Posted at 12:00 AM (CST) by & filed under General Editorial.

Dear CIGAs,

The upcoming Q&A session in Nashville has a venue change. The session is now going to be held at the Hilton Garden Inn. The address is below. The time has not changed.

Date:

Saturday, September 20th, 2014 from 1-5pm

Where:

Hilton Garden Inn
412 Royal Parkway
Nashville TN 37214

Cost:

A fee of $100.00US can be made in advance with any major credit card via the PayPal button on the webpage linked below (no PayPal account required). Please be sure to print out your transaction receipt as this will be your registration, confirmation and entry ticket to the meeting. No further confirmation will be sent.

Click here to purchase tickets…

If you prefer, you may alternatively pay $100.00US by cash, bank check or money order made payable to James Sinclair at the door. If you choose this option, you must pre-register via email with Anna Stoerzinger at [email protected]. Please be sure to note your name and number of seat(s) in your email. A confirmation will be sent to you within 5 business days to confirm this pre-registration.

We look forward to seeing you there!
Jim

Posted at 11:53 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- Economic Bluff and Bluster versus Reality, Politics and Elections 
- Minimal Upside Revision to Second-Quarter GDP Left Gimmicked Growth Even More Heavily Overstated 
- Underlying Reality Remains a Severely Impaired Consumer and Economy 
- Monthly Economic Series to Turn Increasingly Negative

"No. 653: First Revision to Second-Quarter 2014 GDP" 
Web-page: http://www.shadowstats.com

 

Russia Sanctions Hit German Consumers, “Economic Expectations Completely Collapse”
by Wolf Richter • August 27, 2014

It starts out un-alarmingly. The optimism of German consumers weakens somewhat, according to the forward-looking Gfk survey, conducted on a monthly basis for the European Commission. So the overall index fell to 8.6 for September, from 8.9 in August. It was the first decline since January 2013.

The index bottomed in late 2008 below 2, after a breathtaking crash during the financial crisis. In late 2007, it had hovered above 9. Early 2014 was the first time since the prior bubble that the index broke above 8. And August’s level of 8.9 represented an “extremely optimistic economic outlook,” as Gfk calls it. German consumers have been feeling good, and according to the headline index, they’re still feeling good up there somewhere in the rarefied air above 8.

But beneath the surface, there is serious trouble. Gfk reports that the sub-index of economic expectations, “in light of the intensified state of international affairs, completely collapses.”

It plunged 35.5 points to 10.4. The worst monthly plunge since the beginning of the survey in 1980. In a single month, it nearly wiped out all the gains of the boom of the last 12 months. Gfk cites the escalation of the situation in Iraq, Israel, the Eastern Ukraine, and particularly “the faster rotating sanctions spiral with Russia.”

Since there appears to be no sustainable solution to any of the trouble spots, consumers are showing increased uncertainty about the possible consequences for the German economy, Gfk reports. “Particularly the sanctions against Russia, which have already hit exports noticeably, could become a real danger for the German economy.”

More…

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Ukraine: emergency UN, Nato, EU meetings after Russian invasion claim
Nato says 1,000 Russian troops fighting in Ukraine as Kiev accuses Moscow of de facto invasion and opening second front

Shaun Walker in Kiev
The Guardian, Thursday 28 August 2014 20.02 BST

World powers have called a succession of emergency meetings to step up the international response to Russia after Kiev accused Moscow of a de facto invasion and of opening up a second front in the conflict in eastern Europe.

The UN security council was meeting in emergency session, and Nato and EU leaders will consider a response on Friday, amid signs that hundreds of Russian soldiers are actively involved in the insurrection against Kiev’s rule.

Russia denies that any of its troops are in eastern Ukraine. But on Thursday Nato said it estimated there were now more than 1,000 Russian soldiers fighting in Ukraine. The organisation released satellite images that it said showed Russian armoured vehicles and artillery had been crossing into Ukraine for at least a week.

The Ukrainian president, Petro Poroshenko, said: "Russian forces have actually entered Ukraine," while Ukrainian fighters in the south-east said Russian forces had helped separatists take over the border town of Novoazovsk.

More…

China vows to respond to US surveillance flights
Aug. 28, 2014 | 02:59 PM

BEIJING: China said Thursday it will continue responding to U.S. military surveillance flights off its coast, rejecting American accusations that one of Beijing’s fighter jets acted recklessly in intercepting a U.S. Navy plane last week.

Defense Ministry spokesman Yang Yujun said China’s military would closely monitor U.S. flights and reiterated calls for the U.S. to scale back or end such missions altogether.

"According to different situations we will adopt different measures to make sure we safeguard our air and sea security of the country," Yang said at a monthly news briefing.

China has long complained about U.S. surveillance flights that just skim the edge of China’s territorial airspace. However, Yang said such flights this year have become more frequent, are covering a wider area and are coming even closer to the Chinese coast.

U.S. sea and air surveillance missions occur most frequently during Chinese military exercises or weapons tests, raising the risk of accidents and misunderstandings, Yang said.

That was a likely reference to an incident last December in which China accused a U.S. Navy cruiser, the USS Cowpens, of having veered too close to China’s sole aircraft carrier in the South China Sea during sea drills. That nearly led to a collision with a Chinese navy ship in the most serious sea confrontation between the two nations in years.

More…

FBI examining whether Russia is tied to JPMorgan hacking

The Federal Bureau of Investigation (FBI) is investigating whether Russians had any links with recent cyber intrusions against US banking giant JPMorgan Chase and other American banks.

The FBI is investigating whether the attacks, discovered in mid-August, were in retaliation for Western sanctions levied on Russia over the crisis in Ukraine, according to Bloomberg.

Security experts say the sophistication used to bypass multiple layers of security to steal data, is far beyond the capability of ordinary criminal hackers.

Some analysts however believe retaliatory attacks involve destruction or disruption of networks, not theft of data.

The attack on JPMorgan resulted in the loss of gigabytes of sensitive data, said two people familiar with the FBI’s probe, who asked not to be identified because the investigation is still preliminary.

Authorities are investigating whether recent infiltrations of major European banks using a similar vulnerability are also linked to the attack, one of the people said.

A third person familiar with the probe said the National Security Agency is cooperating with the FBI in the investigation.

More…

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Posted at 11:52 AM (CST) by & filed under Jim's Mailbox.

Jim,

It’s got someone’s attention.

Excerpt #1:

“Gas is not an appropriate sector for sanctions because it is a lose-lose situation for all: Russia, Ukraine and the European Union,” Oettinger said.

Excerpt #2
On Wednesday, Russian business daily Kommersant reported that Russian oil company Gazprom Neft has agreed to export 80,000 tons of oil from the Novoportovskoye field to Europe, accepting payment in rubles.

Click here to read the full article…

CIGA Perry

Posted at 11:51 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’ www.ShadowStats.com.

- 22.6% Gain in July Durable Goods Orders Was Just 0.8%, Net of an Irregular 318.0% Surge in Commercial-Aircraft Orders 
- Booked Years in Advance, Commercial-Aircraft Orders Have Negligible Impact on Near-Term Economic Activity 
- July Existing-Home Sales in Ninth Month of Annual Decline 
- July New-Home Sales Held in Pattern of Stagnation, Amidst Ongoing Reporting Instabilities

"No. 652: July 2014 Durable Goods Orders, New- and Existing-Home Sales" 
Web-page: http://www.shadowstats.com?

 

Jim Sinclair’s Commentary

The Yuan is knocking on the dollar door.

British Columbia, Ontario to cooperate on Yuan trading hub
Christopher Donville, Bloomberg
2:38 PM, E.T. | August 27, 2014

Business leaders in British Columbia and Ontario agreed to cooperate in promoting Canada as a currency trading hub for the yuan.

AdvantageBC International Business Centre-Vancouver and the Toronto Financial Services Alliance, a group representing business and financial representatives, said today in a statement they will work together with the governments of Canada and the provinces to make the country the first trading hub for the Chinese currency in North America.

“While Canada’s financial industry is headquartered in Toronto, much of the country’s Canada-China trade passes through Vancouver, making it critical for both jurisdictions to work collaboratively so that Canadian businesses are able to take full advantage of this initiative,” Colin Hansen, AdvantageBC’s chief executive officer, and Janet Ecker, CEO of the Toronto alliance, said today in the statement.

Financial centers around the globe are vying to establish trading hubs for the yuan. China has already signed agreements to trade the yuan more freely with Singapore, London and Frankfurt as part of an economic restructuring that includes taking steps to loosen exchange controls.

AdvantageBC is a non-profit organization promoting international business in British Columbia, according to the statement.

More…

 

Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan

MOSCOW, August 27 (RIA Novosti) – The Russian oil company Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers, the Russian business daily Kommersant reported Wednesday.

Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September. According to Kommersant, the payment for these shipments will be received in rubles.

Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.

According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

More…

Merkel Slams US Hegemony? "America Can’t Solve All The World’s Problems Anymore"
Submitted by Tyler Durden on 08/27/2014 18:29 -0400

First Russia and China, then UAE, Egypt, and Turkey… and now it appears Germany (following a phone call with Putin) is pulling the rug out from under US hegemony – just as Obama’s warmongery ramps up…

*MERKEL SAYS U.S. CAN’T SOLVE ALL THE WORLD’S PROBLEMS ANYMORE

Which is odd because just yesterday, President Obama (who never lies) stated "The United States is and will remain the one indispensable nation in the world…" adding that "no other nation can do what we do." Perhaps he is wrong?

“Even a superpower can’t solve all of the problems alone anymore,” German Chancellor Angela Merkel says.

Merkel did not stop there…

*PUTIN, MERKEL URGE DE-ESCALATION IN UKRAINE, KREMLIN SAYS

*PUTIN, MERKEL DISCUSSED GAS TRANSIT VIA UKRAINE, KREMLIN SAYS

*PUTIN INFORMED MERKEL OF NEW EAST UKRAINE AID PLAN: KREMLIN

*MERKEL URGES HOLLANDE TO CONTINUE REFORMS IN FRANCE

*MERKEL SAYS HOLLANDE HAS CHANCE TO REVIVE FRENCH ECONOMIC POWER

Seems like she is returning to the offensive from the defensive…

More…

Will There Be a ‘New Gold Rush?’ — Ian Gordon, Longwave Analytics

Ian Gordon created Longwave Analytics, which studies the Longwave principle, by which economies obey long-term cyclical trends of expansion and contraction. Eric Sprott is an avid reader — he suggested I interview Ian Gordon for his take on the role of Kondratiev’s ‘long wave cycle’ in explaining the economic environment we are seeing today.

Ian said ‘winter’ was coming for the world economy, though it has been staved off by the flexibility provided by paper money. As a result, a depression will be very different today than in 1929 or 1873, he believes. But now, as then, we could see a massive push for new gold discoveries.

Mr. Gordon explained how he got to know Eric Sprott over 10 years ago:

“I was writing about long-term economic cycles, referred to as ‘Kondratiev’ cycles. In 1998, I realized that we were close to the top of a bull market; we were somewhere akin to 1928 – immediately preceding the Great Depression. Eric appreciated my work, because it helped explain an imminent bull market for gold, which he saw as well.”

I asked: Do these ‘long wave’ economic patterns explain today’s bear market for gold – and the recent rally in general stocks?

“Well, they didn’t predict this – but they can help explain why it’s happening. Over the course of one entire ‘long wave’ economic cycle, covering a full expansion and subsequent contraction, you have what I call four ‘seasons.’ Winter is the period where debt is wiped out of the economy. It happened after 1929, which caused the US banking system to collapse. During the 1920’s, there had been a big build-up in consumer and corporate debt, as well as sovereign debt.

“During the Great Depression and the previous depression of 1873, we were on a gold standard system, so the ability to create money was limited. This time around, we are in a pure credit-based system, so the ability to create money withstands the ravages of the winter. Effectively, governments have been creating more debt. This will ultimately cause a more horrendous economic decline than in either 1929 or 1873, as debt levels are far greater today – and because the world is much more inter-connected financially.”

More…

The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan
Submitted by Tyler Durden on 08/27/2014 13:57 -0400

Several months ago, when Russia announced the much anticipated "Holy Grail" energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar’s stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative.

This changed in late June when first Gazprom’s CFO announced the gas giant was ready to settle China contracts in Yuan or Rubles, and at the same time the People’s Bank of China announced that its Assistant Governor Jin Qi and Russian central bank Deputy Chairman Dmitry Skobelkin held a meeting in which they discussed cooperating on project and trade financing using local currencies. The meeting discussed cooperation in bank card, insurance and financial supervision sectors.

And yet, while both sides declared their operational readiness and eagerness to bypass the dollar entirely, such plans remained purely in the arena of monetary foreplay and the long awaited first shot across the Petrodollar bow was absent.

Until now.

According to Russia’s RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin’(sic) in action the move for a Petrodollar-free world.

More on this long awaited first nail in the petrodollar coffin from RIA:

More…

 

Pentagon warns that Isis has global aspirations as US continues Iraq strikes
US effort to build international coalition against Isis advanced, as UK and six other nations agreed to arm the Kurdish peshmerga
Spencer Ackerman in New York
theguardian.com, Tuesday 26 August 2014 16.36 EDT

Obama spoke about Isis before a group of American military veterans on Tuesday.

The Pentagon warned on Tuesday that Islamic State (Isis) militants have global aspirations, ratcheting up already dire US rhetoric against the jihadist army that has overrun much of Iraq and Syria.

“Quite frankly, we’re not turning a blind eye to their global aspirations as well,” said Rear Admiral John Kirby, the Pentagon press secretary.

Isis has not conducted attacks outside of Iraq – its gestation ground – and Syria, where its successes brought it global attention. Its own rhetoric imagines a global Islamic caliphate, obliterating man-made borders, but its capabilities – which include access to oil wealth – fall significantly short.

Yet Isis’s attraction of as many as thousands of western passport holders has convinced US intelligence that Isis fighters will plot attacks against the US and Europe.

“Much has been made about the threat they pose, and how imminent it is, and you don’t need to look any further than the recruitment of foreign fighters and the degree to which not just the United States government but many western governments are concerned about these foreign fighters leaving their shores, going over there, getting radicalized, trained, and then coming back and executing attacks, which is not out of the realm of the possible,” Kirby told reporters.

US warplanes continued to strike Isis targets on Tuesday. US Central Command said that its planes, supporting Kurdish and Iraqi forces, destroyed two Isis armed vehicles near the Iraqi Kurdish capital of Irbil and damaged a third.

More…

Jim Sinclair’s Commentary

Popular equity market delusions may run iron economic reality.

Treasury Curve Collapse Signals Multiple Expansion Exuberance Is Over
Submitted by Tyler Durden on 08/26/2014 18:29 -0400

Thanks to buybacks, multiple expansion has been the driver of equity market strength as non-economic actors know one thing – buying stocks at record highs pays better than ‘investing’ in Capex or growth. However, the Treasury market’s yield curve is sending a message loud and clear that multiple-expansion is due to end. As Wells Fargo’s Gina Martin Adams notes, "Index P/E is likely to fall," as the spread between 10Y and 2Y yields compresses. Historical data shows the P/E ratio contracted in seven out of eight periods when the curve flattened since 1975.

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As Bloomberg adds, Martin Adams expects the S&P to close 2014 -7.5% from here at 1850 (tied with Deutsche’s David Bianco for lowest prediction among 20 strategists).

More…

Jim Sinclair’s Commentary

And so on we go.

Ukraine-Russia talks in Minsk fruitless — Yatsenyuk
August 27, 16:51 UTC+4

KIEV, August 27. /ITAR-TASS/. Talks between Ukraine and Russia in Minsk, the capital of Belarus, on Tuesday were fruitless, Ukrainian Prime Minister Arseniy Yatsenyuk told a government meeting on Wednesday.

No results had been expected from the meeting, but the event had to take place, he added.

Ukraine currently faces three challenges — war, exchange rate and energy, the premier said, adding that the first could be settled only by restoring control over the border with Russia.

Ukraine’s cooperation with NATO

Yatsenyuk said the government would debate a plan for developing cooperation with NATO. “The Ukrainian president will attend the NATO summit in Wales on September 4-5,” the prime minister said.

“NATO is our partner. We expect the Western countries and NATO to provide practical assistance. We also expect decisions to be made at the NATO summit,” he said.

Deterioration of Ukrainian currency

Ukraine’s currency breached the psychological barrier in exchange rate trading on Wednesday, with the rate of 14 hryvnia to the US dollar, Ukrainian media reported, as Yatsenyuk warned ministers that the national economy could not withstand more than 12 hryvnia for $1.

More…

Russian Central Bank prepares bill to create SWIFT analog in Russia
August 27, 15:06 UTC+4

MOSCOW, August 27. /ITAR-TASS/. The Russian Central Bank and the government’s financial and economic departments have prepared a bill to create a Russian analog of the SWIFT international financial message system, Deputy Finance Minister Alexei Moiseyev said on Wednesday.

“We have prepared a bill. We have consulted with the banking industry and the Central Bank,” Moiseyev said.

Russia will go ahead with the bill as soon as it becomes clear that the Central Bank is technologically prepared “to transfer all operations to internal processing inside Russia.”

Central Bank First Deputy Chairman Georgy Luntovsky said in July that SWIFT was discussing a possibility with the Russian regulator to establish an operational center in Russia. SWIFT Director for Russia, CIS and Mongolia Matvei Gering confirmed this information at that time.

Moiseyev said in April that the Finance Ministry was going to initiate amendments to the legislation to transfer electronic settlements to Russia to ensure their reliable and uninterrupted nature. The system should be registered in Russia and comply with the requirements of the Russian Central Bank, Moiseyev told Rossiya-24 TV channel at the time.

More…

Posted at 1:09 PM (CST) by & filed under In The News.

Russia’s position to remain unchanged at meeting on gas transit with EU — minister Novak
August 26, 17:02 UTC+4

MINSK, August 26. /ITAR-TASS/. Russia will not change its position on key issues at a meeting on gas transit with the EU scheduled for August 29, Russian Energy Minister Alexander Novak said on Tuesday.

“The situation remained unchanged as compared with June 16 after the switch to a prepayment system for gas deliveries,” Novak told ITAR-TASS.

The minister said the meeting would be held in Moscow. “We will discuss issues concerning our energy cooperation and energy dialogue, including mutual relations on gas transit through Ukraine, reliable gas supplies, the construction of South Stream [gas pipeline] and the expansion of access to the capacity of OPAL pipeline,” he said.

Novak cited experts’ data proving that Ukraine “could not survive without Russian gas”.

More…

 

Jim Sinclair’s Commentary

Equity markets today are historical "popular delusions and the madness of the crowd."

Housing Price Gains Hit The Brakes In June, S&P/Case-Shiller Says
8/26/2014 @ 9:05AM

In another indicator that the double-digit housing price gains of 2013 appear to be behind us, price increases continued to slow in June, S&P/Case-Shiller home price data released Tuesday shows.

The National Home Price Index gained just 6.2% in the 12 months ending June 2014, while the 10-City and 20-City Composites gained 8.1%. That’s a dramatic shift from the double-digit, year-over-year price increases that had become the norm in the second half of 2013 and the first part of this year. All three indices saw their rates slow significantly from last month, when the year-over-year price changes for 10-City Composite stood at 9.4%, the 20-City at 9.3%, and the National Index at 7.1%.

“Home price gains continue to ease as they have since last fall,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators – starts, existing home sales and builders’ sentiment – are positive. Taken together, these point to a more normal housing sector.”

To be clear, home prices are not dropping, simply rising at a slower rate. Economists like to look at year-over-year data for a better picture of the overall market trend than month-to-month data. The S&P/Case-Shiller Indices measure home prices across the nation as well as in 10 and 20 specific cities. While all cities saw home prices increases in June, every city the indices track recorded slower year-over-year price increases than in the prior month.

“In San Francisco, the pace of price increases halved since late last summer,” Blitzer noted. “The Sun Belt cities – Las Vegas, Phoenix, Miami and Tampa – all remain a third or more below their peak prices set almost a decade ago.”

More…

Investor Net Worth Drops To New All Time Low, NYSE Reveals
Tyler Durden on 08/26/2014 15:25 -0400

One can debate whether or not margin debt as reported by the NYSE has any relevance in a world in which the retail investor is long gone, and where the marginal buyer are hedge funds (and primary dealers who use excess reserves as collateral for marginable derivatives and futures) who fund themselves using far more arcane "shadow" repo conduits as we have explained previously, it is indisputable that the leverage statistics disclosed monthly by New York Stock Exchange provide a useful glimpse into how the broader market is obtaining "dry powder" to keep BTFATH.

And while in July margin debt did dip modestly from near all time highs hit back in June when total margin debt was virtually tied with the previous record, at $464 billion, it was that other metric tracked by the NYSE, namely Investor Net Worth, calculated by subtracting margin debt from the notional represented in free credit cash accounts and credit balances in margin accounts, that was the notable highlight in the July report: at a negative $182.1 billion, a decline of $6.3 billion from the prior month, investor Net Worth has never been lower.

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Swiss Gold Referendum on November 30
22 August 2014 – Egon von Greyerz

One of the very few remaining proper democracies in the world will vote on bringing the Swiss Gold back to Switzerland on November 30.

This is an initiative that could only happen in Switzerland. An influential member of parliament, Luzi Stamm, representing the biggest Swiss party SVP (Swiss People’s Party) started this initiative with two other parliamentarians.

In order to have a national referendum on an issue in Switzerland, 100,000 supporting signatures are required. The ‘Swiss Gold Initiative’ already achieved this requirement in early 2013.
Not only will the referendum deal with gold repatriation but also seeks to stop all gold sales by the SNB (Swiss National Bank) and to require the SNB to hold 20% of its assets in gold.

The Swiss Parliament and the SNB are against the initiative since it would stop their ability to freely print money. Swiss monetary policy used to be the soundest in the world, but in recent years Switzerland has joined other countries in abandoning a policy of sound money. Switzerland had 2,600 tons of gold in 1999 which was a significant amount in relation to the size of the country. At that time it was decided to sell 50% of the holding. Most of this was sold at the low of the market just like in the UK.

But not only did Switzerland dispose of half of their gold over ten years ago, but a major part of their remaining gold has either been leased out or sold. And some of the gold , if it is still there, is stored in other countries. As most other central banks, the SNB refuses to carry out a proper and official audit of the Swiss gold. Until an audit is done there is no certainty that all of the gold is still there.

Most governments and central banks officially dislike gold because it reveals the decline in the value of paper money. Since 1913 when the Fed in the USA was founded, all major currencies, including the Swiss Franc, have lost between 97% and 99% of their value against gold.

More…

 

Jim Sinclair’s Commentary

You have to love statistics.

Durable Goods Orders Surge 22.6% in July
Jonathan House and Josh Mitchell
Aug. 26, 2014 8:36 a.m. ET

WASHINGTON—Orders for big-ticket manufactured goods surged in July to a record thanks to a jump in aircraft purchases, though underlying readings showed softening business spending last month.

Purchases of durable goods-products like airplanes, cars, and heavy machinery that are designed to last at least three years-rose a seasonally adjusted 22.6% to $300.1 billion in July from the prior month, the Commerce Department said Tuesday.

That was the sharpest increase and highest level in a data series dating back to 1992.

Surging demand for new aircraft drove most of the increase, likely reflecting stronger sales at Boeing Co. BA +0.68%The aircraft manufacturer had reported taking orders for a record 324 planes last month.

Excluding transportation, orders fell 0.8%, though the prior month’s gain was revised up to 3%.

Economists surveyed by The Wall Street Journal had forecast an overall rise in orders of 7.5% last month.

More…

Posted at 12:11 PM (CST) by & filed under Jim's Mailbox.

Jim,

Finally at least one major rating company is sounding the wakeup call for the EU to get real on its energy needs.

CIGA Craig

Europe will be Russia’s hostage over gas supplies for at least another decade
Policymakers will have no choice but to continue buying gas from Russia until at least the mid-2020s and "potentially much longer", according to Fitch
By Szu Ping Chan
3:57PM BST 26 Aug 2014

Europe will remain heavily reliant on Russian gas for at least another decade, according to a leading rating agency.

Fitch said a lack of alternative sources meant policymakers would have no choice but to continue buying gas from Russia until at least the mid-2020s and "potentially much longer".

Europe already buys a quarter of its gas from Russia, and analysts expect consumption to increase by a third by 2030as economies recover from the debt crisis and gas-fired electricity generation replaces old coal and nuclear power

More…

Jim,

If London court rules in favor of Soros, Bass, etc., then the US and USD will be isolated as a jurisdiction for bonds.

CIGA Craig

Soros’s Argentine Bond Bet Revealed in Lawsuit in London
By Katia Porzecanski and Camila Russo Aug 26, 2014 3:18 PM MT

Less than a month after Argentina defaulted for the second time in 13 years, George Soros has suddenly emerged as a key rival of fellow billionaire Paul Singer in the legal fight over the nation’s debt.

According to court documents filed in London last week, Quantum Partners LP, a fund managed by Soros’s family office, has joined a group of investors suing bond trustee Bank of New York Mellon Corp. for failing to distribute 226 million euros ($298 million) of interest payments on Argentine debt. The group, which also includes Kyle Bass’s Hayman Capital Management LP, owns more than 1.3 billion of euro-denominated bonds, court documents obtained by Bloomberg News show

At the crux of the dispute is a U.S. court ruling won by Singer’s Elliott Management Corp., which blocked Argentina from paying its overseas debt until the country compensates him and other holders of debt from its 2001 default. While the ruling prevents BNY Mellon from transferring any money deposited by Argentina until Singer is paid, it shouldn’t apply to bonds governed by jurisdictions outside of the U.S., the group says.

More…

Posted at 4:13 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Attila the Hun is back.

Isis accused of ethnic cleansing as story of Shia prison massacre emerges
As many as 670 prisoners thought killed in Mosul with other abuses reported in Iraq amounting to ‘crimes against humanity’
Luke Harding and Fazel Hawramy in Irbil
The Guardian, Monday 25 August 2014 14.24 EDT

The United Nations said on Sunday it had evidence that fighters fromIslamic State (Isis) had killed as many as 670 prisoners in Mosul and had carried out further abuses in Iraq that amounted to crimes against humanity.

Navi Pillay, the UN high commissioner for human rights, said Islamic State and allied fighters were committing "grave, horrific human rights violations" on a daily basis. These included, including targeted killings, forced conversions, abductions, trafficking, slavery and sexual abuse, Pillay said.

The jihadists, who are consolidating their control of northern and eastern Iraq, have also destroyed religious and cultural monuments and have laid siege to whole communities, Pillay said. "They are systematically targeting men, women and children based on their ethnic, religious or sectarian affiliation and ruthlessly carrying out widespread ethnic and religious cleansing in the areas under their control."

Pillay gave fresh details of an alleged massacre carried out on 10 June by Islamic State extremists. The fighters had just taken control of Mosul, Iraq’s second biggest city, after the Iraqi army fled. About 3,000 inmates were being kept in Mosul’s Badoush prison. During the power vacuum some managed to escape from minimum security areas, but between 1,000 and 1,500 remained after many had escaped during the chaos.

Citing testimony from eyewitnesses and survivors, the UN said Islamic State gunmen arrived at the front gate in a group of pick-up trucks. Several carried machine guns. They took out the prisoners and sorted them into two groups, Sunni and 670 Shias. The fighters grilled the Sunni group, asked them to recite prayers, and interrogated them about family backgrounds. Some Shia prisoners tried to pass themselves off as Sunni. They were discovered and returned to the Shia line-up.

More…

 

Jim Sinclair’s Commentary

It is not all roses out there.

U.S. new home sales fall, services sector activity cools a bit
By Lucia Mutikani
WASHINGTON Mon Aug 25, 2014 10:46am EDT

(Reuters) – Sales of new U.S. single-family homes fell for a second straight month in July, but a surge in the stock of properties on the market and a moderation in price increases should help to stimulate demand in the months ahead.

Other data on Monday showed activity in the vast services sectors slowed again in August. The reports, however, did little to change views the economy is on a strong growth path, against the backdrop of relatively strong job growth and manufacturing activity.

New home sales slipped 2.4 percent to a seasonally adjusted annual rate of 412,000 units, the lowest level since March, the

Commerce Department said. Economists polled by Reuters had forecast new home sales at a 430,000-unit pace last month.

The weak new home sales pace is at odds with other data that have suggested the housing market recovery is back on track. New house sales data, however, is volatile month-to-month because of a small sample.

Data last week showed a jump in new home construction in July. Home resales also rose to a 10-month high in July.

Compared to July last year, new home sales increased 12.3 percent.

In a separate report, financial data firm Markit said its preliminary services Purchasing Managers Index dipped to 58.5 this month from 60.8 in July.

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“The Russian Aggression Prevention Act” (RAPA): A Direct Path to Nuclear War with Russia
By Steven Starr
Global Research, August 22, 2014

The Russian Aggression Prevention Act”, introduced to Congress by U.S. Senator Bob Corker (R-Tenn.), will set the US on a path towards direct military conflict with Russia in Ukraine.

Any US-Russian war is likely to quickly escalate into a nuclear war, since neither the US nor Russia would be willing to admit defeat, both have many thousands of nuclear weapons ready for instant use, and both rely upon Counterforce military doctrine that tasks their military, in the event of war, to preemptively destroy the nuclear forces of the enemy.

RAPA provides de facto NATO membership for Ukraine, Georgia, and Moldova via RAPA

The Russian Aggression Prevention Act, or RAPA, “Provides major non-NATO ally status for Ukraine, Georgia, and Moldova for purposes of the transfer or possible transfer of defense articles or defense services.” Major non-NATO ally status would for practical purposes give NATO membership to these nations, as it would allow the US to move large amounts of military equipment and forces to them without the need for approval of other NATO member states. Thus RAPA would effectively bypass long-standing German opposition to the US request to make Ukraine and Georgia part of NATO.

Germans rightly fear placing US/NATO troops and US Ballistic Missile Defense (BMD) in Ukraine, given the profound and long-standing Russian objections against the expansion of NATO (especially to Ukraine and Georgia) along with deployment of European US/NATO BMD. Germany is acutely aware of the distinct possibility that the civil war raging in Ukraine could evolve into a Ukrainian-Russian war. Under such circumstances, deployment of US/NATO forces in Ukraine would make it virtually inevitable they would come into fight with Ukraine against Russia.

RAPA would accelerate the “implementation of phase three of the European Phased Adaptive Approach for Europe-based missile defense . . . by no later than the end of calendar year 2016.” In 2012, Russia’s highest ranking military officer stated that Russia might consider a pre-emptive strike against such BMD deployments “when the situation gets harder.”

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France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government
Submitted by Tyler Durden on 08/25/2014 08:02 -0400

Earlier this morning, those expecting an out of control European deflationary tumble got one step closer to their goal when French President Francois Hollande asked his prime minister, who only assumed the post a few short months ago in March, to form a new government, following what Reuters reported was him "looking to impose his will on the cabinet after rebel leftist ministers had called for an economic policy U-turn" spearheaded by economy minister Arnaud Montebourg demanding an end to French "austerity." The Guardian is somewhat more direct and to the point: "France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government’s resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany."

In short: just days after we reported that trouble was brewing in socialist paradise, when the rating of Venezuela’s Maduro tumbled to all-time lows, socialism is once again in turmoil, this time in France.

The details:

The prime minister, a social democrat who has been compared to Tony Blair, acted with characteristic swiftness in a bid to reassert his authority. His aides had let it be known on Sunday that the economy minister, Arnaud Montebourg, had crossed a "yellow line" for his dual crime of criticising both the president of France and a valued ally.

Montebourg, 51, fired his first broadside in an interview with Le Monde on Saturday and followed up with a speech to a Socialist party rally the following day. In a veiled reference to President François Hollande, he said that conformism was an enemy and "my enemy is governing"."France is a free country which shouldn’t be aligning itself with the obsessions of the German right," he said, urging a "just and sane resistance".

He was joined in his criticism by the education minister Benoit Hamon, who on Monday denied that he had been disloyal. A third minister, Aurélie Filipetti, also appeared in danger of losing her job after wishing a "good day" on Twitter to her two dissident colleagues.

Perhaps in an ironic case of poetic justice, she will also be terminated via Twitter? Meanwhile, nothing changes for France where other people’s money appears to have run out:

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Libyan capital under Islamist control after Tripoli airport seized
Operation Dawn captures airport in fierce fighting against pro-government militias after five-week siege in the capital
Chris Stephen, and Anne Penketh
The Guardian, Sunday 24 August 2014 17.07 BST

Libya has lurched ever closer to fragmentation and civil war this weekend after Islamist-led militias seized the airport in the capital, Tripoli, proclaimed their own government, and presented the world with yet another crisis.

Operation Dawn, a coalition of Islamist and Misrata forces, captured the airport on Saturday in fierce fighting against pro-government militias after a five-week siege that battered parts of the capital.

Television images from the scene showed jubilant, bearded, militias dancing on wrecked airliners, firing machine guns in the air and chanting "Allah O Akbar" ("God is great").

On Sunday, they set airport buildings ablaze, apparently intending to destroy rather than hold the site.

The victory, which secures Islamist control over Tripoli, was a culmination of weeks of fighting triggered by elections in July, lost by Islamist parties.

Rather than accept the elections result Islamist leaders in Libya accused the new parliament of being dominated by supporters of the former dictator Muammar Gaddafi, and have sought to restore the old national congress.

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Shell’s ex-CEO says sanctions on Russia don’t work
Published time: August 25, 2014 11:25

The former head of Royal Dutch Shell, Jeroen van der Veer, has said sanctions on Russia just “lead to frustration”, as they did not produce their desired effect and led to more sanctions.

“The sanctions do not work. They lead to counter sanctions, which lead to frustration and never solve anything. (Russian President Vladimir) Putin’s popularity in Russia does not wane in the wake of the sanctions. It increases,” Jeroen van der Veer said on Sunday during a Dutch TV program.

He said constructive political dialogue was the first thing Russia and Ukraine needed to establish, though acknowledging it would be difficult.

“Moscow and Kiev should be willing to talk and Russia should respect the Ukrainian borders,” he said.

Van der Veer began working for Shell in 1971 and was its CEO until 2009.

In July the West imposed sectorial economic sanctions on Russia, including a ban on selling it dual–use technology, and access to sensitive oil technology.

However, businesses have so far been demonstrating they don’t care much about the restrictions. On Friday, Russia’s Rosneft agreed to buy a stake in Norway’s North Atlantic Drilling (NADL) in exchange for 150 onshore drilling assets in Russia, and some cash. ExxonMobil and Norway’s Statoil have also confirmed their commitment to cooperating with Rosneft in offshore Arctic drilling. At the end of June Rosneft agreed to supply BP with up to 12 million tons of oil and oil products over the next five years.

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Over 500 Killed as IS Gains Control Over Syrian Air Base in Raqqah

MOSCOW, August 25 (RIA Novosti) – Islamic State (IS) militants have seized an air base in the Syrian northern province Raqqa, with over 500 people being killed in the fighting, Agence France-Presse reported Sunday citing a monitoring group.

"One hundred and seventy Syrian soldiers were killed on Sunday in the offensive which led to the IS jihadists seizing Tabqa airport," the Syrian Observatory for Human Rights told AFP.

Also, 346 IS jihadists has also been killed in the fighting at the air base since Tuesday, according to the Observatory.

The IS insurgents have been trying to seize Tabqa since early August, but began the assault in earnest only on Tuesday.

Since March 2011, an armed conflict has been taking place in Syria that has claimed the lives of more than 190,000 people, according to the latest UN report. Government troops are confronted by militias belonging to different armed groups. The most active are Islamic State militants, who led an assault on the northern and western regions of Iraq in early June, and announced the creation of an Islamic caliphate in Iraq and Syria on June 29.

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Posted at 4:10 PM (CST) by & filed under Jim's Mailbox.

Jim,

Germany is leaning towards commerce over war?

Excerpt: "The majority of NATO members, especially Germany, are opposed to the proposal,"…

CIGA Perry

Baltic Fears: NATO Debates Directing Missile Shield against Russia

NATO officials are considering deploying a long-planned missile defense system — aimed at protecting Europe from attacks from the Middle East — against Russia as well, SPIEGEL has learned.

Calls for such an expansion to the system’s remit, which is backed by the United States, are growing in Poland as well as in NATO member states Lithuania, Estonia and Latvia. In the run-up to next week’s NATO summit, the four countries called for the remaining members to agree on language at the summit that would pave the way for the plan. They feel threatened by Russia’s intervention in Ukraine.

But the majority of NATO members, especially Germany, are opposed to the proposal, warning that it could result in an unnecessary provocation of Moscow. Representatives of these countries have warned that NATO has for years pledged to Russia that the missile defense system would not be directed at the country. Further debate on the issue has since been delayed until after the summit.

Hardliners did, however, succeed in pushing through one issue prior to the summit: The so-called reinsurance measures for Poland and the Baltic states — the placement of four companies and an increase in the number of reconnaissance flights on NATO’s eastern border — will not automatically expire after one year as originally planned. German Chancellor Angela Merkel had demanded that the military action be re-approved by all NATO member states after one year. Ultimately, however, Berlin was alone in the position and abandoned its stance.

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