Faith is reason grown courageous.
– Sherwood Eddy

Dear Friends,

I agree with CIGA Eric on his analysis of the market today. This is a product of hedge fund madness, worse than the cult movie "Reefer Madness."

U.S. Stocks Fall as Commodities Drop Amid Concern Interest Rates Will Rise
By Rita Nazareth – May 11, 2011 10:02 AM MT

U.S. stocks retreated, sending the Standard & Poor’s 500 Index lower for the first time in four days, as commodity producers fell amid concern that accelerating global inflation will lead to higher interest rates.

Freeport-McMoRan Copper & Gold Inc. (FCX) and Chevron Corp. (CVX) dropped at least 1.7 percent as data from China raised expectations about higher borrowing costs. Yahoo! Inc. fell 6.5 percent after the Internet company disclosed a restructuring of a Chinese payment business. Macy’s Inc. (M) jumped 8.5 percent as the retailer beat its sales forecast and doubled its dividend. Intel Corp. (INTC) gained 2.3 percent after boosting payout by 16 percent.

The S&P 500 retreated 0.9 percent to 1,345.54 at 12:01 p.m. in New York. The benchmark gauge for American equities had advanced 1.7 percent over the past three trading days. The Dow Jones Industrial Average declined 114.28 points, or 0.9 percent, to 12,646.08 today.

“Inflation seems to be rearing its ugly head,” said Cliff Remily, a money manager at Santa Fe, New Mexico-based Thornburg Investment Management, which oversees $80 billion. “Some countries are raising interest rates as a way to combat inflation.” That’s putting some pressure on stocks, he said.

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Jim Sinclair’s Commentary

Here they are, two of the best ever.

There is an ancient tradition that meditating on the mastery of a discipline results in opening one’s mind to the highest possibility in life.

If you have no idea what meditation is all about ask Monty Guild, he has been a practitioner for I believe now close to 40 years.

Try it. The worst case is you fall asleep and get some needed rest.

Jesse Livermore is on the left and Bert Seligman is on the right. These are two of the Masters of the Universe of Trading.

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Jim Sinclair’s Commentary

And the difference between using the Social Security Fund for whatever you want is what?

Irish Bombshell: Government Raids PRIVATE Pensions To Pay For Spending
Joe Weisenthal and Gregory White

The Irish government plans to institute a tax on private pensions to drive jobs growth, according to its jobs program strategy, delivered today.

Without the ability sell debt due to soaring interest rates, and with severe spending rules in place due to its EU-IMF bailout, Ireland has few ways of spending to stimulate the economy. Today’s jobs program includes specific tax increases, including the tax on pensions, aimed at keeping government jobs spending from adding to the national debt.

The tax on private pensions will be 0.6%, and last for four years, according to the report.

From the jobs initiative release:

The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans. I propose that the levy will apply at a rate of 0.6% to the capital value of assets under management in pension funds established in the State.

It will apply for a period of 4 years commencing this year and is intended to raise about €470 million in each of those years. The levy will not apply to pension funds established here and providing services and benefits solely to non-resident employers and members. Further details regarding the proposed application of the levy are set out in the Summary of Initiative Measures.

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