Jim Sinclair’s Commentary
Coming soon to bank you use.
BES shareholders brace for ‘bail in’
By Peter Wise in Lisbon
Regulators are preparing to inject up to €4bn into Banco Espírito Santo as part of a government-backed rescue that is expected to penalise shareholders and bondholders but spare taxpayers most of the burden of bailing out the distressed Portuguese lender, according to people familiar with the situation.
Carlos Costa, governor of the Bank of Portugal, was expected to make a statement on the rescue late on Sunday.
Lisbon is expected to use a small bank resolution fund financed by the Portuguese financial sector as a vehicle to acquire BES. It would then be recapitalised and sold to private investors after its toxic assets were removed to a separate “bad bank”, Luís Marques Mendes, a former leader of the governing Social Democrat party, told Portuguese television.
EU regulators have promised a tougher stance on mismanaged lenders, and a bail-in for BES shareholders and bondholders would demonstrate that they are ready to protect taxpayers from bearing the cost of bank rescues before legislation on the issue comes into force at the end of 2015.
Pedro Passos Coelho, prime minister, has also pledged that Portugal’s taxpayers will not be called on to bail out failing banks.
A rapid intervention to rescue BES has become increasingly probable since Wednesday when the lender reported a first-half net loss of €3.58bn and impairments totalling €4.25bn. The record loss wiped out the bank’s capital buffers, dangerously weakened its solvency ratios as its share price plummeted.
Jim Sinclair’s Commentary
There is light at the end of this manipulative tunnel.
Mining Stocks Climb Into Top 10 Of IBD Industry Ranks
By SCOTT STODDARD, INVESTOR’S BUSINESS DAILY
Posted 08/01/2014 06:03 PM ET
Gold and silver miners have risen into the upper echelon of IBD’s industry ranks in recent weeks amid a pickup in profit growth.
The Mining-Gold/Silver/Gems industry stood at No. 7 out of 197 as of Friday’s IBD. That’s up from No. 26 six weeks ago.
Also, the broader mining sector was ranked fifth out of 33.
As a whole, the 50-stock group is up 29% this year, easily outpacing the S&P 500’s 4% gain.
Agnico Eagle Mines (NYSE:AEM) leads the industry with a Composite Rating of 96. However, the stock fell sharply Thursday after the company announced profit of 28 cents per share in the second quarter, rebounding from a loss of 3 cents in the same period last year but below Wall Street estimates.
Revenue for the period jumped 30% to $437.8 million, accelerating from the prior quarter’s 17% gain and the biggest increase in 13 quarters. The stock is getting support at its 10-week moving average for the first time since it broke out of a cup-with-handle base in mid-June.
While that technically puts Agnico in a secondary buy range, investors should be cautious with the market in weak condition and the severe selling last week in Agnico shares.
Missing Soldier Killed in Battle, Israel Confirms
By STEVEN ERLANGER and JODI RUDORENAUG. 2, 2014
JERUSALEM — The Israeli military said early Sunday morning that an officer thought to have been captured by Palestinian militants during a deadly clash Friday morning, which shattered a planned 72-hour cease-fire, was now considered to have been killed in battle.
The announcement came just hours after Prime Minister Benjamin Netanyahu vowed to continue Israel’s military campaign in the Gaza Strip as long as necessary to stop Hamas attacks, while suggesting a de-escalation of the ground war in Gaza may be near.
The case of the missing soldier, Second Lt. Hadar Goldin, 23, became the latest flash point in the conflict, prompting a fierce Israeli bombardment and calls from leaders around the world for his release. His disappearance came after Hamas militants ambushed Israeli soldiers near the southern border town of Rafah, at the start of what was supposed to have been a pause in the fighting.
As the death toll mounted Saturday to more than 1,650 Palestinians, many of them women and children, and images of homes, mosques and schools smashed into rubble filled the media, Mr. Netanyahu was under considerable international pressure, from Washington and Europe, to end the conflict. The United Nations warned of “an unfolding health disaster” in Gaza with little electricity, bad water and a lack of medical supplies.
Jim Sinclair’s Commentary
For those who believe the COT figures, please consider this.
CFTC Charges J.P. Morgan Securities LLC with Repeatedly Submitting Inaccurate Large Trader Reports and Imposes a $650,000 Civil Monetary Penalty
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against J.P. Morgan Securities LLC (JPMS), a wholly-owned subsidiary of JPMorgan Chase & Co. and a CFTC-registered Futures Commission Merchant (FCM), for submitting inaccurate reports to the CFTC relating to the required reporting of positions held by certain large traders whose accounts are carried by JPMS. The reporting violations occurred despite the CFTC notifying JPMS of numerous errors in its reports. The CFTC Order requires JPMS to pay a $650,000 civil monetary penalty to address its unlawful conduct.
The reports are known as the “large trader” reports and are used by the CFTC in order to evaluate potential market risks and monitor compliance with CFTC requirements.
CFTC Director of Enforcement Aitan Goelman commented: “The large trader reports are vital to the CFTC’s role in monitoring market behavior and are important to members of the public, many of whom rely on that information in forming trading strategies. Therefore, submission of accurate and reliable data to the CFTC is essential. The CFTC will be vigilant in enforcing these rules in order to ensure the integrity of the regulatory structure and to maintain transparency in the markets.”
The CFTC Order specifically finds that since at least 2012, the CFTC was notifying JPMS about errors in its large trader reports, which increased in frequency throughout the year. CFTC Regulations require FCMs to submit information on a daily basis for certain large traders, such as the number of open futures or options positions; the number of delivery notices issued or stopped; and the number of Exchange For Related Positions (EFRPs). In December 2012, the CFTC notified JPMS that the on-going problems were unacceptable. JPMS, relying on its third-party vendor that generated the reports for JPMS, assured CFTC staff that the problems would be resolved on or before the end of January 2013. However, JPMS continued to submit large trader reports that contained hundreds of errors throughout the period from February 1, 2013 to February 2014.
Accordingly, the CFTC Order finds that JPMS violated Section 4g(a) of the Commodity Exchange Act (CEA), 7 U.S.C. § 6g(a) (2012), and CFTC Regulation 17.00(a)(1), 17 C.F.R. § 17.00(a)(1) (2013), with respect to its large trader reporting of delivery notices and EFRPs in connection with futures positions.
In addition to imposition of the $650,000 civil monetary penalty, the CFTC ordered JPMS to submit a certified statement of compliance within 120 days of the entry of the CFTC Order stating that it has completed enhancements to its systems and procedures related to reporting of delivery notices and EFRPs, and has tested such systems and procedures to ensure that they now comply with the requirements of the CEA and CFTC Regulations.
Jim Sinclair’s Commentary
Act and reaction is the formula for spreading economic war.
Russia Eyes Banning U.S. Chicken And Some European Fruit
By Brian Wingfield and Ilya Arkhipov Jul 29, 2014 12:21 PM ET
July 29 (Bloomberg) — The U.S. and the European Union may move as soon as today to impose tougher sanctions on Russia as Vladimir Putin’s government formulates its response to growing international pressure over the conflict in Ukraine. Ryan Chilcote reports on “In The Loop.” (Source: Bloomberg)
Facing tougher sanctions over Ukraine, Russia said yesterday it may ban imports of chicken from the U.S. and fruit from Europe and is investigating McDonald’s Corp. (MCD) cheese for safety.
Meanwhile, a Russian lawmaker has drafted legislation that might result in U.S. accounting firms such as Deloitte LLP and KPMG LLP being barred from doing business in his country.
While Russia and the U.S. have long sparred over agricultural trade, the actions fueled speculation they could be retaliatory. The 28-nation European Union and the U.S. plan to impose stiffer sanctions to punish Russian President Vladimir Putin’s government.
“It’s a troubling continuation/expansion of trade as a geopolitical tool,” Gary Blumenthal, president of World Perspectives Inc., a Washington-based agricultural consulting firm, said in a phone interview.
Jim Sinclair’s Commentary
War can start by mistake when combatants and spies are in the same airspace.
U.S. official: Spy plane flees Russian jet, radar; ends up over Sweden
From Barbara Starr, CNN Pentagon Correspondent
updated 10:56 AM EDT, Sun August 3, 2014
Washington (CNN) — The Cold War aerial games of chicken portrayed in the movie "Top Gun" are happening in real life again nearly 30 years later.
A U.S. Air Force spy plane evaded an encounter with the Russian military on July 18, just a day after Malaysia Airlines Flight 17 was downed by a suspected surface-to-air missile that Ukraine and the West allege was fired by pro-Russia rebels in eastern Ukraine.
The RC-135 Rivet Joint fled into nearby Swedish airspace without that country’s permission, a U.S. military official told CNN. The airplane may have gone through other countries’ airspace as well, though it’s not clear if it had permission to do so.
The U.S. plane had been flying in international airspace, conducting an electronic eavesdropping mission on the Russian military, when the Russians took the unusual action of beginning to track it with land-based radar.
The Russians then sent at least one fighter jet into the sky to intercept the aircraft, the U.S. official said Saturday.
The spy plane crew felt so concerned about the radar tracking that it wanted to get out of the area as quickly as possible, the official said. The quickest route away from the Russians took them into Swedish airspace. The U.S. official acknowledged that was done without Swedish military approval.
As a result of this incident, the United States is discussing the matter with Sweden and letting officials know there may be further occurrences where American jets have to divert so quickly they may not be able to wait for permission.
G-20 Revolt? France Gets "Positive Reception" To Challenge US Bank Fines
Submitted by Tyler Durden on 08/03/2014 15:46 -0400
In recent weeks France has defied US demands not to build Mistrals for Russia, has questioned dollar imperialism and the Petrodollar, and has blasted the US banking regulator’s fines as "accelerating the decline of the dollar." So it is likely not a huge surprise that ahead of the G-20 meeting of world leaders later in the year, The FT reports, France has gathered support to challenge US regulators imposing heavy penalties on foreign banks.Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet hoping to bring "more proportionality" to bank fines. With allies like this…
As The FT reports, top regulators have been raising concerns about the impact of the long procession of fines on their efforts to strengthen banks’ finances.
France has gathered support to challenge US regulators imposing heavy penalties on foreign banks at a G20 meeting of world leaders later this year after the record $8.9bn fine levied on BNP Paribas last month.
Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet in Brisbane in Australia in November, according to French and other European officials.
“There should be co-ordination between regulators, as there should not be multiple jeopardy,”agreed one senior European official, who confirmed that there had been “informal discussions” about putting the issue of bank fines on the G20 agenda.
“It is an issue, but we have to be careful not to go into an area of saying ‘it is too much and we have got to lay off these guys’,” said the official, who added that the G20 could discuss how to bring more “proportionality” to bank fines.
French finance minister Michel Sapin sought support for France’s stance in recent meetings with Wolfgang Schäuble and Pier Carlo Padoan, his German and Italian counterparts, according to French officials. There was a “positive reception”, one said.
Jim Sinclair’s Commentary
So many moves are afoot to distance the USD.
Eurasian Economic Union plans to adopt common currency unit
August 03, 23:15 UTC+4
MOSCOW, August 03, /ITAR-TASS/. The Eurasian Economic Union of Russia, Belarus and Kazakhstan might adopt it’s a common currency unit, the Rossiiskaya Gazeta newspaper writes in its Monday issue.
The daily cites Bembya Khulkhachiyev, director of the Eurasian Economic Union’s financial policy department, as saying that the Union was planning to make a wider use of the national currencies of the three member states with an eye to create a common payment system. If these tasks are solved successfully, the issue of a common currency unit might be raised, he said.
Currently, the Eurasian Economic Union, according to Khulkhachiyev, makes 50% of internal settlements in roubles, 40% – in U.S. dollars, eight to nine percent – in euros. The share of other currencies barely reaches one percent.
Processes of financial integration within the Eurasian Economic Union “are especially important now that the European Union and the United States have imposed sanctions against Russia’s financial sector – Sberbank, VTB, VEB, Gazprombank and Rosselkhozbank,” the Rossiiskaya Gazeta notes.
The three countries signed a Eurasian Economic Union Treaty in May 2014. The Union is to supersede the Common Economic Space of Belarus, Russia and Kazakhstan on January 1, 2015. Two more countries of the Commonwealth of Independent States (CIS), Armenia and Kyrgyzstan, have announced their plans to join the Union.