In The News Today

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Jim Sinclair’s Commentary

The latest from John Williams’

– 1.5% GNP versus 2.4% GDP Reflected Net-Debtor Nation Status of United States
– First-Quarter Economic Growth Remained Statistically Insignificant
– Real Disposable Income Contracted Even Adjusted for Year-End Dividend Surge and

"No. 528: First Revision to First-Quarter 2013 GDP"

Jim Sinclair’s Commentary

We are in a global system. Risk in Europe is risk everywhere in the Western world financial system.

Risk of Bank Failures Is Rising in Europe, E.C.B. Warns
Published: May 29, 2013

FRANKFURT — The European Central Bank warned on Wednesday that the euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis, even as overall stress in the region’s financial markets had receded.

In a sober assessment of the state of the zone’s financial system, the E.C.B. said that a prolonged recession had made it harder for many borrowers to repay their loans, burdening banks that had still not finished repairing the damage caused by the 2008 financial crisis.

Last year “was not a good year for banks at all,” Vítor Constâncio, the vice president of the E.C.B., said Wednesday.

While the E.C.B., as customary, did not mention specific banks, it said the most vulnerable were those in countries with high unemployment or falling house prices. That list would include Italy, Spain, Greece and Portugal among others. But ailing banks are also a problem in stronger countries like Germany, where Commerzbank and publicly owned landesbanks, or state banks, are struggling with bad loans to the shipping industry and other problems.

Germany has drawn criticism for lecturing other countries on excessive government debt, while trying to protect its own banks from greater scrutiny. “They are very virtuous when they look at national accounts but less when they are looking at their own banks,” said Stefano Micossi, an economist who is director general of Assonime, an Italian business group.


Assad says Russian S-300 missiles have arrived in Syria
President claims delivery of long-range weapons believed to be in retaliation for EU decision to lift arms embargo
Luke Harding, Paul Owen, Phoebe Greenwood in Tel Aviv

President Bashar al-Assad has said Russian anti-aircraft missiles have arrived in Syria, Lebanese TV reported, in a claim that is likely to dramatically increase tensions in the region and could provoke the Israelis to launch a strike against the weapons.

In an interview with the al-Manar channel, to be broadcast on Thursday, Assad allegedly confirmed that Moscow had delivered the long-range S-300 air defence missiles. The TV channel is owned by the Shia militant group Hezbollah, whose fighters support the Assad regime.

The deal between the Kremlin and the Syrian government has been in train for some time. But the S-300 shipment, if confirmed, appears to be Russian retaliation for the EU’s decision this week to lift an arms embargo on Syria. Britain, France and others such as Turkey are seeking to arm the country’s moderate opposition.

Israeli officials admitted there was confusion as to whether Assad’s claim that he had received the S-300s was correct. "We are trying to find out exactly what the situation is but currently we just don’t know," one said. This week the defence minister, Moshe Ya’alon, signalled that Israel was prepared to destroy the Russian system on the ground before it became operational.

The high-ranking Israeli official added: "This move will certainly change the whole dynamic [of Israeli involvement in the Syrian conflict]. This is mostly as a result of the EU’s reckless decision to lift the arms embargo.



Jim Sinclair’s Commentary

Your protection in a financial storm is gold. Nothing green will do.



Jim Sinclair’s Commentary

Any questions why Germany is backpedaling on its hard austerity advice to all of Euroland? The answer is QE to Infinity everywhere with daily statements about stopping or curtailing.

German Unemployment Increased Four Times Forecast in May
By Stefan Riecher – May 29, 2013 2:32 AM MT

German unemployment rose more than four times as much as economists estimated in May as the euro area’s sovereign debt crisis and a long winter took their toll on Europe’s largest economy.

The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million, the Nuremberg-based Federal Labor Agency said today. That’s the fourth straight monthly gain. Economists predicted an increase of 5,000, according to the median of 35 estimates in a Bloomberg News survey. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent.

German gross domestic product grew just 0.1 percent in the first quarter after a 0.7 percent slump in the previous three months as the 17-nation euro area, the country’s biggest export market, remained mired in recession. Still, business confidence rose this month for the first time since February and consumer confidence is set to climb to the highest since 2007 in June, according to market researcher GfK AG.

“This is a clear warning that the debt crisis is finally taking its toll on the German labor market,” said Carsten Brzeski, senior economist at ING Groep NV in Brussels. However, weak data “can also be explained by the relatively high number of public holidays in May and the still cold weather. Therefore, it is far too premature to start singing Swan Songs on the labor market.”

The euro was little changed after the report and traded at $1.2887 at 10:23 a.m. in Frankfurt.


Jim Sinclair’s Commentary

Trader Dan on the Chinese purchase of Smithfield foods: Every time they make this type of the purchase they hedge more of their USA Treasury Instruments they hold because almost to a deal, they are dollar obligations around the world.

Will Chinese Firm Bring Home The Bacon With Smithfield Deal?
May 30, 2013 3:07 AM

There were questions Wednesday about whether U.S. regulators will approve the Inc., the company that sells all-American hams, hot dogs and bacon, by China’s Shuanghui International.

It’s being the biggest such takeover of an American company by a Chinese firm. Already, Wall Street traders were bullish on the plan, sending the company’s . Industry experts said it will increase exports to the burgeoning Chinese market.

"This does have the potential to increase U.S. pork exports to China, which would benefit all U.S. pork producers," said Dave Warner, director of communications for the National Pork Producers Council.

Impact On Industry

Dan Norcini, an independent commodities trader, said market reaction suggests the deal will be approved. But he had questions about the long-term impact on the pork industry. Shuanghui could ratchet up production to feed the growing demand for meat in China, Norcini said.

"If the Chinese come to own Smithfield, will Smithfield be at the dictates of its Chinese owner? Or will they let market forces determine whether they are going to expand their herd size or not?" he said. "That’s the big question because it could impact the rest of the industry."