In The News Today

Posted at 1:20 AM (CST) by & filed under In The News.

Dear CIGAs,

The following is CIGA Lyn’s volunteer crew practicing for the Hedgie hunt and subsequent feasting.

airborne

Because of the gigantic machine that is government, there cannot be a great deal of difference because of one man. President Obama has gathered so many "old School" thinkers about him that there is little, if any, room for imaginative thinkers that could possibly come up with innovative solutions.

clip_image001

Jim Sinclair’s Commentary

Now this is king of the bears. Note Bloomberg’s disavowal at the end of the article.

U.S. Housing Slump Has ‘Just Begun,’ Says Forecaster Talbott

Feb. 5 (Bloomberg) — Let’s say you own a $1 million home in Santa Barbara, California.

The house seemed like a steal when you bought it with that adjustable-rate mortgage in 2005. You still love the white beaches and those yachts bobbing up and down in the harbor.

Then you awaken early one morning, troubled that your monthly payments will soon double. You go out to pick up your newspaper and see for-sale signs on five houses on the street. One identical to yours just sold for $500,000.

Are you going to pay the bank $1 million plus interest for your place? John R. Talbott, a former investment banker for Goldman Sachs, poses that hypothetical question in his latest book of financial prophesy, “Contagion.”

His answer: “I don’t think so,” he says. “If I’m right, then this housing decline has only just begun.”

More…

 

Jim Sinclair’s Commentary

Recall who called Crude at $100 plus when it was laughed at.

Goldman Sachs lifts gold price forecast to $1,000/oz
Thu Feb 5, 2009 12:55am GMT

SINGAPORE (Reuters) – Investment bank Goldman Sachs raised its forecast for the price of gold to reach $1,000 an ounce in the next three months from its previous forecast of $700 due to rising investor demand for safe haven assets.

"The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange-traded funds (ETFs), and futures contracts as investors seek ‘a safe store of value’ amid the financial distress and inflation risks," it said in a report.

It also noted that a strong relationship betwween the price of gold in U.S. dollars and the exchange rate of the dollar against other currencies has begun to break down. Gold was trading at $903.15 an ounce by 0038 GMT, down $1.70 from New York’s notional close.

More…

Justin Oliver

clip_image001[4]

Not the Justin Oliver you were looking for?

 

Jim Sinclair’s Commentary

Seen any hedgies lately?

DSC_1948_edited-1

 

Dear CIGAs,

The general equity markets are trying to stage a rally. If the SEC would reinstate the uptick rule, maybe a 1930s rally in a bear market could occur. Let’s see if Mrs. Shapiro is a light in a very dark tunnel or if it is business as usual.

Jim Sinclair’s Commentary

Come on you guys out there with the money, get out of paper gold and get into the real fight.

Today Trader Dan said:

"A side note – deliveries in February have so far been disappointing when compared to December 2008. Only a bit more than 200,000 ounces of gold have been stopped compared to 1.17 million after the first 4 delivery days back with the December contract. That is not going to help dislodge the strangle hold that the bullion banks have on the Comex."

Nobody can complain about the Comex guys picking your pocket every day as long as gold is not taken delivery of from the Comex and moved out of their warehouse. The Comex cannot stop gold from going to $1650 and then on to Alf’s number as a product of the choice between public unrest and hyperinflation, a currency event.

All the Comex manipulators can accomplish is a move of the gold price backwards six feet after it has gone forward ten. This will happen on a constant basis until one day it blasts up and out by hundreds of dollars.

Jim Sinclair’s Commentary

The connected can do no PUNISHABLE wrong!

The best investment of a million dollars has not been in any business, stock, or commodity, but in past political donations.

That speaks tomes about where the dollar and all fiat currency is really headed and were gold is finally destined to be.

Madoff Outrage: Whistleblower Testimony Rips SEC
Rich Edson
Tuesday, February 03, 2009

The Madoff whistleblower, Harry Markopolos, has finally and publicly detailed his nearly eight-year investigation into Bernard Madoff — a period in which Markopolos said he feared for his life.

“If Mr. Madoff was already facing life in prison, there was little to no downside for him to remove any such threat,” said Markopolos’ testimony. “We did know, however, that he was one of the most powerful men on Wall Street and in a position to easily end our careers or worse.”

Markopolos provided detail evidence to the Securities and Exchange Commission from 2000 to 2008 and said there was an abject failure by the regulatory agencies, said his testimony.

More…

Jim Sinclair’s Commentary

The connected can do no PUNISHABLE wrong!

The best investment of a million dollars has not been in any business, stock, or commodity, but in past political donations.

That speaks tomes about where the dollar and all fiat currency is really headed and were gold is finally destined to be.

Madoff Outrage: Whistleblower Testimony Rips SEC
Rich Edson
Tuesday, February 03, 2009

The Madoff whistleblower, Harry Markopolos, has finally and publicly detailed his nearly eight-year investigation into Bernard Madoff — a period in which Markopolos said he feared for his life.

“If Mr. Madoff was already facing life in prison, there was little to no downside for him to remove any such threat,” said Markopolos’ testimony. “We did know, however, that he was one of the most powerful men on Wall Street and in a position to easily end our careers or worse.”

Markopolos provided detail evidence to the Securities and Exchange Commission from 2000 to 2008 and said there was an abject failure by the regulatory agencies, said his testimony.

More…

Jim Sinclair’s Commentary

Regardless of "Safe Haven," and whatever the fancy flavor of the month is, the US dollar will be ruled by the size of the US Federal Deficit, the condition of the US TIC report and US Trade Balance.

Algorithms distort everything. The new to-be TA gang get their pockets picked regularly.

In the end economic law rules. Economic law says that the US dollar will break the neckline of the huge Head and Shoulders being created in the US Trade Weighted Dollar and tank the US dollar all to hell.

This is no different than the flavor of the month that had the US dollar 30 year bond at 147.

There is no other possibility.

Big Deficits and a Weaker Dollar
by Michael S. Rozeff

Hyperinflation in the U.S. hasn’t happened for quite some time. The last two instances that come to mind are confederate money in the 1860s and the continentals in the 1770s. In both these cases, governments used inflation to finance wars because their tax systems were weak.

A strong tax system (from the government’s perspective) has several aspects. It has a large productive capacity that it can tax without causing production to decline by a great deal. It can enforce tax collections. The required taxes are low compared to the overall government spending.

The U.S. tax system is not weak, but it is weakening. The productive capacity is difficult to evaluate, but it too has probably weakened. The U.S. economy has a large government sector (at least 40 percent) that is relatively inefficient. It also interferes with and distorts the private economy. The federal government has not been able to finance its spending by current taxes in a long time. Instead it has resorted to borrowing (deficit spending) and inflation. The results are a large national debt and a depreciating currency.

U.S. government financing has weakened further in the past year. The government is borrowing very heavily to pay for such actions as the absorption of Fannie Mae and Freddie Mac, bailouts of AIG and large banks, and the rest of the Troubled Assets Relief Program. A short while ago, the government sent out $160 billions of dollars of tax rebates. Meanwhile the Fed has, on its own and with government cooperation, vastly increased credits to the private economy. This has dramatically inflated the monetary base.

The prospects for further tax cuts and higher government spending are bright. In particular, the federal and state governments have made large promises in Social Security and Medicare that, if carried out, mean much higher future government expenditures. These cannot be financed by higher taxes, as they would be too high and crimp production. This spells greater deficit spending, which in turn raises the prospect of higher inflation. In fact, the Fed has already begun to buy more securities in the open market. This "monetizes" debt or creates base money that allows banks to increase lending if they so choose.

More…

Jim Sinclair’s Commentary

The choice will come in the form of a political decision to redo the Kent State incident OR hyperinflation, a currency event. Count on hyperinflation, a currency event under the present administration and legislative. What decision do you think Barney will make?

Revolt Spreads Across the Globe as "Crisis" Continues to Unfold
Unrest rocks the streets of China, France, Russia, Mexico, and elsewhere. And it is spreading…
By Nathan Coe, GNN
Published: Wednesday February 4th, 2009

“They say that the fires of revolt will spread everywhere, and we see acts like damage to bank branches or state buildings and claims of solidarity with the Greek rioters.”

After numerous European governments expressed fear that the unrest in Greece would spread to neighboring countries and perhaps around the world, the spreading global revolt has taken on another tone: that of confronting the elite for their manipulation of the economic “crisis” (which is really a systemic collapse) in order to consolidate yet even more wealth as the masses of the world suffer the brunt of the former’s greed. The spirit of the Greek revolt has not been forgotten, however, for it is clear whose interests the police serve and protect (as America was recently reminded in Oakland).

As Iceland became the first country to fall due to popular revolt against the economic elite, and then proceeded to elect their first female PM, who is also openly gay, things are heating up around the globe. Recently, over 1,000 protesters assembled illegally to protest the World Economic Forum in Geneva, Switzerland, and while the protests were overwhelmingly peaceful, fear of unrest prompted the police to systematically target and arrest known and identified militants and revolutionaries.

As GNN’s Grady reports, in China “2,000 workers and farmers held wage protests for twelve days outside of Shanghai” in December 2008, “striking workers and security guards clash in a textile factory in Dongguan” on January 15th, and on January 16th, “100 police officers stage a rally in Shenzhen after being sacked from their jobs.” The Times Online also reports that in the southern province of Guangdong, “three jobless men detonated a bomb in a business travellers’ hotel in the commercial city of Foshan to extort money from the management.” In the 12 days of mass demonstrations last December, the Times reports:

…angry workers besieged labour offices and government buildings after dozens of factories closed their doors without paying wages and their owners went back to Hong Kong, Taiwan or South Korea. In southern China, hundreds of workers blocked a highway to protest against pay cuts imposed by managers. At several factories, there were scenes of chaos as police were called to stop creditors breaking in to seize equipment in lieu of debts.

More…

 

Jim Sinclair’s Commentary

Today in the stinking criminal under-world of hedge fund lowlifes:

Judge asks whether guards can use deadly force should Marc Dreier …
New York Daily News – New York,NY,USA
Dreier, 58, is accused of duping hedge fund investors out of nearly $400 million through a scheme to sell fake promissory notes. Shargel estimates that the …

Shredded letter haunts accused hedge fund swindler in court
New York Daily News – New York,NY,USA
BY THOMAS ZAMBITO Prosecutors cited more than just a shred of evidence Tuesday against a hedge fund manager accused of ripping off clients – they …

LuxAlpha Liquidation Sought by Regulator Over Madoff
Bloomberg – USA
3 (Bloomberg) — Luxembourg’s financial regulator will ask a court to liquidate Access International Advisors LLC’s LuxAlpha Sicav-American Selection fund …

Mass. fund fires firm that put money with Madoff
Reuters – USA
By Svea Herbst-Bayliss BOSTON, Feb 3 (Reuters) – Massachusetts’ state pensionfund fired a hedge fund firm on Tuesday that lost millions by putting money …

The Criminal Report Daily : Investigation Discovery: Missing …
By David Lohr 
Arthur G. Nadel, the missing 76-year-old hedge fund manager from Sarasota, Fla., was arrested last week after turning himself in to federal authorities. According to the US Attorney’s Office, Nadel, accompanied by two …

Jailed Hedge Fund Manager to Face Charges in New York — Attorney …
By timgrenda 
Nadel, 76, managed six New York-based hedge funds, but disappeared in January 2009 after investors learned their accounts had been drained. He remained missing for several weeks until federal investigators tracked him down in Tampa, Fla. and placed him under arrest. … The investigation into Nadel’s handling of customer investments began in the wake of the arrest of another New York money manager accused of defrauding investors. That man, Bernard Madoff, …

Hedge Fund Zone » Luxembourg to shut down Madoff-linked hedge fund
By Yahoo! News – Search Results for "hedge fund" 
Find the best information on hedge funds! … Hedge Fund Zone. "It’s Time to Discover the BEST Information About Hedge Funds!" February 3, 2009. Luxembourg to shut down Madoff-linked hedge fund. Luxembourg financial supervisors said …

Reporter Arrested At Madoff’s Front Door | FINalternatives
By Jon Shazar 
There were more losers than winners in the hedge fund universe last year as fundsgrappled with a deteriorating credit market and a global equity sell-off. One firm that bucked the trend with its strong performance was …

Arrest in suspicious powder mailings to be aired – Texas News …
By Examiner Texas Headlines 
Arrest in suspicious powder mailings to be aired – Texas News, 2009-02-03 14:57:33 on ArticleBlip.com, all news no fluff.

Jim Sinclair’s Commentary

Between an ally denying the US a key airbase and this push out of Pakistan, President Obama is being challenged in a pincer move in Afghanistan.

Taliban Destroys a Key Bridge in Pakistan

Main Supply Route For U.S. Is Cut Off
By Candace Rondeaux
Washington Post Foreign Service
Wednesday, February 4, 2009; Page A12

ISLAMABAD, Hundreds of trucks bearing NATO supplies idled at terminals near the city of Peshawar in northwestern Pakistan on Tuesday after Taliban fighters blew up an iron bridge about 15 miles away. The explosion, the latest in a spate of attacks, cut off the main supply route for U.S.-led forces in Afghanistan, complicating plans to substantially increase the Western military presence there and roll back recent gains by Taliban forces.

For a quick look at the state of the war on terrorism in Pakistan and Afghanistan, one need travel only as far as Peshawar’s Karkhano Market. Set at the edge of the sprawling city of 3 million in a dusty warren of ramshackle kiosks, the 24-year-old market has long been known as a key smuggling hub for the hundreds of traders who regularly cross the mountainous no man’s land that lies between Pakistan and Afghanistan.

Business has been especially brisk in recent months, in the wake of more than a dozen major Taliban attacks on NATO supply routes and the creeping encroachment of insurgents in northwest Pakistan, according to Karkhano shopkeepers. Goods pilfered from raids on NATO supply trucks have become a mainstay for shopkeepers like Noor Mohammed.

Customers at Mohammed’s small kiosk can easily purchase a set of American-made tools or an American flag or a durable American-made pistol holder. A U.S. military-issue ammunition vest and staff sergeant’s sun cap together cost a mere $20. "It’s not a problem to get anything here as long as you have the money," Mohammed said. And, with AK-47 assault rifles selling for about $1,000 apiece, profits have never been better.

More…

Militants killed, NATO trucks targeted in NW Pakistan

From Zein Basravi
CNN

ISLAMABAD, Pakistan (CNN) — Conflict raged Wednesday in volatile northwestern Pakistan, with nine militants killed in a gun battle, the Taliban’s abduction and release of about 30 police officers, and strikes on stranded NATO trucks.

It’s the latest fighting between Pakistani security forces and the Taliban militants in the northwestern region near Afghanistan.

The country’s central government has little control in the area, and U.S. intelligence officials say the area is a haven for militants.

Nine militants were killed when police and local residents foiled an attempted kidnapping of the mayor in a village on the outskirts of Peshawar, police told CNN. Taliban fighters attempted to abduct Fahim Ur Rehman, but police and residents resisted and a gun battle ensued.

More…

‘Taliban seize’ Pakistan policemen

Thirty Pakistani policemen are reported to have been captured by Taliban fighters in the northwest Swat Valley after they laid siege to a police station.

"Taliban kidnapped 30 policemen and blew up the police office after a day-long fight," Dilawar Khan, a regional police commander, said on Wednesday.

Army troops were sent to the Shamozai area in an effort to rescue the police officers but the operation was suspended after dusk fell, security officials said.

Four paramilitary and police officers were wounded in the clashes around the police station, a Pakistani intelligence official said.

More…