Posted at 2:53 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Further strength in the Dollar accompanied by further resiliency in gold translated into another new all time high for gold priced in both Euro and British Pound terms although there was no reported Fix today. Look for gold priced in Yen terms to also be very strong.

That showing gave US gold bulls enough ammunition to push prices higher as gnawing uneasiness surrounding Greece, Spain and Portugal is drawing money into gold as a safe haven currency.

The fly in the ointment was the poor showing by the mining shares as hedge funds appeared to be back in the ratio trade business today. I am not sure why that strategy was adopted because the broader equity markets were strong. You’d have to ask their computers because hedge fund managers have no ability to think seeing that they are slaves to their computerized black boxes. Agent Smith from the Matrix could not have asked for more compliant subjects. Either way, it tends to take some of the bullish enthusiasm off the gold market when this sort of thing occurs as can be witnessed by gold’s drifting lower off the early session highs.

A point of interest – crude oil made a yearly high in price today and natural gas was higher as well. Energy prices will need to be monitored for further gains as that will feed into gold. Natural gas has been the laggard due to supply issues but if it can find an elusive bottom, those concerned about inflation will take note as higher gasoline prices at the pump are already garnering some comments from economic watchers. Remember, rising energy costs impact just about every segment of the society regardless of the deceivers at the federal level who concoct their CPI using fallacious inputs and then love to exclude food and energy costs from the “core”.

Bonds were lower today although considering the strength in stocks, are holding very well. Holding the low from Friday will be the key to whether or not they can continue higher and press towards 119 ^20.

One last thing – as a hobbyist beekeeper from some 35 years, I can tell you that the issue with CCD (Colony Collapse Disorder) is quite serious. The average person has no idea how deeply reliant agricultural food production is dependent on pollination by our little friends.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini


Posted at 12:21 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

The following two articles provide a beautiful illustration of quantitative easing in action. They also reveal the shaky, deceptive foundation of our present, so-called economic recovery.

To begin with, the Bloomberg article, “Banks Buying Treasuries Help Keep Borrowing Rates Low," demonstrates how the U.S. government is able to create billions of dollars out of whole cloth.

The Federal Reserve creates as many billions of dollars as it wants with the stroke of a key. Next, it loans those billions of dollars to U.S. Banks at a rate of close to zero percent interest. U.S. Banks then take the billions of dollars they have borrowed from the Federal Reserve and purchase U.S. Treasuries, earning a margin of three percent or more interest.

Banks understandably prefer earning money this way to making actual loans to U.S. businesses and individuals. As noted in the Bloomberg article, “The risk of owning Treasures is lower than creating loans.”

This is an out-and-out monetization of U.S. debt. The government could literally do this to infinity. The only thing holding it back would be coming up with the interest payments; however, those, too, could be monetized to infinity.

It also amounts to an enormous subsidy of the banking industry that was never authorized by the legislature. In exchange for nothing more than executing a couple of keystrokes, U.S. banks earn a margin of three percent or more interest on however much money the U.S. Treasury and the Federal Reserve see fit to create.

Next, as explained in the Wall Street Journal article, “U.S. Role in Mortgage Market Grows Even Larger,” we see that the U.S. government has been forced to take over the lending operations that U.S. banks now find undesirable. As a result, we learn that the U.S. government’s “share” of the U.S. mortgage market has grown to 96.5%.

With apologies to the Wall Street Journal’s headline, if a single player has 96.5% of the home loan market, it does not have a “role” in the home mortgage market, it is the home mortgage market. This ridiculous shell game is the single factor propping up home prices in this country.

To summarize: the U.S. government creates money out of thin air, pays banks to hold onto that money and takes over the risk-based lending functions the banks were set up to perform in the first place. It’s a scheme only a bureaucrat could conceive of, and only a deaf, dumb and blind public could allow.

Banks Buying Treasuries Help Keep Borrowing Rates Low (Update 1)
By Cordell Eddings

May 3 (Bloomberg) — Bank are increasing purchases of U.S. government securities to pump up profits while lending to businesses languishes near the lowest levels since credit markets started to freeze almost three years ago.

Holdings of Treasuries rose each of the past five weeks, an increase of $63.2 billion to $1.5 trillion, according to Federal Reserve data. At the same time, commercial and industrial loans climbed less than 1 percent to $1.27 trillion and are down 23 percent from the record high level in October 2008.

Banks, facing increased regulation after posting $1.78 trillion of write-downs and losses since the start of 2007, are taking advantage of the record gap between their borrowing costs and yields on U.S. debt instead of lending, according to data compiled by Bloomberg. Bank demand for Treasuries is helping cap yields as President Barack Obama sells record amounts of bonds to finance a budget deficit that exceeds $1 trillion.

“The risk of owning Treasures is lower than creating loans,” said Anthony Crescenzi, market strategist and money manager at Newport Beach, California-based Pacific Investment Management Co., the world’s largest bond-fund manager. “There is no clarity on what the capital climates will be domestically or on a global scale with regulation coming down the pipes, which means banks will be banking their money in safer assets.”


U.S. Role in Mortgage Market Grows Even Larger
By Nick Timiraos, The Wall Street Journal, April 30, 2010, 7:46 P.M. ET

The U.S. government’s massive share of the nation’s mortgage market grew even larger during the first quarter.

Government-related entities backed 96.5% of all home loans during the first quarter, up from 90% in 2009, according to Inside Mortgage Finance. The increase was driven by a jump in the share of loans backed by Fannie Mae and Freddie Mac, the government-owned housing-finance giants.

By providing a steady source of liquidity to the mortgage market, the government has helped housing markets to stabilize. However, "Fannie and Freddie have to get smaller and less relevant in order to revamp them, and instead, every day they’re getting bigger and bigger and bigger," said Paul Bossidy, chief executive of Clayton Holdings LLC, a mortgage analytics firm.


Posted at 12:26 AM (CST) by & filed under General Editorial.

My Dear Friends,

Please read this as you must understand the serious nature of what is taking place.


Dear Jim,

The following are some additional thoughts on the seven bank failures announced by the FDIC on Friday, April 30, 2010.

1. Perspective on Losses

This week’s losses were extremely serious, a fact belied by the virtual absence of press coverage. They were the largest in any single week since the failure of IndyMac Bank on July 11, 2008.

IndyMac had assets of about $32 billion and deposits of $19 billion. Its failure cost the FDIC an estimated $8 billion.

The seven banks that failed this week had combined assets of about $25.8 billion and deposits of $19.6 billion. These failures cost the FDIC an estimated $7.33 billion.

Prior to this week, the FDIC’s estimated losses from 57 bank failures in 2010 stood at about $8.6 billion. This week’s failures practically doubled that figure, to $15.93 billion.

This information cannot be reconciled with the MOPE that states the banking sector has recovered. To the contrary, these failures speak of deeply-rooted problems in the banking sector that appear to be getting worse over time.

2. Status of the Deposit Insurance Fund

According to an AP article posted Friday (cited below), the FDIC’s deposit insurance fund “fell into the red last year, hitting a $20.9 billion deficit as of [Dec. 31, 2009].” With this year’s losses, the fund’s deficit has grown to at least $36.8 billion. In addition, the FDIC has a huge exposure for worse-than-expected losses on some $165 billion of assets taken over by acquiring banks.

That pretty much wipes out the $45 billion the FDIC announced it was going to raise by requiring banks to pre-pay premiums for the period, 2010 through 2012. Obligations of the FDIC will soon become obligations of the U.S. taxpayer, adding billions of dollars each year to already out-of-control federal deficits.

3. More FASB-Blessed Fantasy Valuations

Each of the FDIC’s press releases provides vital information about the true market value of the failed banks’ assets versus the values assigned them by bank management. This gives some insight into the extent of over-valuations across the banking sector in the wake of the Financial Accounting Standards Board (“FASB”) having suspended fair value accounting rules last year.

The FASB’s capitulation has given bank management far too much leeway to value assets at levels far beyond what they could fetch in the open market, resulting in banks’ balance sheets becoming increasingly less reliable indicators of their true financial health.

Looking at the five largest failures this week:

Westernbank Puerto Rico of Mayaguez, Puerto Rico, had stated assets of $11.94 billion and deposits of $8.62 billion. On paper, it was an extremely healthy bank; yet the FDIC’s loss estimate for its closure is $3.31 billion. Based on that estimate, the real market value of its assets is only $5.31 billion. Bank management had over-valued these assets by 125%.

R-G Premier Bank of Puerto Rico of Hato Rey, Puerto Rico, had stated assets of $5.92 billion and deposits of $4.25 billion. The FDIC’s loss estimate for its closure is $1.23 billion. Based on that estimate, the real market value of its assets is $3.02 billion, and had been over-valued by 96%.

Frontier Bank of Everett, WA, had stated assets of $3.5 billion and deposits of $3.13 billion. Its loss estimate is $1.37 billion. Based on that estimate, its assets are really worth $1.76 billion, and had been over-valued by 99%.

Eurobank of San Juan, Puerto Rico had stated assets of $2.56 billion and deposits of $1.97 billion. Its loss estimate is $744 million. Based on that estimate, its assets are really worth $1.226 billion, and had been over-valued by 109%.

CF Bankcorp of Port Huron, MI, had stated assets of $1.65 billion and deposits of $1.43 billion. Its loss estimate is $615 million. Based on that estimate, its assets are really worth $815 million, and had been over-valued by 102%.

Here again, these bank failures are being reported free of any allegations of fraud or even negligence on the part of bank management. Absent any such allegations, it stands to reason that these over-valuations, ranging from 96% to 125%, are considered to be in line with reasonable accounting practices sanctioned by the FASB at the time it suspended fair value requirements.

4. AP Article Covering Failures

Linked below is an AP article that provided some better-than-average coverage of this week’s failures and the status of the FDIC’s finances. Interestingly, the article was originally published at about 8:15 pm EST on Friday, April 30, 2010, but had to be re-posted at 10:00 pm EST following the FDIC’s release of additional information late in the evening.

Focusing on the three banks that failed in Puerto Rico, the AP noted they “together held more than one-fifth of the total bank assets on the U.S. Caribbean territory.”

Here’s some food for thought. Puerto Rico’s GDP is about $76 billion, about 21% of the size of Greece’s ($356 billion). What is more relevant to the concerns of U.S. citizens, the fact that Greece is experiencing budget problems, or that FDIC-insured banks controlling one-fifth of the value of the assets on Puerto Rico failed in one week?

What possible explanation could there be for the fact that the Greek “crisis” has been dominating headlines in the U.S. press for months, while matters such as these horrendous bank failures and the impending failures of the majority of U.S. States barely get a mention?

Can you say, Manipulation of Perspective Economics?

Respectfully yours,
CIGA Richard B.

Banks closed in Puerto Rico, Mich., Mo., Wash.
Regulators shut down 7 banks in Puerto Rico, Mo., Mich., Wash., brings total to 64 this year
Marcy Gordon, AP Business Writer, On Friday, April 30, 2010, 10:00 pm

WASHINGTON (AP) – Regulators on Friday shut down shut down three banks in Puerto Rico, two in Missouri, and one each in Michigan and Washington, bringing the number of U.S. bank failures this year to 64.

The Federal Deposit Insurance Corp. took over the banks: Westernbank Puerto Rico, based in Mayaguez, with about $11.9 billion in assets; R-G Premier Bank of Puerto Rico, based in Hato Rey, with around $5.9 billion in assets; and San Juan-based Eurobank, with $2.5 billion in assets.

The FDIC also seized CF Bancorp, based in Port Huron, Mich., with about $1.6 billion in assets; Champion Bank, of Creve Coeur, Mo., with $187.3 million in assets; BC National Banks, of Butler, Mo., with $67.2 million in assets; and Frontier Bank, based in Everett, Wash., with $3.5 billion in assets.

Banco Popular de Puerto Rico agreed to acquire Westernbank’s deposits and about $9.4 billion of its assets. The FDIC will keep the remainder for eventual sale. Scotiabank de Puerto Rico agreed to buy all the assets and deposits of R-G Premier Bank. And Oriental Bank and Trust is acquiring all the assets and deposits of Eurobank. The three healthier acquiring banks are based in San Juan, the Puerto Rican capital.

The three failed banks together held more than one-fifth of the total bank assets on the U.S. Caribbean territory. They had struggled to stay afloat during Puerto Rico’s grinding, four-year recession.

It was Puerto Rico’s largest bank consolidation in more than two decades as well as one of the FDIC’s biggest resolutions of failed banks in the financial crisis that struck in fall 2008.


Posted at 5:49 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

All Western states, be that New York State or Greece, will be bailed out.

QE to infinity is omnipresent in the West.

Eurozone OKs $145 billion bailout for Greece

Loans, with aid of International Monetary Fund, spread across three years
By Elena Becatoros and Raf Casert

BRUSSELS – Finance ministers from the 16 countries that use the euro agreed Sunday to rescue Greece with €110 billion in loans over three years to keep it from defaulting on its debts.

The loan package with the International Monetary Fund is also aimed at keeping Greece’s debt crisis from spreading to other financially weak countries such as Spain and Portugal — just as Europe is struggling out of a painful recession.

In return, Greece had to agree to an austerity program that will impose painful spending cuts and tax increases on its people for years to come.

The plan will still need approval by some countries’ parliaments. But the head of the eurogroup, Luxembourg’s Jean-Claude Juncker, said Greece will get the first funds by May 19, when Athens has €8.5 billion worth of a 10-year bond maturing.

Fears that the money might be held up by objections in powerful eurozone member Germany — where the Greek bailout is not popular — sent shudders through bond and stock markets last week.



Jim Sinclair’s Commentary

The on again, off again Greek rescue is for this evening on again.

Regardless of all the theatrics, every major debtor is going to be bailed out. That includes 33 states of the USA.

QE to Infinity.

Greece Gets $146 Billion Rescue on EU, IMF Austerity Package
By Gabi Thesing and Flavia Krause-Jackson

May 3 (Bloomberg) — Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, said Jean-Claude Juncker after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percent and the International Monetary Fund contributes the rest. Greece agreed to budget measures worth 13 percent of gross domestic product.

“It’s an ambitious program, it’s austere but it’s absolutely necessary,” Juncker told reporters. European Central Bank President Jean-Claude Trichet, speaking at the same press conference, said Greece’s plan will “help to restore confidence and safeguard financial stability in the euro area.”

Policy makers agreed to the unprecedented bailout after investors’ concerns about a potential Greek default sparked a rout in Portuguese and Spanish bonds last week and sent stock markets tumbling. At stake is the future of the euro 11 years after its creators left control of fiscal policy in national capitals.

Interest Rate

The extra yield that investors demand to hold Greek debt over German bunds surged to 826 basis points on April 28 after Standard & Poor’s cut its rating to junk. It eased to 594 points on April 30 as signs of an agreement emerged. The Portuguese spread jumped to the most since at least 1997 last week and the premium on Spain climbed to the highest since March 2009.


Posted at 5:45 PM (CST) by & filed under Jim's Mailbox.


The "Oracle of Omaha" himself now sounds the alarm that the shares of fiat empires are about to collapse. You were always years ahead of the curve for those who listened. We thank you for your service.

Remember the final pillar Jim has told you about!

The stage is set .the act will come to a final curtain call and gold in hand is your ultimate lifeline.

CIGA "The Gordon"

Buffett bearish on currencies holding value
Greek crisis will produce ‘high drama,’ Berkshire chairman predicts
May 1, 2010, 1:08 p.m. EDT

OMAHA , Neb. (MarketWatch) — Warren Buffett said Saturday that he’s bearish about the ability of all currencies to hold their value over time because of massive deficits being run up by governments in the wake of the global financial crisis.

The Berkshire Hathaway Inc. chairman also warned shareholders attending the company’s annual meeting that the Greek debt crisis will produce "high drama" and said it’s unclear how it ultimately will be resolved.

The financial crisis was stemmed by massive monetary and fiscal intervention in developed economies like the U.S. and the U.K. That’s shifted a private-sector debt mountain on to governments, increasing concern about sovereign risks.

One concern is that governments will print lots of new money to pay debts, undermining the value of currencies and triggering a damaging bout of inflation.

"Events in the world over the last few years make me more bearish on all currencies in terms of holding their value over time," Buffett said.


Posted at 6:19 PM (CST) by & filed under Jim's Mailbox.

Thought For The Day

Greece and Goldman hog the news as 33 US states head for bankruptcy.


Jim Sinclair’s Commentary

Richard B. reports on the staggering bank closures this week.

Dear Jim,

The information on this week’s bank closings is staggering. The FDIC announced seven closings as of April 30, 2010, at 9:00 pm EST.

The seven banks’ combined assets amount to $25.83 billion. They had combined deposits of $19.61 billion.

The FDIC is projecting losses of $7.33 billion in connection with the seven closings. That is its “optimistic” estimate based on its having entered into loss share agreements on $19.76 billion of the failed banks’ assets.

That $7.33 billion amounts to about 37% of deposits. Based on that estimate, the real market value of the seven banks’ assets was about $12.28 billion and had been over-stated, on average, by 110%.

I’ll provide a more detailed analysis later in the weekend.

Respectfully yours,
CIGA Richard B.

Posted at 9:25 PM (CST) by & filed under Trader Dan Norcini.

Dear Friends,

The following chart details the Commitment of Traders report released today (Friday) which covers the market involvement of the players through Tuesday of this week.

Note that the heavy blue line, which details the NET position of the Managed Money crowd, has been steadily ramping up their purchases of gold futures. At the risk of being redundant, it is this flow of funds from the managed money side of things which drives markets today. It is therefore a sign of a healthy market that interest continues to build in gold. As long as that buying continues, gold will be propelled higher, bullion bank selling notwithstanding.

Looking into the actual numbers, the total number of long side contracts being held by the Managed Money crowd is currently 24,400 off its recent peak in October of last year. The other large reportables, big locals, individual traders and CTA’s, are currently 9,000 contracts or so shy of their maximum number of longs made that same month. The small specs, the public, are approximately 12,000 contracts shy of their peak long side exposure also made that month. In total, there is a room for an additional new 45,000 longs to be added before we reach the peak that marked the move over $1200.

Even at that, there is nothing that says gold long side exposure will reach those levels and then as if by some mandate, cannot surpass that level and continue to go on to make yet another new peak. It all depends on what investor psychology is at the time and how strongly players feel about the future prospects of gold.

By the way, this is the highest weekly close that the front month gold contract has ever made. Note that I said, WEEKLY CLOSE.

That is interesting because it is occurring when as stated above, the long side guys are below their maximum exposure. It is not a stretch of incredulity to state that the potential exists for a push through the peak price in gold without the market being overextended to the long side.

Click chart to enlarge today’s COT chart in PDF format with commentary from Trader Dan Norciniclip_image002

Click chart to enlarge today’s Weekly HUI chart in PDF format with commentary from Trader Dan Norciniclip_image004

Click charts to enlarge today’s Monthly Gold chart in PDF format with commentary from Trader Dan Norcini

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Posted at 6:37 PM (CST) by & filed under In The News.


Thought For The Day

The cost for a Greek bailout to the citizens of the US via the IMF will be $100 billion.

Now there is a nice addition to the Federal Budget Deficit.


Jim Sinclair’s Commentary

Are you joining me on the non-corporate delegation to Tanzania to examine investment opportunities?

AFDB predicts fastest recovery of Tanzanian economy in East Africa

DAR ES SALAAM (Xinhua) — Tanzania is expected to experience the biggest economy expansion in East Africa this year, the African Development Bank (AFDB) has projected.

The second largest economy in East Africa’s economy is forecast to grow at 5.7 per cent, while Uganda and Rwanda to expand by 5.1 per cent and 4.8 per cent respectively, the local media on Thursday quoted the AFDB projections as saying.

Kenya, the regional largest economy, is expected to grow by 4.3 per cent while Burundi’s economy will accelerate by 3.2 per cent, the AFDB said.

The regional bank believes that policy changes in many countries have created an environment favorable to more internal and foreign private investment.

AFDB President Donald Kaberuka said that the outlook for continuing growth in 2010 is extremely promising if the world economy and world trade continue to recover, and oil and non-oil commodity prices remain close to current levels, with a projected almost 6 percent rate of the pre-crisis period.

He noted the similarities of contemporary African landscape with that of Asia a few decades ago with an increasing number of investors willing to take advantage of countless opportunities in Africa and a fast-growing middle class.

The AFDB projected that the picking up of Tanzania’s growth in the aftermath of the global economic crisis would steer back the country into the unprecedented growth of the past decade that averaged seven percent.

Commenting on the AFDB’s estimates, Tanzania Private Sector Foundation Executive Director Evans Rweikiza said Tanzania needed to bank on agriculture for sustainable growth.

He pointed out that improving agriculture would mean a better life for the majority of Tanzanians, whose livelihoods are closely tied to farming, calling for the extending of the free market principles to agriculture.


Jim Sinclair’s Commentary

John Williams is correct. Consider subscribing.

- GDP Growth Lacks Sustainability 
- Economic and Systemic Risks Intensify

"No. 294: First-Quarter GDP, Mounting Systemic Risks"

Jim Sinclair’s Commentary

These are as scary as Friday’s bankruptcies. Thanks to JB Slear, our "Bullion Delivery Man."

Enforcement Actions
Legal actions by the Board and written agreements approved by the Federal Reserve Banks

April 29, 2010
Written agreement with Coast Bancorp

April 29, 2010
Written agreement with FMB Equibanc

April 27, 2010
Written agreement with Liberty Financial Group, Inc.

April 27, 2010
Written agreement with Sun West Capital Corporation

April 26, 2010
Written agreement with East Dubuque Bancshares and East Dubuque Savings Bank


Jim Sinclair’s Commentary

Lets here a round of applause for the accomplishments of those that recently said "We are doing the work of God."

Chicago-area foreclosure auctions hit new high

More than 9,300 homeowners lost properties last quarter
By Mary Ellen Podmolik, Tribune reporter
April 29, 2010

More Chicago-area homeowners lost their homes to foreclosure in the first three months of the year than in any quarter in the past five years. This disturbing statistic raises doubts about the effectiveness of mortgage loan modification efforts and could put more downward pressure on property values.

Within the six-county Chicago region during the first quarter, 9,302 homes went through a court-ordered auction, the last step in the foreclosure process, and 95 percent of those properties were taken back by lenders. Within the city of Chicago, almost 3,500 homes went to auction, and 95 percent of those also became bank-owned, according to data to be released Thursday by Woodstock Institute, a Chicago-based think tank.

A portion of the increase in auctions can be attributed to various moratoriums lenders put in place during the holiday season and while they evaluated homeowners either for the federal government’s Home Affordable Modification Program or their own internal programs. However, it appears clear lenders are now stepping up efforts to push properties through the foreclosure system as homeowners fail to qualify for loan modifications or default again.

More than half of all loan modifications fell 60 days or more past due by nine months after the initial modification, the federal Office of the Comptroller of the Currency said in a report last month on fourth-quarter mortgage performance.

Lenders "put a halt on the process, but did it help [borrowers] in the end?" said Geoff Smith, Woodstock Institute’s senior vice president. "Are these foreclosure prevention programs working? If HAMP was working, you’d have less completed foreclosures. More people lost their homes. That’s undisputed."


Down with ‘Too Big to Fail’: Angry Americans march on Wall Street..


Jim Sinclair’s Commentary

Roubini is everywhere every day, however this is so correct it had to be posted.

U.S is in worst shape than Greece! Nouriel Roubini Discusses U.S.. Government Deficits-


Jim Sinclair’s Commentary

Remember "We are doing the work of God?"

Banks must defend against bid rigging charges.
A judge ruled that Goldman Sachs (GS), Citigroup (C) and several other high-profile banks will have to defend themselves against allegations that they conspired to rig bids for municipal investment contracts and derivatives. Fifteen California cities and counties brought the suit against more than 40 corporate defendants. AIG’s (AIG) financial arm and a GE (GE) unit were among several companies that won a dismissal of the civil lawsuits brought in 2008.

Goldman faces criminal probe.
Federal prosecutors have reportedly opened a criminal probe into whether Goldman Sachs (GS) or its employees committed securities fraud connected to mortgage trading. The investigation is still in preliminary stages, but raises the legal stakes for Goldman and is said to focus on different evidence than that being used in the SEC’s civil case. Meanwhile, sources said Goldman may soon settle its fraud case with the SEC. The SEC has an "unlimited supply of ammunition" in the form of e-mails and records it could release, and Goldman doesn’t want those documents aired in public.




Jim Sinclair’s Commentary

Gold is the only currency with no liability attached to it and is universally acceptable.

Gold has always acted as a storehouse of value and medium of exchange.

Debt misery helps gussy up gold’s appeal
Is investors’ faith in the precious metal justified?
April 30, 2010, 7:00 a.m. EDT

TOKYO (MarketWatch) — As debt problems in Europe intensify, gold’s ready to fly to investors’ rescue, but in a world of uncertainty, those investors want to know if they can safely put their trust in expectations for a significant climb in the metal’s prices.

Gold certainly has the strength and incentive to do what’s expected. Futures prices for the metal have gained around 5% in a month, and they’ve been making a gradual climb since early February toward the record front-month price of more than $1,226 an ounce seen in early December 2009.

"The primary factor likely to lead to higher gold prices is the combination of safe-haven investor demand and pension and central-bank diversification into gold," said Mark O’Byrne, director at GoldCore. And "the real risks of a sovereign debt crisis and an international currency crisis are likely to make this demand remain robust for the foreseeable future."

Those sovereign debt risks multiplied Tuesday when Standard & Poor’s cut its credit rating on Greece to "junk" status and lowered Portugal’s long-term rating by two notches.


Jim Sinclair’s Commentary

33 states of the USA are headed for bankruptcy.

Ravitch: New York Deficit Could Swell to $15 Billion Next Year
by Bob Hennelly

NEW YORK, NY April 29, 2010 —New York’s $9.2 billion budget deficit is expected to balloon to $15 billion next year, according to Lt. Gov. Richard Ravitch.

Speaking to a midtown audience of real estate developers, Ravitch said he does not expect the state to reach a budget deal any time soon, despite the state’s desperate fiscal situation. The budget is nearly one month late and Ravitch says there are no external triggers forcing lawmakers and the governor to act.

"States can’t go into bankruptcy. They are not included in the bankruptcy code," he says.

Today’s outlook is different from the city’s fiscal crisis of the 1970s when the state couldn’t find any lenders. Instead, he says, bankers are circling Albany with tempting offers.

"The financial community is ready to lend the state all kinds of money. They have 20-odd schemes they are suggesting about how the state can borrow money," Ravitch says.


Jim Sinclair’s Commentary

I am amazed that CNN covered this.

Next thing you know they will be revealing the existence of tea parties.

Protesters descend on Wall Street, New York City banks
By the CNN Wire Staff
April 30, 2010 12:48 a.m. EDT

New York (CNN) — Protesters rallied in downtown New York City Thursday to voice their anger over what they perceive as the roles Wall Street and big banks played in America’s economic crisis.

Marching from City Hall to Wall Street, the protesters chanted "good jobs for all," and held signs with messages including "Hold banks accountable," "Make Wall Street Pay," and "Reclaim America."

Marching from City Hall to Wall Street, the protesters chanted "good jobs for all," and held signs with messages including "Hold banks accountable," "Make Wall Street Pay," and "Reclaim America."

The AFL-CIO organized the rally, and union President Richard Trumka addressed the crowd, saying, "How long will we allow the spirit of greed to continue to drive us into economic holes?"

The National Action Network, a group that was involved in organizing the protest, said in a news release that demonstrators represented unemployed workers, foreclosure victims and community activists.

Protester Gerard Pettine said he just wants Wall Street to be held accountable for its involvement in the economic collapse.


Jim Sinclair’s Commentary

This is one more low for US corporate culture. GM must think it can fool the public, and then the head honcho advertises it.

We need a Car Fax on anything Motors says.

As goes GM so goes America is once again proven.

GM Under Fire for ‘Misleading’ Bailout Ad
GM CEO Boasts TARP Repayment in TV Commercial; Critics Say Money Came From Other Bailout Funds
April 30, 2010

The Obama administration is concerned about a new General Motors commercial in which the bailed-out automaker touts last week’s repayment of the remaining $4.7 billion that it owed to the government from funds it received under the Troubled Asset Relief Program.

In the commercial, the automaker’s CEO, Ed Whitacre, boasts that it has repaid its "government loan in full, with interest, five years ahead of the original schedule."

That sounds great, but that’s not exactly true, warned Sen. Susan Collins, R-Maine, Thursday.

At a Senate subcommittee hearing, Collins told Treasury Secretary Timothy Geithner that the ad seems "very misleading," citing bailout watchdog Neil Barofsky’s comments that GM had simply used one pot of bailout money to repay another.