Posted at 4:19 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

As if there were not enough Black Swans in our pond.

Cuban: Tech bubble worse now than 15 years ago
Jacob Pramuk | @jacobpramuk

Today’s technology bubble is worse than the one that burst 15 years ago, according to billionaire entrepreneur Mark Cuban.

Overvalued tech companies today are mostly private rather than publicly traded, he wrote in a Wednesday blog post. That distinction makes torrents of funding more dangerous for investors, Cuban contended.

"Back then the companies the general public was investing in were public companies. They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks," the Dallas Mavericks owner and "Shark Tank" investor wrote.

"The bubble today comes from private investors who are investing in apps and small tech companies," Cuban continued.

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Jim Sinclair’s Commentary

The whole monetary world is going to Hell.

Europe to start €1.14trn ‘easy money’ program on March 9 – ECB President
Published time: March 05, 2015 13:34
Edited time: March 05, 2015 15:44

The European Central Bank will kick off its monthly €60 billion purchases of government bonds and private sector assets next Monday, said the head of the ECB Mario Draghi.

"Following up on our decisions of 22 January 2015, we will, on 9 March 2015, start purchasing euro-denominated public sector securities in the secondary market. We will also continue purchasing asset-backed securities and covered bonds, which we started last year," Draghi said in a press-release published Thursday after a news conference in Cyprus.

The programme will last till September 2016, Draghi confirmed. The €1.14 trillion package is hoped to avert deflation and save the eurozone from a triple-dip recession.

The ECB has also decided to keep its key refinancing rate at a record low of 0.05 percent.

The European Commission expects eurozone growth to reach 1.5 percent in 2015, exactly what it predicted in November. In two years time growth is expected to reach 2.1 percent, Draghi said. It’s his first prediction for 2017.

The bank has lowered its forecast for eurozone inflation in 2015 to zero from 0.7 percent due to the drop in oil prices, said Mario Draghi. Oil prices have fallen by more than half since summer 2014 when Brent crude was trading at $115 a barrel. In February the price stabilized to around $60 a barrel. Brent was trading at $61.22 at 17:00 MSK on Thursday.

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Jim Sinclair’s Commentary

Somehow the real inside has a habit of telling us what is coming and then going silent.

Lord Rothschild: ‘Investors face a geopolitical situation as dangerous as any since WW2′
Chairman of the popular RIT Capital Partners investment trust warns savers of ‘chaos, extremism and aggression’ around the world, with ‘horrendous’ problems in Europe
By Richard Dyson
2:32PM GMT 04 Mar 2015

Jacob Rothschild, the 78 year-old banker and chairman of RIT Capital Partners, has delivered savers in the £2.3bn trust a stark warning about global instability and the fragility of future returns.

He used his chairman’s statement in the trust’s 2014 annual report to outline his concerns, saying that on top of a "difficult economic background" investors face "a geopolitical situation perhaps as dangerous as any we have faced since World War II".

He said this was the result of "chaos and extremism in the Middle East, Russian aggression and expansion, and a weakened Europe threatened by horrendous unemployment, in no small measure caused by a failure to tackle structural reforms in many of the countries which form part of the European Union".

This was a much gloomier assessment of the world than the picture painted in his statement a year ago.

Then, he listed the major dangers as the slowdown in China’s growth and a possible over-valuation of shares.

The trust was established in the Sixties with the aim of overseeing much of Jacob Rothschild’s personal wealth.

He and his daughter Hannah, who is also on the trust’s board, together own shares worth approximately £160m.

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Jim Sinclair’s Commentary

Chair Yellen, are you listening to independent business people?

NFIB Chief Economist Warns "Bubble In US Net Worth Has Reached Unsustainable Heights"
Submitted by Tyler Durden on 03/04/2015 15:48 -0500

Excerpted from William Dunkelberg’s Op-Ed in Bloomberg Briefs,

The relationship of U.S. net worth to GDP appears to have reached unsustainable heights recently, by historical standards.

American consumers have about $14 trillion in debt and a net worth of over $80 trillion, according to the Federal Reserve. Net worth is the sum of the values of all assets, real and financial, that consumers own, less their debt, including mortgage debt, leases, credit cards and the like.

The wealth we hold is a way of storing purchasing power. You can sell your shares of Apple and buy “stuff”, goods and services. Ultimately, for most consumers, that’s what our wealth is used for, to acquire “stuff”. Some of our assets provide services directly, such as our houses and cars.

The broadest measure of “stuff” is the gross domestic product, the total value of final goods and services produced in a given period. Constructing the ratio of net worth to GDP illustrates the fluctuation of claims on output per dollar of output produced.

Not surprisingly, this was a fairly steady series for 25 years (maybe longer) from 1970 to the mid-1990s, as gains in nominal wealth were matched with gains in nominal output, averaging about 3.5 dollars in claims on output for every one dollar of GDP. Then came the dot-com boom and Fed bubble-blowing…

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Each peak in this relationship was followed by a recession, the last one the worst in modern history. And now the ratio has once again reached 4.7 dollars. History suggests that the ratio will collapse again, probably toward the 3.5 dollar level. This can be accomplished by a massive increase in GDP (unlikely) or a massive decline in the value of assets, net worth (more likely).

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US Factory Orders Drop For 6th Month In A Row – Worst Since Lehman
Tyler Durden on 03/05/2015 10:08 -0500

Must be the weather… since August. US Manufacturers New Orders tumbled 0.2% in January (missing expectations of a 0.2% rise for the 6th of the last 7 months). This extends the losing streak for factory orders to 6 months, something we have not seen since the great recession in 2008… The drop was led by a plunge in Consumer Goods – not exactly what one would expect from all those gas savings? Just add it to the growing list of missed macro data expectations since the start of Feb!

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We suspect this puts a final nailk in the coffin of low oil prices being positive for consumers…

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Posted at 1:16 PM (CST) by & filed under In The News.

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Supreme Court Appears Sharply Split in Case on Health Law
By ADAM LIPTAKMARCH 4, 2015

WASHINGTON — The Supreme Court on Wednesday seemed bitterly divided during heated arguments over the fate of President Obama’s health care law.

As expected, the court’s four liberal members voiced strong support for the administration’s position. But the administration must almost certainly capture the vote of either Chief Justice John G. Roberts Jr. or Justice Anthony M. Kennedy to prevail.

The chief justice said almost nothing.

Justice Kennedy asked questions suggesting that he was uncomfortable with the administration’s reading of the statute. But he added that the challengers’ reading posed problems, too.

“Your argument raises a serious constitutional question,” he told their lawyer.

Solicitor General Donald B. Verrilli Jr. argued for the Obama administration, facing Michael A. Carvin, who represented the plaintiffs in another challenge to the law that reached the Supreme Court in 2012.

The argument, which lasted 80 minutes rather than the usual hour, started with a presentation from Mr. Carvin that was tied closely to the text of the law.

“This is a straightforward question of statutory interpretation,” he said, referring to a provision in the law that seems to say that subsidies are available only to people living where the insurance marketplaces, known as exchanges, had been “established by the state.”

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March 4, 2015 
Bangkok, Thailand

When I arrived to Bangkok the other day, coming down the motorway from the airport I saw a huge billboard—and it floored me.

The billboard was from the Bank of China. It said: “RMB: New Choice; The World Currency”

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Given that the Bank of China is more than 70% owned by the government of the People’s Republic of China, I find this very significant.

It means that China is literally advertising its currency overseas,and it’s making sure that everyone landing at one of the world’s busiest airports sees it. They know that the future belongs to them and they’re flaunting it.

And it’s true. The renminbi’s importance in global trade and as a reserve currency is increasing exponentially, with renminbi trading hubs popping up all over the world, from Singapore to London to Luxembourg to Frankfurt to Toronto.

Multinational companies such as McDonald’s are now issuing bonds in renminbi, and even sovereign governments are issuing debt denominated in renminbi, including the UK.

Almost every major global player out there, be it governments or major multinationals, is positioning itself for the renminbi to become the dominant reserve currency.

But here’s the thing. Nothing goes up and down in a straight line.And China is in deep trouble right now. The economy is slowing down and the enormous debt bubble is starting to burst.

A lot of people, including the richest man in Asia, are starting to move their money out of the country.

So while the long-term trend is pretty clear – China becoming the dominant economic and financial superpower – the short-term is going to look incredibly rocky.

We talk about this in today’s short podcast with Sovereign Man’s Chief Investment Strategist, Tim Staermose, which includes a few ways to actually make money from China’s short-term unwinding.

Have a listen here: http://www.sovereignman.com/podcast/034-heres-exactly-how-you-can-profit-from-chinas-short-term-unwinding-16312/click here

Until tomorrow,
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Simon Black
Founder, SovereignMan.com

 

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Posted at 12:46 PM (CST) by & filed under Jim's Mailbox.

Jim,

Very disconcerting!

There goes the U.S. Constitution, right out the door. By the time people wake up, it will be illegal to anything.

What will be done in the next economic emergency?

-Close all markets for trading?
-Bank holidays?
-Confiscation of IRA’s, 401-k’s, Pension Funds, bank accounts?
-Declaration of wars at will?
-Confiscation of real estate?
-Marshal Law?
- Confiscation of firearms?
-Restricted free speech?

You could go on and on. This is a must read for everyone.

CIGA Wolfgang

Dear Wolfgang,

GOTS. What else can you do if Gold is not your thing?

Jim

Bernanke Wants The US President To Declare "Economic Emergencies" In Future Crises
Submitted by Tyler Durden on 03/04/2015 – 11:03

"Presidents should get the power to declare economic emergencies along the lines to declare war… [and] take extraordinary actions and not put that all on the Fed." – Former Fed Chairman Ben Bernanke

For those of us who remain horrified and disgusted by the 2008-09 Federal Reserve and U.S. government bailout of the kleptocratic oligarchs who created the crisis, the above comments by the mastermind of this historic theft should be extremely concerning.

Although bankers and oligarchs got everything they wanted and more from the post crisis panic, what seems to bother Bernanke is that some of the response measures had to be pursued publicly. By calling for the U.S. President to declare economic emergencies in future crises, he is explicitly saying he doesn’t want Congress involved at all, even if just ceremonially. This man is a dyed in the wool fascist.

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Posted at 12:43 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Maybe the Simpsons have the right idea.

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Stop Whining America! Economists "Show" You’re The Happiest In 56 Years
Tyler Durden on 03/03/2015 09:41 -0500

Under-employed? Over-indebted? Under-paid? Forget about it… the clever economists that run the world have news for you. Based on economist Arthur Okun’s "Misery Index" – which combines inflation and unemployment rates -Americans are the least miserable since 1959…

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or… perhaps, just perhaps, the government supplied data on inflation and unemployment is entirely fallacious? You decide…

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Jim Sinclair’s Commentary

Chair Yellen, are you watching?

Consumer spending drops for second straight month – first time since 2009
3-2-15 8:39 AM EST

Consumer spending in January fell for the second straight month for the first time since early 2009, as Americans paid less for gasoline and increased their savings. Consumer spending dropped a seasonally adjusted 0.2% last month, the Commerce Department said Monday. Personal income rose 0.3% last month. Economists polled by MarketWatch had forecast a seasonally adjusted 0.1% decrease in spending and a 0.4% gain in income. Since incomes grew faster than spending, the amount of money individuals save climbed to 5.5% from 5% in December. Also, inflation as gauged by the PCE price index decreased 0.5% in January. The PCE index has risen a scant 0.2% in the past 12 months. THe core PCE index that excludes food and energy, meanwhile, rose 0.1%, and it’s up 1.3% over the past year.

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Barclays gives information to U.S. precious metals probe

Reuters) – Barclays has been providing information to an investigation into precious metals by the U.S. Department of Justice (DoJ), the bank said in its 2014 annual report on Tuesday, a week after a similar statement by HSBC.

The DoJ and the Commodity Futures Trading Commission are investigating at least 10 banks for possible rigging of precious metals markets, the Wall Street Journal reported last week, citing people close to the inquiries.

Tuesday’s acknowledgment of its involvement in the investigation comes after HSBC said in its annual report on Feb. 23 that the DoJ had issued a request to HSBC Holdings in November seeking documents related to a criminal antitrust investigation it was conducting.

The latest investigation is a further distraction for a bank battling to cut costs and boost profit even as it prepares to settle allegations that its traders manipulated foreign exchange markets. Taking into account charges, provisions and restructuring costs, the bank suffered a 21 percent drop in full-year net profit, it said on Tuesday.

Regulatory scrutiny of precious metals trading and benchmarking has increased since the Libor rigging scandal exposed widespread manipulation of interest rates in the foreign exchange market.

Swiss regulator FINMA said in November that it found a clear attempt to manipulate precious metals benchmarks during its investigation of precious metals and foreign exchange trading at UBS.

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Chris Powell: Broadcast Interview – Available Now
March 01, 2015

Chris Powell: Mr. Powell has been focused on uncovering sensitive government and market information for over 15 years – Chris has been quoted in both national and international publications. He has also appeared in many major financial media outlets including Bloomberg, CNBC, King World News and more.

Chris Powell: Director, Treasurer & Secretary – Powell has been managing editor of the Journal Inquirer, a daily newspaper in Manchester, Connecticut, since 1974. He began working at the paper when he left high school in 1967. He writes a column about Connecticut issues that is published in a dozen other newspapers in the state and Rhode Island and often appears on radio and television public-affairs programs in Connecticut.

From 2004 through 2009 he was legislative chairman of the Connecticut Council on Freedom of Information. In 2006 he was inducted into the Academy of New England Journalists by the New England chapter of the Society of Professional Journalists and the New England Society of Newspaper Editors.

In addition to the Connecticut Council on Freedom of Information, he is a member of the Connecticut, Manchester, and Vernon historical societies and the Churchill Centre.

Click here to listen to the full interview…

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Jim Sinclair’s Commentary

Do you really think central banks are confident that they know what they are doing and where they are going?

The Draghi Derangement: $2 Trillion Euro Government Bonds Trading At Negative Yield
by David Stockman • March 2, 2015

That investors anywhere in this age of fiscal profligacy would pay to own the notes and bonds of sovereign states is a testament to the financial deformations of modern central banking. But the fact that nearly $2 trillion of debt issued by European governments is currently trading at negative yields——now that’s a flat-out derangement.  After all, the aging, sclerotic economies of the EU have been making a bee line toward fiscal insolvency for most of the last decade.

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So it goes without saying that this giant agglomeration of pay-to-own government debt is not reflective of an outbreak of fiscal rectitude or any other rational economic development. It’s purely an artificial trading result stemming from central bank destruction of every semblance of honest price discovery. In this case, the impending ECB purchase of $70 billion of government debt and other securities per month for the next two years has transformed the financial casinos of Europe and elsewhere into a front runner’s paradise.

As today’s Bloomberg piece tracking Europe’s $2 trillion of exuberant irrationality makes clear, sovereign bond prices are soaring because traders are accumulating, not selling, in anticipation of the ECB’s big fat bid hitting the market in the weeks ahead:

“It is something that many would not have pictured a year ago,” said Jan von Gerich, chief strategist at Nordea Bank AB in Helsinki. “It sounds very awkward in a sense, but if you look at it more, the central bank has a deposit rate in negative territory, and there’s a huge bond-buying program coming. People are holding on to these bonds and so you don’t have many willing sellers.”

Needless to say, this is the opposite of at-risk price discovery; it amounts to shooting fish in a barrel. Never before have speculators been gifted with such stupendous, easily harvested windfalls. And these adjectives are not excessive. The hedge fund buyers who came to the game early after Draghi’s “anything it takes”ukase have enjoyed massive price appreciation, but have needed to post only tiny slivers of their own capital, financing the balance at essentially zero cost in the repo and other wholesale funding venues.

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Jim Sinclair’s Commentary

Somebody really wants World War I.

Despite Russian Warnings, US Will Deploy A Battalion To Ukraine By The End Of The Week
Tyler Durden on 03/02/2015 23:00 -0500

"Before this week is up, we’ll be deploying a battalion… to the Ukraine to train Ukrainian forces for the fight that’s taking place," stated US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday. Despite earlier warnings from Russia (and claims that NATO had not agreed to any such foreign ‘boots on the ground’ action’), Sputnik News reports, Foster added, "what we’ve got laid out is six United States companies that will be training six Ukrainian companies throughout the summer."

This comes a week after PM David Cameron confirmed Britain will be sending 75 military personnel to help combat Russian military aggression.

Despite earlier reports from Russia’s NATO envoy that, as TASS reports,

NATO has taken no decisions on sending British or any other instructors to Ukraine, Russia’s Ambassador to the North Atlantic Alliance Alexander Grushko said on Monday.

"NATO has taken no decisions on sending instructors," he told the Rossiya 24 television channel. "NATO is implementing the decisions that were taken at the political level at the Wales summit in September 2014."

Moscow will take all measures, including military-technical, to neutralize possible threat from NATO presence in Ukraine, he added.

It seems it is happening, as Sputnik News reports,

The United States will deploy personnel by the end of this week to train the Ukrainian national guard, US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday.

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Posted at 12:32 PM (CST) by & filed under Jim's Mailbox.

Jim,

GOTS now!

CIGA Wolfgang Rech

Greek Pensioners To Fund Ukraine’s Government: Syriza Will Tap Pension Funds To Pay IMF
Submitted by Tyler Durden on 03/03/2015 – 13:46

Just yesterday we warned that, among the ‘solutions’ the Greek government was exploring in its scramble for cash to pay back The IMF loan, was ‘borrowing’ from the nation’s pension funds. Today we get the sad confirmation that indeedGreece will raid cash reserves in pension funds and other public sector entities to cover its funding needs. As Reuters reports, Greece will use short-term repo transactions to transfer the cash, but one government official said theycould not be used to repay the IMF. As the radical left-wing government takes from the implictly wealthier Greeks (pension funders), it is giving free electricity, a rent allowance, and food stamps to the poor.

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Jim,

Let’s go Yellen! We needs mo’ monies!

Keep on printing.

CIGA Wolfgang

GDP Shocker: Atlanta Fed Calculates Q1 Growth Of Only 1.2%
Submitted by Tyler Durden on 03/03/2015 – 14:35

While every other word from talking-heads and policy-makers relates various anecdotes (or simple lies) about US economic growth, The Atlanta Fed appears to have taken a ‘data-dependent’ perspective on the real economy (as opposed to smoke and mirrors). Based on their GDPNow "nowcasting" model, The Atlanta Fed projects Q1 2015 GDP growth os just 1.2% (less than half current sell-side economist consensus) and getting weaker…

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Jim,

Wake up America!

Not only do illegals qualify for free healthcare in the US, but now WE owe them money to boot!

They have our number. They don’t even get married in order to take advantage of the system.

Example: Woman with 6 or 7 children is single, no income, no assets, BUT… lived with her "boyfriend" for the past 10-12 years. Now she and the children get free healthcare while the boyfriend (husband) pays only for himself.

This is not an outlier. The overwhelming majority of the illegals do this.

When will our population wake up to this and take a stand? The politicians are running all over their constituencies in order to garner foreign votes.

Only in America.

CIGA Name withheld by request

Obama’s Action Gives Illegal Immigrants Billions in Tax Credits
By Rob Garver

A senior Republican senator is challenging an Internal Revenue Service interpretation of the tax code which would make some individuals currently in the U.S. illegally eligible for several years’ worth of Earned Income Tax Credit payments. Sen. Chuck Grassley said Monday that he would introduce legislation in an effort to change the tax code to block such payments.

The issue arose in a hearing last month, in which Sen. Grassley questioned IRS Commissioner John Koskinen about President Obama’s plan to give some five million illegal immigrants protection from deportation and the ability to work in the U.S. legally. A previous interpretation of the tax code by IRS staff had allowed retroactive claims for EITC payments.

Grassley had two basic questions. Would the undocumented immigrants covered by the executive actions be eligible to apply for retroactive tax credits for work they did and taxes they paid prior to gaining temporary legal status? And if so, would the IRS reconsider its interpretation of the rules?

Koskinen, after consulting with his staff, sent Grassley a letterdated February 25. His answers were, respectively, yes and no.

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“A taxpayer may claim the earned income tax credit (EITC) for a taxable year using a Social Security number (SSN) acquired in a later taxable year,” he wrote, citing a 2000 finding by the IRS’s legal department, known as a Chief Counsel advice (CCA). “[T]he Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed.”

The upshot is that current illegal immigrants who are granted temporary legal status under the president’s plan could be eligible to apply for up to three years of retroactive EITC credits, worth thousands of dollars. In theory, the payouts could total billions of dollars.

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Posted at 11:59 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

My porch with three more days of snow predicted.

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Jim Sinclair’s Commentary

Do these two gentlemen look happy? This picture was taken yesterday after a frank discussion.

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Jim Sinclair’s Commentary

Chair Yellen: Are you paying attention as your economic recovery looks poor?

ISM Manufacturing Tumbles To 13-Month Lows, Employment Slumps, Construction Spending Plunges
Submitted by Tyler Durden on 03/02/2015 10:08 -0500

Despite a collapse in US macro data in February, Markit somehow managed to conjure a better than expected 55.1 print for US Manufacturing PMI. Under the covers employment creation was the slowest since July and inflationary pressures loom as selling prices rose notably. ISM Manufacturing printed 52.9 – a small miss vs 53.0 expectations – down for the 4th month in a row to 13-month lows, with employment at its weakest since June 2013. Construction spending’s modest rebound in (seemingly un-weather-affected) December (after dropping in November) has been destroyed with a 1.1% drop in January (against expectations of 0.3% rise) for the biggest drop in 8 months.

Spot The Odd One Out – one of these is a soft survey… the other summarizes US macro hard data into one variable…

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Doesn’t exactly look like a ‘recovery’ in manufacturing based on the jobs created…

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Jim Sinclair’s Commentary

GOTS means get out of the system while you still can.

"Spectacular Developments" In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole "Discovered"
Tyler Durden on 03/01/2015 19:59 -0500

Slowly, all the lies of the "recovery", all the skeletons in the closet, and all the bodies swept under the rug are emerging.

Moments ago, Austrian ORF reported that there have been "spectacular developments" in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta’s balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said.

As a result, according to Reuters, the bad bank that was created in the aftermath of the Hypo collapse, is itself about to be unwound, as the bad bank itself goes bad!

"Austria’s Financial Market Authority stepped in on Sunday to wind down "bad bank" Heta Asset Resolution and imposed a moratorium on debt repayments by the vehicle set up last year from the remnants of defunct lender Hypo Alpe Adria."

In short: Austria just cut off state support of what was until this moment a state-backed, wind-down vehicle and a key pillar of trust in what was already a shaky financial system.

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Jim Sinclair’s Commentary

Now this is downright tempting for a man that made 35 OTC markets in 1954.

Meanwhile, Over At The "New York" Stock Exchange… Lasers
Tyler Durden on 03/02/2015 07:22 -0500

The last time we looked at the most important tower in the world, about 4 months ago, it looked as follows:

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The tower in question is the primary microwave relay into the ill-named "New York" Stock Exchange which actually is located just off MacArthur Boulevard and Route 17 in Mahwah, New Jersey, and in our opinion is the "most important tower" in the world, because without it, the financial industry, which these days means a few hundred thousands HFT algos and their math PhD creators, would grind to a halt as suddenly trading would revert back to the "caveman days" of 2007, when one actually traded not just to frontrun a whale order in some dark pool half way around the world, but actually cared about such things as "fundamentals" and "reality" (oh, and there wasn’t some $12 trillion in cental bank created liquidity supporting every asset class).

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Jim Sinclair’s Commentary

A picture is worth a thousand words. If that is the case, then thanks to WilliamBanzai7 this is worth 10,000 words.

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David Stockman Warns "It’s One Of The Scariest Moments In History"
Submitted by Tyler Durden on 03/01/2015 22:45 -0500

"The Fed is out of control," exclaims David Stockman – perhaps best known for architecting Reagan’s economic turnaround known as ‘Morning in America’ – adding that "people don’t want to hear the reality and the truth that we’re facing." The following discussion, with Harry Dent, outlines their perspectives on the looming collapse of free market prosperity and the desctruction of American wealth as policymakers "take our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades." The Fed, Stockman concludes, "is a rogue institution," and their actions have led us to "one of the scariest moments in our history… it’s a festering time-bomb and we’re not sure when it will explode."

Full Discussion:

Full Transcript here.

Key Excerpts from the detailed interview:

David Stockman: People don’t want to hear the reality and the truth that we’re facing. But I think there is an enormous appetite out in the country to get a different perspective than what you have from the media day in and day out, so I say the fed is out of control. Its balance sheet is exploded. It’s printing money like never before.

Zero interest rates for 70 months have basically destroyed the pricing function in the financial markets. I said that as a result of this, Wall Street has become a huge casino which basically rewards gamblers, but it is not functioning as a capital raising, capital allocating instrument, which really is what the financial markets should do in a free market system. I warned about the size of the federal debt. I’m an old budget director from the Reagan days. We had a trillion dollar national debt, a 3 trillion economy when I started. Today, it’s 18 trillion. Eighteen fold gain in the last 35 years versus maybe a fourfold gain in the economy. So all of these trends are taking our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades.

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Jim Sinclair’s Commentary

Pensions are a great target for all governments with too much debt, the USA included. That is to borrow from them which means assets out, and government paper in.

As Greek Default Fears Return, Government Considers "Borrowing" Pensions To Repay IMF
Submitted by Tyler Durden on 03/02/2015 14:54 -0500

Greek short-term default risk jumped over 300bps today putting the odds of a restructuring at 50-50 within the next year as the warnings we issued last week with regard Greece’s imminent default on its IMF loan loom. Seeking to reassure its lenders (and avoid yet more capital flight), Reuters reports the Greek government said it was "exploring solutions," including delaying payments to suppliers or try to raise up to 3 billion euros by borrowing from state entities such as pension funds.

As Reuters reports, Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its bailout by four months. Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner.

"The Greek government has been exploring solutions … to ensure there won’t be a single problem with repaying the IMF loan, or its funding obligations in March," Government Spokesman Gabriel Sakellaridis told Greek radio.

So far, Athens’s other funding options have stumbled upon problems. Transferring 1.9 billion euros worth of profits the European Central Bank made on buying Greek bonds will not be allowed until Greece has completed promised reforms.

Another option is the issuance of additional Treasury bills, but Athens’s EU/IMF lenders have set a 15 billion euro cap on such debt and it has already been reached.

On Wednesday, Athens will go ahead with a regular six-month T-bill auction of 875 million euros to refinance a maturing issue, in a sale that will be closely watched as the government faces a possible funding gap.

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Jim Sinclair’s Commentary

It is simply nuts to speak about voluntarily raising interest rates when there are systemic problems of this nature.

California Rental Armageddon: Nearly half of Los Angeles adults doubling up, working class moving out, or you have the option of simply living in poverty.

California like the rest of nation has gained a large number of rental households.  Many of these households were formed from the ashes of the 1 million completed foreclosures.  Over the last ten years the nation has lost 1 million net homeowner households and has gained a whopping 10 million rental households.  L.A. County with roughly 10 million residents is predominately a renter county.  Over the last ten years the large gain in California households has come in the form of rentals.  Maybe you find living with roommates deep into your 30s and 40s as awesome or maybe you enjoy living a Spartan lifestyle just so you can pay your monthly rent while hearing helicopters overhead in your hipster neighborhood.  Every piece of research simply shows that people are being pushed into spending more money on housing.  Some say move out.  Well guess what?  Many middle class Californians are doing just that.  The rental and housing market has gone into full on financial Armageddon mode yet in typical California fashion, the sun keeps glowing brightly.  Ironically over time people think it is normal to dump every nickel you have into housing.  Let us look at three trends impacting the rental market in California.

Moving out

The urge to buy real estate is a deeply rooted American concept, although Millennials might be changing their tune.  For the majority of the country, buying a home is a simple endeavor.  With your typical house costing $200,000 and with low interest rates, simply having the median household income is good enough to not have your home consume every penny of your income.  But in California, we have $700,000 crap shacks that look as if a two-year old developed it in their first art experiments.  In the last couple of years, there is a vocal group saying “hey, if you can’t make it in California get out!”  Apparently some people are listening to this:

More…

Posted at 11:42 AM (CST) by & filed under Jim's Mailbox.

Jim,

If only 50% of this is true, it is still very scary.

CIGA LarryM.

Al-Qaida planning kamikaze attacks on ships in Mediterranean, cables claim
Leaked document from Russian intelligence agency claims north African branch wants to extend its range to Europe with marine unit
Seumas Milne and Ewen MacAskill
Wednesday 25 February 2015 13.48 ESTLast modified on Thursday 26 February 2015 11.31 EST

Al-Qaida has developed a seaborne unit to attack targets around the Mediterranean, according to a confidential report from Russian intelligence, one of a cache of secret documents from spy agencies around the world tracking jihadi terrorist groups.

According to the Russians, North African al-Qaida (Aqim – al-Qaida in the Islamic Maghreb) has established a 60-strong team of suicide bombers to plant mines under the hull of ships and to use small, fast craft for kamikaze attacks.

The claim, in a leaked document from Russia’s Federal Security Service (FSB), is one of a string of reports on the rise of Islamic State (Isis) and al-Qaida.

They include a two-month briefing by Omani intelligence estimating that Isis now has up to 35,000 fighters and an income of $1.5m (£1m) a day, reports from United Arab Emirates agents about the Isis leadership structure and a dossier from Jordanian intelligence on confessions extracted from terrorist suspects.

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Jim,

The template is in motion, The G20 agreement (AKA Bailed-In) this year has been ruled into adoption for FAILED INSTITUTIONS and of course it happens on a weekend.

Guess who the creditors are of this bank?

Excerpt:
"The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta – or "bailed in" – under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden."

Click here to read the full article…

CIGA Perry

Perry,

An unsecured creditor of a bank is defined as a depositor in the bank.

Respectfully yours,
Jim

Posted at 11:34 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mario, where are you?

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Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- Downside GDP Revision Reflected Corrections to Excess Inventory Levels 
- Downside Revisions Loom for Historic GDP Growth 
- First-Quarter 2015 Economic Outlook Is Troubled

"No. 700: Fourth-Quarter 2014 GDP, First Revision" 
Web-page: http://www.shadowstats.com

Gold Imports by India Seen Surging as Jaitley Retains Record Tax
Sunday, 01 Mar 2015 03:21 PM

Gold imports by India, the world’s biggest consumer, are poised to surge after Finance Minister Arun Jaitley belied industry expectations for a reduction in tax.

Overseas purchases may jump to 100 metric tons in March from about 25 tons in February as jewelers and traders, who delayed purchases in anticipation of the tax cut, replenish stockpiles, Rajesh Mehta, chairman of Rajesh Exports Ltd., said by phone from Bengaluru on Feb. 28. Domestic demand will also increase as retail buyers return to the market, he said.

The revival in Indian demand may help gold prices in London to extend the first weekly gain in five and spur smuggling. Jaitley retained the duty at a record 10 percent in the budget on Feb. 28, while announcing plans to tap a part of the 20,000 metric tons of locally stockpiled gold to lower reliance on imports. Seven of the 10 jewelers and analysts surveyed by Bloomberg in February had predicted a tax cut.

“Imports will pick up in March because in the past one month there wasn’t much imports,” Mehta said. “Everyone was waiting for the duty changes.”

The tariff is the last of the import restrictions imposed in 2013 to contain a record current-account deficit that drove the rupee to an all-time low. The deficit has narrowed with the plunge in crude oil, helping the rupee rebound and allowing Jaitley to ease controls on shipments.

“With Akshaya Tritiya festival around the corner, imports will only rise next month,” Mehul Choksi, chairman of Gitanjali Gems Ltd., said by phone from Mumbai on Feb. 28.

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Jim Sinclair’s Commentary

Let me recall. When was the last time I heard these exact words? I know. It was when I was just in grammar school and the nun had our entire class practicing how to get under our desks if there was a nuclear attack, which was anticipated by everyone. You think the clock is turning backwards?

Russia ready to repel any nuke strike, retaliate – missile forces command chief
Published time: March 01, 2015 14:09

Russia’s Strategic Missile Forces are ready to react to any nuclear strike even if it is lightning fast, SMF Central Command chief said. A retaliatory strike would take place in all circumstances, “without hesitation,” he added.

“If there’s a challenge to repel a lightning-fast nuclear in any given conditions – it will be done in fixed time, that’s dead true,” the Strategic Missile Forces Central Command’s chief, Major-General Andrey Burbin, told Russian News Service on Saturday.

Russia’s strategic missile forces are positioned geographically in such a way that no global strike can knock them out completely, Burbin said.

In case an order is given to carry out a nuclear strike, Russian nuclear weapons operators will fulfill it, he added.

“There would be no hesitation, the task would be executed,” he said.

The unavoidability of a retaliatory nuclear strike from Russia is also guaranteed by the fully automatic and constantly modernized ‘Perimeter’ system, also known as “Dead hand.”

More…

A Tale of Two Cities:

 

Chicago, IL

 

Houston, TX

 
         

Population

2.7 million

 

2.15 million

 
         

Median HH Income

$38,600

 

$37,000

 
         

% African-American

38.9%

 

24%

 
         

% Hispanic

29.9%

 

44%

 
         

% Asian

5.5%

 

6%

 
         

% Non-Hispanic White

28.7%

 

26%

 
         
                 

Pretty similar until you compare the following:

 

Chicago, IL

 

Houston, TX

 
         

Concealed Carry – Legal

No

 

Yes

 
         

# of Gun Stores

None

 

184 Dedicated gun stores plus 1500 – legal places to buy guns–Wal-Mart, K-mart, sporting goods, etc.

 
         

Homicides, 2012

1,806

 

207

 
         

Homicides per 100K

38.4

 

9.6

 
         

Avg. January high temperature  (F)

31

 

63

 
         

Liberal Conclusion: Cold weather causes murders. This just has to be due to global warming.