In The News Today

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Jim Sinclair’s Commentary

I miss Bert. He was tough.

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Jim Sinclair’s Commentary

2012 is the year that the US dollar loses major value due to the sundering utilization as the major international settlement currency. This is significant enough to take out .7200 on the downside in the antiquated USDX index. War need not be a fire fight. War can be more effective as an economic fight. China is going to own it all, and never fire one bullet.

China expands yuan export settlement to all qualified companies
By Jim Jia
Bloomberg News
Friday, March 2, 2012

China expanded a trial of yuan settlement for exports to all companies qualified for foreign trade from a list of designated participants, the nation’s central bank said on its website yesterday.

The change is aimed at promoting trade and the Chinese currency’s cross-border use, the People’s Bank of China said, citing a combined directive with the ministries of finance and commerce, the customs and taxation bureaus, and the China Banking Regulatory Commission. A circular on the new policy attached to the announcement is dated Feb. 3.

Premier Wen Jiabao is encouraging the wider use of the yuan in international trade and investment to curb reliance on the U.S. dollar while maintaining some controls on funds flowing in and out of China. Officials have said they want to gradually achieve the yuan’s full convertibility under the capital account by 2015.

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Jim Sinclair’s Commentary

It is not over until it is literally over.

Greece Debt-Swap Deadline This Week to Show If Europe Moving Past Crisis
By Patrick Donahue – Mar 4, 2012 6:00 PM ET

The European Union faces a first test in its attempt to turn the page on the two-year debt crisis when Greece’s private creditors decide this week whether to sign off on the biggest sovereign-debt restructuring in history.

The success of the 106 billion-euro ($140 billion) debt swap, confirmed on the eve of last week’s European Union summit, depends on how many investors agree to the writedown by the March 8 deadline. Euro-area finance ministers will hold a teleconference on March 9 to review the deal’s outcome.

“The European crisis is not quite over yet,” Erik Nielsen, chief global economist at UniCredit SpA in London, wrote in a note to clients yesterday. He said enough creditors will probably participate in the writedown to avoid triggering so-called collective action clauses, which could be used by Greece to compel investors to participate and roil markets by triggering credit-default swap insurance contracts.

The Greek government has set a 75 percent participation rate as a threshold for proceeding with the transaction, in which investors will forgive 53.5 percent of their principal and exchange their remaining holdings for new Greek government bonds and notes from the European Financial Stability Facility. Euro- area finance ministers last week authorized the EFSF to issue bonds for the swap.

Leaders of the European Union last week said their focus will shift away from budget-cutting to growth measures after completing the details of a second Greek bailout package. Whether that 130 billion-euro package can proceed will depend on the outcome of this week’s swap.

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Jim Sinclair’s Commentary

For those who do not comprehend the implications of the ISDA’s determination of “no default” in the 70% haircut of Greek sovereign debt, the following is prerequisite information. For those that deny the Greek credit event is an economic clutch event there is no hope.’

How to Live in Your Car
Posted by Barbara Peterson

Living in a car isn’t something that anyone would recommend. However, when you get laid off, your emergency fund runs out, your home is foreclosed (or you get an eviction notice) and there’s nobody to help, living in your car might be the only choice, especially if you don’t feel safe at a local shelter. Unfortunately, in many places, sleeping in your car is not only frowned upon, but also illegal. Here’s how to get by until something better comes along.

Remember, you are not alone and you have a vehicle. Lots of people have survived and even thrived while sleeping in cars.[1]

Steps

You can only live in your car successfully if your car works. You’re going to need a new or “newish” car or be a good mechanic to live in an older car. If you have an old car keep in mind that you’re liable to break down at an inopportune moment if you don’t stay on top of maintenance.

Find a safe and inconspicuous place to park. First, check to see if there are any organizations or businesses in your area (or a nearby area) that designates parking lots specifically for people in situations like yours; For example, Wal-Mart allows people to camp overnight in their parking lots. It’s not only legal, but the organization might screen the people who use the lot, or even designate a women-only lot.[2] If there are no such lots available, and you live in a urban area, look for streets with no sidewalks, no overlooking windows, and adjacent to woods; the area should be sparse enough to avoid nosy onlookers but populated enough that the car does not stand out.[3] Parking lots of big-box retailers (especially those that are open 24 hours and have restrooms, such as Wal-mart) are great to clean up in and have security, as long as you spend a couple of dollars there and don’t park in one place too often. Parking lots however can be noisy, particularly in the morning as trucks arrive carrying food and goods. [4]

Church car parks are often quiet during week days. If you check around, you may find a church that is less used than others. This could be a good place to park, and you may be able to ask for assistance at the church.[5]

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Jim Sinclair’s Commentary

This looks more like borrowing to fill the gap caused by losses on sovereign losses.

Barclays borrows 8.2bn euros from ECB
2 March 2012 Last updated at 10:34 ET

Barclays has confirmed that it borrowed 8.2bn euros (£6.7bn) from the European Central Bank’s (ECB’s) latest long-term refinancing operation (LTRO).

It is the fourth British bank to reveal that it accessed the low-interest three-year loans.

It said it would use the money to manage the risk associated with funding gaps in Spain and Portugal.

Barclays did not take any cash from the ECB’s previous offer of such loans in December.

The BBC’s business editor, Robert Peston, says that given the cheap interest rate at which the money is offer these loans are arguably a susbsidy by eurozone taxpayers for UK financial institutions.

On Wednesday the ECB said that 800 banks across the European Union had accessed 530bn euros through its LTRO.

In December, more than 500 banks borrowed 489bn euros.

Of the other big four British banks, Lloyds borrowed 13.6bn euros in the latest auction, HSBC borrowed 5.6bn euros, most of it in the first auction, and RBS borrowed 10bn euros across both auctions.

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Jim Sinclair’s Commentary

Of course they will miss it. They never studied the Formula of 2006.

Spain to miss 2012 budget deficit target, says Rajoy
2 March 2012 Last updated at 09:00 ET

Spanish Prime Minister Mariano Rajoy has said his country will miss its budget deficit target for this year, just as EU leaders agree a new treaty to enforce budget discipline.

Mr Rajoy said Spain’s deficit would be 5.8% of total economic output in 2012, higher than its agreed target of 4.4%.

He said the higher target still represented "significant austerity".

The Netherlands also said it would miss its budget target for this year, with a deficit of 4.5%.

The Dutch target was 4.1%.

‘Difficult objective’

"I’m backing austerity and aim to reduce the deficit from 8.5% [in 2011] to 5.8%," said Mr Rajoy.

In January, he outlined 8.9bn euros ($11.8bn; £7.4bn) in new budget cuts, as well as tax increases designed to raise 6.3bn euros.

But analysts said even hitting the new deficit target would not be easy.

"It’s still a difficult objective in the absence of any traction in external demand," said Emilio Ontiveros at Analistas Financieros Internacionales in Madrid.

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Jim Sinclair’s Commentary

This was a bomb when it came out.

It was MOPEd to be GM’s savior and bombed all on its own without MSM’s help.

GM laying off 1300 due to low Volt sales
by Joel Gehrke

General Motors Co. announced the temporary suspension of Chevrolet Volt production and the layoffs of 1300 employees, as the company is cutting Volt manufacturing to meet lower-than-expected demand for the electric cars.

"Even with sales up in February over January, we are still seeking to align our production with demand," GM spokesman Chris Lee said. The car company had hoped to sell 45,000 Chevy Volts in America this year, according to the Detroit News, but has only sold about 1,626 over the first two months of 2012.

"GM blamed the lack of sales in January on “exaggerated” media reports and the federal government’s investigation into Volt batteries catching fire, which officially began in November and ended Jan. 21," the Ann Arbor (Mich.) News reported.

The laid-off employees will be rehired April 23rd, when GM resumes production of the Volt.

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Jim Sinclair’s Commentary

The Chinese certainly are consistent once they make up their minds.

China reduces holdings of US govt bonds
Updated: 2012-03-03 09:11
By Wei Tian (China Daily)

BEIJING – China has made the first annual reduction in its holdings of US Treasury bonds in a decade. Experts are viewing the move as a sign that the country is accelerating the move away from dollar assets in search of more diversified investment channels.

According to the latest monthly figures from the US Treasury Department, China’s holdings of US Treasury bonds dropped for a fifth consecutive month in Dec to $1.15 trillion.

The number was an update of a figure released in February, after the US department adjusted its method of collecting data on foreign holdings of US government bonds, a move aimed at obtaining more information about the use of proxies buying and holding US securities.

As a result, China’s June holdings of US Treasury securities have been amended to $1.31 trillion instead of $1.17 trillion. The figure at the end of 2011 was $51 billion higher than the previous calculation.

According to the revised data, China cut its holdings of US debt by $8.2 billion in 2011 compared with the previous year. It was the first time that the country had reduced its yearly holdings since 2001.

The country remains the largest foreign holder of US treasuries, but analysts suggest that China’s $3.2 trillion in foreign-exchange reserves means that the country is beginning to rapidly diversify its portfolio of foreign currencies.

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Jim Sinclair’s Commentary

The horror those I care a great deal about have experienced through the loss of lifelong trading winnings delivered to them by MF must be adjudicated

CME Subpoenaed By Federal Grand Jury, CFTC in Probes of MF Global Collapse
By Lisa Abramowicz and Matthew Leising – Feb 28, 2012 9:49 AM MT

CME Group Inc. (CME), the world’s largest futures exchange, said it received a subpoena from a federal grand jury investigating the October collapse of MF Global Holdings Ltd.

CME Group, which had auditing authority over the failed futures broker, has been asked to produce information and witnesses in connection with the investigation by a grand jury in the Northern District of Illinois, the Chicago-based company said in a regulatory filing today. The company also received a subpoena from the U.S. Commodity Futures Trading Commission and a document request from the Securities Investor Protection Corp. trustee handling MF Global’s liquidation, it said.

The CFTC is reviewing CME Group’s audit of MF Global before the broker’s Oct. 31 bankruptcy, when as much as $1.6 billion in client funds went missing, a person familiar with the matter said last month. The CFTC, Securities and Exchange Commission, Justice Department and bankruptcy trustees overseeing MF Global’s liquidation are investigating the possible misuse of client funds.

“We believe that we carried out our duties and responsibilities in accordance with these standards and procedures,” CME said in the filing.

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