In The News Today

Posted at 12:16 PM (CST) by & filed under In The News.

Dear CIGAs,

At 11:30am this morning the Whistle Blower comment reported yesterday was deleted from the CFTC web page.

According to comments made in the euro press, the Fed is in arrears concerning gold audits due to countries storing gold with the New York Federal Reserve Bank.

 

Jim Sinclair’s Commentary

If the market fails to properly value a company making progress on the ground, M&A will.

Anglo American sees M&A as ‘strategic priority’ – Parker
By: Natasha Odendaal
16th March 2012

JOHANNESBURG (miningweekly.com) – Diversified mining group Anglo American continued to examine merger and acquisition opportunities as a “strategic priority” in driving value in core commodities, said chairperson SirJohn Parker.

Last year, the group bought the Oppenheimer family’s 40% interest in De Beers for $5.1-billion, raising its profile in diamonds. Anglo American also brought up its total stake in Peace River Coal (PRC) mine, including a number of exploration leases, in British Columbia, Canada, to 100%, following its acquisition of the 25.17% interest in PRC that it did not already own.

Anglo American in November also sold its 24.5% interest in Anglo American Sur copper assets, in Chile, for $5.4-billion to Mitsubishi Corporation.

“Our commodities help to both fuel growth in developing countries and to enable the continuing technological revolution in the developed economies,” he said, adding that growing demand for metals and minerals was fuelling mining companies exploration of regions beyond their traditional mining jurisdictions, despite infrastructural, logistical and other challenges.

“Anglo American’s diversified portfolio included material exposure to metallurgical coal and iron-ore, which both benefited from continued industrialisation in emerging economies, while also having exposure to later cycle businesses through platinum and ultimately, diamonds, as GDP [gross domestic product] per capita increases,” Parker wrote in the group’s 2011 annual report, published this week.

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Jim Sinclair’s Commentary

The more the talk of change, the more things remain the same.

Goldman Should Be Barred From Returning More Capital, Bair Says – Bloomberg

Goldman Sachs Group Inc. (GS) should be prohibited from boosting its dividend or repurchasing stock because Federal Reserve stress tests showed the investment bank is too leveraged, according to former regulator Sheila Bair.

The leverage ratios of four financial firms dropped below 4 percent under the stressed scenario, according to test results the Fed released this week. Two of those firms, Citigroup Inc. (C) andMetLife Inc. (MET), were prohibited from raising dividends or repurchasing shares. The central bank approved the capital plans of two others, Goldman Sachs and Morgan Stanley.

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Jim Sinclair’s Commentary

In the economic sense, this is nuclear even if only selective at the inception.

The Banks named for all intents and purposes are put out of business.

SWIFT instructed to disconnect sanctioned Iranian banks following EU Council decision
Published on 15 Mar 2012

This article is also available in German

Brussels, 15 March 2012 – Following an EU Council decision, SWIFT is today announcing it has been instructed to discontinue its communications services to Iranian financial institutions that are subject to European sanctions.

The new European Council decision, as confirmed by the Belgian Treasury, prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned Iranian banks. SWIFT is incorporated under Belgian law and has to comply with this decision as confirmed by its home country government.

“This EU decision forces SWIFT to take action” said Lázaro Campos, CEO of SWIFT. “Disconnecting banks is an extraordinary and unprecedented step for SWIFT. It is a direct result of international and multilateral action to intensify financial sanctions against Iran.”
The EU-sanctioned Iranian financial institutions and the SWIFT customer community have been notified of the disconnection, which will become effective on Saturday 17 March at 16.00 GMT.

SWIFT has been and remains in full compliance with all applicable sanctions regulations of the multiple jurisdictions in which it operates, and has received confirmation of this from the competent regulatory authorities. As a global provider of secure messaging services, SWIFT has no involvement in or control over the underlying financial transactions that are contained in the messages of its member banks.

Related links

Council of the European Union – Council elaborates EU sanctions against Iran

Official Journal of the European Union

Statements on sanctions

About SWIFT

SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 financial institutions and corporations in 210 countries. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

For more information, please refer to http://www.swift.com/.

SWIFT
Simon Bale 
+32 2 655 3377
[email protected]

 

Jim Sinclair’s Commentary

The Greek tragedy is FAR from over.

IMF approves $36.56 billion funding for Greece
EU warns that painful social overhaul ahead
By Nicholas Paphitis
March 16, 2012

ATHENS – The International Monetary Fund on Thursday approved $36.56 billion in funding for Greece over the next four years, while Standard and Poor’s warned that the country’s new bonds remained vulnerable to default despite this month’s massive debt writedown.

The IMF’s executive board granted the immediate release of $2.15 billion of these funds as part of the country’s second bailout, a statement said.

Greece will receive a total $226.2 billion in rescue loans from its eurozone partners and the IMF to keep it afloat until 2016, as dizzily high borrowing rates have blocked its ability to raise money on the international bond markets.

IMF Managing Director Christine Lagarde warned that risks to Greece’s austerity and reform program still “remain exceptionally high, and there is no room for slippages.’’ She said new pain lies ahead for Greeks, despite the tough measures implemented over the past two years.

“Full and timely implementation of the planned adjustment – alongside broad-based public support and support from Greece’s European partners – will be critical to success,’’ she said in a statement.

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Jim Sinclair’s Commentary

When you turn your client into a counter party that client enters the cross hairs of the OTC derivative manufacturer.

In all probability, $3.4 billion is the price of tearing up the pieces of paper.

Italy Said to Pay Morgan Stanley $3.4 Billion
By Nicholas Dunbar and Elisa Martinuzzi – Mar 16, 2012 8:10 AM MT

When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.

Italy, the second-most indebted nation in the European Union, paid the money to unwind derivative contracts from the 1990s that had backfired, said a person with direct knowledge of the Treasury’s payment. It was cheaper for Italy to cancel the transactions rather than to renew, said the person, who declined to be identified because the terms were private.

The cost, equal to half the amount to be raised by Italy’s sales tax increase this year, underscores the risk of derivatives countries use to reduce borrowing costs and guard against swings in interest rates and currencies can sour and generate losses for taxpayers. Italy, with record debt of $2.5 trillion, has lost more than $31 billion on its derivatives at current market values, according to data compiled by the Bloomberg Brief Risk newsletter from regulatory filings.

“These losses demonstrate the speculative nature of these deals and the supremacy of finance over government,” said Italian senator Elio Lannutti, chairman of the consumer group Adusbef.

The transaction may prompt regulators to push for greater transparency and regulation of how governments use derivatives, said the head of the European Parliament panel that deals with market rules.

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Jim Sinclair’s Commentary

This is why the video sent to you yesterday is appropriate. The market reactions to the Greek situation are delusional.

Spanish Debt Load Hits New High
By DAVID ROMAN

MADRID—Spain’s central bank said Friday that government debt rose to 68.5% of gross domestic product in the fourth quarter, the highest since at least 1990, as the country’s budget deficit surpassed expectations.

Spain’s government ran a budget deficit of 8.5% of GDP last year, down from 9.2% in 2010 but well above the 6% government target.

Debt is also expected to increase this year, as Madrid seeks to cut its deficit to 5.3% of GDP, a tough prospect amid economic contraction and weak tax receipts. Spain’s government is forecasting the economy may contract 1.7% during the year.

In the third quarter, Spanish debt stood at 66% of GDP. A year earlier, it was at 61.2%. Bank of Spain records, starting in 1990, show that debt had previously peaked at 67.4%.

Spain’s debt remains low by European standards, and below the 87.4%-of-GDP euro zone average, according to Eurostat estimates, but it has been rising faster than in other countries as tax receipts collapsed in the wake of a four-year property bust, and government outlays soared with unemployment surpassing 23%—the highest by some distance in the euro zone.

Even though countries like Germany, France and Italy all have government debt levels significantly higher than Spain’s, they also have lower government deficits.

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Jim Sinclair’s Commentary

Here is a situation that is totally FUBAR.

Karzai Calls on U.S. to Pull Back as Taliban Cancel Talks
By ROD NORDLAND, ELISABETH BUMILLER and MATTHEW ROSENBERG
Published: March 15, 2012

KABUL, Afghanistan — President Hamid Karzai insisted Thursday that the United States confine its troops to major bases in Afghanistan by next year as the Taliban announced that they were suspending peace talks with the Americans, both of which served to complicate the Obama administration’s plans for an orderly exit from the country

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