In The News Today

Posted at 5:43 PM (CST) by & filed under In The News.

Dear Friends,

1. The position of Volcker as Chairman of the Economic Advisory Board is a window dressing presently to placate conservatives.
2. Chairman Volcker is there, but on his own agenda, no one else’s.
3. Chairman Volcker, assuming he is blessed with eight more years of life, will once again perform as Master of the Financial Universe, saving whatever then is left of the USD.
4. All you need to do is review Chairman Volcker’s previous and present words to understand that agenda.
5. Yesterday, Chairman Volcker said it would cost trillions more, not billions, to paste together the tattered economy.
6. Chairman Volcker historically has defined the economic condition we are in as the Mother of Financial Crises. MOTHER OF ALL.
7. Chairman Volcker historically has said that the US dollar will decline as long as no policies are put in place with the proven capacity to change deficits towards surpluses.
8. Chairman Volcker had the total backing of the then sitting Administration when he bankrupted the USSR in the early 1980s.
9. Chairman Volcker will act when conditions get so terrible that the sitting Administration applies to him for his help. There will be a price for that help.
10. The Federal Reserve Gold Certificate Ratio, modernized and revitalized, will be adopted as I have outlined to you multiple times.
11. The Chairman will require that policies be put in place that have historical precedent to cause deficits to move towards surpluses, untenable now.
12. That mark to the low is a pummelled dollar below .5100 USDX.
13. This will mark the time for long term investment in companies leading the technology and biomedical fields of that time.
14. As a result of the "FRGCR" the price of gold will go up and remain up. This will effectively defeat 99.9% of the present gold writer’s outlooks for the metal.
15. I believe the most successful owners of gold will be the Carlyle corporation.
16. I believe the consolidator of the gold industry, assuming they rise to Russian and Chinese competition, will be Barrick. This has also been outlined to you multiple times.

Respectfully yours,

Obama names outside economic advisory panel

Published: Friday February 6, 2009

President Barack Obama on Friday charged a new Economic Recovery Advisory Board to provide him with independent advice on pulling the United States out of recession.

The president signed an executive order formally creating the board which will hold regular briefings for Obama and Vice President Joe Biden and will be under the chairmanship of former Federal Reserve chief Paul Volcker.

The board will be modelled on the Foreign Intelligence Advisory Board that offers the president an independent viewpoint on intelligence issues, the White House said.

Volcker, 81, played a prominent role during Obama’s election campaign, providing him with economic advice and gravitas as the US meltdown developed.

The announcement came on a day when new government data showed unemployment surging to 7.6 percent — the highest since 1992, as 598,000 jobs were cut.

Among other business figures on the new board were Obama supporter Penny Pritzker, chairman of the Pritzker Realty Group and former Obama campaign finance chair, Charles Phillips, President of the Oracle Corporation and Laura D’Andrea Tyson, a former Clinton administration economic official.



Jim Sinclair’s Commentary

Every bank has its own Patsy.

You know those trillion dollar deals don’t really stand out too well. Quadrillion dollar deals must be totally invisible.

Ever heard the words Compliance, Ethics and Oversight?

More major BS in a spin it all world.

Deutsche Bank Fallen Trader Left Behind $1.8 Billion Hole

The fall of Boaz Weinstein, once one of Wall Street’s hottest traders, speaks volumes about why financial firms still are reeling from the shattered global markets.

As a chess master, poker and blackjack devotee and top trader at Deutsche Bank AG, Mr. Weinstein made big bets using complex financial instruments, generating large returns for the bank and about $40 million in annual pay for himself. But in 2008 the group he ran saddled the bank with $1.8 billion in losses, erasing more than two years of trading gains.

On Thursday, the German banking giant reported a 2008 loss of $5 billion (€3.9 billion), its first one-year loss in over five decades and a reminder that financial firms are not out of the woods. In an earnings conference call, Chairman Josef Ackermann described the market environment as a "series of earthquakes with constantly changing epicenters."

The losses are the latest reminder of the challenges faced in the new financial order. Wall Street firms long relied for much of their profit on massive risk-taking by aggressive traders deploying the firms’ own money; with that game over, firms are struggling to find fresh sources of revenue.

But first they must stabilize their institutions after the holes dug by former Masters of the Universe. Last month, Deutsche Bank shut down Mr. Weinstein’s operation and wound down many of his positions. He left the bank this week, with plans to start a hedge fund.



Jim Sinclair’s Commentary

Today in Pakistan.

India: Official Accuses Pakistan in Mumbai Attacks
Published: February 6, 2009

India has for the first time directly accused Pakistan’s Inter-Services Intelligence spy agency of links to the planners of the terrorist attacks in Mumbai in November. “The perpetrators planned, trained and launched their attacks from Pakistan, and the organizers were and remain clients and creations of the ISI,” Shivshankar Menon, India’s foreign minister, said in a speech in Paris. Mr. Menon accused Pakistan of “prevarication” in investigating the attacks, which killed more than 160 people. The speech, delivered Wednesday, was released to the news media on Thursday. Pakistan said Indian officials should avoid making such statements at a time when Islamabad was in the process of investigating the matter.


Pakistan nuclear scientist ‘free’

A court in Pakistan has freed disgraced nuclear scientist Abdul Qadeer Khan from house arrest.

Dr Khan, who has been under tight restrictions since 2004, can now leave home and receive visitors.

Dr Khan welcomed the ruling and said he was not bothered what the international community thought of his release.

Dr Khan admitted transferring nuclear secrets to other countries in 2004 but was later pardoned by former Pakistani President Pervez Musharraf.

The US has repeatedly said it wants to question Dr Khan but Pakistan has always refused access.


Reflecting upon Pakistan and Its Nuclear Weapons
February 6, 2009 – 12:00am
By Luis de Lencquesaing

The centrality of Pakistan was first revealed to me two summers ago. I was visiting Cornell friends in Islamabad and Lahore. During a dinner conversation I had with the Turkish ambassador — a diplomat who impressed me by his particularly refined vision of the global dynamics — the topic of Pakistan’s role in the world came up. The ambassador emphasized the strategic role of Pakistan, which sits at the juncture of the broader Middle-East and South Asia.

Is Pakistan not parted in two by the Indus River, on the banks of which Alexander the Great died, and which academics often define as the border between these two universes? This duality is not only geographic, but also cultural. Whether walking down the streets of Lahore, or crossing through villages in the Kashmiri mountains, I was struck by the contrast between the joyful women in their blue or pink Punjabi Shalwar Kamiz with a veil negligently passed over their heads, and the women in black Burkas, with only their mysterious eyes visible. The relaxed Islam of South Asia coexists with Saudi Wahhabism. Pakistan belongs to both worlds. Although Vice President Biden probably was not thinking about the Pakistani women when he visited the country a few weeks ago — I guess you have to be French and 20 for that — he certainly was signaling that in the crucial regions of the Middle East and South Asia, Pakistan is the key actor. For that reason alone, it is the center of the world.

Dryden Road. Jan. 28, 2009. 7:30 a.m. I peek out the window from under my covers, see a snow storm, and wonder why I am not studying in California.

I get to the Statler for a working breakfast organized by the Cornell International Affairs Review on nuclear weapons in Pakistan. Gaurav Kampani, a graduate student in the government department who works on the politics of nuclear proliferation gave us a pessimistic presentation. In the midst of such a “wave of hope,” this talk reminded us that President Obama’s magic may not be enough to solve all the problems of the world between now and Slope Day.



Jim Sinclair’s Commentary

Hedge funds at the dock.

Market Rap – Bernard Madoff, the Mafia, and the Friends of Michael …
In 2005, Patrick Byrne, the CEO of (OSTK) and future Deep Capture investigative reporter, began a public crusade against illegal naked short selling (hedge funds and brokers creating phantom stock to manipulate stock … It is a common misperception that Boesky’s testimony led to the 98-count indictment of Michael Milken. Considering the scope of business the two criminals did together, Boesky actually provided very little information to the government. …
Recent Articles –

Judge Orders Accused NY Lawyer Freed on Bail – Funds and ETFs * US…
A U.S. grand jury indicted Dreier on Jan. 30, accusing him of securities fraud, conspiracy and wire fraud for lying to hedge funds and investment funds that he was selling notes on behalf of a New York developer and a pension fund in …
CNBC Top News and Analysis –

New York investment fraud lawyer Marc Dreier bailed out! | Press …
By heather 
As reported by Reuters, Dreier, a high profile New York attorney for 30 years, wasindicted by a US federal grand jury for securities fraud, conspiracy, wire fraud, misrepresenting hedge funds and investment funds in New York and … | Legal… –

[Updates] Riveting Testimony by a Great American, Harry Markopolos …
By Larry Doyle 
When Mr. Markopolos remarks that FINRA is in bed with the industry, is he referencing that they are invested in hedge funds, fund of funds, and private equity? Our new SEC chair, former FINRA chair Mary Schapiro, ….. Many of these people shouldn’t be appointed, they should be indicted. I guess honest and decent people like Harry Markopoulos don’t have a place in today’s governments. Obama promised change, but he has filled his administration with corrupt and incompetent …

The Divagator: Considerations of Huntington
By The Divagator 
2008 Was Lean Year for New Hedge Funds – Raising money to start any new venture was tough last year, but especially so if you were a hedge fund. Assets for new hedge-fund launches declined 35 perc… 23 minutes ago. Volokh Conspiracy …Germans Probe Report Of Nazi Doctor’s Death – German TV network says concentration-camp doctor Aribert Heim died in Cairo in 1992. He was indicted in Germany in absentia in 1979 on hundreds of counts o… 2 hours ago …
The Divagator –


Jim Sinclair’s Commentary

Pension funds are broke and those anticipating retirement are going to get a royal screwing. This is another problem akin the 1950’s Japanese SciFi wherein the unstoppable green blob ate the earth. Recognition that practically all major retirement fund are broke is the one that fires social unrest and hyper inflation. The green blob is the present economic rescue plan and the seven to follow.

Ford May Add $4 Billion to Pensions, Spurring Aid Bid (Update2)
By Keith Naughton

Feb. 6 (Bloomberg) — Ford Motor Co. may have to contribute $4 billion to its pension plan after a 2008 shortfall, a cash drain that risks dragging the second-largest U.S. automaker closer to a federal bailout.

The collapsing stock market left the fund with a $4.1 billion deficit for its projected obligations, after 2007’s $3 billion surplus, Ford said in its fourth-quarter financial results. That may force an infusion of money starting next year, according to the viability plan filed with Congress in December.

Such spending would add to the strain on the only Detroit automaker not relying on government aid. With U.S. auto sales at their lowest since the early 1980s, Ford said Jan. 29 it lost a record $14.6 billion last year and tapped its entire $10.1 billion credit line while the money was still available.

“The pension is another demand on cash at a time when Ford cannot really afford it,” said Pete Hastings, a fixed-income analyst with Morgan Keegan Inc. in Memphis, Tennessee.

Ford is working to pare costs through steps such as closing plants and is trying to raise money by selling its Volvo unit. The Dearborn, Michigan-based automaker is in early talks with China’s Geely Automobile Holdings Ltd., people familiar with the matter have said.


Jim Sinclair’s Commentary

8th in 2009 and counting.

California’s Alliance Bank marks eighth failure of the year
By John Letzing
Last update: 7:42 p.m. EST Feb. 6, 2009

SAN FRANCISCO (MarketWatch) — Culver City, Calif.-based Alliance Bank was closed by regulators Friday, marking the eighth bank failure of the year amid the ongoing credit crisis, the Federal Deposit Insurance Corporation said. San Diego-based California Bank & Trust has agreed to assume the failed bank’s deposits, the FDIC said. Alliance Bank had $1.14 billion in assets and $951 million in total deposits as of Dec. 31, the FDIC said.



Jim Sinclair’s Commentary

This is not capable of correcting the economic malaise as it does not even address the real problem.

It is quite capable of initiating the inflationary potential of monetary stimulation without any historical precedent.

The adventure begins now, which will culminate in an inflation of such dimension that it also lacks historical precedent.

Reinstate the uptick rule guys if you want a hand from an equity rally of some duration.

Senators Reach Accord on Stimulus Plan as Jobs Vanish

Published: February 6, 2009

WASHINGTON — Spurred by a dismal unemployment report for January and prodded by President Obama, senators reached an accord on Friday evening on an economic stimulus program of some $780 billion.

Democrats succeeded, after a long day of private negotiations and intense public debate, in winning the support of enough Republicans to move the package toward a final Senate vote, where Democrats are confident of passage, given the support announced by several Republicans. Exact outlines of the accord, which is somewhat smaller than the amount originally sought by President Obama, were not immediately available, but the senators agreed to cut some spending and strip out some business tax cuts to gain enough Republican support.

Senator Harry Reid of Nevada, the Democratic majority leader, hailed the agreement. “This is a very critical juncture for our great country,” he said on the Senate floor.

The timing of the Senate vote was not clear, but Mr. Reid signaled that action could take place over the weekend. Once it the package is approved, differences between the Senate legislation and a considerably different version passed recently by the House will have to be reconciled. President Obama has said he hopes all that can be accomplished in time for him to sign the measure within 10 days.

Three centrist Republicans, Arlen Specter of Pennsylvania and Olympia J. Snowe and Susan Collins, both of Maine, were among the senators wooed by Democrats, whose efforts were bolstered by Rahm Emanuel, the president’s chief of staff, who is a former Congressman from Illinois.