In The News Today

Posted at 11:08 PM (CST) by & filed under In The News.

Dear CIGAs,

Last weekend the President’s meeting with the bankers at the White House was a repeat of the JP Morgan meeting with the then bankers, but this time the meeting ran into a problem. Even if the banks could cooperate, who is going to borrow?

The meeting with Jesse Livermore ran into the richest lobby effort ever and never took place. No meaningful action on the uptick rule means Jesse did not agree. No agreement from Jesse and no rally can have legs.

Putting out a new form of the uptick rule for discussion is no action at all. Both initiatives fail then all bear market rallies run into thunderous reactions and quick culmination.

The Evil Knievel Formation compliments of CIGA Currie:

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Jim Sinclair’s Commentary

We are so far from the end of this disastrous period.

Soros Predicts 30 Percent Fall in US Commercial Real Estate Prices
By Barry Wood 
Washington
26 March 2009

Legendary hedge fund investor George Soros said Thursday that US commercial real estate prices will fall 30 percent, a development that he says shows that the financial crisis is continuing.

Soros told a Washington forum that it is inevitable that commercial property prices in the United States will fall drastically. The 78-year-old investor said the price declines will come shortly. Other experts, including analyst Christopher Whalen, agree, saying the demand for commercial property is falling rapidly while overbuilding has created a huge surplus of supply.

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Jim Sinclair’s Commentary

Not everyone agrees with Timmy’s plan.

Bankrupting the world
By Jerry Mazza
Mar 30, 2009, 00:25

The so-called Public Private Partnership Investment Program (PPPIP) introduced last Monday, by Treasury Secretary Timothy Geithner not only stands to bankrupt America but the global financial system as well. This is the worst yet of the bailouts, a swindle if ever there was one, which will cause President Obama’s approval rating to plummet. In fact, count me among those coming to the president’s aid. I really don’t think he understands what this means.

Consider Geithner as the face, the voice though not the brain, for this program which advocates turning over the keys to the banking system to a bunch of hedge fund sharks, and all at taxpayer’s expense. The cost could more likely end up being $6 trillion than the $1 trillion in starter money. In fact, it’s more likely that the dastardly plan was launched like a missile from jolly old London, which is in line to lose big if their offshore hedge fund empire is shut down.

So, we are not dealing with just your typical political blunder. This is a policy fiasco built to bring down the United States altogether. I believe it’s coming from a London-based financial oligarchy out to do in the US altogether. Speaker of the House Nancy Pelosi and House Financial Services Committee Chairman Barney Frank and the one and only Larry Summers, head of the Whitehouse Economic Council, are completely complicit in what amounts to an act of treason in recommending this.

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Jim Sinclair’s Commentary

This is not in the definition of a Democracy.

New Task Seen for Fannie, Freddie
By JAMES R. HAGERTY

The regulator of Fannie Mae and Freddie Mac is considering giving the government-backed mortgage companies another role: helping to finance small mortgage banks.

A spokeswoman for the regulator, the Federal Housing Finance Agency, said it is looking at ways that the two companies might help revive the market for so-called warehouse loans, which are loans made to mortgage banks. This possible role for Fannie and Freddie is the latest sign of how they are being used increasingly as instruments of government policy rather than corporations focused on shareholder returns.

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Jim Sinclair’s Commentary

Look for Asia to back Russia on gold. Only the US Sheeple are clueless. Gold is your lifeline. Don’t let the paper players on the COMEX fool you. Anyone without gold is a castaway on the Ocean of Samaras. It is just that serious.

Russia backs return to Gold Standard to solve financial crisis
Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.
By Ambrose Evans-Pritchard
Last Updated: 8:23AM BST 30 Mar 2009

Arkady Dvorkevich, the Kremlin’s chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.

Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

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Jim Sinclair’s Commentary

The following video is Ambrose Evans-Pritchard on Gold.

Jim Sinclair’s Commentary

We are nowhere near overcoming the deep credit market lock up. Gold is your only way out. Take it or stay inside the problem.

Deutsche Bank’s Banziger Says Crisis ‘Far From Over’
By Aaron Kirchfeld

March 30 (Bloomberg) — Deutsche Bank AG Chief Risk Officer Hugo Banziger said the global credit crisis is “far from over” and global financial regulations must be overhauled to regain investor trust.

“We are in the middle of it,” Banziger, 53, said today at an event at the Frankfurt School of Finance and Management. The industry has “an opportunity” to build a stable financial system that seeks higher capital buffers, and encourage investors to return money to the market and help stem the crisis, he said.

Deutsche Bank in February reported its first annual deficit in more than 50 years after the worst financial crisis since the Great Depression pummeled bond and stock trading. The crisis has caused $1.3 trillion in losses for financial companies worldwide, a total that may climb to more than $3 trillion, Banziger said today, citing forecasts.

Deutsche Bank has gained 40 percent this month in Frankfurt trading, valuing the bank at 18 billion euros ($24 billion), and eclipsing the 5 percent advance in the Bloomberg Europe Banks and Financial Services Index of 65 companies. The bank fell 10 percent to 28.75 euros in trading today.

The German bank skirted the worst of the U.S. subprime mortgage collapse by betting against the bonds that contributed to credit losses and writedowns at the world’s largest financial companies and forced government-led bailouts from Berlin to London to Washington.

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Jim Sinclair’s Commentary

Pakistan in crisis: When Pakistan falls it will start a ball rolling that can produce a $100 up move in crude that holds its price in the middle of a depression.

12 die in bloody siege at Pakistan police academy
By BABAR DOGAR – 2 hours ago

LAHORE, Pakistan (AP) — A group of gunmen, some in police uniforms, attacked a police academy Monday and held it for hours, seizing hostages, throwing grenades and killing at least six trainee officers before being overpowered by Pakistani commandos.

Four suspected militants were arrested while at least three blew themselves up in the eight-hour battle to retake the compound on the outskirts of Lahore in eastern Pakistan, said Rao Iftikhar, a top government official in Punjab province. He said three other bodies were still unidentified.

Interior Ministry chief Rehman Malik said one of the arrested man was an Afghan, and that investigators believe the attack may have its roots along Pakistan’s border with Afghanistan, where Taliban militants have hideouts. But Malik also pointed fingers at a Punjab based Sunni extremist group and also refused to rule out an Indian role.

As the siege ended, black-clad Pakistani commandos fired their guns in the air in celebration at the top of the building, shouting "God is Great!" and "Long live Punjab police!"

Officials said more than 90 officers were wounded and that some of the attackers wore police uniforms.

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Jim Sinclair’s Commentary

The statement that "We are on a Road to Hell" did in fact state the position of the G20 even if cloaked in plausible deniability.

The Hell in this statement is a worldwide Weimar if the G 20 was to do what the Obama Administration’s finance guys wished for. America is headed to this Weimar Hell, but only North Americans seem not to know it.

Being on this road that now has "no exit," Gold becomes your lifeline.

I mean this literally. It is your LIFEline.

Respectfully yours,
Jim

 

Jim Sinclair’s Commentary

The USA is not made up of people. It is made up of sheeple.

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Jim Sinclair’s Commentary

This is what is known as Permanently Impaired. There are plenty of them so get used to the new term of valueless and hopeless assets.

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Jim Sinclair’s Commentary

You think Fitch just realized this might carry a bit of risk, certainly when granted naked?

What raving BSers! Who do they think they are kidding.

Fitch rethinks structured credit counterparty risk
Mon Mar 30, 2009 11:40am EDT

LONDON, March 30 (Reuters) – Fitch Ratings proposed changing its evaluation of counterparty risk in structured finance deals after the rapid demise of Lehman Brothers and Icelandic banks last year hurt investors and forced some notes to default.

The ratings agency aims to help investors reduce exposure to counterparty risk embedded in collateralised debt obligations (CDOs), asset-backed securities and other types of structured credit.

Experience in 2007 and 2008 showed that counterparties such as Lehman could jump rapidly from an investment-grade rating to default and that a ratings downgrade could rachet up pressure on a bank to come up with more funding and push it into a downward spiral, known as "cliff" risk, Fitch said on Monday.

The ratings agency made several alternative proposals and asked people in the market to provide feedback by May 1. It scheduled a conference for Tuesday to discuss its presentation.

"There are a number of alternatives to the current approach," Stuart Jennings, Fitch managing director, said in a statement. "All provide enhanced mitigants to problems such a cliff risk, but equally each option has its own drawbacks as well as advantages." Under the existing rating system, when a counterparty’s rating falls below a minimum of ‘A’ for long-term deals and ‘F1’ for short-term, the investor has 30 days to replace that counterparty or get it to post collateral for mark-to-market losses before Fitch downgrades the deal.

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G20 meeting will fail

This week there will be a meeting between G20 leaders and central bankers in London to save the world economy.

Let us make it very clear – the meeting is bound to fail. There is no chance that the G20 leaders will reach an agreement that will save the world economy. Even two world leaders can’t agree on how solve the biggest global financial crisis that the world has ever encountered, never mind twenty.  Each one of twenty leaders has a different political agenda and they will all blame each other, so there is no possibility whatsoever that the meeting will result in more than the normal platitudes about cooperation  to solve the crisis. Both Merkel and Sorkozy have already rejected Gordon Brown’s proposed stimulus package and that is before the meeting has even started.

But the main reason why the meeting will fail to reach a result is the worthless derivatives of over $ 1 quadrillion and unlimited amounts of toxic debt which will never be repaid with real money.

We have long said that we will have a worldwide depression which will be worse than the 1930’s. But worse than that it will be a hyperinflationary depression in many countries.

The famous financier George Soros agrees with us.  He sees a global financial meltdown and a major depression as he explains in an interview in the Times today (Soros interview). Soros also states that the UK will probably have to be bailed out by the IMF as we outlined in our February newsletter. But as we stated then, the IMF has also run out of money!

Although governments at the G 20 meeting will not solve the insoluble world financial crisis, they will continue with the only thing they know – TO PRINT MORE MONEY!

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Jim Sinclair’s Commentary

Everyone knows what has happened except Americans and Canadians. This article, published in Jakarta, calls for accountability of the raw criminality behind the scenes.

What Asia and the world need from America now
Tom Plate ,  Beverly Hills ,  California   |  Sat, 03/28/2009 1:29 PM  |  Opinion

What the American governing and legal establishment must do, before too much time goes by, is to come completely clean not only with the American people but with Asia, especially, which has poured so much of its wealth into the US China and Japan are its biggest financial investors.

Everyone needs to know what really happened and who should be held accountable for the raw criminality behind the scenes.

The US needs to come clean by devising a wide-ranging – but fair — criminal investigation of hedge-fund leaders and managers, derivatives sales groups and their allies, and of course any and all Ponzi-schemers that have defrauded people of their life savings. We don’t need a visceral witch-hunt; we require fair and honest accounting.

What’s at stake is not so much an eventual honest return on investments (which, in many instances, may be impossible, as many funds have vaporized down the rat-holes of criminal enterprises), but the credibility of the United States of America. And this is something that, when healthy, is priceless, and when destroyed, is worthless.

America, which has often and loudly described itself as a "nation of laws, not men *or women*," now needs to demonstrate for the world what that phrase represents. Criminal conspirators like members of the Mafia know what the lash of our law can mean.

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Jim Sinclair’s Commentary

The supposed shock of other European nations at the statement of the President of the European Union is purely plausible denial and politics.

You read the position of France and Germany carried in the Euro press. The US is on a road to hell, so to hell with the US demand for drastic ramped up spending and tax reductions across Euroland.

We are on that "Road to Hell" so now gold is your lifeline and survival suit in the Bering Sea winter storms.

EU presidency: US stimulus is ‘the road to hell’
By AOIFE WHITE, AP Business Writer – Wed Mar 25, 3:38 pm ET

BRUSSELS – The head of the European Union slammedPresident Barack Obama’s plan to spend nearly $2 trillion to push the U.S. economy out of recession as "the road to hell" that EU governments must avoid.

The blunt comments by Czech Prime Minister Mirek Topolanekto the European Parliament on Wednesday highlighted simmering European differences with Washington ahead of a key summit next week on fixing the world economy.

It was the strongest pushback yet from a European leader as the 27-nation bloc bristles from U.S. criticism that it is not spending enough to stimulate demand.

Shocked by the outburst, other European politicians went into damage control mode, with some reproaching the Czech leader for his language and others reaffirming their good diplomatic ties with the United States. The leaders of EU’s major nations —France, Britain and Germany, among others — largely ignored Topolanek and his remarks.

Obama pays his first official visit to Europe next week, aiming to thrash out reforms to the global financial system with the Group of 20 nations and call on NATO allies to commit more troops to the U.S. war in Afghanistan.

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