Jim Sinclair’s Commentary
One thing is for sure. Regardless of whether the rumors are true about the Chinese central banker, you can be sure the people who run the Chinese central bank will not buy many more US Treasuries.
Yes, this statement speaks to the Chinese rating of US Treasury investments, a definite downgrade that Moody’s and Standard and Poors dare not make.
Japan debt safer than U.S. debt: China economist
By Simon Rabinovitch and Aileen Wang
Posted 2010/08/11 at 7:42 am EDT
BEIJING, Aug. 11, 2010 (Reuters) — China has been buying record amounts of Japanese government debt because it is less risky than U.S. debt, at least in the short term, a Chinese government economist said on Wednesday.
Investing in Japanese bonds is safer because so much of the country’s debt is held domestically, and the yen is on course to strengthen further, said Zhang Ming, an economist with the Chinese Academy of Social Sciences, a top government think-tank.
"Even though the difference in yields is big, China has been abandoning U.S. debt and picking up Japanese debt. This definitely shows that it believes the risks of U.S. debt far exceed those of Japanese debt," Zhang said in a report issued by his research institute.
The report was issued a day after the Federal Reserve said it would buy more U.S. government debt in a form of mild quantitative easing to counter economic weakness.
Top Chinese leaders have previously registered their concerns about lax U.S. fiscal policies eroding the value of their investments in the United States.
Jim Sinclair’s Commentary
I wonder if he just figured this out.
This has been true since they planted the buttonwood tree.
Hedge Fund Manager Dan Loeb: "The Whole System Is Rigged"
Posted Aug 31, 2010 12:48pm EDT by Courtney Comstock
Provided by the Business Insider, August 31, 2010:
Apparently everyone’s forwarding around the powerful message in hedge fund manager Dan Loeb’s most recent letter to investors.
The message, from the number of chunks of quotes Dealbook pulls out of Loeb’s letter is: I don’t trust the government to do what’s best for the economy, so I’m pulling out of companies that could be impacted by public policy.
Third Point’s most recent investment strategy reflects Loeb’s belief that banks, healthcare, and for-profit education companies are "overly exposed to unpredictable government regulation."
In the startling conclusion, Loeb says:
“It is easy to see why so many people have concluded that the entire system is rigged.”
Here are the quote chunks we pulled from Dealbook’s analysis of the letter. Key points are bolded:
Jim Sinclair’s Commentary
And I understand in Iran.
Citigroup to Increase China Workforce to 12,000 in Three Years
By Cathy Chan – Aug 31, 2010 9:01 AM MT
Citigroup Inc. plans to almost triple its workforce in China to as many as 12,000 people in the next three years, intensifying its rivalry with HSBC Holdings Plc in the world’s fastest-growing major economy.
The New York-based bank will hire more in China than in any other market in Asia-Pacific, Stephen Bird, Citigroup’s co-chief executive officer for the region, said yesterday in an interview. Citigroup has 4,500 employees in China and 50,000 in Asia, according to spokesman James Griffiths.
Citigroup CEO Vikram Pandit is raising his bet on China, where banks extended a record $1.4 trillion of new loans last year. Unlike HSBC and Standard Chartered Plc, Citigroup has no plans to sell shares in China and will instead fund expansion with money generated in Asia, Bird said on Aug. 25.
“China is one of Citi’s priority markets globally,” said Bird, 43. “We have aggressive consumer banking expansion plans and want to open branches as fast as regulators in China will let us.”
Citigroup has 29 outlets in the country and plans to add 10 more this year. That will still leave it short of HSBC’s 102 outlets and the 59 operated by Standard Chartered.
Standard Chartered, the U.K. bank that gets more than three-quarters of profit from Asia, has more than 4,000 employees at its China unit. HSBC, Europe’s largest lender by market value, has more than 5,000. Industrial & Commercial Bank of China Ltd. had 390,000 workers at the end of 2009.
Jim Sinclair’s Commentary
Even the dead are now homeless.
Jim Sinclair’s Commentary
The Consumer Confidence Index is a survey of economic statistics that is dicey at best.
Consumer confidence rose more than forecast in August. Specifically, the Conference Board’s confidence index increased to 53.5 from a five-month low of 51 in July; beating the Street’s estimate of 50.7. (From Bloomberg.com)
Jim Sinclair’s Commentary
Case-Shiller, your nose is growing.
The S&P/Case-Shiller home-price index for June increased 4.2% from June 2009. (From Bloomberg.com)
Jim Sinclair’s Commentary
Debka is rumored (unconfirmed) to be influenced by Massad.
Regardless, this development is telling.
US to sell Israel massive military fuel stocks worth $2 bn
DEBKAfile Exclusive Report August 28, 2010, 12:53 PM (GMT+02:00)
On Aug. 6, the US Defense Security Cooperation Agency, DSCA, informed Congress of the sale to Israel of 60 million gallons of unleaded gasoline, 284 million gallons of JP-8 aviation jet fuel and 100 million gallons of diesel fuel at an estimated cost of two billion dollars. The date is significant, DEBKAfile’s intelligence sources find. Ten days earlier, the Japanese tanker M.Star was attacked in Omani waters of the Strait of Hormuz with 200,000 tons of oil.
Although American experts who examined the vessel, they never attributed the damage to sabotage by Iran or al Qaeda, despite the latter’s claim of responsibility on Aug. 4 While Washington did its best to sweep the incident under the rug, Saudi intelligence were worried enough about the threat inching dangerously close to the Gulf’s oil exporting lifeline to launch an independent investigation of the incident.
Their investigators discovered it was staged by a Saudi terrorist who operates out of Iran under the orders of the Revolutionary Guards. To Riyadh, the episode looked like a blunt warning from Tehran to Washington and its allies about the consequences – not just of a direct strike against Iran’s nuclear facilities, but the possibility of sanctions upsetting the equilibrium of the Islamic regime.
Blockage of the Strait of Hormuz would cut off Israel’s primary source of fuel. Therefore, our sources report, a series of accords, some of them secret, have been transacted to back up America’s standing commitment to keep Israel supplied with its energy needs in the event of armed conflict or crisis on world fuel markets.
Jim Sinclair’s Commentary
The Federal Budget Deficit is going further and further out of control.
Record number in government anti-poverty programs
By Richard Wolf, USA TODAY
WASHINGTON — Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.
More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That’s up at least 17% since the recession began in December 2007.
POLITICS: Welfare agencies boost voter rolls
"Virtually every Medicaid director in the country would say that their current enrollment is the highest on record," says Vernon Smith of Health Management Associates, which surveys states for Kaiser Family Foundation.
The program has grown even before the new health care law adds about 16 million people, beginning in 2014. That has strained doctors. "Private physicians are already indicating that they’re at their limit," says Dan Hawkins of the National Association of Community Health Centers.
More than 40 million people get food stamps, an increase of nearly 50% during the economic downturn, according to government data through May. The program has grown steadily for three years.
