My Dear Friends,
As of 3:18pm EST I have answered all inquiries of yesterday and today. If you emailed before that time yesterday or today, and do not have an answer, please send your question again.
Your personal financial watchman,
Jim
Jim Sinclair’s Commentary
There is a trend out there that the manipulating managed spread traders cannot survive.
Brazil’s Gold Reserves Rise For First Time Since 2008
By Nicholas Larkin and Glenys Sim on October 25, 2012
Brazil increased its gold reserves for the first time since December 2008 at a time when investors raised holdings in exchange-traded products to a record.
Brazil’s holdings expanded 1.7 tons last month to 35.3 tons, data on the International Monetary Fund’s website showed. Turkey’s holdings increased 6.8 tons and Ukraine added 0.3 ton. Brazil’s central bank doesn’t comment on the policy of its reserve composition, it said in an e-mail.
Central banks have been expanding reserves after the metal climbed the past 11 years and investors held a record tons in bullion-backed exchange-traded products this month, data compiled by Bloomberg show. Nations bought 254.2 tons in the first half of 2012 and may add close to 500 tons for the year, the London-based World Gold Council said in August.
“We expect strong buying by central banks to continue,” said Dan Smith, a commodities analyst at Standard Chartered Plc in London. “They will be encouraged by lower prices and continued worries about inflation and currency risks.”
Turkey’s bullion holdings have increased due to it accepting gold in its reserve requirements from commercial banks. Russia’s reserves fell by 2.2 tons, Belarus by 1.5 tons, Czech Republic by 0.3 ton and Kazakhstan by 0.4 ton, the IMF data show.
Jim Sinclair’s Commentary
Keep this firmly in mind. This trend is not going to reverse.
Jim Sinclair’s Commentary
No matter who is elected the pensioner is flushed. Who speaks for the elderly? The answer is nobody
San Bernardino halts pension fund payments
Bankrupt city owes $5.3 million to CalPERS; judge may have to decide payment priorities.
THE ORANGE COUNTY REGISTER
The city of San Bernardino filed for bankruptcy protection three months ago, and shortly afterward was reported to be under investigation by the federal Securities and Exchange Commission, allegedly for hiding deficits by diverting money intended for sewers, roads and construction to pay ongoing bills instead.
Now, the Wall Street Journal reports the Inland Empire city of about 210,000 residents "has stopped making its regular payments to the California Public Employees Retirement System" and owes $5.3 million toward its employees’ pensions. A San Bernardino official told the Journal the city needs to be put on a payment plan because it doesn’t have enough cash to pay its bills.
This is just the latest in a string of California municipal fiscal difficulties. Perhaps more troubling, San Bernardino may offer a glimpse of the future for other cities struggling to avoid bankruptcy as varied interests and creditors make demands for limited funds. A lawyer for the state employees retirement system, known as CalPERS, says federal bankruptcy law doesn’t pre-empt state control over benefits overseen by the fund, the Journal reported.
Jim Sinclair’s Commentary
There is no way QE to infinity can cease. There is no way stimulation in all forms can be reigned in. There is no room for austerity anywhere.
Firing Bernanke if the Banker wins will go down as the greatest error in financial history. If he could make such an error he will also be a one term wonder.
Apple Disappoints
10/25/2012 – 16:33 Apple
And so the behemoth misses… again:
APPLE 4Q EPS $8.67, EST. $8.75 – miss
APPLE 4Q SALES $36.0B – slight beat
APPLE SOLD 14.0 MILLION IPADS DURING QTR, UNIT EST. 15.3M
But the uglyness is in the forecast. And this time it is not a low-ball:
APPLE SEES 1Q EEPS $11.75, , EST. $15.49
APPLE SEES 1Q REV. ABOUT $52B, EST. $55.07B
Stock halted so keep an eye on the QQQ as a proxy – QQQs imply AAPL $590 here (200DMA is $587)… AAPL will resume trading at 4:50ET
Amazon Bloodbath After Hours As Suddenly "Earnings Matter" Once Again
10/25/2012 – 16:16 After Hours
After defying gravity for months on end, on what we quarter after quarter warned were ever declining margins and revenue growth, the Amazon bubble (just about 300x P/E at last check) has finally popped, and investors no longer believe that the company can offset collapsing profit margins with increasing volume. And yes, the Kindle is proving to be nothing more than yet another fad rather than the latest and greatest razor-razorblade ecosystem paradigm.
Morning Rumor Control
Yesterday’s popular myth gone viral in the community is that gold banks have infinite liquidity to depress the price of gold. That assumes that gold is the trading center of the entire market universe, which I am sorry to tell you, it is not. It might be my and your universe, but the gold banks compared to other markets is small. You have to assume with that rumor that all the major investment banks do is eat, sleep and think gold. That is also untrue.
I have to inform you that gold banks do not have unlimited liquidity for the gold market. That rumor is busted!
Jim Sinclair’s Commentary
At last, a good initiative by the Gold Counsel, the mouth piece of the major producers.
Invitation to a World Gold Council policy roundtable – “A more effective Eurozone monetary policy tool – gold-backed sovereign debt
INVITATION TO A POLICY ROUNDTABLE
The World Gold Council and Monetary Expert Panellist, Professor Ansgar Belke invite you to attend a policy roundtable on
“A more effective Eurozone monetary policy tool – gold-backed sovereign debt”
Chair:
Daniel Gros, Director, Centre for European Policy Studies
Confirmed speakers:
Prof. Dr. Ansgar Belke, Monetary Expert Panellist for the Economic and Monetary Affairs Committee, European Parliament and Jean Monnet Professor at the University of Duisburg-Essen
Prof. Dr. René Smits, Professor of the Law of Economic and Monetary Union at the University of Amsterdam
Date: 6 November 2012
Time: 12.00 – 14.00 – Lunch will be provided
Location: Cicero Brussels, Rue de la Science 14
Monetary Expert Panellist for the Economic and Monetary Affairs Committee, European Parliament and Jean Monnet Professor at the University of Duisburg-Essen, Dr. Ansgar Belke will present his report commissioned by the World Gold Council which provides a platform to debate the use of gold as collateral for highly distressed bonds and the benefits this would bring in terms of reduced financing costs in the Eurozone without the associated shortcomings of the other non-conventional monetary policy tools that have been used to date.
Professor Dr. René Smits, Professor of the Law of Economic and Monetary Union at the University of Amsterdam will provide legal insight into the debate.
The event will bring together senior policymakers and journalists to discuss the role that gold-backed bonds can play in bringing about a more effective Eurozone monetary policy.
We hope that you will be able to join us for what we know will be a stimulating discussion amongst senior policymakers, academics, and media representatives.
To register for this free event please RSVP to [email protected]
Jim Sinclair’s Commentary
Absolutely true!
