My Dear Friends,
You can see the importance of the $1764 Angel today.
Regards,
Jim
Jim Sinclair’s Commentary
The Fed has thrown the dollar into the wind.
Jim Sinclair’s Commentary
This is as important in the grand scheme as the downgrade of US treasuries.
S&P Cuts AAA Ratings on Thousands of Municipal Bonds After U.S. Downgrade
By Sarah Frier and Michelle Kaske – Aug 8, 2011 9:01 PM MT
Standard & Poor’s lowered the AAA ratings of thousands of municipal bonds tied to the federal government, including housing securities and debt backed by leases, following its Aug. 5 downgrade of the U.S.
The rating company assigned AA+ scores to securities in the $2.9 trillion municipal bond market including school- construction bonds in Irving, Texas; debt backed by a federal lease in Miami; and a bond series for multifamily housing in Oceanside, California. Olayinka Fadahunsi, an S&P spokesman, said he couldn’t provide a dollar figure on the affected debt.
S&P also cut ratings on securities backed by Fannie Mae and Freddie Mac, prerefunded issues and munis repaid by using federal assets, also known as defeased or escrow bonds. No state general-obligation ratings were affected and the company said some may remain unchanged.
“It’s expected, but nobody is happy about it,” Bud Byrnes, chief executive officer of Encino, California-based RH Investment Corp., said in a telephone interview. “No one that I know thinks it was justified to cut the U.S. bonds to AA+. Once that happened, you knew that any prerefunded bonds or escrowed bonds would be downgraded too. It’s a domino effect.”
Byrnes said funds required to invest in AAA bonds would be most affected by the downgrades and may be forced to liquidate some holdings. “They will have a hard time replacing that yield,” he said.
Jim Sinclair’s Commentary
This you can take to the bank as it will happen for certain.
Rogoff Sees Fed Asset Purchases in Effort to Secure U.S. Economic Recovery
By Susan Li and Scott Lanman – Aug 8, 2011 8:20 PM MT
Federal Reserve policy makers are likely to embark on a third round of large-scale asset purchases, moving “more decisively” to secure the U.S. recovery, said Harvard University economist Kenneth Rogoff.
“They certainly should do something right away,” said Rogoff, a former International Monetary Fund chief economist who attended graduate school with Fed Chairman Ben S. Bernanke. It’s “hard to know” if Bernanke would immediately be able to gain the support of Federal Open Market Committee members, Rogoff said in an interview today on Bloomberg Television.
The FOMC meets today in Washington a day after the worst day for U.S. stocks since December 2008. Bernanke last month outlined policy options including additional asset purchases or strengthening the commitment to low interest rates after the first two rounds of so-called quantitative easing failed to keep the unemployment rate below 9 percent.
“Out-of-the-box policies are called for, especially much more aggressive monetary policy, however unpopular that may be,” said Rogoff, 58, a former Fed economist who like Bernanke earned a Ph.D. from the Massachusetts Institute of Technology. The Fed is “going to move more decisively,” Rogoff said.
The Fed is scheduled to release a statement at about 2:15 p.m. New York time after its meeting. Bernanke and his colleagues may prolong a pledge to maintain record monetary stimulus, said economists at JPMorgan Chase & Co. (JPM), BNP Paribas and Goldman Sachs Group Inc. (GS) The Fed could do so by making a commitment to hold its $2.87 trillion balance sheet steady for an “extended period.” The central bank has kept its benchmark rate near zero since 2008.
Jim Sinclair’s Commentary
Much to do about nothing. The Fed is in freeze frame, shocked by the failure of business to hold any recovery and the downgrading of US treasuries.
Fed to Hold Rates Exceptionally Low Through Mid-2013
By BINYAMIN APPELBAUM
Published: August 9, 2011
WASHINGTON — The Federal Reserve said Tuesday that it would hold short-term interest rates near zero through mid-2013 to support the faltering economy, but it announced no new measures to further reduce long-term interest rates or otherwise stimulate renewed growth.
The Fed’s policy-making board said in a statement that growth “has been considerably slower” than it had expected, and that it saw little prospect for rapid improvement, prompting the change in policy. It had previously said that it would maintain rates near zero “for an extended period.”
“The committee now expects a somewhat slower pace of recovery over the coming quarters,” the Fed’s statement said. “The unemployment rate will decline only gradually.”
Many economists and outside analysts argue that the Fed should act more aggressively in response to rising unemployment and faltering growth. But internal divisions are limiting the central bank’s ability to pursue additional steps.
Even the modest commitment announced Tuesday was passed only by a vote of 7 to 3. The central bank prefers to act unanimously whenever possible.