Posted at 2:45 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

This is the ONLY interview I have ever requested because the credit collapse is in progress! Please take the time to listen.

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! [email protected]

Posted at 2:37 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is far, far away from the total oil derivative problem. The timing of Iran coming in the market is not by accident.

Wells Fargo’s Problem Emerges: $17 Billion In Junk Energy Exposure
Tyler Durden on 01/17/2016 18:37 -0500

When Wells Fargo reported its Q4 earnings last week, the one topic analysts and investors wanted much more clarity on, was the bank’s exposure to oil and gas loans, and much more color on its energy book over concerns that Wells, like most of its peers, was underestimating the severity of the upcoming shale default wave.

And while the company’s earnings call indeed reveals that things are deteriorating rapidly in Wells energy book, perhaps an even bigger concern for Wells investors, which just happens to be the largest US mortgage lender, should be what is going on with its mortgage book. The answer: nothing. In fact, at $64 billion in mortgage applications in the quarter, this was not only a major drop from Q3, but also the lowest since the first quarter of 2014.

Wells Mortgage Applications_0

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Posted at 1:13 PM (CST) by & filed under General Editorial.

Dear CIGAs,

If a major bank, international investment house, well-connected corporation or even a small house way over its head with derivatives linked into the above three goes broke on oil or oil related over the counter derivatives, just hide it or rewrite the rules to save it.

This is an attempt to steady the equity markets that have known these OTC derivative have been belly up for some time. It is not hard to find out if your bank is belly up on you. This had to be done since the Plunge Protection Team has clearly failed in China, here, and everywhere else. Now if the equity market fails to rise, watch out below because there is no more PPT, only tricks of the financial legerdemain.

Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears
Tyler Durden on 01/16/2016 14:21 -0500

Earlier this week, before first JPM and then Wells Fargo revealed that not all is well when it comes to bank energy loan exposure, a small Tulsa-based lender, BOK Financial, said that its fourth-quarter earnings would miss analysts’ expectations because its loan-loss provisions would be higher than expected as a result of a single unidentified energy-industry borrower. This is what the bank said:

“A single borrower reported steeper than expected production declines and higher lease operating expenses, leading to an impairment on the loan. In addition, as we noted at the start of the commodities downturn in late 2014, we expected credit migration in the energy portfolio throughout the cycle and an increased risk of loss if commodity prices did not recover to a normalized level within one year. As we are now into the second year of the downturn, during the fourth quarter we continued to see credit grade migration and increased impairment in our energy portfolio. The combination of factors necessitated a higher level of provision expense.”

Another bank, this time the far larger Regions Financial, said its fourth-quarter charge-offs jumped $18 million from the prior quarter to $78 million, largely because of problems with a single unspecified energy borrower. More than one-quarter of Regions’ energy loans were classified as “criticized” at the end of the fourth quarter.

It didn’t stop there and and as the WSJ added, “It’s starting to spread” according to William Demchak, chief executive of PNC Financial Services Group Inc. on a conference call after the bank’s earnings were announced. Credit issues from low energy prices are affecting “anybody who was in the game as the oil boom started,” he said. PNC said charge-offs rose in the fourth quarter from the prior quarter but didn’t specify whether that was due to issues in its relatively small $2.6 billion oil-and-gas portfolio.

Then, on Friday, U.S. Bancorp disclosed the specific level of reserves it holds against its $3.2 billion energy portfolio for the first time. “The reason we did that is that oil is under $30″ said Andrew Cecere, the bank’s chief operating officer. What else will Bancorp disclose if oil drops below $20… or $10?

It wasn’t just the small or regional banks either: as we first reported, on Thursday JPMorgan did something it hasn’t done in 22 quarter: its net loan loss reserve increased as a result of a jump in energy loss reserves. On the earnings call, Jamie Dimon said that while he is not worried about big oil companies, his bank has started to increase provisions against smaller energy firms.

Then yesterday it was the turn of the one bank everyone had been waiting for, the one which according to many has the greatest exposure toward energy: Wells Fargo. To be sure, in order not to spook its investors, among whom most famously one Warren Buffett can be found, for Wells it was mostly “roses”, although even Wells had no choice but to set aside $831 million for bad loans in the period, almost double the amount a year ago and the largest since the first quarter of 2013.

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Posted at 1:03 PM (CST) by & filed under Jim's Mailbox.

Jim,

My son Jon (Attaining his Bachelor Degree at Montana Tech Petroleum Engineering) sent me this. I thought it might fit well on your website to illustrate how ridiculous and upside down the price of crude is and how upside down the world’s financial system is.

CIGA Howard

Crowfoot

Posted at 1:01 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Hillary’s audience for a recent campaign speech.

Hillary

 

The Warmongers’ Brawl — How The GOP Is Deserting Free Markets, Sound Money And Fiscal Rectitude
New York City, New York
January 17, 2016

According to Dante’s Divine Comedy the inscription on the gates to hell says, “Abandon hope all ye who enter here”.

That should have been emblazoned on the entrance to the North Charleston Coliseum Thursday night, as well. In their lust for war, the GOP candidates to a man forgot why the Republican party even exists.

It started with Senator Cruz who ignored the first question and launched off into an utterly gratuitous exercise in rank demagoguery about the US sailors held for 16 hours by Iran. Said the candidate who is supposed to be talking about the Fed’s war on savers and Washington’s burial of the nation’s taxpayers in debt:

“Today, many of us picked up our newspapers, and we were horrified to see the sight of 10 American sailors on their knees, with their hands on their heads,” Cruz said. “I give you my word, if I am elected President, no serviceman or servicewoman will be forced to be on their knees, and any nation that captures our fighting men will feel the full force and fury of the United States of America.”

Oh, c’mon, Senator. This incident happened because two state of the art US riverine patrol boats, which specialize in marine landings, wandered into Iranian territorial waters and at the very worst place imaginable. That is, about 1.5 miles from Farsi Island, which is a major base of the Iranian Revolutionary Guard Corps (IRGC)—-the very reactionary force in Iranian politics that wants to sabotage the nuke deal and normalization of relations with the US no less than Washington’s neocons.

So if someone needed to be called on the carpet by the GOP debaters, it should have been General Joseph Dunford, Chairman of the Joint Chiefs of Staff. The lapse of command and control in the instance was inexcusable.

After all, treading on the IRGS’s Farsi Island base is the equivalent—–given the debate’s geographic setting——of firing on Fort Sumter. No US warships should have been anywhere in the vicinity—-especially given that the implementation schedule for dismantling much of Iran’s uranium enrichment capacity is starting right now…

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Posted at 12:31 AM (CST) by & filed under General Editorial.

image004

 

Jim Sinclair’s Commentary

Mr. Williams declare recession at hand.

- Recession in Hand – Here Is What It Looks Like
- Fourth-Quarter Production Plunged by 3.4% (-3.4%) at Annualized Pace; Quarter Was Down Year-to-Year by 0.9% (-0.9%)
- Year-to-Year Decline Was of a Magnitude Seen Previously Only in Formal Recessions, Post-World War II, and with the 1952 Steel Strike, When President Truman Nationalized the Steel Industry
- Headline Nominal December Retail Sales Fell by 0.1% (-0.1%), Down by 0.4% (-0.4%) Using Old-Fashioned, Consistent Seasonal Factors
- Quarterly Retail Sales Growth Slowed Sharply, Possibly Flat Net of Inflation, with Continued Recession Signal Generated by Sub-Par Annual Growth
- December Headline Wholesale Goods Inflation Fell by 0.74% (-0.74%), While Wholesale Service-Industry Profit Margins Rose by 0.09%; Headline, Hybrid PPI Declined by 0.18% (-0.18%) for the Month 

“No. 780 December Industrial Production, Retail Sales and Producer Prices (PPI) ”
Web-page: http://www.shadowstats.com

Posted at 2:44 PM (CST) by & filed under General Editorial.

My Dear Friends,

Bill Holter’s informed speculation on China and silver and its impact on gold in his conversation with Mr. Sprott and Mr. Embry of Sprott International seems to me to be hitting the nail on the head. The last time the North American insiders took gold down they used the Hunt silver situation to do it. This could be a re-enactment of March 1980. The difference this time is it is for accumulation and will prove the recent down in gold to simply be a bear phase in a super gold bull cycle that is going to $50,000 in my life time. I am a geezer. This time the North American and old European Jewish financial families like mine, the Seligmans, did not lead the manipulation. They may have joined in the market reaction as they are the most sensitive of traders, but they did not lead and may have gotten hurt at the top.

It explains a great deal to me. The recent gold information contained in my last interview with Greg Hunter gives the absolutely correct information on the gold price if you have ears to hear.

The bigot sicko trolls are about to go nuts. They go directly into my blocking system.

Jim

 

Dear CIGAs,

I recently had a long and very interesting conversation with John Embry of Sprott Resources. It is always good to speak with him as I consider him one of the five sharpest economic/precious metals minds I know of and certainly value his opinion. John’s name came up a couple of days ago when someone asked “where is all this silver coming from” to meet the outsized physical demand? I said “this is the number one question John Embry and Eric Sprott have been asking for about a year now”.

Our conversation was quite broad but let’s zero in on the “silver supply” aspect because I believe it is more important than anything else in our world today. That is a very big statement but stay with me as you will see toward the end why I believe this. John asked where IS all the silver coming from? Let me first say what follows was my best educated “guess” and I know of no one who has the firm and hard answer; I told him during the 80′s and early 90′s the amount of “scrap” could be a very logical explanation. Then during the 90′s and early 2000′s the silver deficit could be explained by the huge amount of silver recovered from the “Manhattan Project” estimated to be nearly 1 billion ounces. I also believe the Chinese lent somewhere around 300 million ounces of silver to the U.S. back in 2003 for a 10 year term which expired in that “magical year” 2013. If this was true, it would explain the massive paper takedown in May of 2013 because the lease was “up”. I believe silver had to be taken down as the price was getting away and threatening $50. A collapsing price would allow the U.S. to say “don’t worry, you will get your silver back as we have the price under control”.

Here is where I believe the silver to meet delivery has come from, CHINA! But why? First and foremost, China was a “silver nation” and had used silver as money for longer and in greater quantity than any other nation. In other words, the silver has come from the only place it could have because China had it. OK, but even if China was the only large stockpile, why would they “throw good money after bad” if they were already defaulted on? I believe they wanted the crowned jewel of the West, Gold! They had silver but the West had the gold accumulated during the 1900′s and especially after WWII. Yes the U.S. dishoarded in the 50′s and 60′s but we did still have 8,000 plus tons left and are (were?) custodian for other Western gold holdings. It is my contention a deal was made where silver has been supplied by China to prevent the Achilles heel (silver) from defaulting and blowing up everything. In other words, keeping the game going for longer would allow China to accumulate gold and drain what is left, had the game blown up in 2013, China would not have had the ability to accumulate what they have since then. Call this “dropping pennies to pick up dollars”.

Getting back to what I said at the beginning where I said “silver is more important than anything else in the world”, please follow this through. Silver is a very small market, some would say unimportant except for its various technological, medical, etc. uses. However, in no way could silver’s price get away to the upside without dragging gold with it. Were the price of gold to get away to the upside, demand would explode (particularly in China where they are known as speculators and “chasers”). Were this to happen, the existing supply would be chewed up and the uncomfortable request “please deliver my gold” would become prevalent. At this point the game would be over as the scam of fractional reserve gold (and silver …and everything else) would be public knowledge.

You see, “trust” is at the heart of it all. Our entire financial system is based on trust. Trust in government, trust in fiat currency, trust in cross trading partners, trust in your bank or your broker… it is ALL TRUST! What would happen to this trust if it turned out that a Ponzi scheme turned up somewhere? Not just any Ponzi scheme like Madoff but one where the exchange itself was running a fractional reserve fraud and could not deliver? Trust …IN EVERYTHING would fail!

As usual I am sure I will be trolled for the above and called an idiot but I must ask you this- If global gold supply has not met demand for 20 years or more, where can the metal have come from to meet the deficit? The same goes for silver and even more so because the supply/demand deficit has been even more severe and longer in duration? The answer is most obvious, the metal had to come from the only place available, above ground supplies. For gold, that can only mean “official” stockpiles (vaults). For silver, I believe the only large above ground stockpile left was legacy silver in China.

Please do not point at the price and say “see, there are no shortages” as we have seen shortages, rationing and backwardation in both silver and gold over the last two years. If you gave me 100 billion counterfeit shares of IBM I could sell whenever I wanted, I am pretty sure I could make IBM look like a falling down drunk whenever I wanted and the price would certainly be depressed! Herein lies the fault, gold nor silver can be “printed” and when all is said and done investors holding receipts for same will be in for a very big and very bad surprise!

To finish, if I am correct about the silver for delivery coming from the most likely of all places, China, then I believe this will be looked back on by historians as “the Chinese silver fox in the West’s golden hen house! Am I correct? I don’t know but we will soon see as the global paper financial edifice is quaking on its own. John Embry told me, “of all the many theories I have heard so far, yours makes the most sense and is the most logical”. I mentioned this topic to Jim yesterday and he told me when we first talked about it six months back he was skeptical but the more he has thought about it …the silver can ONLY be coming from where it exists…Chinese legacy silver!

I think China has done some very intelligent maneuvering particularly since the 2008 crisis. They figured out our fractional reserve scheme was toast but they played along anyway. They even levered up as much or more than we did since then. However, with this increase in credit they have built infrastructure in the form of roads, bridges, cities, plant and equipment …all for and with future uses. The West on the other hand has thrown a “standard of living party” and neglected infrastructure to the point of dilapidation. Yes China’s financial system will implode with all the rest, they may even lead it! But, they will be left with new infrastructure and “money” (our gold) to get started again. President Xi has even said this to his people and to the world. He said the short term would be difficult but the long term beneficial. I think he is telling the truth!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! [email protected]

Posted at 12:04 PM (CST) by & filed under General Editorial.

Jim Sinclair’s Commentary

Abandon ship before the underfinanced FDIC is called upon to perform!

Press Release
FDIC Announces the Retirements of Stanley R. Ivie, Robert W. Mooney, and Eric J. Spitler, and Appointment of M. Andy Jiminez
FOR IMMEDIATE RELEASE
January 15, 2016

The Federal Deposit Insurance Corporation (FDIC) today announced the following personnel changes:

Eric J. Spitler, director of the Office of Legislative Affairs, retired after a 22-year career at the FDIC. He twice served as director of legislative affairs, most recently starting in 2012.

Prior to 2012, Spitler served for three years as counselor to the chairman and director of the Office of Legislative and Intergovernmental Affairs at the Securities and Exchange Commission. His retirement was effective at the end of 2015.

“Eric demonstrated outstanding judgment, professionalism, expertise, and enduring commitment to the FDIC’s mission for more than two decades,” Chairman Martin J. Gruenberg said.

The FDIC Board of Directors approved the appointment of M. Andy Jiminez as the new director of the Office of Legislative Affairs. Jiminez previously was the acting deputy director of legislative affairs at the FDIC and was a legislative attorney/advisor since July 2012. Prior to joining the FDIC, Jiminez served as senior counsel for banking and trade for the U. S. House of Representatives’ Committee on Small Business and as a senior financial services legislative assistant to U.S. Representative Nydia Velazquez.

Jiminez has also served as an attorney at the Office of the Comptroller of the Currency. He earned a law degree from The Ohio State University and a bachelor of science with dual majors in biology and history from Tulane University.

Robert W. Mooney, national director, Minority and Community Development Banking, retired at the end of 2015 after a 26-year career at the FDIC. Mooney oversaw the FDIC’s Minority Depository Institutions and Community Development Financial Institutions (MDI/CDFI) Program since November 2012. Previously, Mooney served as a senior advisor in the Office of the Chairman under both Sheila C. Bair and Martin J. Gruenberg, and held multiple senior leadership positions in compliance and consumer affairs.

“Bob is recognized by the industry as an expert in his field, and he has been instrumental in building the FDIC’s high-caliber MDI/CDFI program,” Doreen R. Eberley, director of the Division of Risk Management Supervision, said.

Scott D. Strockoz, is serving as acting national director for Minority and Community Development Banking. Strockoz, a 24-year veteran of the FDIC, is currently deputy regional director in the New York region, overseeing examination activities relating to financial institutions’ compliance with consumer protection, fair lending, and community reinvestment laws and regulations. He holds examiner commissions in both risk management and consumer protection and has additionally served as review examiner, field supervisor, acting regional director, and acting associate director, Compliance and Consumer Protection.

San Francisco Regional Director Stanley R. Ivie is retiring effective March 7, 2016, after serving more than 31 years at the FDIC. As regional director since 2007, Ivie has overseen the FDIC’s bank supervision activities in Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. He previously served as regional director of the Dallas region and has also worked as a bank liquidation specialist, senior congressional liaison, assistant director and deputy director for the Division of Resolutions and Receiverships, and interim director of the Office of Public Affairs.

“Stan has done an exceptional job leading the San Francisco region through the recent financial crisis, after leading the Dallas region through the devastation wrought by Hurricane Katrina,” Doreen R. Eberley, director of the Division of Risk Management Supervision, and Mark Pearce, director of the Division of Depositor and Consumer Protection, said in a joint statement.

###

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public con?dence in the nation’s banking system. The FDIC insures deposits at the nation’s banks and savings associations, 6,270 as of September 30, 2015. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars—insured financial institutions fund its operations.

FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC’s Public Information Center (877-275-3342 or 703-562-2200). PR-3-2016

 

Jim Sinclair’s Commentary

As goes Walmart so goes the US consumer demand.

Wal-Mart to close 269 stores as it retools fleet
Krystina Gustafson  | Courtney Reagan 

Wal-Mart said Friday it will close 269 stores across the globe, including 154 in the U.S. The world’s largest retailer also will open as many as 405 stores globally in the coming fiscal year, as it shifts its focus toward Supercenters and Neighborhood Markets in profitable locations.

In all, 16,000 employees will be impacted by the store closings, about 10,000 of whom are in the U.S.

Stifel Nicolaus analyst David Schick told investors that Wal-Mart’s thoughtful review of its real estate portfolio is evidence it’s undergone an “evolution” in its approach toward physical stores, as it aims to reposition the business longer term.

“Net net, we like these developments and see them as part of increasing focus on quality (versus quantity) of Wal-Mart operations,” Schick said.

The domestic store closures will mostly impact the company’s Walmart Express stores, which account for 102 of the closings. These small stores, which are comparable in size to a dollar store, had been in pilot since 2011. They were rebranded as Neighborhood Market in 2014.

Also domestically, Wal-Mart will also close 23 Neighborhood Market stores, 12 Supercenters, seven stores in Puerto Rico, six discount centers and four Sam’s Clubs.

Internationally, Wal-Mart is closing 115 stores, including 60 recently shuttered, unprofitable stores in Brazil, which represent about 5 percent of that market’s sales. The remainder of the stores are primarily small, money-losing stores in other Latin American markets.

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Jim Sinclair’s Commentary

Will they see zero before 1%? Probably.

Here It Comes: New York Fed President Says “If Economy Weakens Further, Would Consider Negative Rates”
Tyler Durden on 01/15/2016 09:43 -0500

Remember when the Fed’s dots – less than a month ago – suggested there would be 4 rate hikes in 2016? Ah, the memories. Well, you can not only forget that (now that the market is estimating the next rate hike will come in October if ever), but it appears that the Fed will follow Kocherlakota’s advice after all and not only cut rates (the possibility of a January rate cut now is 10%), but will pass go, and collect negative rates:

DUDLEY: IF ECONOMY WEAKENED, WOULD CONSIDER NEGATIVE RATES

After today’s atrocious, recessionary data, one can be certain that the Fed is furiously considering negative rates.

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