2. The data signal companies are becoming reticent to hire as the economy cools.
“Businesses are looking at what’s going on in Europe and the stock outlook and people are becoming a little more skittish,” Marisa Di Natale, a director at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We may see that for a couple of more months until we start to see some real momentum in some sector of the economy
Jim Sinclair’s Commentary
Keep the police, teachers and firefighters, fire the egg sucking politicians
California Official’s $800,000 Salary in City of 38,000 Triggers Protests
By Christopher Palmeri – Jul 20, 2010
Hundreds of residents of one of the poorest municipalities in Los Angeles County shouted in protest last night as tensions rose over a report that the city’s manager earns an annual salary of almost $800,000.
An overflow crowd packed a City Council meeting in Bell, a mostly Hispanic city of 38,000 about 10 miles (16 kilometers) southeast of Los Angeles, to call for the resignation of Mayor Oscar Hernandez and other city officials. Residents left standing outside the chamber banged on the doors and shouted “fuera,” or “get out” in Spanish.
It was the first council meeting since the Los Angeles Times reported July 15 that Chief Administrative Officer Robert Rizzo earns $787,637 — with annual 12 percent raises — and that Bell pays its police chief $457,000, more than Los Angeles Police Chief Charlie Beck makes in a city of 3.8 million people. Bell council members earn almost $100,000 for part-time work.
City Attorney Edward Lee said the council members couldn’t discuss salaries in public without advance notice. The council then adjourned for a private session. About an hour later, the council members returned, and Hernandez read a statement saying the city would prepare a report on the salaries and seek public comment at the next council meeting, scheduled for Aug. 16.
Residents shouted in protest. Lee said he would have the room cleared if people continued to speak out of line. Police Chief Randy Adams said the fire department wanted to end the meeting because the crowd outside was blocking the door.
Jim Sinclair’s Commentary
Care to attach any names to this illustration? This is so true!
Jim Sinclair’s Commentary
An essential by subscription service:
- Housing Starts Show Bottoming-Bouncing, Approaching Renewed Decline
"No. 311: June Housing Starts"
http://www.shadowstats.com/
Jim Sinclair’s Commentary
Dollar negativity is building like a compressed spring.
When it breaks out it is going to confirm the recent dollar break down in spades.
Home construction sinks to lowest level since Oct.
By ALAN ZIBEL (AP)
WASHINGTON — Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted.
Construction of new homes and apartments in June fell 5 percent from a month earlier to a seasonally adjusted annual rate of 549,000, the Commerce Department said Tuesday. May’s figure was revised downward to 578,000.
Driving the June decline was a more than 20 percent drop in the volatile condominium and apartment market. Construction of single-family homes, the biggest part of the market, was down slightly. It dropped 0.7 percent.
One bright area of the report was an increase in building permit applications, which is a sign of future activity. They rose 2.1 percent from a month earlier to an annual rate of 586,000.
Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.
Jim Sinclair’s Commentary
How about Moody’s "is history" if it downgrades US Debt?
The US Will Collapse Before Moody’s Gets Around To Downgrading Its Debt
Joe Weisenthal | Jul. 19, 2010, 8:03 PM
I t probably bears worth repeating that if there were much about about Moody’s clout in the sovereign debt arena, it should have be erased today: Moody’s has no clout.
A downgrade of Ireland early on barely produced a blip on any market anywhere.
That follows a recent spectacularly uneventful downgrade of Portugal.
Every once in a while Moody’s lobs a very vague warning about debt and spending in the direction of London and Washington DC, and occasionally the subject of the US losing its AAA rating comes up.
But really, Moody’s is NOT going to be ahead of the US downgrade curve. And they certainly don’t want to be responsible for it. As Niall Ferguson points out, collapses come suddenly.
Jim Sinclair’s Commentary
Mercenaries fought for Rome in its last days.
National Security Inc.
Posted at 12:24 AM, 7/20/2010
In June, a stone carver from Manassas chiseled another perfect star into a marble wall at CIA headquarters, one of 22 for agency workers killed in the global war initiated by the 2001 terrorist attacks.
The intent of the memorial is to publicly honor the courage of those who died in the line of duty, but it also conceals a deeper story about government in the post-9/11 era: Eight of the 22 were not CIA officers at all. They were private contractors.
To ensure that the country’s most sensitive duties are carried out only by people loyal above all to the nation’s interest, federal rules say contractors may not perform what are called "inherently government functions." But they do, all the time and in every intelligence and counterterrorism agency, according to a two-year investigation by The Washington Post.
What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest — and whether the government is still in control of its most sensitive activities. In interviews last week, both Defense Secretary Robert M. Gates and CIA Director Leon Panetta said they agreed with such concerns.
The Post investigation uncovered what amounts to an alternative geography of the United States, a Top Secret America created since 9/11 that is hidden from public view, lacking in thorough oversight and so unwieldy that its effectiveness is impossible to determine.
Jim Sinclair’s Commentary
The West gave it all away. Greenspan simply wrapped greatness in a gift box and presented it to Asia.
China, regardless of the host of bashers that seem never to cease, is going to lead the economic world.
China Passes U.S. as World’s Biggest Energy Consumer, IEA Says
By Grant Smith and Christian Schmollinger – Jul 20, 2010
China overtook the U.S. as the world’s biggest energy user last year, emphasizing that developing nations are driving global growth, according to the International Energy Agency.
China consumed 2,252 million metric tons of oil equivalent in 2009 in the form of crude, coal, natural gas, nuclear power and renewable sources, IEA Chief Economist Fatih Birol said yesterday. That exceeded the 2,170 million tons used by the U.S.
“It’s one of those major turning points,” Tilak Doshi, the chief economist at the Energy Studies Institute at the National University of Singapore, said in a phone interview. “China is growing by leaps and bounds. You’ve got OECD countries where you’re talking about oil demand peaking, meanwhile the emerging countries like China and India will keep growing their energy demand.”
China’s gross domestic product expanded 10.3 percent in the second quarter even as the government took measures to cool growth. China, with Hong Kong included, was the biggest energy user in 2009, consuming 2.2 billion tons of oil equivalent, BP Plc said in its annual Statistical Review of World Energy in June. The U.S. was second and Russia ranked third, BP said.
“As China overtakes the U.S. as the world’s largest energy consumer, it is not only a domestic issue for China, but has repercussions for the rest of the world not only in supply terms, but also in how the energy is consumed,” Birol said in an interview by phone from Paris. “If China uses electric cars, hybrids and so on, they will impose the manufacturing line on most of the rest of the world.”
