In The News Today

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Jim Sinclair’s Commentary

Take warning. There is no Bull equity market with legs on Armstrong’s time table yet.

Merrill’s Rosenberg: Goodbye, Thank You, Yes It’s Just A Sucker’s Rally
Henry Blodget | May. 9, 2009, 9:06 AM

Merrill’s economist David Rosenberg left the firm yesterday (planned for several months).  And he went out swinging.  David has maintained from the beginning that the recent rocket rally off the lows is just a suckers’ rally, and he reiterated that view as he walked through the doors.

Some excerpts from his swan song, which was published Thursday:

Market likely to peak the end of the week [Yesterday].  Just as the clock is winding down on my tenure at Merrill Lynch, the equity market is winding up with an impressive near-40% rally in just nine weeks. For those that were still long the equity market back at the March 9 lows, a good ‘devil’s advocate’ exercise would be to ask yourself the question whether you would have taken the opportunity, if the offer had been presented, to have sold out your position with a 40% premium at the time. What do you think you would have said back then, as fears of financial Armageddon were setting in? We haven’t conducted a poll, but we are sure at least 90% of the longs at that point would have screamed “hit the bid!”

Are we at risk of missing the turn? Fast forward to today, and within two months optimism seems to have yet again replaced fear. Are we at risk of missing the turn? What if this is the real deal – a new bull market? This is the question that economists, strategists and market analysts must answer.

Risk is much higher now than it was 18 weeks ago.  The nine-week S&P 500 surge from 666 at the March lows to 920 as of yesterday has all but retraced the prior nine-week decline from the 2009 peak of 945 on January 6 to the lows on March 9. We believe it is appropriate to put the last nine weeks in the perspective of the previous nine weeks. To the casual observer, it really looks like nothing at all has happened this year, with the market relatively unchanged. But something very big has happened because the risk in the market, in our view, is much higher than it was the last time we were close to current market prices back in early January, for the simple reason that we believe professional investors have covered their shorts, lifted their hedges and lowered their cash positions in favor of being long the market. 



Jim Sinclair’s Commentary

For your information.

US swine flu overtakes Mexico’s as number of American cases soars to almost 3,000
The number of confirmed swine flu cases in the US has soared to 2,254, with 104 people in hospital, as the outbreak spreads around the world.
By Philip Sherwell in New York
Last Updated: 11:19AM BST 10 May 2009

There are another 700 presumed cases in the US which has overtaken Mexico, the epicentre of the outbreak, for confirmed infections after a “backlog” of laboratory tests was released. More than 4,000 people have been made ill in 29 countries, with at least 51 deaths.

The virus killed a woman in the Canadian province of Alberta, making it the third country to report a death. The unnamed victim, who was in her 30s and died on April 28th, had not travelled to Mexico but had other health problems, doctors said.

Canadian food officials also said that they suspect a herd of pigs in Alberta had been infected by a farm worker who had recently returned from Mexico in what would be the first case of human-to-swine transmission.

The death raised the confirmed global toll to 51 – 48 in Mexico, where three new deaths were reported in Saturday, and two in US border towns in Texas.

“Today there are almost 3,000 probable and confirmed cases here in the United States,” the CDC’s Dr Anne Schuchat told a news briefing. “The good news is we are not seeing a rise above the epidemic threshhold in that system.” Cases have been reported in 43 of the 50 states.

The confirmed number of new infections in Mexico, where the new mutant strain was first reported, rose from 1,204 to 1,578 as it sets up own facilities to run tests.



Jim Sinclair’s Commentary

Who enforces this, the Sheriff of Nottingham, NY?

Let’s hear a round of applause for the Greenwich, CT OTC derivative manufacturers and distributors who hold total karmic responsibility. This is a debt that will not be bailed out. They have changed a normal modest two to four year recession into a financial disaster that will probably be the biggest of all written and oral history. When they did it they had to know this would happen.

New York City Starts Charging Rent at Homeless Shelters
Updated 12:24 PM EDT, Sat, May 9, 2009

Even the homeless can’t escape the high price of a night in New York City.

City officials this month began charging rent to working families staying in public homeless shelters.

The policy stems from a 1997 state law that hasn’t been enforced until now. Under that law, shelter managers started to require families to pay a portion of their income, depending on the shelter and family size, according to  The New York Times. Residents could be expected to pay up to half their earnings.

Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.

One single mother living in a Manhattan shelter tells the Times she got a letter saying she had to give up $336 of the $800 she makes each month as a cashier. Vanessa Dacosta makes $8.40 an hour at Sbarro. She got a letter under her door at the shelter a few weeks ago saying she’d have to fork up nearly half of what she was bringing in.

For Dacosta, who pays nearly $100 a week on child care for her 2-year-old, paying the shelter is hardly an expense she can afford.

“It’s not right,” Dacosta told the Times. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”

But the city says it’s got to find a way to cover the costs of state housing aid. Officials had to pay back $2.4 million in 2007 that they said should have been paid by residents of homeless shelters who could afford it.


Jim Sinclair’s Commentary

He who has the surpluses and increasing gold holdings will overtake those that have lost the will, honor, courage and determination to be first.

Money is made today by destruction, not building, by fraudulent paper made good rather than morality in commerce.

China overtakes the US as Brazil’s largest trading partner
China has become Brazil’s most-important trading partner, disrupting a relationship between the United States and the Latin country that stretches back to the 1930s.
By Malcolm Moore in Shanghai
Last Updated: 9:57AM BST 10 May 2009

Welber Barral, the Brazilian trade minister, said total trade between Brazil and China had amounted to $3.2bn (£2.14bn) in April, representing a near twelve-fold increase since 2001.

The sum was greater than the $2.8 billion of imports and exports to the US and represented the second consecutive month that China had topped the trade table.

“It is a historic moment,” he said, adding that he expected China to remain in pole position for the rest of the year because its economy is still growing healthily. “China is now a platinum account [for Brazil],” said Douglas Smith, a Latin American economist for Standard Chartered bank.

The US has been Brazil’s principal trading partner for nearly 80 years, but a sudden surge in Chinese demand for Brazilian iron ore in the first quarter of this year dislodged the Americans.

The news is the latest sign of China’s increasing challenge to US hegemony in Latin America. China has been steadily increasing its sphere of influence and has become particularly close to the four “Red” South American countries: Venezuela, Bolivia, Ecuador and Peru.


Jim Sinclair’s Commentary

Let’s not forget those that have lost everything and have now fallen out of the social net of unemployment insurance. That is the real unemployment number, not the bull the liars pose.

Think of their anger and disgust as media pumps out the good news of a supposed slowing of the problem when they cannot find jobs no matter how much they try. They are forced to do part time or off the books jobs at a slave’s wage. This probably pleases Daddy Warbucks.

This suffering means nothing to the dancing TV clowns and Bloomberg Money Bunnies that welcome us to the new bulls**t bull market.

This is disgusting in its greed. This is evil in its disdain for the suffering multitude.

How about GM shutting down more plants?
How about Dupont further cutting staff?
How about Microsoft further cutting staff?
What if the Chrysler surgical bankruptcy becomes a regular bankruptcy?

Damn those bondholders of Chrysler who are pursuing their contractual rights. Who do they think they are?

Actual U.S. Unemployment: 15.8%

This morning’s news that U.S. unemployment has hit 13.7 million, pushing the rate to 8.9 percent, tells only half the story of this recession.

The total number of Americans who are not working full-time but ought to be is actually about 22 million, or 15.8 percent, according to the Bureau of Labor Statistics.

Who are those other 8.3 million Americans? Call them the unofficially unemployed.

As The Ticker points out each time the Bureau releases the monthly unemployment figure, it does not include many out-of-work Americans.

There are many reasons for this.

The bureau, which is under the Labor Department, cannot use unemployment compensation records to count the out-of-work, because they are not reliable or up-to-date enough. The bureau also cannot count every out-of-work person.

Instead, as The Ticker reported here in December: “In the case of the monthly jobs report, the Labor Department contacts 60,000 households to determine the unemployment picture for the entire workforce, which consists of about 154 million Americans.”