Posted at 2:35 PM (CST) by & filed under Jim's Mailbox.

Jim,

Remember comedian Henny Youngman?

"Take my wife… please!"

Well, here’s the government to ALCOA… "Take my money… please!"

Maybe, with the negative interest rate environment taking place worldwide, ALCOA will get paid to take this loan! This is how far the corruption and crony capitalism has come in America.

You may laugh at this, but already banks are paying people to take out mortgages in Europe. It’s not a leap to suggest the government will be paying corporations to take government money. It certainly solves the problem of eroding sales in a recessionary environment. In fact, corporations won’t have to make or sell anything anymore, for years to come. And if you think that citizens being laid off because of this matters, think again. The government doesn’t actually need your tax dollars. They have the Fed. They can print to their heart’s content.

Citizens, this is where your tax dollars go until nothing is left. Then it will be too late to express your revolt.

Gold is looking better as each day passes.

CIGA Wolfgang Rech

Latest $269 Million DOE Loan Causes Major Controversy
Submitted by Tyler Durden on 04/14/2015 – 12:26

No doubt smarting from criticism about its lack of success in picking winners in alternative energy vehicles, the Department of Energy has given initial approval for a $269 million loan to a proven winner – Alcoa’s high-strength aluminum to make vehicles lighter and more fuel efficient. But the new loan came under immediate fire for being superfluous since Alcoa was proceeding with the plant with or without DOE assistance.

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Posted at 4:56 AM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The more it grows, the more complex manipulation of paper gold becomes.

Shanghai International Gold Exchange Comes To Life
Posted on 11 Apr 2015 by Koos Jansen

In September 2014 the Shanghai Gold Exchange (SGE) launched its International Board, the Shanghai International Gold Exchange (SGEI). After a slow start, the volume of the physical SGEI kilobar contract (iAu99.99) has transcended all other SGE contracts in week 15 (April 6- 10).

The primary goals for the launch of the SGEI was to facilitate gold trading in renminbi, improve price discovery in renminbi and internationalize the renminbi. The Chinese consider gold as an indispensable component of China’s financial market and for the renminbi to internationalize the renminbi-gold market has to internationalize. It could be that the spike in trading volume of iA99.99 was an incidental burp, it could also be we’re witnessing the Chinese international gold exchange entering its adolescence.

In any case, the chairman of the SGE, Xu Luode, has been very clear about his intentions with the SGEI. A few snippets from Xu…

December 2013:

The Shanghai Gold Exchange chairman Xu Luode said he considers the construction of an offshore gold exchange international gold market in the Shanghai Free Trade Zone, for the cross-border use of renminbi, it will be launched for the international offshore investors… The industry comments that it will be a tool to promote the internationalization of the renminbi, …

…the goal is to build Shanghai into an international gold exchange trading market with global influence.

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Central bankers gather privately in Washington this Friday to discuss gold

Submitted by cpowell on Mon, 2015-04-13 19:04. Section: Daily Dispatches

3p ET Monday, April 13, 2015

Dear Friend of GATA and Gold:

Attention, mainstream financial journalists! Here’s something else important for you to ignore this week, thanks to the diligent eye of gold researcher and GATA consultant Ronan Manly.

It’s a breakfast meeting to be held Friday in Washington for "a select group of central banks and other official-sector institutions," sponsored by the Official Monetary and Financial Institutions Forum and the World Gold Council, to discuss "gold, the renminbi, and the multicurrency system," convened in conjunction with the spring meeting of the International Monetary Fund and World Bank Group, a United Nations agency:

http://www.omfif.org/meetings/briefings/

"Discussions," the discreet announcement from OMFIF says, "are under Chatham House Rules," whereby information may be used but never attributed:

http://www.chathamhouse.org/about/chatham-house-rule

While many nations with central banks purport to be representative democracies and while the World Gold Council purports to be the representative of the gold industry, some of whose participants actually have to get their hands dirty every day –

http://www.gold.org/about-us

– attendance at Friday’s meeting will be by invitation only. So for the record GATA has requested one.

But if you don’t get an invitation, you can fairly assume that the valuation of all capital, labor, goods, and services in the world is none of your business. This is after all the central bankers’ world. The rest of us are lucky that they let us even pass through it from time to time, though the impertinent among us might wonder why central bankers should need to talk in secret about something supposedly as irrelevant and retrograde as gold.

Good thing for them that mainstream financial journalists have neither curiosity nor backbone.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Jim Sinclair’s Commentary

Chess game, anyone?

Spengler to Bhadrakumar: Russia’s missile sale to Iran is retaliation for Ukraine
Author: David P. Goldman April 14, 2015

Why did Russia announce on Monday that it would sell it S-300 air defense system to Iran after years of hesitation? One might as well ask why Karpov used a rook rather than a bishop against Korchnoi in his celebrated 1988 endgame: he had a rook, but didn’t have a bishop. Outside its immediate periphery, Russia has only two means of projecting power, namely energy and arms. A declining but still significant power, Russia still makes some of the world’s best anti-missile and anti-aircraft systems, and deploys them on the chessboard of its strategic vision.

M.K. Bhadrakumar’s learned and informative commentary in this publication on what he calls a new Russian-Iranian axis and a Russian “red line” for US policy makes no mention of the most important word in the whole mix, and that is, “Ukraine.” It has been obvious since no later than 2005 that Russia might retaliate for American efforts to pry Ukraine away from Russian influence by thwarting Western interests in the Persian Gulf. I warned in Asia Times on Dec. 6, 2005:

Nonetheless, Russia’s evident willingness to upgrade Iran’s weapons capability reflects another unintended result of Washington’s ideological campaign for democratization. America has offered open support for the “color revolutions” in parts of the former Soviet Union, beginning with Ukraine’s “Orange” revolution last year and continuing through the “Yellow” revolution in Kyrgyzstan last spring. The unpleasant regimes Washington helped replace gave way to equally unpleasant regimes, except with greater instability.

Russian President Vladimir Putin fears instability on Russia’s borders, but he cannot persuade Washington to desist from stirring the pot. Russian military cooperation with Iran provides him with a bargaining chip to use against Washington’s designs on what Putin considers a Russian sphere of influence.

I repeated the warning in 2008: “If Washington chooses to demonize Russia, the likelihood is that Russia will become a spoiler with respect to American strategic interests in general, and use the Iranian problem to twist America’s tail. That is a serious risk indeed, for nuclear proliferation is the one means by which outlaw regimes can pose a serious threat to great powers.” And I repeated the warning on numerous occasions through 2015. The American State Department is a patzer in chess argot, a beginner who can’t think two moves ahead. It never seems to have occurred to Washington that its embrace (if not its sponsorship) of the Maidan Revolution in Ukraine would prompt counter-moves by Moscow, including a new rapprochement with China and the “Russian-Iranian axis” that Bhadrakumar projects. Some American officials, for example Assistant Secretary of State Victoria  Nuland (of “f*** the Europeans” fame), actually believed that Maidan would be repeated in Red Square.

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The Fed Never Learns—–Another Inventory Dump Is Brewing
by David Stockman • April 14, 2015

The fairy dust peddlers who moonlight as Wall Street economists were out in force this morning after March retail sales came in with a positive m/m change for the first time since November.  This purportedly confirms that we’re back on track for a big rebound in Q2:

Ian Shepherdson, chief economist at Pantheon Economics, said he expected stronger sales in coming months as the drop in gas prices have built up consumer cash savings.

Now how in the world does he figure that? Total retail sales in March were up a miniscule $5.5 billion or 1.3% over prior year. But then again, gasoline sales were down $10 billion, meaning that consumer spending on everything else was up by $15 billion or 4%. So consumers weren’t hoarding their money or building a cash cushion for some big shopping spree later this spring——-they were just reallocating it like they always do.

Today’s bubble vision jabbering about March retail sales, of course, is just more of the phony baloney “gas tax cut” meme. The 50% cut in world oil prices did not put more income in consumers’ pockets; it just allowed them to spend a tad more on home improvement and restaurants and less on gasoline. But relative price changes and spending reallocations between categories come and go; and besides, this was the “advance” retail report that is going to get revised several more times, anyway.

What might more profitably be asked is this: Has there been any improvement in the tepid rate of retail sales gain since the pre-crisis peak? The answer is no there hasn’t been.

In fact, the March monthly number of $441.4 billion reflected only a 2.1% annual rate of gain since the November 2007 peak. During that same seven year period the CPI was up at a 1.5% rate—-meaning that inflation adjusted retail sales have grown at only 0.6% per annum during the last 7 years.

The graph below which displays inflation adjusted retail sales since the turn of the century explains how Wall Street economists chronically peddle fairy dust. In a word, they focus narrowly on short term rates of change while completely omitting any sense of context. Accordingly, if you are digging out of a deep hole the rate of change can be made to look robust when the trend is actually quite punk.

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Posted at 6:35 PM (CST) by & filed under Jim's Mailbox.

Jim,

Physical versus paper. Paper covers rock but not forever. Soon paper will be on the bottom and rock will be on the top.

CIGA Miki

Central Bank Gold Buying Soars To Near A 50-Year High
April 10, 2015

During 2014 country Central Banks bought 477 tonnes…close to a 50-year high…and that’s equivalent enough to buy 75 Boeing Dreamliners planes. This is at once astounding as well as revealing vis-à-vis a slowly dropping gold price since late 2011.  

Russia was by far the largest buyer. Its purchases made up a staggering 36% of total Central Bank buying. In total, Central Banks bought 477 tonnes of the precious metal last year of which 173 tonnes flowed into Russia, according to a report from the World Gold Council.

Emerging market Central Banks in general have also had a strong appetite for gold in recent years. "They don’t have the legacy of the gold standard, so they are looking to add to their gold reserves," explained World Gold Council’s Bhatia. "Big buyers over the last decade? China has added, India, Thailand, Mexico, Kazakhstan," he said.

Looking ahead what can we expect to see from Central Banks in terms of gold purchases? Most likely more of the same. "We expect Central Banks to be consistent buyers of gold. We are looking at steady as she goes. We expect Russia to continue to buy gold — and we don’t expect major sales from anyone," concluded CPM Group’s Christian.  (Source: KitcoNews)

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Posted at 12:46 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The EU committed economic suicide when it joined in sanctions of Russia. They put the dollar up because sanctions killed the euro. They self destructed.

German Farmers Lose €600 Mln From Anti-Russian Sanctions
10:32 11.04.2015(updated 11:11 11.04.2015)

The Russian ban on food imports from Europe dealt a devastating blow to German agriculture, sending prices on some produce tumbling down, the head of the German Farmers’ Union complained Friday.

German farmers suffered nearly €600 million in losses in 2014 after Russia banned European Union food imports in a tit-for-tat move for sanctions imposed on it over Ukraine, German Farmers Union president Joachim Rukwied told Deutsche Welle.

The price for German-produced milk went down four cents per liter while that for a kilo of pork dipped below €1.4, Rukwied said.

He earlier complained also about the falling prices for apples, which equally nosedived after Russia banned the import of apples from Poland.

In August 2014 Russian President Vladimir Putin announced bans or limits on food and agricultural imports from countries that had imposed sanctions on Russia over its alleged involvement in the conflict in eastern Ukraine.

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Posted at 4:02 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

More growth for the Chinese currency.

China, S Africa sign currency swap dea
Sat Apr 11, 2015 1:44PM

China’s central bank signed a currency swap agreement valued at 30 billion yuan ($4.9 billion) with the South African central bank on Friday.

The agreement lasts for three years, and can be extended upon agreement by both sides, said a spokesman for the People’s Bank of China (PBOC).

The deal aims to facilitate bilateral trade and investment as well as maintain regional financial stability, China’s Xinhua news agency reported.

Also, the South African Reserve Bank (SARB) has announced in a statement that the purpose of the agreement is to support trade and investment between South Africa and China, and also to act as a mitigating resource for short term balance of payment pressures.

The PBOC also signed swap agreements with Armenia and the Republic of Suriname in March.

To promote international use of the yuan, China has signed currency swap agreements with more than 20 countries and regions since the onset of the global financial crisis in late 2008.

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Jim Sinclair’s Commentary

They have not recovered from the first.

U.S. States Aren’t Prepared for the Next Fiscal Shock

U.S. states, still grappling with the lingering effects of the longest recession since the 1930s, are even more vulnerable to another fiscal shock.

The governments have a little more than half the reserves they’d stashed away before the 18-month recession that ended in June 2009, according to a report last month by Pew Charitable Trusts. New Jersey, Pennsylvania, Illinois and Arkansas have saved the least.

Skimpier rainy-day funds have implications for the national economy, which is in its sixth year of expansion. States would have to cut spending or raise revenue by a combined $21 billion in the event of a recession, exacerbating economic weakness, Moody’s Analytics found in a stress test of state finances. Reserves take on added importance for governments balancing obligatory pension and health-care costs with swings in tax collections, said Daniel White, a senior economist at the arm of Moody’s Corp.

“What the Great Recession has shown is that things have fundamentally changed in terms of the way that state fiscal conditions are determined,” White said from West Chester, Pennsylvania. “They need to be much more prepared for very volatile fiscal conditions than they had been in the past.”

Investor Focus

Investors are monitoring states’ fiscal balances after seeing how reserves helped some governments weather the recession, said John Donaldson, who helps manage $800 million of munis as director of fixed income at Haverford Trust Co. in Radnor, Pennsylvania.

California won credit upgrades and saw borrowing costs shrink after voters in November agreed to bolster rainy-day funds. With Fitch Ratings lifting California to A+ in February, its fifth-highest level, the state has its highest marks from the three biggest rating companies since at least 2009.

Bond buyers demand about 0.3 percentage point of extra yield to own 10-year California munis instead of benchmark debt, close to the lowest spread since 2007, data compiled by Bloomberg show.

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Jim Sinclair’s Commentary

Why markets do what they do.

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Posted at 1:53 PM (CST) by & filed under In The News.

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HSBC’s Long List of Troubles Just Got Even Longer
by Stephen Morris

HSBC Holdings Plc has had a rough time of it lately.

Since former Swiss employee Herve Falciani made off with client data in 2008 and fled to France, Europe’s biggest bank has been dealing with the fallout as investigations into money laundering and tax evasion have begun around the world.

On Thursday, HSBC announced it’s been charged in a related French tax-evasion probe and ordered to pay bail of $1.1 billion. There are similar investigations under way in Belgium, Switzerland, Argentina and India. And after fresh details emerged in February from the Falciani files, Chief Executive Officer Stuart Gulliver and Chairman Douglas Flint were grilled by U.K. lawmakers, and conceded how damaging the affair had been to the bank’s reputation.

Heidi Ashley, an HSBC spokeswoman, declined to comment.

Fallout from the Falciani case isn’t all that HSBC is grappling with on the legal front. Here are a few of its other headaches:

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The Housing Market: Media-Promoted Fairytales vs. Reality
April 10, 2015

There was time in U.S. history when journalism reflected true investigative due diligence in which reporters made an effort to verify the validity of the topic being covered and to make a bona fide attempt to report facts.  It is a process that is imperative to a healthy democracy.  Unfortunately now the media is nothing more than an avenue for Wall Street, corporate America and political elites to promote false realities which are invariably connected to squeezing or stealing money from the public.

The idea that the housing market is “recovering” from the housing bubble that burst in 2005/2006 has been promoted ad nauseum by Wall Street and the housing market cheerleader organizations like the National Association of Realtors and the National Association of Homebuilders.   And recently the mainstream media has gone full-throttle at pumping out housing market propaganda promoting the idea that the housing market is healthy.

A perfect example of this is an article by Bloomberg News about a week ago titled, “This New Indicator Shows There’s No Bubble Forming” (article link).   The “indicator” is Nationwide Insurance’s “Leading Index of Healthy Housing Markets” report, which it unveiled at the end of March.   Bloomberg’s news report was little more than marketing propaganda for the housing market. It was clear that Bloomberg did not research the validity of Nationwide’s new housing market “indicator.”  But I did.

Although Nationwide offers no detail regarding the sources for the data it uses, the variables in its index are employment, demographics, the mortgage market and house prices.  To be blunt, based on the information about the index provided by Nationwide, its housing index has to be one of the most preposterous economic indicators outside of the employment and GDP reports.  The “employment” variable is likely derived from the Census Bureau’s non-farm payroll report, which is widely acknowledged to be statistically useless, if not outright fraudulent (see this commentary:  LINK).  The fact that Nationwide does not disclose any details about its index other than the parameter labels makes the quality level of the metric highly suspect.

The section of Nationwide’s website that describes its housing market index contains a quarterly report which summarizes the Company’s assessment of the housing market across the country.  The report is a pdf file that reads like a marketing brochure for the housing industry.   I was curious to understand Nationwide’s motive behind publishing this highly fatuous housing market report.  As it turns out, Nationwide also owns a bank which offers mortgages, home equity loans and home equity lines of credit.   This goofy housing market health report is a marketing tool for its mortgage business.

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Jim Sinclair’s Commentary

Can you imagine anyone saying the US leadership fibs?

Ayatollah Khamenei Accuses WH of ‘Lying,’ Being ‘Deceptive,’ and Having ‘Devilish’ Intentions
5:42 PM, APR 9, 2015
BY THOMAS JOSCELYN

President Obama has long known that the real decision maker in Iran is Ayatollah Khamenei, the so-called supreme leader. While other Iranian officials have negotiated with Western powers over the mullahs’ nuclear program, Khamenei’s opinion is the only one that really counts. It is for this reason that Obama began writing directly to Khamenei early in his presidency.

Earlier today, Khamenei broke his silence on the supposed “framework” the Obama administration has been trumpeting as the basis for a nuclear accord. Khamenei’s speech pulled the rug out from underneath the administration. 

Khamenei accused the Obama administration of “lying” about the proposed terms, being “deceptive,” and having “devilish” intentions, according to multiple published accounts of his speech, as well as posts on his official Twitter feed. 

Khamenei also disputed the key terms Obama administration officials have said were agreed upon in principle. Economic sanctions will not be phased out once Iran’s compliance has been “verified,” according to the Ayatollah. Instead, Khamenei said that if the U.S. wants a deal, then all sanctions must be dropped as soon as the agreement is finalized. Khamenei also put strict limits on the reach of the inspectors who would be tasked with this verification process in the first place.

Beginning earlier this month and in the days since, Obama and his advisers have attempted to portray the negotiations as major step forward. During an appearance in the Rose Garden on April 2, Obama said the U.S. and its allies have “reached a historic understanding with Iran.”

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Khamenei breaks silence on nuclear deal with equivocal comment
DEBKAfile April 9, 2015, 1:17 PM (IDT)

Iran’s supreme leader Ayatollah Ali Khamenei Thursday delivered his much-awaited first comment on the nuclear framework concluded in Lausanne last week with the world powers. He said that the deal is no guarantee that a full agreement will be reached by the end of June. "What has been done so far does not guarantee an agreement, nor its contents, nor even that the negotiations will continue to the end," Khamenei, who has the final word on all matters of state, said on his official website. Iran on no account will rescind its demand for the immediate removal of all sanctions, he emphasized.

Deputy Chairman of Iran’s Armed Forces Chief of Staff Brigadier General Masoud Jazayeri said Thursday that the “Swiss Statement” does not include allowing inspections of military centers. ‘We have not so far permitted inspection of the military centers, and we will not to do so in the future,’ Jazayeri stressed.

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Jim Sinclair’s Commentary

This reads like the "End of Days."

Iran, Saudi Arabia in tense buildup opposite Yemen’s Gulf of Aden shore: US air tankers refueling Saudi jets

Saudi-Iranian saber-rattling over Yemen has reached a dangerous peak, Thursday, April 9, the Saudi army spokesman, Brig. Gen. Ahmad Al-Assiri, warned: “Iranian ships have the right to be present in international waters, but won’t be allowed to enter Yemeni territorial waters.”

This was Riyadh’s rapid-fire riposte for the Iranian decision to deploy its navy’s 34th Flotilla, consisting of the Alborz destroyer and the Bushehr helicopter carrier warship, in the Gulf of Aden opposite the Yemeni coast.

The Saudi general noted that Iran had not evacuated any of its citizens from Yemen because, he said, “they are all involved in training and arming the Houthis.”

Soon after launching their air offensive in late March against the Iranian-backed Houthi rebels and forces loyal to ousted president Ali Saleh, the Saudis took control of the country’s airspace to prevent the landing of airlifted Iranian supplies for the Houthis. Russian flights were also barred later from landing in the embattled country.

Gen. Al-Assiri then issued Saudi Arabia’s bluntest threat yet: “Those Iranians planning to remain in the country would face the same fate as the Houthis and their supporters,” he said.

Clearly, the Iranian Revolutionary Guards personnel were being trapped in a Saudi vice: Unable to leave Yemen, on the one hand, they were threatened with death if caught, on the other.

Tehran decided to send its most effective naval force to the Gulf of Aden when it realized that Riyadh would not heed its warnings to back off Yemen. Its presence substantiated the threat of direct Iranian intervention in the Yemeni conflict should harm come to the elite IRGC force aiding the rebels.

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Posted at 12:56 PM (CST) by & filed under Jim's Mailbox.

Jim,

Nothing could be sweeter than to see gold spike upwards on top of a collapsing Euro and a Fed that is signaling a rate hike in June.

Bonds and equities should get hit hard. Derivatives will get smashed, especially the interest rate at oil sectors. Corporate earnings will be decimated. Economy will drown.

Where to go?  Where to go?

I got it! GOLD.

CIGA Wolfgang Rech

Fed’s ‘Bad Cop’ Lacker Sees "Substantial" FOMC Support for June Rate Hike, Economic Weakness "Transitory"
Submitted by Tyler Durden on 04/10/2015 10:17 -0400

We’ve heard from uber-dove ‘good cop’ Kocherlakota (demanding moar QE), Dudley’s admission of Dow-data-dependence, and now its Jeff ‘bad cop’ Lacker’s turn to stir things up. Speaking to reporters this morning, lacker explained that recent economic weakness is "transitory" due to weather, and that the FOMC Minutes, despite economists’ spin, show substantial support for a June rate hike. Markets are unmoved (for now).

As Bloomberg summarizes:

*LACKER SAYS IF IT WERE UP TO HIM, FED WOULD SELL ASSETS NOW

*LACKER SAYS U.S. ECONOMY CONTINUES TO ADVANCE AND DO BETTER

*LACKER SAYS WEATHER CLEARLY HAD AN IMPACT IN FIRST QUARTER

*LACKER SAYS SOME OF THE RECENT WEAKNESS IN DATA IS TRANSITORY

*LACKER: CENTRAL BANKS SHOULDN’T PREVENT ALL MARKET VOLATILITY

*LACKER: FOMC MINUTES SHOW `SUBSTANTIAL’ SUPPORT FOR JUNE RISE

So – it’s the weather… and everything is awesome… so hike rates now… and let’s have some more volatilty.

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Posted at 12:42 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The financial firm or their clients?

The Oil Industry’s $26 Billion Life Raft
Thu, Apr 9, 2015, 2:36 PM EDT

For U.S. shale drillers, the crash in oil prices came with a $26 billion safety net. That’s how much they stand to get paid on insurance they bought to protect themselves against a bear market — as long as prices stay low.

The flipside is that those who sold the price hedges now have to make good. At the top of the list are the same Wall Street banks that financed the biggest energy boom in U.S. history, including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.

While it’s standard practice for them to sell some of that risk to third parties, it’s nearly impossible to identify who exactly is on the hook because there are no rules requiring disclosure of all transactions. The buyers come from groups like hedge funds, airlines, refiners and utilities.

“The folks who were willing to sell it were left holding the bag when prices moved,” said John Kilduff, partner at Again Capital LLC, an energy hedge fund in New York.

The swift decline in U.S. oil prices — $107.26 on June 20, $46.39 seven months later — caught market participants by surprise. Harold Hamm, the billionaire founder of Continental Resources Inc., cashed out his company’s protection in October, betting on a rebound. Instead, crude kept falling.

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Jim Sinclair’s Commentary

Come on Janet, jack those interest rates up to slow down the runaway US economic recovery.

Recession 2.0: Abysmal Wholesale Sales Join Factory Orders In Confirming US Economic Contraction
Tyler Durden on 04/09/2015 10:37 -0400

Despite another data series revision by the Department of Commerce, there was no way to put lipstick on the pig of America’s wholesale trade data, and as reported moments ago, the all important merchant sales for February dropped for 3rd month in a row in February, the longest stretch since the last recession. After January’s downward revised plunge of 3.6% MoM (against -0.5% expectations), which was the biggest single monthly drop since March 2009, the decline continued in February at a -0.2% pace, wiping the floor with expectations of a 0.3% rebound.

Worst of all the annual pace of decline has now stretched over both January and February, confirming that 2015 is now officially a year of contraction for the US economy. As a reminder, every time this series suffers an annual decline, there is a recession.

Worse, not expecting the drop in demand, wholesales built up inventories once more, with wholesale inventories rising by 0.3%, above the 0.2% expected, and as a result the Inventory to Sales ratio has hit a new post-Lehman high of 1.29.

The above should not come as a surprise: a parallel and just as important data series, the US factory orders, also confirmed a week ago that the US is now in a recession, when Factory Orders tumbled by 4.3% Y/Y, their worst annual decline since, you got it, Lehman.

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Jim Sinclair’s Commentary

Making friends into enemies.

Norman Bailey: Israel’s historic shift in economic relations to Asia
Author: Norman A. Bailey April 7, 2015

Israel is in the midst of an historical shift of international economic relations emphasis from Europe and the U.S. to south and east Asia, including China, Japan, South Korea, Taiwan, Vietnam, Singapore and India. All indices of Israeli international trade and investment are pointing in the same direction.  The question now is how does Israel transform its economic success in Asia to political, diplomatic and perhaps eventually military support.  Along with this development is another equally significant one, namely the formation of an informal alliance of Sunni states, including Egypt, Jordan, Saudi Arabia and the Gulf states (except Qatar) in countering Iran and extremist Islamic terrorist organizations.

Israel is actively collaborating with those countries in security, defense and intelligence activities, as well as such economic projects as gas supply to Jordan and the Red to Dead Sea water project in that country. Stay tuned for major economic/scientific/technological collaboration with Egypt in the works.

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Jim Sinclair’s Commentary

Next month may not be easy for Greece.

Merkel Powerbase at Risk as Tsipras Courts Putin

Tsipras’ decision to go to Moscow, amid his huge bailout battle with Europe should come as no surprise to historians. Most of the current Greek minority population in Russia comprises descendants of Medieval Greek refugees, from the Byzantine Empire, the Ottoman Balkans, and Pontic Greeks from the Empire of Trebizond and Eastern Anatolia.

Despite Tsipras being atheist, he is keen to play-up the Orthodox Christian bond between Greece and Russia, which will play well to the significant population of Greek descendants who make up large communities in Moscow and St Petersburg. He even laid a wreath at the Tomb of the Unknown Soldier.

Having paid off its latest loan ($490m) to the International Monetary Fund on April 9, all eyes are on the next payment Greece will have to make every week in April and the further $7.75 billion it will have to find in May and June, while struggling to pay its own government staff and state pensions.

Greece Exit or Russian Sanctions?

By going to Moscow, Tsipras is playing a grand game. Germany’s Angela Merkel is on record as having said a Greek Exit from the Euro would mean the end of the European dream. Many analysts believe a Grexit would consign the Euro to a less valuable currency, with countries able to pick and choose when and how they adopt it. It would devalue the brand.

Meanwhile, with the European Union due to vote on whether to continue — or even increase — sanctions against Russia in June, Tspiras has one other trump card up his sleeve. The vote requires all 28 states to agree, and Tsipras has threatened to derail the sanction vote, which would prove hugely damaging to the EU, as a body of states.

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Jim Sinclair’s Commentary

If anyone knows, he certainly does.

J.P. Morgan’s Dimon warns next crisis will bring even more volatility

LONDON (MarketWatch) — You ain’t seen nothing yet, when it comes to market wreckage from a financial crisis, according to J.P. Morgan boss Jamie Dimon.

In his annual letter to shareholders, the bank’s chief executive warned “there will be another crisis” — and the market reaction could be even more volatile, because regulations are now tougher.

He argued the crackdown on the financial sector, added to more-stringent requirements for capital and liquidity, will hamper banks’ capacity to act as a buffer against shocks in financial markets. Banks could become reluctant to extend credit, for example, and less likely to take on stock issuance through rights offering, which would essentially create a shortage of securities.

Such factors “make it more likely that a crisis will cause more volatile market movements, with a rapid decline in valuations even in what are very liquid markets,” Dimon said in the letter. “Recent activity in the Treasury markets and the currency markets is a warning shot across the bow.”

The J.P. Morgan JPM, -0.25%  CEO pointed to the 40 basis-point move in Treasury securities on Oct. 15 as one of those warning shots. The move — though “unprecedented” and “an event that is supposed to happen only once in every 3 billion years or so” — was still relatively easily absorbed in the market and no one was significantly hurt by it, he noted.

“But this happened in what we still would consider a fairly benign environment. If it were to happen in a stressed environment, it could have far worse consequences,” Dimon said.

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