Jim Sinclair’s Commentary
The latest from John Williams’ www.ShadowStats.com.
Financial Markets Are Starting to Take Note of Faltering U.S. Economic Activity and Perceived Fed Impotence
– Average Weekly Earnings Fell in September for “All Employees,” Both Before and After Adjustment for Inflation
– Monthly Real Retail Sales Rose by 0.26% in September, with Annual Growth Still Signaling Imminent Recession
– September Annual Inflation: 0.0% (CPI-U), -0.6% (CPI-W), 7.6% (ShadowStats)
– Having Pummeled Headline August and September Inflation, Gasoline Prices Are on Track to Boost the October CPI
“No. 759: September Consumer Price Index, Real Retail Sales and Earnings”
Jim Sinclair’s Commentary
More from Mr. Williams
– Annual Production Growth Collapsed to Recession Levels
– Despite a Quarterly Gain from the July Auto-Production Surge, Third-Quarter 2015 Production Activity Held Below Fourth-Quarter 2014 and First-Quarter 2015
– Recession Should Be Timed from December 2014
“No. 760: September Industrial Production”
Jim Sinclair’s Commentary
Isn’t it a little late to jump ship?
Deutsche Bank Board Member Stephan Leithner to Leave Bank
European executive oversees regulatory affairs and compliance
By Jenny Strasburg
Updated Oct. 15, 2015 5:22 p.m. ET
Deutsche Bank AGsenior executive Stephan Leithner plans to leave the bank after 15 years, vacating a management-board seat he has held since 2012, according to a person familiar with the matter.
Mr. Leithner is chief executive officer for Europe except for Germany and the U.K., and is broadly responsible for the German lender’s regulatory affairs, compliance and human resources.
Mr. Leithner plans to join European private-equity firm EQT Partners, as a partner in its Munich office, according to a person familiar with the matter. Bloomberg earlier reported his plans. Spokespeople for EQT and Deutsche Bank declined to comment. Mr. Leithner didn’t respond to requests for comment.
As a member of Deutsche Bank’s eight-member management board, Mr. Leithner has shared responsibility for companywide decisions about risk controls and strategy. The lender’s strategy is being overhauled under new co-CEO John Cryan, who started in July and has said he plans to streamline businesses, narrow the company’s focus and simplify its top-level committee structure.
Mr. Leithner was among current and former Deutsche Bank executives criticized earlier this year by Germany’s financial watchdog, BaFin, for alleged failures to stop market manipulation and address other cultural shortcomings at the bank. BaFin questioned whether Mr. Leithner was adequately forthcoming with regulators about traders’ roles in efforts to rig financial benchmarks. Mr. Leithner didn’t respond to questions about BaFin’s criticisms earlier this year or Wednesday.
Mr. Leithner previously oversaw European and Asia corporate-finance teams at Deutsche Bank, and German and European deal-advisory businesses. He previously was a partner at McKinsey & Co.
Is Japan “Inc.” Pulling Out Of The Comex And LBMA?
Posted on October 16, 2015 by The Doc
I would suggest that Mitsui’s move pull out of the NY and London – thereby joining Deutsche Bank and Barclays – is symbolic of the world’s increasing perception that the New York and London financial markets are the biggest Ponzi schemes in history.
At the very least, it suggests that the world of growing weary of the fraudulent paper gold and silver markets on the Comex and the LBMA.
Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
One of Japan’s largest global precious metals trading companies, Mitsui Precious Metals, is closing down its operations in New York and London by the end of 2015. Note that it will maintain its operations in Tokyo and Hong Kong – interestingly: Mitsui Pulls Out Of NY, London.
Mitsui is one of the largest business groups in Japan and one of the largest corporations in the world. “When in doubt, pull out.” In my view, this move reinforces the growing global fear of the massive paper to physical gold/silver leverage embedded in the NY/London banking system.
Remember, we are able to assess only what might be available to back visibly traded paper gold and silver derivatives (Comex futures, LBMA forwards). And reported inventories are based on reports submitted by the bullion banks and Central Banks. Do any of us really trust these bank reports as reported without visual confirmation and independent audits?
In fact, I will go as far to say that any analyst in this sector who presents any analysis and commentary based on bank-generated gold/silver inventory reports that does not stipulate up front that any and all information is based on reports that may or may not be accurate is thereby presenting invalid analysis.
Fox News’ terrorism expert arrested for lying about non-existent CIA career
Published time: 16 Oct, 2015 02:23
A frequent Fox News guest cited as a terrorism expert due to an extensive career with the CIA has been arrested and charged with fraud relating to that very career. He is accused of lying on official government documents.
Wayne Simmons has appeared on Fox News dozens of times since 2004, usually with a shortened title of “former CIA operative,”“analyst” or “officer.” On his personal website, he says he was recruited by the US spy agency after he joined the Navy in 1973 “to became part of an Outside Paramilitary Special Operations Group.”
In this role, he says he “spearheaded Deep Cover Intel Ops against some of the world’s most dangerous Drug Cartels and arms smugglers from Central and South America and the Middle East.”
On one of Simmons’ appearances on Fox News, in November 2007, he discussed the case of former FBI agent and CIA spy Nada Nadim Prouty, who was found guilty of committing fraud and selling state secrets.
Jim Sinclair’s Commentary
Obama Withdraws Aircraft Carrier Support From Middle East Just As Russia Unveils Its Syrian Airbase
Submitted by Tyler Durden on 10/16/2015 14:33 -0400
One glance at the map below, showing the current distribution of U.S. naval assets, reveals something that has almost never happened at any time in the past decade:
As the map shows, US aircraft carrier, CVN 71 Theodore Roosevelt is currently on its way out of the Persian Gulf, leaving just the LHD-2 Essex Amphibious Warfare ship group to defend the Persian Gulf and more importantly, leaving the hotly contested middle east without U.S. carrier-based air support for the first time in years.
How did this happen?
According to USNI News, the Theodore Roosevelt Carrier Strike Group left U.S. 5th Fleet on Tuesday with no public timeline for when its replacement will reach the Middle East to continue U.S. air strikes against Islamic State in Iraq in Syria (ISIS) targets. While the CVN 71 The Harry S. Truman Carrier Strike Group is slated to be the next CSG bound for the Middle East, but the Navy would not specify a deployment time other than later this year, a service official told USNI News on Tuesday.
“We’re not going to talk to future operations,” the official said.
Jim Sinclair’s Commentary
Lower bond prices automatically create higher interest rates as interest rates are made in the market place and not at the FOMC, Fed.
The biggest American debt selloff in 15 years
By Patrick Gillespie
America’s debt is getting dumped left and right as the global slowdown worsens.
Countries around the world are selling their U.S. government debt holdings this year by the largest amounts seen since at least 2000.
China has been selling U.S. debt but it’s not alone. Lots of emerging markets like Brazil, India and Mexico are also selling U.S. Treasuries. Not that long ago all these countries were all huge buyers of U.S. debt, which is viewed as one of the safest places to park money.
“Five or six years ago, the big concern was that China was going to own the United States,” says Gus Faucher, senior economist at PNC Bank. “Now the concern is that China is selling them.”
Foreign governments have sold more U.S. Treasury bonds than they’ve bought in the 10 consecutive months through July 2015, the most recent month of available data from the Treasury Department.
Just in the first seven months of the year, foreign governments sold off $103 billion of U.S. debt, according to CNNMoney’s analysis of Treasury Department data. Last year there was an overall increase of nearly $45 billion.
Countries don’t have cash to buy Treasuries
It’s a reality of the global economic slowdown.
Jim Sinclair’s Commentary
Does this mean “A Turkey Shoot” as in defining the ability of the pilot? How many passes at the drone did he have to make before he or she hit it 7 or 8? Was the drone driver in Kansas injured in the same place as the lady who sued McDonald’s for their overheated coffee falling on the drone drivers desk?
Turkey shoots down ‘unknown’ drone near Syrian border
Fresh reported violation of Turkish airspace comes amid heightened diplomatic tensions over Russian airstrikes in neighbouring Syria
Friday 16 October 2015 12:04 UTC
The Turkish army on Friday shot down a drone of “unknown nationality” that entered its airspace near the country’s border with Syria.
A US official commenting on the violation said the aircraft “may” have been Russian.
However, Russia has said that all of its drones operating in Syria are safe and “operating as normal”.
The Turkish army said it issued three warnings to the aircraft after it entered Turkish airspace on Friday afternoon, and was eventually shot down, according to rules of engagement, above the south-eastern province of Kilis.
The reported violation of Turkish airspace comes amid heightened tension on its border with war-torn Syria, where Russian planes have been continuing a bombing campaign in support of President Bashar al-Assad.
Earlier this month, Turkey said it “cannot endure” further violations of its airspace, after Russian jets strayed into Turkish territory on two consecutive days.
Since then Russia, which blamed the violations on poor weather, has said it is taking steps to avoid further violations.
Jim Sinclair’s Commentary
7 million is a few?
Some Medicare Beneficiaries Face Premium Sticker Shock Next Year
by SHARON EPPERSON
CORRECTION: The 2016 changes to Medicare Part B will affect 30 percent of Medicare beneficiaries, but only about half will pay the increases out of pocket. That figure was misstated in an earlier version of this article.
The year 2016 will send shockwaves to some Medicare beneficiaries — roughly 7 million Americans. They’re going to be paying a lot more for their monthly Medicare Part B premium.
Individuals affected will see their monthly premiums rise from about $104.90 to $159.30, and $318.60 for married couples. For those whose income exceeds the threshold, the projected increase is anywhere from $223 per month up to $509.80 per month for individuals making more than $214,000 a year and between $446 and $1,019.60 per month for couples making more than $428,000 per year.
It all has to do with a legal provision that addresses cost-of-living adjustments for Social Security benefits, and the fact that the government announced Thursday that there won’t be an adjustment next year. Unless there is action by Congress or the Department of Health and Human Services, the premium increases will go into effect in 2016. A bill to block the premium spikes was recently introduced, but the outcome is pending.
Here’s what you need to know. The premiums will affect:
New enrollees in 2016;
Enrollees who don’t collect Social Security yet;
Enrollees with high incomes (individuals earning $85,000 or married couples bringing in $170,000);
Dual Medicare-Medicaid beneficiaries
If you’re part of one of these groups, you’ll want to do some extra planning.
Those who have deferred claiming Social Security, and who enroll in Part B for the first time in 2016, may want to consider enrolling earlier if they’re already 65 and eligible. Individuals can avoid higher premiums if they start receiving their Social Security benefits, and have their premiums deducted, in November and December 2015.
Jim Sinclair’s Commentary
You have to wonder why all the cities, colleges and charities are on the losing side.
Chicagoans’ Cost to Exit Swap Agreements Approaches $300 Million
October 14, 2015 — 12:00 AM EDTUpdated on October 14, 2015 — 5:28 PM EDT
Chicago’s attempt to clean up a legacy of wrong-way bets on interest rates is costing taxpayers at least $270 million since Moody’s Investors Service cut its rating to junk in May, city documents show.
The payouts to Wall Street banks, which come as the Windy City considers a record tax increase to cover pension costs, are more than the city spends a year to collect garbage at 613,000 homes, and could cover the cost of hiring more than 2,000 police officers. The pain isn’t over yet as officials plan another round of debt restructuring that could cost $110 million to unwind derivatives on its water debt early next year.
“I don’t think the public should be gambling with its funds,” said Richard Ciccarone, Chicago-based chief executive officer of Merritt Research Services, who has been analyzing municipal finance since the 1970s. “Save the speculation for people who risk their own money, not for taxpayers.”
The city was forced to restructure obligations after decades of failing to address its rising pensions and borrowing to cover debt service, a legacy that began under former Mayor Richard M. Daley and continued until this year under Mayor Rahm Emanuel. Moody’s downgrade of Chicago’s general-obligation debt in May forced the city to begin a debt restructuring the mayor was already planning.
Repossessions spike 66% as foreclosure crisis lingers
Diana Olick | @DianaOlick
Thursday, 15 Oct 2015 | 12:01 AM ETCNBC.com
New foreclosures may be back to nearly normal, but the mess from the epic housing disaster in the last decade is far from gone. Bank repossessions, the final stage of the foreclosure process, jumped 66 percent year over year in the third quarter of this year, according to RealtyTrac, a foreclosure sales and analytics company. It’s the largest annual rise ever recorded in bank repossessions by RealtyTrac. More than 123,000 homes went back to the bank in just three months.
“In states such as New Jersey, Massachusetts and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years,” said Daren Blomquist, vice president at RealtyTrac. “That deferred distress often represents properties with deferred maintenance that will sell at more deeply discounted prices, creating a drag on overall home values.”
A bank owned sign is seen in front of a foreclosed home.
New York and New Jersey have the longest foreclosure timelines in the nation. In both states, foreclosures can take well more than three years. New Jersey has a formidable judicial process, as well as a strong voice in nonprofit housing activists working with distressed homeowners. Those combined to keep the foreclosure process at a snail’s pace, until now. Banks have finally reached a point where they can push foreclosures forward, having streamlined all the extra paces required by laws and court rulings.
“Additionally, more nonbank lenders who purchased nonperforming loans over the past couple years are moving forward with foreclosure, having passed the foreclosure moratorium of six to 12 months required by many of these purchase agreements,” said Blomquist.
Putin Derides `Weak’ U.S. Policy as Diplomats Discuss Syria
By Andrey Biryukov and Dana Khraiche
October 15, 2015 — 4:11 AM EDTUpdated on October 15, 2015 — 4:22 PM EDT
Russian President Vladimir Putin once again derided American policy on Syria as weak and lacking objectives, as his air force continued bombing raids to support Bashar al-Assad’s government.
“I don’t really understand how the U.S. can criticize Russia’s actions in Syria if they refuse to have direct dialogue,” Putin told reporters Thursday during a visit to Astana, Kazakhstan. “The basic weakness of the American position is that they don’t have an agenda, though we’re keeping the door open” for high-level discussions, he said.
Amid growing friction over the Russian military intervention that began Sept. 30, U.S. Secretary of State John Kerry countered that Russia must make “good on its commitment, repeated many times, to help” the U.S.-led, 65-member coalition fighting to defeat Islamic State terrorists.
“The point we have made to the Russians, however, is that it would be totally self-defeating to the point of farce to try at the same time to prop up Bashar al-Assad and his murderous regime, which seems to be precisely what Moscow wants to do,” Kerry said Thursday in a speech at Indiana University’s School of Global and International Studies in Bloomington, Indiana.
Kerry and Russian Foreign Minister Sergei Lavrov discussed Syria by phone on Thursday and expressed satisfaction on the progress of military talks to improve “security in the Syrian airspace in the context of anti-terrorist actions,” the Foreign Ministry in Moscow said in a statement on its website. The U.S. has emphasized that the “technical” talks are limited to reducing the risk of a conflict between their aircraft in the skies over Syria.
Russian warplanes flew 33 sorties and made 32 airstrikes in the past 24 hours against Islamic State positions in Syria’s Idlib, Hama, Aleppo and Deir ez-Zor provinces, Interfax news service reported, citing Defense Ministry spokesman Igor Konashenkov.
Jim Sinclair’s Commentary
Why? Because they see trouble coming from the speculating which can be defined as OTC Derivatives.
Britain’s biggest banks to be forced to separate retail banks from investment arms
Bank of England fails to back down on ring-fence rules despite pressure from banking lobby
By Tim Wallace
9:35AM BST 15 Oct 2015
Britain’s biggest banks will have to run their retail banking operations as independent banks, almost entirely separate from their investment banking and overseas operations, as the Bank of England made it clear that there will be no relaxation of the incoming ring-fencing rules.
As a result, regulators hope the high street lenders will be able to continue running the retail arms with no difficulties even if their investment banking arms get into trouble.
Basic services such as payments and bank account access should be able to continue even if the parent group collapses.
The new rules will apply to all of the big banks
Those ring-fenced units must hold bigger capital buffers to protect themselves against a downturn, and have their own independent IT, human resources, processing and risk teams.
However, in one minor concession, the retail banks will be able to pay dividends to their parents, as long as they tell the regulator first and show the payouts will not harm their resilience and stability.
The ring-fence rules apply to HSBC, Barclays, Royal Bank of Scotland, Lloyds Banking Group, Santander UK and the Co-operative Bank, as they all had core deposits of more than £25bn when this process began. Challenger banks which expect to grow to that size by 2019 also need to consider preparing for the changes.
US, China brace for stand-off over disputed islands sail-by as Aussies fence-sit
Published time: 15 Oct, 2015 10:03
China may use force if the US proceeds with its plan to sail within 12 miles of a reclaimed island in the South China Sea. Australia, which previously supported the American plan, said it wouldn’t be part of it.
“We wouldn’t participate in any surveillance or whatever other activities the United States might have talked about,”Australian Trade Minister Andrew Robb said on Thursday in an interview with Bloomberg. He was commenting on the Pentagon’s plan to test China’s resolve to protect the waters around its artificial islands.
“On that issue, we’re not taking sides,” Robb added.
China is building several artificial islands in the disputed sea territory hosting radar stations, airstrips and other facilities, which critics insist serve military purposes. China says the military aspect of its reclamation program is minimal and that the islands’ purpose is mostly civilian.
At the same time Beijing believes that the islands are China’s proper sovereign territory and considers the waters within 12 miles of them to be its territorial waters. The US rejects the claims and, according to some media reports, is planning to sail a military patrol closer than 12 miles from at least one of the islands.
“Make no mistake, the United States will fly, sail and operate wherever international law allows, as we do around the world, and the South China Sea will not be an exception,” US Defense Secretary Ash Carter told a news conference on Tuesday after a two-day meeting between senior American and Australian officials.
Speaking alongside Carter, Australian Foreign Minister Julie Bishop said the two countries were “on the same page”on the issue. That statement was apparently undermined by the trade minister’s latest remark.
“Nearly three quarters of our trade moves through that South China Sea, so I think it’s quite legitimate for us to have a view on the need to make sure that we’ve got passage,” Bishop said.
China commented on Carter’s words on Wednesday by saying that what US calls militarization of South China Sea was due to “certain countries… flexing military muscles” there.
“We hope the US can look upon the current situation of the South China Sea from an objective and fair perspective and play a constructive role together with China in keeping the peace and stability in the South China Sea,” Chinese Foreign Ministry spokeswoman Hua Chunying said.
China’s Global Times, a newspaper considered close to the Chinese Communist Party, published an editorial on Wednesday, saying sailing a warship this close to Chinese territory could be “breach of China’s bottom line.”
Empire Fed Misses Again As New Orders Collapse To 5 Year Lows
Submitted by Tyler Durden on 10/15/2015 08:45 -0400
After collapsing in August and unable to get up in September, October’s Empire Fed bounced very modestly from -14.67 to -11.36 (but missed expectations for the 7th month of the last 8). This is the first time since 2009 that Empire Fed has printed below -10 3 months in a row putting The US firmly in recession territory, the underlying components were ugly with New orders crashing at the fastest pace since Nov 2010. Employees tumbled (as did inventories, although the plunge slowed) with prices received plumbing new cycle lows. In other words, total disaster… time to hike rates.
The headline print is firmly in recession territory…
As new orders collapse…
And employment crashed…
And prices received is the lowest since Dec 2009…
Jim Sinclair’s Commentary
The World’s preeminent gold exchange to bury even the memory of the COMEX.
Shanghai Gold Exchange to name new chairman ahead of benchmark launch
SINGAPORE | BY A. ANANTHALAKSHMI
Oct 13 The Shanghai Gold Exchange (SGE) is likely to name Jiao Jinpu, an official from China’s central bank, as its new chairman, two sources said, in a move that could pave the way for the planned launch this year of a yuan-denominated gold benchmark.
The SGE, the world’s largest physical gold exchange, has been without a chairman for nearly six months since former head Xu Luode was appointed executive vice president of Bank of China .
The arrival of Jiao is expected to prompt the exchange to push ahead with the launch of a Chinese gold benchmark that has been in the works since early 2015 as the country seeks more say over the pricing of the precious metal.
“There hasn’t been a lot of big moves (by the exchange) recently because there was no chairman,” said one of the sources with direct knowledge of the matter.
“(Jiao) is a respected figure in the Chinese financial industry. Once he settles in, we should see things move.”