In The News Today

Posted at 12:31 PM (CST) by & filed under In The News.

History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.
–Martin Luther King Jr.

 

Jim Sinclair’s Commentary

It seems that both DTCC and the CME have had a boon in the Perfect Storm Sandy.

If it were not for this storm a report like this would put gold up a few hundred dollars, but then it is only a small problem with the gold being under water. What do you think?

What do you think would happen to gold ETFs if paper gold could not be converted into bullion? Somewhere on the paper gold contracts it is hedged in the first derivative.

I do not recall. Did the COMEX stop delivery when on 9/11 all the Comex gold was buried under all the floors?

This was also reported by Dow Jones news service

CME Declares Force Majeure at Manhattan Gold Depository
Published November 26, 2012
Dow Jones Newswires

CME Group Inc. (CME) on Monday said that Manfra, Tordella and Brookes Inc., one of the exchange’s gold depositories, will not be able to delivery metal as the lower Manhattan company deals with "operational limitations" almost a month after the arrival of Hurricane Sandy.

MTB, one of five depositories licensed to deliver gold against CME’s benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure, a contract clause that frees parties from liability due to an event outside of their control, for the facility.

CME said that individuals holding MTB warrants, or certificates for a specific lot of metal stored in the depository, may receive gold delivered from Brinks Co. (BCO) in New York. MTB is responsible for any additional costs incurred by customers receiving metal from Brinks, CME said.

"This shouldn’t have a material impact on the way market participants are doing business," a CME spokesman said. "They’ll still contact MTB if they want to take delivery on contracts," and MTB will arrange for delivery through Brinks.

In a notice posted to its website dated Nov. 12, MTB said the firm "sustained substantial damages" following Hurricane Sandy’s arrival in New York City on Oct. 29, and had curtailed its operations.

The force majeure will remain in effect until further notice from the exchange, the CME said. The delivery period for CME’s December-delivery precious metals futures begins on Friday.

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Jim Sinclair’s Commentary

In terms of solid news this might be very important.

In shocker, Israel’s Barak quits politics
By AMY TEIBEL | Associated Press

JERUSALEM (AP) — Israeli Defense Minister Ehud Barak on Monday abruptly announced he was quitting politics, injecting new turmoil into the Israeli political system weeks ahead of general elections.

Barak, Israel’s most-decorated soldier and one-time prime minister, said he would stay on in his current post until a new government is formed following the Jan. 22 balloting.

His resignation could mean the departure of the most moderating influence on hawkish Prime Minister Benjamin Netanyahu, who holds a wide lead in polls and is expected to easily win re-election. Barak, who heads a small centrist faction in parliament, often served as Netanyahu’s unofficial envoy to Washington to smooth over differences with the Obama White House.

His impending departure comes at a key time for Israel, as the nation struggles to find its way in a region where the old order of Arab autocrats has been swept aside by the Arab Spring and the rise of Islamist political parties. Israel also faces a looming decision on whether to attack Iran’s nuclear program, which the Jewish state fears is designed to develop atomic weapons — a charge Tehran denies.

Less than a week ago, Barak led an eight-day military offensive against the Hamas militant group that rules the Gaza Strip. The fighting, aimed at ending rocket fire from the Palestinian territory. ended in a fragile truce.

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Jim Sinclair’s Commentary

Now here is a piece of counter trend news.

Supreme Court Says It’s OK To Record Cops In Illinois
Michael Kelley | Nov. 26, 2012, 12:20 PM

The U.S. Supreme Court issued an order Monday that essentially allows people in Illinois to record police officers, the Chicago Tribune reports.

The justices declined to review a lower court ruling that found the state’s “anti-eavesdropping law” to be in violation of a person’s free speech rights when used against anyone who records police officers.

By refusing to review the case, the high court leaves the ban on the law in place.

The law set out a maximum prison term of 15 years.

In 2010 the American Civil Liberties Union (ACLU) filed a lawsuit to block prosecution of ACLU staff for recording police officers performing their duties in public places.

Harvey Grossman, legal director of the ACLU of Illinois, said the organization "continues to believe that in order to make the rights of free expression and petition effective, individuals and organizations must be able to freely gather and record information about the conduct of government and their agents – especially the police."

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Jim Sinclair’s Commentary

The major difference between now and 1979 is that gold is moving towards, not away, from the system.

OMTs are outright monetary transactions.

A More Effective Euro Area Monetary Policy than OMTs – Gold-Backed Sovereign Debt

Abstract

This note argues that using gold as collateral for highly distressed bonds would bring great benefits to the euro area in terms of reduced financing costs and bridge-financing. It is mindful of the legal issues that this will raise and that such a suggestion will be highly controversial. For this purpose, it brings gold into the debate and outlines the value of Europe’s gold reserves. It also explains that gold has been used as collateral in the past and how a gold-backed bond might work and how it could lower yields in the context of the euro crisis. This move is then compared to the ECB’s now terminated Securities Markets Programme (SMP) and its recently declared Outright Monetary Transactions (OMTs). Namely, a central bank using its balance sheet to lower yields of highly distressed countries where the monetary policy transmission mechanism is no longer working. Beyond some similarities between the moves, the specific benefits of using gold in this manner vis-a-vis the SMP and the OMTs are highlighted. For instance, there is no transfer of credit risk between high risk/low risk countries, losses are borne by specific countries and not by the largest shareholder of ECB. It would turn out to be more transparent and it would not be inflationary and would foster reforms.

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Jim Sinclair’s Commentary

For those of you who think Egypt is controlled by a CIA stooge, this offers two possibilities.

1. The stooge has decided to keep the country and drive it his own way. Ultimate power in a country is the ultimate intoxicant. Not good for his health.
2. The Islamic Brotherhood is the main beneficiary of the Arab Spring and that is totally negative for Western interests.

Maclean’s exclusive: Brothers in charge — Is Egypt becoming the next Iran?
A feature report by Michael Petrou on the dynamics at play in the streets of Cairo
By macleans.ca | Maclean’s

Click here to watch the video…

Weak Uptrend

Smart Scan Chart Analysis shows that positive longer term is weakening. The market action could signal the start of a major trend change Weak Uptrend Very tight money management stops.

Based on a pre-defined weighted trend formula for chart analysis, EURUSD scored +65 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

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