Jim Sinclair’s Commentary
Today in Connecticut.
Another JPMorgan Banker Dies After Murder-Suicide: Chokes Wife, Stabs Himself To Death
Submitted by Tyler Durden on 02/09/2015 14:14 -0500
By now, there have been so many banker-related suicides that it has become a moot point of i) tracking them all or ii) trying to find a pattern. And yet, one name continues to stand out: JPMorgan. The bank which has been most prominent among the list of “suicided” bankers notched one more casualty over the weekend when “a JPMorgan Chase & Co. employee strangled and stabbed his wife to death before turning the knife on himself, according to police who are treating the couple’s death in Bergen County, New Jersey as a murder-suicide.”
Bloomberg reports the gruesome details according to which Michael A. Tabacchi, 27, and his wife, Iran Pars Tabacchi, 41, were found dead Friday about 11:30 p.m. in the bedroom of their Closter home after a 911 call placed by the husband’s father, Bergen County Prosecutor John Molinelli said in an interview. Closter is located in northern New Jersey, about 20 miles (32 kilometers) from midtown Manhattan.
It wasn’t a nail-gun this time. It was a knife:
Autopsy results on Sunday showed the wife died of strangulation and a stab wound to the chest while Michael Tabacchi died from a single self-inflicted stab to the chest, he said.
As his LinkedIn profile below shows, Tabacchi was an associate for JPMorgan in its global custody product unit.
Jim Sinclair’s Commentary
Slowly but with determination the Petro dollar comes under attack. I guess full on war with Russia is now inevitable.
Moscow & Cairo to drop USD, use national currencies in bilateral trade – Putin
Published time: February 08, 2015 23:10
Edited time: February 09, 2015 10:08
Russia and Egypt might soon exclude the US dollar and use their national currencies in the settlement of accounts in bilateral trade, Russian President Vladimir Putin said in an interview to Egyptian media ahead of his Monday visit to the country.
The issue of abandoning the dollar in trade is “being actively discussed,” Putin told Al-Ahram daily newspaper ahead of his two-day trip to Egypt. The Russian president was invited for a bilateral meeting by his Egyptian counterpart Abdul Fattah al-Sisi.
“This measure will open up new prospects for trade and investment cooperation between our countries, reduce its dependence on the current trends in the world markets,” Putin said.
“I should note that we already use national currencies for trade with a number of the CIS [Commonwealth of Independent States] states, and China. This practice proves its worth; we are ready to adopt it in our relations with Egypt as well. This issue is being discussed in substance by relevant agencies of both countries.”
Egypt is a long-time and trusted partner of Russia and the relationship between the two countries has been rapidly developing, the Russian president said.
“The volume of bilateral trade has increased significantly over the past years: In 2014, it increased by almost half compared to the previous year and amounted to more than $4.5 billion,” he said urging for this trend to be strengthened.
He also praised the development of “mutually beneficial and effective” cooperation in the sector of agriculture. “Egypt is the major buyer of Russian wheat, Russia provides about 40 percent of grain consumed in the country; as for us, we import fruits and vegetables.”
Jim Sinclair’s Commentary
The EU committed suicide by their own hand when they did not think through the economic impact on Russian sanctions of Europe itself, especially the euro.
Europe Fractures: France Pivots To Putin, Cyprus Offers Moscow Military Base, Germany-US Splinter On Ukraine
Tyler Durden on 02/08/2015 21:30 -0500
Following yesterday’s summary of the utter farce that the Minsk Summit/Ukraine “peace” deal talks have become, the various parties involved appear to be fracturing even faster today. The headlines are coming thick and fast but most prescient appears to be: DespiteJohn Kerry’s denial of any split between Germany and US over arms deliveries to Ukraine, German Foreign Minister Steinmeier slammed Washington’s strategy for being “not just risky but counterproductive.” But perhaps most significantly is France’s continued apparent pivot towards Russia… Following Francois Hollande’s calls for greater autonomy for Eastern Ukraine, former French President Nicolas Sarkozy has come out in apparent support of Russia (and specifically against the US), “we are part of a common civilization with Russia,” adding, “the interests of the Americans with the Russians are not the interests of Europe and Russia.” Even NATO appears to have given up hope of peace as Stoltenberg’s statements show little optimism and the decision by Cyprus to allow Russia to use its soil for military facilities suggests all is not at all well in the European ‘union’.
German Foreign Minister Frank-Walter Steinmeier doubled down on Germany’s rejection of weapons deliveries to Ukraine in a speech here Sunday…
*GABRIEL SAYS GERMAN SPD WOULD NEVER BACK ARMS TO UKRAINE
*EUROPE SEES U.S. ARMS DELIVERIES TO UKRAINE AS BAD IDEA: LAVROV
“I see this, to say it openly, as not just for risky but for counter-productive,” Mr. Steinmeier said at the Munich Security Conference. Mr. Steinmeier also hit back at open criticism of Germany’s position on weapons deliveries from U.S. Senators and others here on Saturday. The White House is mulling delivering weapons to Ukraine to support the country’s fight against pro-Russia separatists in the country’s east.
“Perhaps we are so insistent because we know the region a bit,” Mr. Steinmeier said.
But John Kerry says, everything’s fine… as he denies any split between U.S. and Europe on Russia policy…
Secretary of State John Kerry on Sunday denied any divisions between the U.S. and Europe over how to handle Russia, as Germany announced another high-level summit aimed at stemming the crisis in Ukraine.
Sunset for dollar hegemony
by Bill Holter for Miles Franklin
We learned on Thursday about two very separate trips to be made on Friday. Germany’s Angela Merkel and France’s Francois Hollande made a trek to Moscow which turned out to be a five hour meeting, while John Kerry flew into Kiev. What were these meetings about? Very little has been reported except http://www.bloomberg.com/news/articles/2015-02-06/merkel-putin-pledge-to-pursue-ukraine-cease-fire-after-talks
What were the goals and what was accomplished? Presumably Mr. Kerry offered arms and assistance to Ukraine because other than “dollars”, we have nothing else to offer. The meeting in Moscow was not so simple. Do Germany and France see the writing on the wall? Did they make deals with Russia regarding natural gas and the delivery logistics? Trade? Did they pledge to stay neutral and hope Russia did not look towards them when the real fighting begins? Were currencies discussed? Maybe even new ones? Did they put distance between themselves and NATO so as to escape the Russian crosshairs? Lots of questions and as of yet, few answers but apparently some sort of press conference for Monday and another meeting this Wednesday. I will add one more thought, when the heads of state meet with little to no press coverage and then followed by no statement of the results with any meat on the bone whatsoever, something REALLY big was discussed! Make no mistake, this is not about a single country, nor countries plural. They know this is entirely about “systems” themselves and whether they can work in harmony or not work at all.
We do know one thing for sure, Russia has mobilized her ICBM rocket launchers and will begin full scale war games. Are these only games or are they making ready for the real thing? I would suggest if the U.S. does in fact rearm Ukraine, these may not be “games” any more, Russia will finally retaliate. Another possibility is that of “discovery”. As I understand it, there are now some foreign “boots on the ground”. Ukrainian forces are surrounded in Mariupol http://www.reuters.com/article/2015/01/26/us-ukraine-crisis-military-idUSKBN0KZ0L920150126 , it looks like they will soon to be captured or killed. What if it turns out some of these boots are of the type “made in USA”? We have already seen one video clip of an American combatant in Ukraine, how many more are there? This would be very bad and would give Mr. Putin a good and verifiable reason to escalate the shoving match into a hot war. In my opinion, Mr. Putin will not attack unless provoked directly, I believe he will just sit back and wait. In my opinion, he would prefer to wait until “the money runs out” which I will explain further shortly.
On the financial side, last week was all about Greece. First, they were given an ultimatum and a line in the sand drawn for the end of February to “accept financial aid” from the West, presumably the IMF and ECB. On Friday, this ultimatum was fast forwarded and cut to only 10 days …or else! They have a debt payment due at the beginning of March and do not have the money. Simply put, they are broke. More elegantly but no less to the point, Yanis Varoufakis, Greece’s new finance minister said of the Eurozone and I quote “A clueless political personnel, in denial of the systemic nature of the crisis, is pursuing policies akin to carpet bombing the economy of proud European nations in order to save them”. Do you see exactly what he is saying? This is not about Greece, it’s not even about the Eurozone, this is about the systemic failure of the West’s policies and financial system. I want to move along but this aspect of “systemic failure” will be tomorrow’s topic and why the West cannot in any fashion call a spade a spade.
So Greece now has an ultimatum of 10 days, accept the terms of the Eurozone …or get out. Greece doesn’t even need to request departure, the powers that be seem to be threatening to kick them out! Let me point out another Western financial failure and one which will be “dis connected” in the future. Ukraine now has two, possibly three weeks worth of cash left. They also owe Russia several billion dollars for gas already delivered and used. Mr. Putin knows this and as I said earlier, is just sitting back and waiting for the money to run out …or for them to “accept” aide from the West. Both of these NATO countries are broke and unfortunately at the same time which obviously turns up the heat further in rather inconvenient fashion.
Just so you didn’t miss my pun above, Russia is clearly “disconnecting” Ukraine. Russia has already begun very seriously to divert gas shipments that were going through the Ukraine. Russia was not being paid and some of her gas to Europe was being stolen, thus, turn off the spigot. Geopolitically, Russia has already made a pipeline deal with Turkey which will end …you guessed it, at the Greek border! Think this one through, Russia has already offered assistance to Greece …while Greece is being pressured by Europe to go further into debt. Don’t you think it might be in Greece’s best interest to “do a deal” with Russia?
What might any deal look like with Russia and thus out from under the Eurozone and NATO? How about “connecting” to the Turkish pipeline for starters and running it through Greece to arrive in eastern Europe? The Russians (Chinese) could finance the deal, Greece would then earn gas transit cash flows. A pipeline would also create jobs and economic activity. Greece would also be free to trade with Russia, their farmers could ship crops to Russia without being under the current ridiculous embargos and sanctions, again good for the Greek economy! One last benefit might be “debt relief”. Not that the West will forgive what the Greeks owe (because they cannot, I’ll include this in tomorrow’s piece), the Greeks can simply say “we are not paying you” …
7 Terrifying Warnings That The Greek Disaster Is Now Set To Catapult The World Into A Global Meltdown
February 09, 2015
Today Greece has rejected bailouts ahead of the emergency meetings, Alan Greenspan has now predicted the collapse of the euro and the Greek Finance Minister has also warned that the euro will collapse if Greece exits! With that chaotic backdrop, below are 7 terrifying warnings that the Greek disaster is now set to catapult the world into a global meltdown. These 7 crucial warnings all indicate that this crisis now has world heading toward a catastrophic outcome.
Below are the 7 terrifying warnings that the Greek disaster is now set to cataput the world into a global meltdown:
Paul Craig Roberts warned King World News that the Greek cisis is a game-changer for the entire world:
Jim Sinclair’s Commentary
The banking industry will not like this.
Tsipras favours Greek jobless over creditors in defiant policy speech
Prime minister says government’s first priority is to tackle humanitarian crisis caused by years of austerity
Helena Smith in Athens
Sunday 8 February 2015 14.30 EST
The Greek prime minister, Alexis Tsipras, has announced his anti-austerity government programme in a defiant address that prioritised the jobless and destitute over international creditors who have lent the country more than $300bn (£200bn).
In his first policy speech before parliament, he said his government did not have the right to prolong the five-year bailout deal that has foisted austerity on Greece, and felt a duty “not to disappoint” those who had voted him into power.
“We see hope, dignity and pride returning to Greek citizens. Our obligation and duty is not to disappoint them,” he told the 300-seat house. “We realise that negotiations [with foreign lenders] won’t be easy … but we have faith in our struggle, because justice is on our side.”
Declaring his administration “a government of national salvation”, Tsipras said he would also pursue claims to win back from Germany wartime loans that Greece had been forced to make to Nazi occupiers. “I can’t overlook what is an ethical duty, a duty to history … to lay claim to the wartime debt.”
Tsipras did signal a new round of belt-tightening – but on the part of ministers and MPs. He promised to sell half of all government limousines and a government jet in a money-raising exercise, as well as trimming back on security. Tsipras said Greece’s new class of politician would set the example of frugal living. “We do not need three government aircraft. Politicians can do away with the privilege of having a car,” he said.
The Death Of The Petrodollar Was Finally Noticed
Submitted by Tyler Durden on 02/07/2015 23:29 -0500
Three months ago, we wrote “How The Petrodollar Quietly Died, And Nobody Noticed”, in which we explained in painful detail why far from the simple macroeconomic dogma which immediately prompted the macro tourists to scream that “oil prices dropping are good for US consumers”, the collapse in the price of crude is not only a disaster for oil exporting nations – one which will lead to a series of violent “Arab Springs” across the oil-producing developed world – but far more importantly, have a massive impact on capital markets as a result of the plunge in the most financialized commodity in history.
On the death of the Petrodollar we commented that unlike previously, when petrodollar recycling funneled the proceeds from oil-exports into financial markets, helping to boost asset prices and keep the cost of borrowing down, henceforth “oil producers will effectively import capital amounting to $7.6 billion.” We added that “oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.”
The conclusion was simple: “net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity – not to mention related downward pressure on US Treasury yields – is negative.”
In retrospect, it probably was not “simple enough”, because even three months ago everyone was confident that both higher yields and an increase in market liquidity are imminent. Since then not only has the yield on the 10 Year plunged to near record low levels (while 16% of global government debt now trades at negative yields), but judging by the absolute liquidity devastation in the E-Mini, in Treasurys and virtually every other asset class, few actually grasped the implications of what plunging oil really means in a world in which this most financialized of commodities plays a massive role in both the global economy and capital markets, not to mention in geopolitics, with implications far, far greater than the amateurish “yes, but gas is now cheaper” retort.
Fearing Grexit, Greeks Turn To Gold Again
Submitted by Tyler Durden on 02/09/2015 13:05 -0500
It never fails: every time redenomination risks and the specter of the (New) Drachma rear its ugly heads, Greeks, like dutiful Austrian economists, realize that Neoliberal economics is nothing but a steaming pile of drivel that only works when everyone is “confident” and gets deeper in debt with a smile on their face while failing in every other instance, and decide that the time has come to convert their paper wealth into hard assets. It happened in 2010, in 2012, and now that Greece is on the verge of its third Grexit in the past 5 years, it is happening again.
As Bloomberg reports, “Greek demand for gold coins is rising as investors search for a safe haven from the country’s political turmoil, according to the U.K. Royal Mint.”
“There has been a noticeable increase in demand in this last quarter,” Lisa Elward, head of bullion sales at the Royal Mint, said in an e-mail to Bloomberg News. “We tend to see an upsurge in sales at times of political and financial uncertainty.”
They said that with a straight face because in Greece “times of political and financial uncertainty” are now a monthly if not quarterly development. As a result, Greek investors are turning to gold. The Royal Mint declined to provide exact sales figures for the gold coins, known as Sovereigns.
Domestically, the Greek gold demand is currently run-rating at more than double that of Q4 2014: the Bank of Greece sold 5,849 Sovereign coins in January, according to an e-mail from the central bank. Bloomberg cites government data which show sales of 7,857 coins in the last quarter of 2014.
Why gold? “The one thing everyone knows about gold is it is a good thing to hold if your currency is about to devalue,” Matthew Turner, an analyst at Macquarie Bank Ltd., said via phone. “It would be understandable for Greeks to buy gold because they are afraid of losing their money.”
Yellen, We Have A Problem
Submitted by Tyler Durden on 02/09/2015 15:48 -0500
Just three things to consider: “The Fed doesn’t matter?” – so just ignore the correlation between Federal Reserve balance sheet expansion (flow) and S&P 500 performance tumbling lower. “Earnings don’t matter?” – because for now, stocks are entirely ignoring the three-month plunge in consensus EPS expectations. “Macro fundamentals don’t matter?” – because if they did, US equity prices would be collapsing. Trade accordingly…
It’s the flow, stupid…
It’s the earnings, stupid…
Hooded gunmen fire on police in Marseille
DEBKAfile February 9, 2015, 1:13 PM (IDT)
Heavily armed French elite police forces poured into the scene after hooded gunmen fired on police in Marseille Monday when Prime Minister Manuel Valls was on his way to visit the southern French city. They have cordoned off the area. Unconfirmed sources say that the head of police was shot at by one of the Kalashnikov-armed men. The attack took place in a high-crime, low-cost housing district of Marseille. The town is known both for its large North African community and gang wars. Islamist radicals and criminal gangs often join forces in its tense ghetto neighborhoods. There is no initial word on casualties. Developing…
Jim Sinclair’s Commentary
This could be the Black Swan of all Black Swans when it comes to weak EU partners bond markets.
Greek Contagion? Spanish/Italian Bond Risk Surge Most In 4 Months
Tyler Durden on 02/09/2015 11:20 -0500
With Spanish and Italian leaders desperately running around to any and every media outlet to proclaim themselves economically fit and deny deny deny what Greek FinMin Varoufakis said yesterday, it appears the market has a different perspective. Portuguese bond spreads are 16bps wider and Spanish and Italian bond spreads are 12bps wider – their worst day in almost 4 months – as it appears Grexit fears are starting to creep into the rest of the periphery.
Jim Sinclair’s Commentary
Sanction blowback will change the geography of wealth.
China and Russia-led Eurasian Economic Union may set up free trade zone
Published time: February 09, 2015 15:55
China may establish a free trade zone with the Eurasian Economic Union (EEU) in the future, says the Russian Ambassador to China Andrey Denisov. It would make trade with Russia, Belarus, Kazakhstan, Armenia, and soon Kyrgyzstan tariff-free.
“At first the Chinese were cautious about the Eurasian Trade Union; they just needed to make sure that it works. Now they are increasingly showing interest in participation with the union, not just with Kazakhstan, Belarus, Russia, Armenia, and Kyrgyzstan on an individual basis, but with the union per se,” Denisov told RIA in an interview published on Monday.
As far as I know they [the Chinese – Ed.] offered us, the members of this Union –EEU – to think long-term about the creation of a free trade zone. Well, this is probably the case, even if it’s far off in the future.
The Eurasian Economic Union includes Russia, Armenia, Belarus and Kazakhstan and was officially launched on January 1. Kyrgyzstan has said it will join, with accession expected by the end of May.
Jim Sinclair’s Commentary
Good work on gold history. Long but worth your time.
Second Thoughts On US Official Gold Reserves Audits
Posted on 9 Feb 2015 by Koos Jansen
This post is a sequel to “A First Glance At US Official Gold Reserves Audits”.
What is not often covered in the media or blogosphere are the audits of the US official gold reserves stored at the US Mint, which is the custodian for 95 % (7716 tonnes) of the stash – also referred to as deep storage, and at the Federal Reserve Bank Of New York that safeguards the remaining 5 % (418 tonnes). The lawful owner of the US official gold reserves is the US Treasury. Part one covered the most recent records I could find published by the US government, in this post we’ll examine more historical records and approach this matter from a more critical angle. Because of the amount of information I found this post is split in multiple parts.
What Is A Gold Audit?
Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment, which is communicated through his audit report.
Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits.
To be sure, I’ve asked several bullion dealers about how their audits are being conducted. They all agreed an audit involves three parties: the owner of the gold, the custodian and an external (independent) auditor. The external auditor examines the gold, compares its findings with the statements of the custodian and then reports on the accuracy of the statements of the custodian to the owner of the gold. An example of an audit report by such an external auditor can be found here.
The fact that the auditor is an external party is essential; if the custodian itself would perform the audit it could easily falsify the reports and lend gold that isn’t often transferred in and out of the vaults.
What Is A Gold Assay?
Assaying gold is done to test the purity of the metal; to make sure a bar contains at least the amount of fine gold disclosed on its inscription. For assay tests often samples are taken from random bars (not from all bars of a specific inventory). From Wikipedia:
A metallurgical assay is a compositional analysis of an ore, metal, or alloy. Raw precious metals (bullion) are assayed by an assay office. Silver is assayed by titration, gold by cupellation and platinum by inductively coupled plasma optical emission spectrometry.
Jim Sinclair’s Commentary
Greece could start a flock of Black Swans.
Ireland ‘will insist on similar deal’ if any secured by Greece
Mon, Feb 9, 2015, 10:06
Coveney says same rules must apply to Greece as to all other European Union countries
Pamela Newenham, Suzanne Lynch
Ireland will insist that any new or better deal secured by Greece will also apply to Ireland, Minister for Agriculture Simon Coveney has said.
Greek prime minister Alexis Tsipras yesterday ruled out requesting an extension of the Greek bailout when meeting his European counterparts at a summit in Brussels this week.
Rather than an extension of the bailout when it expires on February 28th, Mr Tsipras reiterated his demand for a bridge programme to tide the country over until June, when a more long-standing loan arrangement can be established.
He expressed confidence that agreement could be reached between Greece and its international lenders.
Mr Coveney said the same rules must apply to Greece as to all other European Union countries.
“What we would encourage Greece to do is exactly what Ireland has done. Which is to restructure and change the way that their debt is to be repaid so they can reduce that debt burden,” Mr Coveney said.