Posted at 4:13 PM (CST) by & filed under Jim's Mailbox.


Suspect a combination of China being the last lender and China wanting to keep its shipyards busy. Suspect we will see a lot more EximBank deals as China’s economy softens. Another form of currency warfare.

CIGA Craig

China EximBank lends $1.2 billion to German firms for Chinese ships: Xinhua
BEIJING Sat Mar 29, 2014 12:00am EDT

Export-Import Bank of China (EximBank) will lend $1.2 billion to German shipping firms Peter Dohle Shiffahrts-KG and Bernhard Schulte for the purchase of Chinese ships, the official Xinhua news agency reported.

The deal will increase chances that German shipping firms will purchase more China-made ships, Xinhua reported the EximBank as saying late on Friday.

A prolonged slump in shipping and pressure to shrink bloated loan books have forced many European banks to abandon or scale down lending to the sector.




I suspect there is no way Russia will ever accept a government headed by neocon-controlled Tymoshenko especially given her recent comments on wanting to kill 8 million Russians.  If Poroshenko defeats her, he might be the leader that will create a neutral Ukraine that is acceptable to Putin.

CIGA Craig

Ukraine’s chocolate baron Petro Poroshenko holds golden ticket
by AFP | March 29, 2014 , 5 : 33 pm GST

Kiev: He has chocolate factories galore, is a self-made billionaire and occasional revolutionary, but Ukraine’s Petro Poroshenko also wants to be president, and many believe he holds the golden ticket.

The tall, slightly greying 48-year-old is one of Ukraine’s 10 richest men and also one of the most popular, topping opinion polls this week with 25 per cent ready to back him in the May 25 snap presidential election.

A shrewd politician who has flip-flopped between governments for more than a decade, Poroshenko was the only Ukrainian oligarch to openly back the pro-European protest movement that ousted president Viktor Yanukovych, under whom he served as economics minister.

Handing out chocolates, or taking to the stage to denounce Ukraine’s stupefying levels of corruption, Poroshenko became a favourite figure at Kiev’s protest camp on Independence Square.

The "time when politicians lied to people is over," the tycoon said when announcing his candidacy late on Friday, the Interfax news agency reported.

His ticket is further boosted with the support of boxer-turned-opposition icon Vitali Klitschko who came second in the poll with nine per cent and on Saturday renounced running for president himself to back the diabetic chocolate baron.

Poroshenko was the only politician to fly to Crimea in a bid to negotiate with pro – Russian troops who seized parliament after Yanukovych fell, but was angrily chased off by demonstrators.



A good speech by Putin. A lot of history.

CIGA Craig

Address by President of the Russian Federation
March 18, 2014, 15:50 The Kremlin, Moscow

In people’s hearts and minds, Crimea has always been an inseparable part of Russia. This firm conviction is based on truth and justice and was passed from generation to generation, over time, under any circumstances, despite all the dramatic changes our country went through during the entire 20thcentury.

After the revolution, the Bolsheviks, for a number of reasons – may God judge them – added large sections of the historical South of Russia to the Republic of Ukraine. This was done with no consideration for the ethnic make-up of the population, and today these areas form the southeast of Ukraine. Then, in 1954, a decision was made to transfer Crimean Region to Ukraine, along with Sevastopol, despite the fact that it was a federal city. This was the personal initiative of the Communist Party head Nikita Khrushchev. What stood behind this decision of his – a desire to win the support of the Ukrainian political establishment or to atone for the mass repressions of the 1930’s in Ukraine – is for historians to figure out.

Like a mirror, the situation in Ukraine reflects what is going on and what has been happening in the world over the past several decades. After the dissolutionof bipolarity on the planet, we no longer have stability. Key international institutions are not getting any stronger; on the contrary, in many cases, they are sadly degrading. Our western partners, led by the United States of America, prefer not to be guided by international law in their practical policies, but by the rule of the gun. They have come to believe in their exclusivity and exceptionalism, that they can decide the destinies of the world, that only they can ever be right. They act as they please: here and there, they use force against sovereign states, building coalitions based on the principle “If you are not with us, you are against us.” To make this aggression look legitimate, they force the necessary resolutions from international organisations, and if for some reason this does not work, they simply ignore the UN Security Council and the UN overall.

This happened in Yugoslavia; we remember 1999 very well. It was hard to believe, even seeing it with my own eyes, that at the end of the 20thcentury, one of Europe’s capitals, Belgrade, was under missile attack for several weeks, and then came the real intervention. Was there a UN Security Council resolution on this matter, allowing for these actions? Nothing of the sort. And then, they hit Afghanistan, Iraq, and frankly violated the UN Security Council resolution on Libya, when instead of imposing the so-called no-fly zone over it they started bombing it too

Let me note too that we have already heard declarations from Kiev about Ukraine soon joining NATO. What would this have meant for Crimea and Sevastopol in the future? It would have meant that NATO’s navy would be right there in this city of Russia’s military glory, and this would create not an illusory but a perfectly real threat to the whole of southern Russia. These are things that could have become reality were it not for the choice the Crimean people made, and I want to say thank you to them for this.


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

Jim Sinclair’s Commentary

The latest from John Williams’

- Incomplete and Inadequate, Minimal Revisions to Industrial Production Left Negative Economic Outlook Intact
- Aggregate Net Upside Revision of 0.3% to Series Was in Context of Some Activity Being Shifted from Early-2012 into Late-2012, 2013
- Usual New Information for 2012 Was “Unavailable”

"No. 613: Industrial Production Benchmark Revision"


Mistrust overshadows Obama’s Saudi trip

Riyadh (AFP) – US President Barack Obama meets Saudi King Abdullah Friday as mistrust fuelled by differences over Iran and Syria overshadows a decades-long alliance between their countries.

Obama, who is due to arrive in Saudi Arabia late in the afternoon on a flight from Italy, is expected to hold evening talks with the monarch on a royal estate outside Riyadh.

Saudi Arabia has strong reservations about efforts by Washington and other major world powers to negotiate a deal with Iran on its nuclear programme.

It is also disappointed over Obama’s 11th-hour decision last year not to take military action against the Syrian regime over chemical weapons attacks.

Saudi analyst Abdel Aziz al-Sagr, who heads the Gulf Research Centre, said Saudi-US relations are "tense due to Washington’s stances" on the Middle East, especially Iran.

The recent rapprochement between Tehran and Washington "must not take place at the expense of relations with Riyadh," Sagr told AFP.


Jim Sinclair’s Commentary

China discusses Russia with NATO.

Chinese president arrives in Berlin for talks and deals

Berlin (dpa) – Chinese President Xi Jinping arrived Friday in Berlin for a visit that is to include the signing of a 1-billion-euro (1.38-billion-dollar) agreement between Germany‘s Daimler carmaker and its Chinese partner, Beijing Automotive.

Xi and his wife, Peng Liyuan, were greeted with full military honours by German President Joachim Gauck before Xi holds talks with Chancellor Angela Merkel in the afternoon.

Those discussions are expected to focus on international crises and the expansion of business ties. Merkel was also expected to raise China‘s human rights record.

Part of the effort to broaden business relations is to be the agreement between Daimler and Beijing Automotive to increase the car and motor production of their joint venture, Beijing Benz, in the Chinese capital, company sources said in Beijing.

The two companies have cooperated for 10 years, and in November, Daimler bought a 12-per-cent stake in Beijing Automotive‘s passenger car division for 625 million euros. The investment was the first time a foreign carmaker had bought a large stake in a state-run manufacturer in China, the world‘s largest car market.


How The BRICs (Thanks To Russia) Just Kicked The G-7 Out Of The G-20
By Paul Mylchreest of Monument Securities

A critical juncture

Over the course of the last century, the US Congress has been blamed for much that has gone wrong in international relations. The unwillingness of Congressional leaders in 1919 to support US participation in the League of Nations doomed from the outset that quixotic attempt to put global relations on a rational basis. Renewed world war was the eventual outcome. Then in 1930, Congressional passage of the Tariff Act, widely known as Smoot-Hawley, marked the break-out of beggar-thy-neighbour trade practices that no less an authority on that period than Mr Bernanke has maintained contributed to the length and depth of the global depression. It is no matter that some historians argue that Smoot-Hawley merely built on the Fordney-McCumber Tariff Act of 1922; that had been Congress’s doing as well. More recently, the US Congress has resisted presidential demands for ‘fast-track’ authority to tie up international trade deals. The lack of faith of the USA’s counterparties in Washington’s ability to ratify trade agreements was an important factor in the collapse of the Doha Round, which has put a brake on the development of the World Trade Organisation. Now, the US Congress is acting in a way which could have consequences at least as serious as those that followed these past examples of obduracy.

This week the US Congress is considering a bill to provide financial aid to Ukraine. President Obama had appended clauses to this bill to ratify the IMF’s 2010 decision to increase the quotas, and hence voting power, of emerging countries, chiefly at the expense of European members, and to boost the IMF’s capacity to lend. The USA enjoys a blocking minority in IMF decision-making under current quotas, and would continue to do so after the changes; it is essential, therefore, that US ratification be secured if the reform is to go ahead. However, many members of the US Congress, especially on the Republican side, are suspicious of the IMF and its activities. Specifically, that element of the reform package which would convert countries’ temporary lending to the IMF during the global financial crisis into a permanent increase in IMF resources has roused fierce opposition. For more than three years, congressional leaders have thought better of exacerbating party tensions by bringing forward proposals to approve the IMF changes. However, the G20 meeting in February ‘deeply regretted’ that the reform was still held up and urged the USA to ratify ‘before our next meeting in April’. Mr Siluanov, Russia’s finance minister, then suggested that the IMF should move ahead with the reforms without US approval, a suggestion sympathetically received by other BRICS leaders but which would threaten to split the IMF. Mr Obama’s concern to avoid this outcome is understandable and he has argued that, since the IMF will play the lead role in supporting Ukraine’s economy, approval of the new quotas is relevant to the Ukraine legislation. All the same, Mr Reid, the Democrat Majority Leader in the Senate, yesterday stripped the IMF provisions from the text, taking the view that the bill would be given a rough ride through the Senate and no chance of passage through the House of Representatives if it retained them. It now seems unlikely that the USA will complete (or, indeed, begin) legislative action on the IMF reform by the 10 April deadline the BRICS have set. The odds are moving in favour of a showdown at the G20 finance ministers’ and central bank governors’ meeting due in Washington on that date.

International discord over Ukraine does not bode well for the settlement of differences over the IMF’s future. Though the G7 is excluding Russia from its number, in retaliation for its action in Crimea, this does not amount to isolating Russia. There has been no suggestion that Russia be excluded from the G20. The USA and its allies have suspected that several other G20 members would not stand for it. This suspicion was confirmed yesterday when the BRICS foreign ministers, assembled at the international conference in The Hague, issued a statement condemning ‘the escalation of hostile language, sanctions and counter-sanctions’. They affirmed that the custodianship of the G20 belongs to all member-states equally and no one member-state can unilaterally determine its nature and character. In short, their statement read like a manifesto for a pluralist world in which no one nation, bloc or set of values would predominate.


Jim Sinclair’s Commentary

TTIP negotiations are the negotiations concerning the "Transatlantic Trade and Investment Partnership (TTIP)." This was discussed in depth in GEAB #83 and yesterday there was mention on page #4.

If the EU goes for this they are totally bonkers.


Jim Sinclair’s Commentary

It may well become true in the China sea. It is not called the Japan Sea.

China angrily denounces Japan for Russia – Crimea analogy

BEIJING (Reuters) – China denounced Japanese Prime Minister Shinzo Abe on Friday for drawing an analogy between Russia’s behaviour in Crimea and China’s actions in the disputed East and South China Seas, accusing Abe of hypocrisy.

Japan’s Kyodo news agency said Abe raised the issue at a G7 meeting in The Hague this month, warning that China was trying to change the status quo through coercion, and said something similar to Russia’s seizing of Crimea could happen in Asia.

Chinese Foreign Ministry spokesman Hong Lei said those comments were completely out of place, and launched a personal attack on Abe himself, using unusually strong language.

"We’ve long since said that this Japanese leader on the one hand hypocritically proposes improving Sino-Japan ties and on the other says bad things about China wherever he is internationally. These comments again expose his true face," Hong told a daily news briefing.

"He tries in vain on the international stage to mislead the public with prevarication and deliberate falsehoods and blacken China’s name. But this cannot pull the wool over the eyes of the international community."


Jim Sinclair’s Commentary

Japan awakes to the results of Abenomics!

Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold
Submitted by Tyler Durden on 03/28/2014 10:42 -0400

As we reported yesterday, the world’s most clueless prime minister, Japan’s Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan’s infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable goods and services ahead of an imminent price surge? Simple – while the government may have no options now, the same can not be said of its citizens who have lived next to China long enough to know precisely what to do when faced with runaway inflation, and enjoying the added benefit of a collapsing curency courtesy of Kuroda’s "wealth effect." That something is to buy gold, of course, lots of it.

According to the FT, "Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."

Of course, while the Japanese consumers know what is the best defense against runaway inflation and purchasing power destruction, the government also knows that just like in India, where massive gold imports to satisfy local demand so skewed the current account deficit that India spent most of 2013 imposing gold capital controls, it simply needs to make gold purchases impossible in order to redirect spending into more Keynes-approved products and services.

However, for now Japan is happy just to crush its population’s meager disposable income with soaring energy prices. Which also means the locals can allocate their personal capital in the most efficient way: one which discounts a very unpleasant future.


Military Cuts Render NATO Less Formidable as Deterrent to Russia

WASHINGTON — President Obama and European leaders pledged Wednesday to bolster the NATO alliance and vowed that Russia would not be allowed to run roughshod over its neighbors. But the military reality on the ground in Europe tells a different story.

The United States, by far the most powerful NATO member, has drastically cut back its European forces from a decade ago. European countries, which have always lagged far behind the United States in military might, have struggled and largely failed to come up with additional military spending at a time of economic anemia and budget cuts.

During the height of the Cold War, United States troops in Europe numbered around 400,000, a combat-ready force designed to quickly deploy and defend Western Europe — particularly what was then West Germany — against a potential Soviet advance.

Today there are about 67,000 American troops in Europe, including 40,000 in Germany, with the rest scattered mostly in Italy and Britain. The Air Force has some 130 fighter jets, 12 refueling planes and 30 cargo aircraft. At the end of the Cold War in the early 1990s, it had 800 aircraft in Europe.


Windfall for hedge funds and Russian banks as IMF rescues Ukraine
Ukraine’s premier said his country was “on the edge of economic and financial bankruptcy”, but will comply with demands for drastic austerity

By Ambrose Evans-Pritchard
7:49PM GMT 27 Mar 2014

Ukraine has secured an emergency bail-out of up to $18bn (£10.9bn) from the International Monetary Fund to stave off imminent default but will see no debt relief and will be forced to slash spending amid dangerous civil conflict.

Critics say the package may be too small to stabilise the country as it spirals into depression with wafer-thin foreign reserves, and braces for a fuel shock as Russia’s Gazprom doubles the cost of energy in a move described by Washington as political harassment.

Arseny Yatseniuk, Ukraine’s premier, said his country was “on the edge of economic and financial bankruptcy”, yet vowed to comply with demands for drastic austerity – including a 50pc rise in fuel prices – even if this proved a “kamikaze” mission.

There will be no haircuts for creditors under the deal, unlike the EU-IMF formula in Greece and Cyprus. This amounts to a bail-out for Russian state banks and Western funds accused of propping up the previous regime and for vulture funds that bought Ukrainian debt cheaply for quick gain.

Tim Ash, from Standard Bank, said: “Ukraine has been the ultimate moral hazard play and it’s cavalier to expect taxpayers to cover this.”


Jim Sinclair’s Commentary

By the time the IMF gets finished making Ukraine into Greece they will be praying to become Russians as well.

Ukraine’s parliament passes anti-crisis law required for IMF bailout
27 March 2014, 22:16

Ukraine’s parliament on Thursday voted in favour of an anti-crisis law accepting austerity measures demanded by the International Monetary Fund as part of a $14-18 billion bailout package.

Earlier, parliament deputies failed to support the draft law despite the entreaties of the government, but later returned after a recess and approved it with a vote of 246 – 20 more than the number required.

The International Monetary Fund (IMF) has reached a working-level agreement with the Ukrainian leadership on opening a two-year credit worth from $14 billion to $18 billion, the IMF said in a press release.

The International Monetary Fund has agreed to grant Ukraine between $14 billion and $18 billion to help the country avoid a default. The package is vital for securing further help from other international lenders like the World Bank and the EU.

The IMF promised to grant Kiev the lifeline over the next two years, after finishing its mission in Ukraine on Wednesday. Overall support from the broader international community will stand at $27 billion over the period, the IMF statement said.


And Now The Real Economic Pain Begins As IMF Unleashes $27BN Bailout In "Near Bankrupt" Ukraine
Submitted by Tyler Durden on 03/27/2014 08:08 -0400

Gazprom must really be demanding payment on overdue Ukraine invoices which is the only way we can explain the unprecedented speed with which the IMF has managed to cobble together a makeshift bailout package of up to $27 billion – the bulk of which will naturally go to Russia – which has just made Ukraine its latest vassal state.

As Bloomberg reports, Kiev reached a staff-level agreement with the Washington-based lender for a two-year loan of $14 billion to $18 billion. The IMF’s board must still sign off on the package, Ukraine’s third since 2008, and the government needs to complete “prior actions” to receive the first installment.  Approval is “expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” IMF mission chief Nikolay Gueorguiev said in the statement. Disbursement may start next month, he said at a news conference in Kiev.

There are of course, conditions: "Approval is “expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” IMF mission chief Nikolay Gueorguiev said in the statement. Disbursement may start next month, he said at a news conference in Kiev."

Just like Troika disbursement for Greek aid may come any minute now… as long as Greece allows to extend the definition of fresh milk so European milk exporters can put Greek milk producers out of business. Yup: we know how the IMF works. That, and of course the requirement to hike gas prices by 40% or so.

And then comes the hyperinflation: "Monetary policy will target domestic price stability while maintaining a flexible exchange rate. This will help eliminate external imbalances, improve competitiveness, support exports and growth, and facilitate the gradual rebuilding of international reserves. The NBU plans to introduce an inflation targeting framework over the next twelve months to firmly anchor inflation expectations."


Obama says ‘bigger nations cannot simply bully smaller ones’. Wait… what?
Published time: March 27, 2014 10:03 
Edited time: March 28, 2014 11:43

President Obama’s key speech in Brussels on Ukraine and attempts to isolate Russia appears to be an exercise of omission, mutually-exclusive statements and unveiled double standards.

Here’s a quick look at what Obama told an audience of some 2,000 people in his damning 30-minute speech.

“Each of us has the right to live as we choose.”

But it’s true only for those good pro-European protesters in Kiev, who used firebombs and batons to make their point. The bad pro-Russian residents of Crimea are not allowed to, right?

“Together, we’ve condemned Russia’s invasion of Ukraine and rejected the legitimacy of the Crimean referendum.”

That’s right. Referendum = bad. Firebombs = good.


Dimon Gets 74 Percent Raise After Billions in Fines
By Nick Summers  January 24, 2014

After agreeing to pay $23 billion in penalties and settlements in 2013, JPMorgan Chase (JPM) Chief Executive Jamie Dimon was rewarded today by the board he chairs, receiving a 74 percent pay raise to $20 million.

Dimon has presided over a series of costly settlements with government investigators, including paying $13 billion for mortgage activity that helped lead to the financial crisis and $2 billion for failing to do anything about signs that client Bernie Madoff was running a Ponzi scheme. But in the amoral logic of the stock market, each payout has been met with gains in the company’s stock price, as investors see one fewer uncertainty looming over future profits.

Here’s a key point: That stock performance matters more to Dimon than headline pay figures. He’s sitting on a third of a billion dollars in JPMorgan shares. The shares he held at the beginning of 2013 increased almost $80 million over the course of the year—four times the official compensation announced today. He made more in one day, Nov. 8, than his entire 2012 salary of $11.5 million—which represented a 50 percent cut from 2011 as a rebuke for his oversight of a reckless multibillion-dollar trading loss at the bank’s London office. Even when the bank loses, Dimon gains.

The raise Dimon is getting, $8.5 million, isn’t meaningless. It’s a lot of money for anyone! (The total includes salary, stock, and the value of stuff like plane use.) But it’s so little compared with his holdings—on three out of four trading days last year, Dimon’s shares swung by more than $1 million—that the award has to be interpreted politically. That is, in terms of the message it sends to the strapped-for-cash regulators he meets with, who know JPMorgan is too big to prosecute; to his CEO peers, who can only look on with envy at the thrall in which he keeps his board; and to his staff, who learn that the consequence of breaking the law and making money at the same time is bigger rewards.


Walmart Just Revealed How Poor U.S. Shoppers Are

Walmart is no stranger to sensational headlines, but there’s at least one story this week that is just begging to be taken apart. Anyone who thinks “Walmart Just Revealed How Poor Its Customers Are” is an accurate reflection of the facts needs to keep reading.

Because the problem isn’t that Walmart revealed how poor its customers really are, it’s that Walmart revealed how poor U.S. shoppers really are.

The hook here, the news peg, is that Walmart released its annual report and in it, there’s a paragraph that states:

Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control … These factors include … changes in the amount of payments made under the Supplement[al] Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public assistance plans, …

The implication is that Walmart preys on the poor, that the retailer has somehow created poor people by paying low wages. That it relies on government assistance in a way that goes beyond accepting payment from shoppers via government programs. According to Business Insider:

Walmart, for the first time in its annual reports, acknowledges that taxpayer-funded social assistance programs are a significant factor in its revenue and profits. This makes sense, considering that Walmart caters to low-income consumers. But what’s news here is that the company now considers the level of social entitlements given to low-income working and unemployed Americans important enough to underscore it in its cautionary statement.


Bundesbank, PBOC Sign Accord to Make Frankfurt Yuan Hub
By Angela Cullen and Weixin Zha Mar 28, 2014 11:59 AM ET

Germany’s Bundesbank and the People’s Bank of China agreed to cooperate in the clearing and settling payments in renminbi, paving the way for Frankfurt to corner a share of the offshore market.

The central banks signed a memorandum of understanding in Berlin today, when Chinese President Xi Jinping met German Chancellor Angela Merkel, the Frankfurt-based Bundesbank said in an e-mailed statement.

Germany’s financial capital prevailed over Paris and Luxembourg in a euro-area race to win trade in renminbi, which overtook the euro to become the second-most used currency in global trade finance in October, according to the Society for Worldwide Interbank Financial Telecommunication. The U.K. Treasury said on March 26 that the Bank of England would sign an initial agreement with the PBOC on March 31 to clear and settle yuan transactions in London.

“Frankfurt is one of Europe’s foremost financial centers and home to two central banks, making it a particularly suitable location,” said Joachim Nagel, a member of the Bundesbank’s executive board. “Renminbi clearing will strengthen the close economic and financial ties between Germany and the People’s Republic of China.”

China is loosening exchange-rate controls in an overhaul of its $9 trillion economy. The accord follows the establishment of a 350 billion-yuan ($56 billion) and 45 billion-euro ($62 billion) bilateral swap line between the PBOC and the ECB in October, bolstering access to trade finance in the euro area.


Saudi anti-US step before Obama lands in Riyadh
DEBKAfile March 27, 2014, 6:17 PM (IST)

Shortly before US President Barack Obama arrived for a visit Friday, Saudi King Abdullah unexpectedly appointed former intelligence chief, Prince Muqrin bin Abdulaziz, as second in the line of succession to the throne, directly after the incumbent Crown Prince Salman. DEBKAfile: The Obama administration has been busy promoting the claim of Interior Minister Prince Mohammad Bin Nayef to this position.  Muqrin’s appointment blocks this claim and the US president will be forced to address him in this capacity during his visit to Riyadh. 




Turkish government blocks YouTube after Twitter
DEBKAfile March 28, 2014, 5:34 PM (IST)

YouTube was blocked in Turkey Friday three days before local elections and a week after Twitter. The ban was triggered by a leaked recording published anonymously purporting to reveal a conversation between Turkey’s foreign minister, spy chief and a general discussing how to create a pretext for a Turkish attack inside Syria.
A voice identified as that of intelligence chief Hakan Fidan appeared to suggest a missile assault as the pretext for a Turkish invasion. The local elections are seen as a referendum on the future of the Tayyip Erdgoan government which has been beset by protest and scandal.


IMF Deal Will Break Ukraine, Harm Global Stability
Mar. 28, 2014 1:45 AM ET  |  Includes: ESR, GUR

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…)


The IMF-Ukraine deal will lead to Ukrainians paying one fifth of income on heating. There are also other measures which will hurt living standards.

A fragile Ukrainian society is unlikely to withstand this pressure and is likely to tear itself apart.

The result is that the European Union can be left without 1/5 of its gas supplies, leading to economic disaster.

Now that the spectacular part of this crisis is over, with the Crimea situation settled and the new government in Kiev settling in, the spotlight on Ukraine is slowly going to fade. The markets welcomed the news of the IMF deal by lowering the CDS rate for Ukrainian bonds. An economic war between Russia and the West is not likely to materialize. I believe the European Union is partially aware of its vulnerability in the event of economic hostilities breaking out.

It is a shame that people will now stop paying attention, because the dangerous part of this crisis is still ahead and policies towards Ukraine coming from the West will contribute to this danger. An Oxford report released a few weeks ago pointed out that military and economic confrontation between Russia and the West is unlikely to reach a point of mutual economic destruction. The main danger comes from Ukraine being unable to pay its bills, including its gas bills, which after the end of the agreement with Russia will increase by about 50% as of April 1. Russia would have no choice but to shut off the gas just as it did in previous situations when Ukraine was unable to make its payments. The Oxford report fails to account for an additional danger and that is the likelihood of Ukraine simply becoming entirely dysfunctional, ungovernable, unstable and eventually slide into civil war. The current IMF deal just ensured that the likelihood of this happening increased dramatically.


Obama accuses Putin of reverting to the Cold War
DEBKAfile March 28, 2014, 5:00 PM (IST)

US President Barack Obama Friday urged Russian President Vladimir Putin to “drop his grievance over the breakup of the old Soviet Union” and “take the path forward, not revert back to the Cold War. In a CBS interview capping his six-day trip to Europe, Obama said that if Putin is trying to reverse history and “recreate a dominant, influential nation bursting with nationalism” he is ”misreading the West. He is certainly misreading American foreign policy.” He urged Russia to move back its troops on Ukraine’s border, saying it may be an effort to intimidate Ukraine, or “it may be that [Russia has] additional plans.

The UN General Assembly passed Thursday a resolution declaring invalid Crimea’s referendum that led to the region’s reunification with Russia. The non-binding resolution was approved by 100 votes in favor, 11 against, and 58 abstentions.


Posted at 10:55 AM (CST) by & filed under Jim's Mailbox.


Are mulitnationals turning against banks??

CIGA Craig

Wal-Mart sues Visa for fixing price of credit card fees
27 March 2014 Last updated at 20:41 ET

Giant US retailer Wal-Mart has sued credit card firm Visa for $5bn (£3bn), alleging that Visa worked with large banks to fix the price of transaction fees it charged to Wal-Mart.

The move comes after Wal-Mart opted out of a $5.7bn settlement with Visa and Mastercard in December.

Wal-Mart and other US retailers, such as Target, objected to the terms of that agreement.

Visa had sued Wal-Mart in June 2013 to prevent the firm from filing a lawsuit.

Wal-Mart, which is the world’s largest retailer, argues that Visa worked with large banks "to illegally fix the interchange fees and inflate the network fees that Wal-Mart and other merchants pay on Visa charge card transactions".

Those large fees then caused "enormous damage" between 2004 and 2012, the retailer claims.


Posted at 2:54 PM (CST) by & filed under In The News.

Dear CIGAs,

The following is a sweet happy birthday sent to me from my little ones.

Jim Sinclair’s Commentary

The latest from John Williams’

- Fourth-Quarter GDP Revision Was Little More than Statistical Noise;First-Quarter GDP Contraction Remains Likely
- Real Durable Goods Orders on Track for 9.0% Annualized First-Quarter Contraction
- New Deflated and "Corrected" Durable Goods Series Confirm No Recovery
- New Homes Sales Down Year-to-Year for Second Month, Pattern Not Seen Since Series Trough in 2011

"No. 612: GDP Revision, February Durable Goods Orders, New-Home Sales"


One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation.
– Thomas B. Reed (1839-1902) Speaker of the U.S. House of Representatives, known as "Czar Reed"  1886

How This Central Bank Bubble Ends
By Bill Bonner, Chairman, Bonner & Partners on March 24, 2014

I sometimes get the feeling that somewhere across that huge puddle, in America, people sit in a lab and conduct experiments, as if with rats, without actually understanding the consequences of what they are doing.
–Vladimir Putin, 4 March 2014

We promised to explain how it ends. The world, that is. The world we live in now. The one in the middle of a rapidly inflating central bank bubble.

First, we need to understand that this is a very different world from the world of the 19th and early 20th centuries. It is a world where central bankers play a role somewhere between con artists, mad scientists and God Himself.

They deceive and cheat. They conduct their experiments without any real idea how they will affect people. And they move almost every price in the world – sending investors, householders and business people all running in one direction.

Their experiments change not only prices quoted on the Big Board and the supermarket. They also change the physical world. Jobs are lost to machines that – without such low interest rates – would not have been built.




JPMorgan defeats appeal in U.S. silver price-fixing lawsuit
12:13 p.m. CDT, March 27, 2014

NEW YORK (Reuters) – Silver investors failed to show that JPMorgan Chase & Co conspired to drive down the metal’s price, and an antitrust lawsuit accusing the largest U.S. bank of price-fixing should be dismissed, a federal appeals court ruled.

The 2nd U.S. Circuit Court of Appeals said the investors, who traded COMEX silver futures and options contracts, failed to show that JPMorgan violated federal antitrust and commodities laws by having distorted silver prices at their expense between 2007 and 2010.

Among the allegations were that the bank would amass huge short positions that market conditions did not justify, and make "fake" late-day trades when market volume was thin.

Thursday’s order upheld a March 2013 ruling by U.S. District Judge Robert Patterson, who also sits in Manhattan.

Christopher Lovell, a partner at Lovell Stewart Halebian Jacobson representing the investors, did not immediately respond to requests for comment. JPMorgan spokesman Brian Marchiony declined to comment.

Investors had filed at least 43 complaints in 2010 and 2011 that accused banks of amassing hundreds of millions of dollars in illegal profit through silver price-fixing.

After the lawsuits were consolidated, HSBC Holdings Plc was dropped from the case in September 2011, leaving New York-based JPMorgan as the main defendant.

In Thursday’s order, a three-judge 2nd Circuit panel said it could not infer from allegations that JPMorgan took large and "uneconomic" short positions in silver that the bank intended to manipulate prices, or conspired with floor brokers to do so.

"An inference of intent cannot be drawn from the mere fact that JPMorgan had a strong short position," the panel said.




U.S. pending home sales fall to lowest level since October 2011
WASHINGTON, March 27 Thu Mar 27, 2014 10:00am EDT

(Reuters) – The number of contracts to buy previously-owned U.S. homes fell in February to the lowest level in more than two years, a sign the housing sector has yet to shake off the impact of higher interest rates and a harsh winter.

The National Association of Realtors said on Thursday its pending home sales index, based on contracts signed last month, fell 0.8 percent to 93.9 in February. That was the lowest level since October 2011.

Interest rates on 30-year fixed-rate mortgages have risen about a percentage point since May, while much of the United States has experienced an unusually cold and snowy winter.

Lawrence Yun, chief economist for the realtors group, said the drag from bad weather was likely to reverse itself soon.


Jim Sinclair’s Commentary

BRIC’s Swift System

Russia To Create Own National Payment System In "Bid To Reduce Dependence On The West"
Tyler Durden on 03/27/2014 11:13 -0400

The more the West attempts to "isolate" Russia and pushes it away from its "core values" and of course the US Dollar, the more Russia will seek the safety of a non-dollar based system. We have previously described how Putin has been scrambling to enmesh Russia in tight bilateral commodity-based trade with both China and India, and now it is Russia’s turn to announce it would seek its own "national payment settlement system" following last week’s surprising and unmandated service halts by both Visa and MasterCard, which as Vladimir Putin said earlier today, will be a "bid to reduce economic dependence on the West."

Putin observed, cited by AFP, that Russia is aggressively looking to trim its dependence on the west for payment settlement: "In countries such as Japan and China these systems work, and work very well," Putin told lawmakers in televised remarks.

"Initially, they started out solely as national systems limited to their own markets, their own territory, their own population but they are becoming more popular right now… Why should we not do it? We should definitely do it and we will do it," he said, noting that Russia’s Central Bank and the government have been looking into the matter.

And as everybody knows, while the biggest trump card over the West Russia has are its energy exports, one can retort that Western leverage over Russia is in the form of SWIFT, or the "Society for Worldwide Interbank Financial Telecommunication", aka the umbrella framework for all interbank transactions taking place in a petrodollar world. If and when the day comes when Russia and/or China and/or India and/or any other BRICs and other nations who are tired of the hegemony of the fading US superpower, decide to create their own version of Swift, all bets on the reserve currency for the past century are off.


US human rights record chastised in UN report
UN human rights committee raises concerns over torture, drone strikes, the death penalty and NSA data collection
Matthew Weaver, Thursday 27 March 2014 13.28 EDT

The UN has delivered a withering verdict on the US’s human rights record, raising concerns on a series of issues including torture, drone strikes, the failure to close Guantánamo Bay and the NSA’s bulk collection of personal data.

The report was delivered by the UN’s human rights committee in an assessment of how the US is complying with the International Covenant on Civil and Political Rights [ICCPR], which has been in force since the mid 1970s.

The committee, which is chaired by the British law professor Sir Nigel Rodley, catalogued a string of human rights concerns, notably on the mass surveillance exposed by the whistleblower Edward Snowden.

It said the collection of the contents of communications from US-based companies under the Prism program had an adverse impact on the right to privacy. It added that the legal oversight of such programs had largely been kept secret and failed to protect the rights of those affected.

The UN committee urged the US to overhaul its surveillance activities to ensure they complied with US law and conformed to US obligations under the ICCPR.


Fed’s Bullard: Financial stability concerns loom large
By Laura He

HONG KONG (MarketWatch) — St. Louis Federal Reserve Bank President James Bullard said Thursday that the key risk for U.S. economy would be a bubble forming as the central bank removes monetary-policy accommodations, while he also raised concerns about financial stability in the U.S. economy. "I don’t see a major bubble right now, but one will form as we are trying to remove the accommodation in the years ahead, because that’s what exactly had happened in the 2004-2006 period," Bullard told the Credit Suisse Asian Investment Conference in Hong Kong. "I do think that’s a key risk going forward," he said. Bullard related the risk to the situation in 2006, the housing prices had already started to peak at the same time as the central bank was in a tightening cycle. "Just because you are moving away accomodation doesn’t mean the risk of bubble forming is going away," he said. Bullard also emphasized that financial stability concerns are "looming large," as policy makers are thinking about how to accommodate those concerns. He said macroprudential tools, which have been strengthened, can be used to address emerging bubbles. Bullard is a non-voting member of Federal Open Market Committee this year.


Jim Sinclair’s Commentary

Every step forward for the Chinese currency is a move backwards for the dollar.

Bank of England agrees Chinese London currency clearing hub
26 March 2014 Last updated at 09:32 ET

The Bank of England has agreed a deal with the People’s Bank of China to make London a hub for Chinese currency dealing.

The memorandum of understanding, to be signed on Monday, sets out settlement and clearing arrangements for the renminbi, or yuan, in London.

The signing is expected to be followed by the appointment of a London clearing bank for yuan.

62% of yuan payments outside of China already take place in London.

Following an agreement with Beijing last year London asset managers are the only ones in the West able to invest directly in Chinese stocks and shares in yuan.

London hub

Last year the UK and Chinese central banks signed a three-year currency swap arrangement worth 200bn yuan which allows them to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars.



Ukraine Parliament Rejects IMF’s Bailout Terms (As US Passes Ukraine Aid Bill)
Tyler Durden on 03/27/2014 12:32 -0400

The US Senate is more than happy to hand over a few billion and confirm sanctions:



But, it seems the IMF’s requirements for Ukraine’s bailout are too much for the locals to bear:


Lawmakers will continue to work on the bill as it seems they approve the top-line budget but not the taxes required to get there… beggars can be choosers again maybe?

US says "yes" to US Aid; Via NY Times,

The Senate voted overwhelmingly on Thursday to approve a billion-dollar aid package for Ukraine, two days after Senate Democrats relented to Republican demands that they drop a provision backed by the White House that would have authorized an overhaul of the International Monetary Fund.

The vote was 98 to 2. The House is expected to pass a similar bill later in the day. President Obama has said he will sign the bill, which includes new sanctions against Russians and Ukrainians who provided support to Russia to annex the Crimea region of Ukraine.

“This bill is a first step toward supporting the Ukrainians and our Central and Eastern European partners, and imposing truly significant costs on Moscow,” the House majority leader, Eric Cantor, said in a floor speech as his chamber considered its bill.


German chancellor Merkel against imposition of economic sanctions on Russia
27 March 2014, 01:05

German Chancellor Angela Merkel has said the crisis around Ukraine should be resolved by political means without imposing economic sanctions on Russia.

Merkel said in Berlin on Wednesday after talks with South Korean President Park Geun-hye that the West “has not reached a stage that implies the imposition of economic sanctions” on Moscow.

“And I hope we will be able to avoid it,” she said. “I am not interested in escalation. On the contrary, I am working on de-escalation of the situation.”

German experts say economic sanctions against Russia that Western countries could impose for Russia’s position on the situation in Ukraine and Crimea would negatively affect Germany’s economy.

The German-Russian trade in 2013 totaled 76 billion euros; some 6,000 German companies do business with Russian enterprises; the overall volume of their investment totals 20 billion euros. Some 300,000 jobs in Germany depend on the country’s economic relations with Russia.


Posted at 2:31 PM (CST) by & filed under Jim's Mailbox.


It looks like Russia wants to give US a taste of military encirclement. I wonder if such potential bases will be traded off against US objections to Russian expansion in Eastern Europe.

CIGA Craig

Putin’s quiet Latin America play
By Kristina Wong

Away from the conflict in Ukraine, Russian President Vladimir Putin is quietly seeking a foothold in Latin America, military officials warn.

To the alarm of lawmakers and Pentagon officials, Putin has begun sending navy ships and long-range bombers to the region for the first time in years.

Russia’s defense minister says the country is planning bases in Cuba, Venezuela, and Nicaragua, and just last week, Putin’s national security team met to discuss increasing military ties in the region.

“They’re on the march,” Gen. James Kelly, commander of U.S. Southern Command said at a Senate hearing earlier this month. “They’re working the scenes where we can’t work. And they’re doing a pretty good job.”

Kelly said there has been a “noticeable uptick in Russian power projection and security force personnel” in Latin America.

“It has been over three decades since we last saw this type of high-profile Russian military presence,” Kelly said at the March 13 hearing.




The move towards war is truly in the blood of Americans.

CIGA Larry and Miki

Three Who Made A War
Paul Craig Roberts

The Spanish-American War was caused by three people: Teddy Roosevelt, Henry Cabot Lodge, and William Randolph Hearst. The war, which killed a number of Spaniards and Americans, including some prominent Harvard “Swells,” was based entirely on lies and machinations of these three men and served no purpose other than their personal needs. Princeton University historian Evan Thomas calls these three monsters The War Lovers.

Hearst needed a war to build his newspaper circulation. Roosevelt needed a war to
sate his blood-lust and desire for military glory. Lodge needed a war to reinvigorate American manhood and to enlist American manhood in his “Large Policy” of American Empire. Between them, thanks to the ignorance and stupidity of the American people, they pulled it off.

Their adversary was Speaker of the House, Thomas Brackett Reed, “the Czar,” the most powerful politician in Washington. Reed, an honest and incorruptible politician, saw Lodge’s policy of “American exceptionalism” as naked imperialism that stood in total opposition and in great danger to American purposes. Reed saw Roosevelt’s war lust as a diversion of national purpose from the reconstruction of an economy that increasingly served a shrinking minority at the expense of the American people. But Hearst, Roosevelt, and Lodge made “peace” an epithet. The American people, whose gullibility is never-ending, were captivated by war-lust. Reed lost confidence in the American people whom he so well served. Reed could find no moral purpose in pushing the country toward war over nothing but fake news reports by “yellow journalism.”

Only a few years previously, Reed had had to halt the Cleveland administration from going to war with Great Britain over a British boundary dispute with Venezuela concerning mineral-rich land claimed by British Guyana. Somehow this boundary dispute, which had no more to do with US security than Honduras, Afghanistan, Iraq, Libya, Syria, Pakistan, Somalia, Yemen, Georgia, Ukraine, and the South China Sea have today, was seen as a “threat to US national security.”


Posted at 11:27 AM (CST) by & filed under In The News.

KOO: The US Is In A ‘QE Trap’ And Both The Markets And The Media Missing It

Nomura economist Richard Koo is out with his first comments since Janet Yellen’s first FOMC meeting last week.

Remember, Yellen briefly spooked markets with what some perceived to be a hawkish tone, mostly owing to the specificity with which she talked about the timing of the first rate hike.

According to Koo, the US is in a "QE Trap" and both the market and the media are missing it. This trap, he says, explains the hawkish bent.

The argument is essentially that risks of very hot inflation are much higher now than they would be if we were coming out of a normal slump that didn’t require QE. But because we did QE, and there are all these excess reserves in the system, the potential for very rapid loan growth and very hot inflation are now significant, and thus the Fed has no choice but to be more hawkish than it otherwise would be at this stage in the recovery.

This is a contrarian stance that’s not in line with most thinking, but then Koo rarely is.

Markets and media unaware that US is in QE trap
Nevertheless, it was easy enough to predict that the Fed would have to move in this direction when it began normalizing policy after years of quantitative easing. The media’s criticism of her dialog with the market and market participants’ complaints about the lack of further accommodation tells us that most of them have yet to realize the US economy has fallen into the QE trap. Their ignorance is of far greater concern, in my view. Market participants and members of the media simply do not understand that an economic recovery in a country that has undertaken QE is going to be very different from a recovery in a country that has not.


Russia’s actions in Crimea ‘completely understandable’ – German ex-chancellor
Published time: March 26, 2014 17:57

Moscow’s actions in the Crimea are comprehensible, former German chancellor, Helmut Schmidt said, criticizing the Western reaction to the peninsula’s reunification with Russia.

President Vladimir Putin’s approach to the Crimean issue is “completely understandable,” Schmidt wrote in Die Zeit newspaper where he’s employed as an editor.

While the sanctions, which target individual Russian politicians and businessmen, employed by the EU and the US against Russia are “a stupid idea,” he added.

The current restrictive measures are of symbolic nature, but if more serious economic sanctions are introduced “they’ll hit the West as hard as Russia,” Schmidt warned.

He also believes that the refusal of the Western countries to cooperate with Russia in the framework of the G8 is a wrong decision.


Russian Sanctions Have Been Pointless, but the Next Ones Could Hurt the U.S. More
By Polly Mosendz March 25, 2014 3:33 PM

Since Russia’s annexation of Crimea, the United States has been issuing a series of retaliatory sanctions, all against particular Russian individuals. Moscow has responded in kind, with for tit-for-tat restrictions on American lawmakers. While they serve as useful shows of diplomatic strength, they have been largely toothless. Perhaps that’s because if more restrictions come, they could be just as bad for the West as they are for Russians.

The original U.S.-led sanctions were against 11 executives and politicians — specifically, Vladimir Putin’s innermost circle — a development that most Russian politicians found vaguely amusing. A Russian official joked, "So what if I can’t get a visa to the United States? I didn’t want to go there anyway."

Amidst criticism from the EU and other nations, the U.S. Treasury has updated their sanctions list, bumping it up to twenty Russian officials. The sanctions include sixteen government officials, including Putin’s chief of staff, Sergie Ivanov; the speaker of the State Duma, Sergey Naryshkin; and Viktor Ozerov, chairman of the security and defense committee of the parliament’s upper house. The Treasury has also prevented United States banks and individuals from doing business with Bank Rossiya, as the bank is associated with Putin’s inner circle. Still, no actual trade sanctions were issued against the country as a whole.

The European Union also joined in, sanctioning a total 33 officials, banning visas and freezing assets. Dmitry Rogozin, Deputy Prime Minister of Russia, was unfazed:


Paul Craig Roberts – The Greatest Crisis In Mankind’s History

Today former US Treasury official, Dr. Paul Craig Roberts, warned King World News that the world is now facing the greatest crisis in the history of mankind.  Dr. Roberts also warned that the United States is in danger of being wiped off the face of the Earth.  The interview also contains an ominous warning for humanity.  Below is what Dr. Roberts had to say in this remarkable and timely interview.

Dr. Roberts:  “That government (in Ukraine) is conducting extraordinary propaganda against Russia, claiming that Russian troops are massed on the border and are going to invade Ukraine.  So they are creating this image which helps foment war.  Here’s the great danger in all of this….


Jim Sinclair’s Commentary

The most interesting part of GEAB #83′s report is note 10 where they talk about Europe’s political elite. Europe has no political elite (though politicians might disagree). Their elite is a mix of old nobility and banksters whose primary goal is the collapse of the current sovereign states to implement a true EU at all levels. I believe this is the underlying truth to what happened with Ukraine. Even the TTIT treaty is just another tool to get there: once the old colonies have been sufficiently plundered, their dollar will go the way of the dodo anyway so putting Europe in the dollar zone for a while is of no concern. Europe’s current states getting too friendly with Russia on the other hand is a totally different matter. It may also be the reason Mrs. Merkel is given speeches to read that make a sane observer question a lot of things.

Click here to view GEAB’s website…


The U.S. Can’t Really Undermine Russia by Exporting Gas
No matter how fast export facilities for liquefied natural gas are approved, it will be years before the U.S. can challenge Russia’s position as a dominant supplier.
By Mike Orcutt on March 18, 2014

Why It Matters

Russia’s position as dominant supplier of natural gas to Europe gives it a significant geopolitical advantage.

The crisis in Crimea has prompted calls for the U.S. to ramp up natural gas exports to Europe by quickly approving new facilities capable of liquefying the fuel and sending it overseas. The argument is that this could undermine Russia’s strategic power by reducing Europe’s heavy reliance on Russian gas.

The numbers on natural gas exported to Europe show just how simplistic this argument is. Russia dominates the market, and regardless of the speed of the approval process, it will take several years and tens of billions of dollars of investment for the U.S. to come close to Russia’s exports.

In 2012, pipelines carrying Russian gas supplied 34 percent of all the natural gas sold in the European Union by non-E.U. countries. Several nations, including Bulgaria, Lithuania, and the Czech Republic, rely on Russia to supply over 80 percent of their natural gas needs. Around 80 percent of the gas exported to Europe travels by pipeline; the rest arrives as liquefied natural gas (LNG).


UK to start directly buying Russian gas
Published time: March 24, 2014 11:02
Edited time: March 24, 2014 18:51

Britain will begin buying Russian gas directly this year, while the rest of Europe is attempting to cut its reliance on supplies from Moscow amidst the crisis in Ukraine.

Under a deal signed in 2012 the UK’s biggest utility company Centrica will start importing Russian gas from October this year, Reuters reports.

The deal remains in the pipeline, despite EU calls to move away from energy reliance on Russia. On Friday European Union leaders discussed the possible ways to diversify, as they say Crimea’s annexation by Russia made them more determined to take action.

UK domestic gas production is falling by about 7 percent annually, and the country is looking for alternative sources to fill the gap.

Supplies of Russian gas, which already provide a third of Europe’s needs, reach Britain through the central and south eastern parts of the continent, rather than directly. Most of Britain’s imports comes piped from Norway and liquefied natural gas (LNG) shipments from further afield.

Most Russian supplies have recently been from storage in Germany.


Document: JPMorgan Chase Bets $10.4 Billion on the Early Death of Workers
By Pam Martens and Russ Martens: March 24, 2014

(Left) JPMorgan’s European Headquarters at 25 Bank Street, London Where Gabriel Magee Died on January 27 or January 28, 2014 Under Suspicious Circumstances

Families of young JPMorgan Chase workers who have experienced tragic deaths over the past four months, have been kept in the dark on many details, including the fact that the bank most likely held a life insurance policy on their loved one – payable to itself. Banks in the U.S., as well as other corporations, are allowed to make multi-billion dollar wagers that their profits from life insurance policies on employees will outstrip the cost of paying premiums and other fees. Early deaths help those wagers pay off.

According to the December 31, 2013 financial filing known as the Call Report that JPMorgan made with Federal regulators, it has tied up $10.4 billion in illiquid, long term bets on the death of a large segment of its employees.

The program is known among regulators as Bank Owned Life Insurance or BOLI. Federal regulators specifically exempted BOLI in passing the final version of the Volcker Rule in December of last year which disallowed most proprietary trading or betting for the house. Regulators stated in the rule that “Rather, these accounts permit the banking entity to effectively hedge and cover costs of providing benefits to employees through insurance policies related to key employees.” We have italicized the word “key” because regulators know very well from financial filings that the country’s mega banks are not just insuring key employees but a broad-base of their employees.

Just four of the largest U.S. banks, JPMorgan Chase, Bank of America, Wells Fargo and Citigroup hold over $53 billion in investments in BOLI according to 2013 year-end Call Reports. Death benefits from life insurance is purchased at a multiple to the amount of the investments, meaning that $53 billion is easily enough to buy $1 million life insurance policies on 159,000 employees, and potentially a great deal more. Industry experts estimate that the total face amount of life insurance held by all banks in the U.S. on their employees now exceeds half a trillion dollars.


Jim Sinclair’s Commentary

These guys are geniuses.

Kiev Moves to disarm Ukrainians with Russia at the door
By Conor Higgins, Communities Digital News

WASHINGTON, March 24, 2014 — According to a report from the New York Times, the government of Ukraine has ordered any of its citizens in possession of “illegal guns” to turn them in to the authorities. This move is being heralded by the European Union, which has made this step a provision of membership. Kiev believes that disarming Ukrainians will go a long way to end the escalating destabilization and the ever present threat of violence that has risen with the formation of “self-defense groups.” Others see this as a superficial power grab, and meddling politics on behalf of Europe.

It is dangerous at this point to demand that Ukrainians disarm. It is dangerous for a number of reasons. First, the grip of the new government on the country is tenuous. Crimea has already been lost, with Ukrainian troops currently pulling out of their bases there in the wake of Russia’s decision to annex the peninsula.

Kiev is not up to the task of both courting the EU and the West, while fending off the Russian wolf prowling at their door. The Ukrainian government cannot afford to alienate themselves from the boots-in-the-square civilians who put them in power. Calling for disarmament has the potential of only further destabilizing the region. Second, it would be difficult to believe after weeks of taking machine gun fire during their protests that Ukrainians have any desire to be weaker than the government again.

Indeed, they were disarmed years ago, when President Obama urged and assisted Ukraine in collecting some 400,000 small arms from the country in an effort to lead them away from conflict. These people faced the machine guns and riot police of Viktor Yanukovych and won. They overthrew him, they believe they gained their freedom, and they armed themselves to make sure that they would not be taken advantage of again. It was the will and courage of the Ukrainian people that won the new Ukrainian government their seats, and it was the will and courage of the Ukrainian people that they are in a position to bargain with the E.U. Neither the Ukrainian government nor the E.U. has the right to demand that those same people disarm.


UBS Said to Suspend FX Traders in New York, Zurich and Singapore
By Liam Vaughan, Ambereen Choudhury and Gavin Finch

UBS AG suspended foreign-exchange traders in the U.S., Singapore and Switzerland as its investigation into the alleged rigging of currency markets widened, according to a person with knowledge of the matter.

They include Onur Sert, an emerging markets spot trader based in New York, and at least three more worldwide, said the person, who asked not to be identified because of the probe. Sert and Dominik von Arx, a spokesman for UBS in London, both declined to comment on the move.

Switzerland’s largest bank opened a review of its currency operations last year after Bloomberg News reported in June that traders in the industry had colluded to rig the WM/Reuters rates, a benchmark used by investors and companies around the world.

Sert, 30, previously worked for Standard Chartered Plc. UBS suspended Niall O’Riordan, its co-chief dealer, last year after regulators announced they were probing the $5.3 trillion-a-day market. The Zurich-based firm has also banned employees from taking part in instant-message groups involving other banks.

Authorities in three continents are investigating whether traders at some of the world’s largest banks sought to manipulate the WM/Reuters rates in their favor by pushing through trades before and during the 60-second windows when the benchmarks are set.


Posted at 11:04 AM (CST) by & filed under Jim's Mailbox.


Ukraine has 30% of the world’s top soil. As part of the West’s asset stripping, prime farmland will be sold off cheaply. China has long-term leases on huge tracts of Belarus farmland. I suspect the Chinese will try to buy the Ukrainian land before the West can steal it.

CIGA Craig

Ukraine’s Next Casualties Could Be Its Farmers
By Carol Matlack

After taking part in protests that toppled President Viktor Yanukovych in February, some Ukrainian farmers rushed back to their land to prepare for spring planting.

The question now is whether they can afford to grow what they plant. A 25 percent decline in the hryvnia currency this year has pushed up the cost of fertilizer and other essentials, while the government’s deteriorating finances are choking off farmers’ access to credit. Russia is adding to farmers’ woes by canceling discounts on fuel it sells to Ukraine—and by annexing Crimea, the site of several Black Sea ports that are important for agricultural exports.

“Neglecting these problems can cause the country another crisis—food,” Alex Lissitsa, president of the Ukrainian Agribusiness Club, said on March 18. The Kiev-based industry group is predicting that 20 percent of acreage set aside for grain and oilseed planting will go unsown this year.

Until recently, Ukrainian farmers were preparing for what looked to be one of their best years ever. “Ukraine is set to become the world’s third-largest exporter of corn and sixth-largest exporter of wheat in 2013-14,” London-based analysts Michael Lewis and Michael Hsueh of Deutsche Bank (DB) wrote earlier this year. “Despite the weakness in other parts of the economy, the agricultural sector has been a success story.”




They are presenting any and all reasons for being optimistic about the economic recovery in England. Figures don’t lie, but liars sure can figure.

CIGA Larry

Growth in wages indicates the economy is recovering says Bank of England expert
Mar 26, 2014 07:30
By David Millward

Economic growth is looking stronger as wages start to show signs of increasing, Bank of England expert Dr Martin Weale CBE had told the Reading Post .

The member of the Monetary Policy Committee, which sets the UK’s interest rates, says the signs are promising but the picture is brighter in some parts of the country than in others.

Dr Weale also said there can be no guarantees about any increases in interest rates in the future but he believes any rise will be gradual.

Agents from the bank’s Central Southern England division accompanied Dr Weale on a trip to Berkshire on Thursday, which included a visit to the Post’s offices.

He said: “My sense is things are going quite well. That looking at the evidence, the economy is growing in a way which is quite different from a year ago.


Jim Sinclair’s Commentary

Courtesy of CIGA Barry D.