Jim Sinclair’s Commentary
The latest from John Williams’ www.ShadowStats.com.
– Shifting Production Detail Indicated Still Weaker First-Quarter GDP, Suggested Slowing Second-Quarter Inventory Growth (a GDP Negative)
– Volatile PPI Resumed Upswing in Inflation Reporting
Did the Other Shoe Just Drop? Big Banks Hit with Monster $250 Billion Lawsuit in Housing Crisis
Posted on July 16, 2014 by Ellen Brown
For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans.
In June, however, the banks may have met their match, as some equally powerful titans strode onto the stage. Investors led by BlackRock, the world’s largest asset manager, and PIMCO, the world’s largest bond-fund manager, have sued some of the world’s largest banks for breach of fiduciary duty as trustees of their investment funds. The investors are seeking damages for losses surpassing $250 billion. That is the equivalent of one million homeowners with $250,000 in damages suing at one time.
The defendants are the so-called trust banks that oversee payments and enforce terms on more than $2 trillion in residential mortgage securities. They include units of Deutsche Bank AG, U.S. Bank, Wells Fargo, Citigroup, HSBC Holdings PLC, and Bank of New York Mellon Corp. Six nearly identical complaints charge the trust banks with breach of their duty to force lenders and sponsors of the mortgage-backed securities to repurchase defective loans.
Why the investors are only now suing is complicated, but it involves a recent court decision on the statute of limitations. Why the trust banks failed to sue the lenders evidently involves the cozy relationship between lenders and trustees. The trustees also securitized loans in pools where they were not trustees. If they had started filing suit demanding repurchases, they might wind up sued on other deals in retaliation. Better to ignore the repurchase provisions of the pooling and servicing agreements and let the investors take the losses—better, at least, until they sued.
China financials dominate in EM debt issuance
By Thomas Hale and Christopher Thompson
China’s financial institutions are issuing more internationally-marketed debt than their counterparts in any other emerging economy as the country’s rapidly evolving financial sector continues to ramp up its global presence….
“China is simply moving towards its natural weight in international capital markets,” said Demetrio Salorio, global head of debt capital markets at Société Générale. “This is not just a spike – the proportion of bonds will continue augmenting as a proportion of emerging market debt.”
So far this year, Chinese financials have issued $16.9bn in internationally marketed issuance – already higher than the $9.2bn raised over the whole of last year. Internationally marketed issuance from Chinese financials was less than $1bn in 2008.
Most major Chinese banks have existing tier-1 capital adequacy ratios of at least 9.5 per cent, according to CLSA, meeting Basel III requirements. But many analysts believe more cash will need to be raised over coming years.
Iraqi forces withdraw from Tikrit offensive
Jul. 16, 2014 | 08:56 AM (Last updated: July 16, 2014 | 01:27 PM)
BAGHDAD: Iraqi forces have withdrawn from the militant-held city of Tikrit after their new offensive met heavy resistance, in a blow to the government effort to push back Sunni insurgents controlling large parts of the country.
The failure highlights the difficulties of Baghdad’s struggle to recapture territory from the insurgents who seized Mosul, Tikrit and other cities last month in a rapid offensive which threatens to fragment Iraq on ethnic and sectarian lines.
The setback came as Iraqi politicians named a moderate Sunni Islamist as speaker of parliament Tuesday. That was a long-delayed first step towards a power-sharing government urgently needed to confront the militants, who are led by the Al-Qaeda offshoot Islamic State of Iraq and Greater Syria (ISIS).
It is unclear if the election of Salim al-Jabouri as speaker will break the broader deadlock over Prime Minister Nouri al-Maliki’s bid to serve a third term. He has ruled since the April election as a caretaker.
Government troops and allied Shiite volunteer fighters retreated from Tikrit before sunset Tuesday to a base 4 km south after coming under heavy mortar and sniper fire, a soldier who fought in the battle said.
Expected Microsoft Layoffs Could Top 5,800, Report Says
Jul 15th 2014 6:02AM
By Supriya Kurane
Microsoft (MSFT) is planning its biggest round of job cuts in five years as the software maker looks to integrate Nokia Oyj’s handset unit, Bloomberg reported, citing people with knowledge of the company’s plans.
The reductions, expected to be announced as soon as this week, could be in the Nokia unit and the parts of Microsoft that overlap with that business, as well as in marketing and engineering, Bloomberg reported.
Since absorbing the handset business of Nokia this spring, Microsoft has 127,000 employees, far more than rivals Apple (AAPL) and Google (GOOG) Wall Street is expecting Chief Executive Officer Satya Nadella to make some cuts, which would represent Microsoft’s first major layoffs since 2009.
The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, the report said.
Some of the job cuts will be in marketing departments for businesses such as the global Xbox team, and among software testers, while other job cuts may result from changes Nadella is making to the engineering organization, Bloomberg reported.
Last week, Nadella circulated a memo to employees promising to "flatten the organization and develop leaner business processes" but deferred any comment on widely expected job cuts at the software company.
Bron Suchecki: GLD worries about failure of unallocated gold
Submitted by cpowell on 07:09AM ET Wednesday, July 16, 2014. Section: Daily Dispatches
10:08a ET Wednesday, July 16, 2014
Dear Friend of GATA and Gold:
The Perth Mint’s Bron Suchecki reports that gold exchange-traded fund GLD is proposing an amendment to its procedures that expresses concern about the reliability of unallocated gold.
Suchecki writes: "Why the need to clarify this now? Is there something the World Gold Council (which sponsors GLD) knows about the state of the market that didn’t exist before?"
Suchecki’s commentary is headlined "GLD Amendment Refers to ‘Unforeseen Reasons’ for Unallocated Failure" and it’s posted at his blog, Gold Chat, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.