Posts Categorized: In The News

Posted by & filed under In The News.

My Dear Friends,

Whatever hope you have for a new personality to make a difference in government, remember the teaching given to us all by our Past Masters:

“There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”
–Daniel Webster

Jim Sinclair’s Commentary

I have no argument with the following thesis. I would however push the serious social unrest out into very late 2009 at the earliest.

In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt.

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Jim Sinclair’s Commentary

As the "Too Big to Fail" banks get bailed out and the "Too small to be concerned about," roll over, we are building but a few mega corporations to be the engines of tomorrow’s Robber Barons.

I am convinced that when Lehman was dumped to accelerate the decomposition of the international economic corpse, our planners did not foresee the degree of the implosion now without any practical solution whatsoever.

This is why it has all hit the Fan.

What do you do when you have stolen all the dollars? You then rule over but a Paper Empire, the gene pool of serfs having been economically cleansed. Now here is a good argument for the Federal Reserve Gold Certificate Ratio modernized and revitalized.

HuffPost Contest: Name That Bank Seizure
February 16, 2009

Republican Sen. Lindsey Graham of South Carolina stunned political observers on Sunday when he said that "the idea of nationalizing banks" must be kept on the table, even if it makes him "not comfortable."

Moments earlier, Rep. Maxine Waters (D-Calif.), who agrees with Graham, lamented that "the word ‘nationalization’ scares the hell out of people."

Indeed, many who support a policy of ‘nationalization’ say the term is neither an accurate description of the policy nor politically helpful. (For more, read Arianna’s recent column, "Why is Obama Reluctant to Kill the Zombie Banks Threatening Our Economy?")

So what should ‘nationalization’ be called instead?

To enter our name-that-bank-seizure contest, drop your suggested replacement term in the comments section. We’ll highlight the best suggestions in a post later this week and, and use the winner when referring to nationalization. As more economists argue that nationalization is increasingly a matter of when rather than if, it’s a reference that will be popping up with rising frequency.

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Jim Sinclair’s Commentary

This is dramatically true if the IMF was to be a seller of any gold. What a great opportunity for central banks around the world to get rid of what has been and will again be their Toxic Paper, the US dollar.

CBRC Official Says U.S. Bonds Not Only Option, China News Says
"U.S. debt is one option in addition to gold and other government debt,"
By Judy Chen

Feb. 13 (Bloomberg) — China Banking Regulatory Commission official Luo Ping said holding U.S. government bonds is not the only option for investing reserves, clarifying comments made a day earlier, the China News Service reported.

U.S. debt is one option in addition to gold and other government debt, Luo, head of the training center at the banking regulator, was quoted as saying in an interview with the news agency late yesterday. If the U.S. government issues too much debt in its efforts to revive the economy, all Treasury holders will suffer losses, he added, the Chinese-language report said.

Dow Jones on Feb. 11 cited Luo as saying that there are few real alternatives to holding U.S. Treasury securities. CBRC said late yesterday in a statement that Luo’s comments don’t represent the view of the regulator.

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Gold Scams Galore:

Here is an example of pay for it in the USA and get it in a tax shelter country. Guess what, you are screwed, you got nothing.

This was not gold but the form of the gold scam follows the form of this scam.

Remember this when you sign up for the gold deal that helps you, wink, wink, get out from under Uncle.

These deals search for the terminal gullibility, preaching fear to get you to act.

They tell you what you want to hear in order to pick your pocket.

"Gold Caveat Emptor."

U.S. Accuses Texas Financial Firm of $8 Billion Fraud
By CLIFFORD KRAUSS, PHILLIP L. ZWEIG and JULIE CRESWELL
Published: February 17, 2009

HOUSTON — Stopping what it called a “massive ongoing fraud,” the Securities and Exchange Commission on Tuesday accused Robert Allen Stanford, the chief of the Stanford Financial Group, of fraud in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.

In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured CDs.

The C.D.’s were sold by Stanford International Bank through the firm’s registered broker-dealer and investment adviser, which are in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the S.E.C. suit. Stanford Financial asserts that it advises about $50 billion in assets.

Shortly after 10 a.m. Central time, about 40 police officers and other law enforcement officials simultaneously entered Stanford Group’s two office buildings in Houston. Many of the law enforcement personnel carried large black briefcases. Stanford group’s headquarters are in two offices in Houston, one within a tower of the Houston Galleria shopping mall, and the other across the street.

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Jim Sinclair’s Commentary

Your retirement has gone Missing.

Those now comfortably retired for life with your retirement don’t give a damn.

Slowly the most egregious of what has been stolen emerges – your plans for your future.

Your pensions, all of them, having been savaged by the OTC derivative manufacturers and distributors are all now going to be inflated away as there is no other way.

Keep in mind an axiom: There is no loss without a profit offsetting.

Retirement now is out of the question. You work until you are used up, and then get whatever kind of a job you can. Your best hope is to depart in your sleep. There is no other way.

Pension insurer’s deficit deepening
Tuesday,  February 17, 2009 3:01 AM
BY DEB RIECHMANN
ASSOCIATED PRESS

WASHINGTON — The worsening recession spells trouble for a little-known government corporation that insures the pensions of 44 million workers and retirees.

The Pension Benefit Guaranty Corp. has an $11 billion deficit that seems sure to grow as corporate America suffers through the worst economic crisis since the Great Depression.

With companies reporting shortfalls in their pension funds, it’s all but certain that the pension agency will be forced to take over the plans of a rising number of bankrupt businesses. That means more red ink at the corporation before things possibly can improve.

The future financial health of the agency is hard to forecast. It hinges on interest rates, the length of the recession and the pension agency’s own luck in playing the market, where it has billions invested.

The agency has $63 billion in assets. But it is obligated to spend $74 billion on pension benefits in the coming years. The agency might have time to rebound, but over the long term, it might become insolvent and require a bailout.

"Someday — probably more than 20 years from now — there’s a significant chance that somebody is going to have to pay the piper," said former agency Director Charles E.F. Millard, a Bush administration appointee who stepped down Jan. 20 when Barack Obama became president. "In the near to medium term, there will be no need for a bailout of" the agency.

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Jim Sinclair’s Commentary

Alf’s target on gold will be reached when the markets are stunned to find out that there is no safe haven in the US dollar.

Prior to that, gold in under the magnet may reach $1224 on the simple panic now building in markets as participants recognize there is NO practical solution to the enormous disruption that OTC derivatives manufacturers, distributors and Hedgies have caused.

The BIS (Bank for International Settlement) publicly altered the manner by which they determine the total nominal value of derivatives outstanding. This has actually backfired badly now that it is assumed every entity is lying. The BIS was all that was left for somewhat legitimate economic statistics.

You probably noticed the amount of outstanding OTC derivative nominal value dropped 80% from the BIS figure of one quadrillion one thousand and one hundred forty four trillion dollars as the BIS moved to the computer modeling of value to maturity, another foolishly glib cartoon.

Euro Falls to 10-Week Low on Concern Europe’s Turmoil to Worsen
By Yasuhiko Seki and Ron Harui

Feb. 17 (Bloomberg) — The euro fell for a second day against the dollar and the yen on speculation financial turmoil in Europe will worsen and after its recent losses triggered automatic orders to sell the currency.

The pound declined versus the yen on concern a U.K. report today will show inflation slowed due to the economic slump, giving the Bank of England more room to cut interest rates. The dollar may weaken for a second day against the yen before U.S. housing and manufacturing reports that economists say will show the recession is deepening.

“The financial turbulence in central and Eastern Europe is likely to persist,” said Masafumi Yamamoto, head of foreign- exchange strategy for Japan at Royal Bank of Scotland in Tokyo and a former Bank of Japan currency trader. “The markets may perceive this as a factor to sell the euro.”

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Jim Sinclair’s Commentary

The problems of bankrupt states and municipalities is only starting.

States in a financial pinch looking at drastic cost-cutting measures

(CNN) — California Gov. Arnold Schwarzenegger issued 10,000 layoff notices Tuesday, affecting a wide spectrum of state employees and aimed at dealing with the state’s budget crisis, a spokesman said.

California lawmakers resumed negotiations late Tuesday after the longest legislative session in state history over the weekend resulted in a budget impasse.

"Every state employee who receives a salary under the general fund is affected, and the governor began issuing layoff notices for the least-senior employees in various agencies," said Aaron McLear, the governor’s press secretary.

The layoffs would begin on July 1, which marks the fiscal year, and includes jobs in the Departments of Health and Human Services and Corrections, among others, McLear said. Another 10,000 layoff notices could be issued on Wednesday in other departments, he said.

The governor, facing a $42 billion deficit, was prompted to move on the layoff notices after lawmakers missed a Monday night deadline to reach a budget deal, McLear told CNN late Monday.

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Jim Sinclair’s Commentary

Here is one of the little nasty players ousted.

Let see who he outs.

SEC Charges George Georgiou, a Canadian Citizen, for Market Manipulation Schemes
Thu. February 12, 2009; Posted: 03:53 PM

Feb 12, 2009 (SECURITIES AND EXCHANGE COMMISSION RELEASE/Content Works via COMTEX) — The Commission announced that on February 12, it charged George Georgiou, of Toronto, Ontario, with manipulating the market in four separate microcap stocks — Avicena Group, Inc., Neutron Enterprises, Inc., Hydrogen Hybrid Technologies, Inc., and Northern Ethanol, Inc. The Commission’s action, filed in federal district court in Philadelphia, alleges that, from 2004 through September 2008, Georgiou, who controlled the publicly-traded stock of each company, manipulated the market for the purpose of artificially inflating each company’s stock price or to create the false appearance of an active and liquid market. In order to do so, Georgiou used many nominee accounts that he either directly or indirectly controlled at offshore broker-dealers and banks, and used a variety of manipulative techniques, including matched orders and wash sales. Ultimately, Georgiou realized at least $20.9 million in ill-gotten gains from his manipulation schemes.

In addition to the enforcement action, the Commission today entered an order suspending trading in the securities of the four manipulated stocks for a ten day period commencing 9:30 a.m. Feb. 12, 2009. The U. S. Attorney for the Eastern District of Pennsylvania today separately announced criminal charges against Georgiou involving the same conduct.

The Commission’s complaint alleges that Avicena Group is headquartered in Palo Alto, California, and that the other three companies are headquartered in Canada. Each of the manipulation schemes followed a similar pattern. Georgiou controlled all or a large percentage of the unrestricted, publicly-traded stock of each company. He had influence with management, access to confidential shareholder lists, and was able to coordinate the release of company news with his illegal trading. In recorded conversations and through his own e-mails, Georgiou admitted his intent to manipulate each of the stocks, and gave directions to his nominees.

The complaint further alleges that Georgiou used many nominee accounts at offshore broker-dealers in Canada, the Bahamas, Turks and Caicos, and other locations. Georgiou asserted direct control over some accounts by issuing trading and wiring instructions directly to broker-dealers, and indirect control over others by communicating trading instructions to nominees who, in turn, executed Georgiou’s trading instructions. Through these accounts, Georgiou used a variety of manipulative techniques in each scheme, including controlling the trading volume through promises of profits to nominees, executing or directing matched orders, wash sales, or other prearranged trades, marking-the-close, and paying illegal kickbacks in exchange for purchases.

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Jim Sinclair’s Commentary

How is your sense of humor?

Greenspan Concedes to `Flaw’ in His Market Ideology (Update2)
By Scott Lanman and Steve Matthews

Feb. 17 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the U.S. may be doing too little to repair its financial system and promote an economic recovery.

President Barack Obama today signed into law a $787 billion economic stimulus package of tax cuts and increased spending. He has also pledged to use the bulk of the roughly $315 billion left in the bank bailout fund approved by Congress last October to revive the battered financial industry.

“The amount of money in both these pots may not be enough to solve the problem,” Greenspan said in an interview before a speech prepared for today to the Economic Club of New York.

The comments highlight the difficulties Obama faces in fighting the steepest recession in a generation. The economy contracted at an annual pace of 3.8 percent in the fourth quarter of last year, the most since 1982.

Greenspan, who now heads his own Washington-based consulting company, warned in his speech that the positive impact of the stimulus package on the economy will peter out if the U.S. fails to fix its financial system.

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Jim Sinclair’s Commentary

Change is an elusive asset.

Obama Sends 17,000 Additional Soldiers to Afghanistan (Update3)
By Edwin Chen and Roger Runningen

Feb. 17 (Bloomberg) — President Barack Obama said the war in Afghanistan is “still winnable” as he signed an order increasing U.S. troops there by 17,000 combat and support personnel.

Military force alone cannot adequately deal with the threat posed by a “resurgent” Taliban, Obama said in an interview with Canadian Broadcasting Corp. The war is “still winnable — in the sense of our ability to ensure that it is not a launching pad for attacks against North America.”

Only a “comprehensive strategy” that also relies on diplomacy and development can halt the Taliban and the spread of extremism, the president said.

The announcement of the deployment marks Obama’s first significant decision on defense as he seeks to fulfill his campaign promise to shift the focus away from Iraq to Afghanistan as the central front on the battle against terrorists.

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Jim Sinclair’s Commentary

The problems are legion. The solution simply does not and will not exist. Hyperinflation is the only way out.

Kan. suspends income tax refunds, may miss payroll

TOPEKA, Kan. (AP) — Kansas has suspended income tax refunds and may not be able to pay employees on time, state officials said Monday.

The state doesn’t have enough money in its main budget account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest borrowing $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and Republican leaders refused Monday.

Budget Director Duane Goossen said that without the money, he’s not sure the state can meet its payroll. About 42,000 state employees are scheduled to be paid again Friday.

He added that the state might also have to delay payments to public schools and to doctors who provide care to needy Kansas residents under the Medicaid program.

Goossen said the state stopped processing income tax refunds last week. Sebelius accused Republicans, who hold majorities in both chambers of the state legislature, of blocking the accounting maneuver to "play political games."

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Jim Sinclair’s Commentary

If the OTC Derivative guys come for your house remember this article. It is very much for real. I hear the degree of record keeping has never met the volume of SIVs sold, which forms a secondary problem of severe potential ramifications. Basically, the paperwork is a total disaster. It was the subject of a special meeting called by the New York Fed which was presented for the purpose of handling back office problems.

Homeowners’ rallying cry: Produce the note
By MITCH STACY – 2 hours ago

ZEPHYRHILLS, Fla. (AP) — Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

And just like that, the foreclosure proceedings came to a standstill.

Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

"I’m going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I’ll try everything I can because it’s all I have left."

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Jim Sinclair’s Commentary

The slope we are on is the slipperiest in history. I am glad that I turn 68 next month.

Greenspan backs bank nationalisation
By Krishna Guha and Edward Luce in Washington
Published: February 18 2009 00:06 | Last updated: February 18 2009 00:06

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman has told the Financial Times.

In an interview with the FT Mr Greenspan, who for decades was regarded as the high priest of laissez-faire capitalism, said nationalisation could be the least bad option left for policymakers.

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Jim Sinclair’s Commentary

How smart they are!

China Feasts on Miners as ‘Bank of Last Resort,’ as Metal Falls
By Helen Yuan and Rebecca Keenan

Feb. 18 (Bloomberg) — Wuhan Iron & Steel Group and Jiangsu Shagang Group Co., China’s third- and fifth-largest steelmakers, are shopping for iron ore mining stakes in Australia and Brazil, executives said in interviews.

“We are evaluating and selecting” candidates in Australia and Brazil, said Shen Wenrong, Jiangsu-based Shagang’s chairman. “Going overseas is the government policy, so I believe we will get financing from Chinese banks.” Wuhan spokesman Bai Fang said his company is “looking for opportunities” amid lower acquisition costs for iron ore assets in Australia and “won’t rule out other countries.”

The world’s top metal user, China already has acquired $22 billion worth of commodity assets this year after a 70 percent drop in metal and oil since July ended a six-year boom in raw materials. With U.S. and Australian banks still hesitant to lend, Rio Tinto Group and OZ Minerals Ltd., laboring under combined debt of $40 billion, agreed this month to sell stakes to Aluminum Corp. of China and China Minmetals Corp., respectively.

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

"Pakistan unwound," in one of three uninvited, non- anticipated events that pushed a dire world economic situation into a maelstrom of geopolitical morass.

Basically, it is the last thing wanted at exactly the worst time possible.

Remember I am the messenger simply saying protect yourself, now in whatever form you can.

It has all hit the fan and there is no reverse.

Pakistan Govt, Islamists Sign Deal To Enforce Sharia-Minister
Last update: 2/16/2009 4:48:37 AM

PESHAWAR, Pakistan (AFP)–The Pakistan government and Islamic hard-liners on Monday signed an agreement to enforce Islamic Sharia law in the northwestern Swat valley, a provincial minister told reporters.

"Today an agreement has been signed between the government of NWFP (North West Frontier Province) and Maulana Soofi Mohammed," provincial information minister Mian Iftikhar Hussain told reporters.

"All laws against Sharia will be abolished, and Sharia will be enforced under this justice system," he added.

The agreement will cover Pakistan’s northwest Malakand area, which is one of the districts of NWFP and of which the troubled Swat valley is a part.

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Jim Sinclair’s Commentary

Only pocket change for Madoff.

California Struggles to Close a Projected $41 Billion Deficit
By JENNIFER STEINHAUER
Published: February 16, 2009

LOS ANGELES — The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently free of allies or influence — appears headed off the fiscal rails.

Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.

After negotiating nonstop from Saturday afternoon until late Sunday night on a series of budget bills that would have closed a projected $41 billion deficit, state lawmakers failed to get enough votes to close the deal and adjourned. They returned to the capital late Monday morning only to adjourn until the afternoon, though it was far from clear whether they would be able to reach a deal.

California has also lost access to much of the credit markets, nearly unheard of among state municipal bond issuers. Recently, Standard & Poor’s downgraded the state’s bond rating to the lowest in the nation.

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Jim Sinclair’s Commentary

This one moves slower and so far silently out of media focus, yet possesses within its totally impossible structure the seeds of the worst disaster of the entire economy, without historic precedent.

Government pension agency braces for recession
Little-known agency that insures pensions of 44 million workers braces for recession fallout
Deb Riechmann, Associated Press Writer
Monday February 16, 2009, 12:12 pm EST

WASHINGTON (AP) — The deepening recession spells trouble for a little-known government corporation that insures the pensions of 44 million workers and retirees.

The Pension Benefit Guaranty Corp. already has an $11 billion deficit that seems sure to grow larger as Corporate America suffers through the worst economic crisis since the Great Depression.

With companies reporting shortfalls in their pension funds, it’s all but certain that the PBGC will be forced to take over the pension plans of a rising number of bankrupt businesses.

That means more red ink at the corporation before things possibly can improve.

The future financial health of the agency is hard to forecast. It is hinged on interest rates, the length of the recession and the PBGC’s own luck in playing the market, where it has billions invested.

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Jim Sinclair’s Commentary

Question: Hurry? Why?

Answer: Because it has all hit the fan! There is no reverse setting.

Geithner Pressed By G-7 to Move Faster on Bank Bailout (Update1)
By Simon Kennedy and Rebecca Christie

Bloomberg Feb. 16 (Bloomberg) — Finance chiefs from the Group of Seven nations joined the chorus of U.S. investors and lawmakers pushing Treasury Secretary Timothy Geithner to move faster to fix the banking system.

Stung by domestic criticism for failing to provide details last week on just how he plans to clean up banks’ toxic assets and revive lending, Geithner was told by foreign policy makers at weekend talks in Rome that speed was of the essence.

“A concrete U.S. plan would have positive spillover effects on markets and economies elsewhere,” said Marco Annunziata, chief economist at UniCredit MIB in London. “They are also probably hoping Geithner unveils the magic formula, which they could then also adopt.”

The G-7 finance ministers and central bankers want Geithner, 47, to tackle a U.S. credit crisis that lies at the heart of the worst global recession since World War II. Bank stocks, as measured by the Standard & Poor’s 500 Financials Index, have fallen 30 percent this year and ended last week lower than before Geithner presented his rescue plan on Feb. 10.

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Jim Sinclair’s Commentary

The newest, best business in town is running a country with a Taliban presence.

Pakistan to Seek Additional $4.5 Billion IMF Loan (Update4)
By Khaleeq Ahmed and Khalid Qayum

Feb. 16 (Bloomberg) — Pakistan will seek a further $4.5 billion loan from the International Monetary Fund, warning that the country’s fight against terrorists is hurting the economy.

“We will ask the board of directors for the amount as the war on terror has caused serious economic problems,” Shaukat Tarin, the finance adviser to the prime minister, said yesterday in a telephone interview from Islamabad. The additional funds would boost the country’s total borrowing from the IMF to more than $12 billion, he said.

President Asif Ali Zardari is facing pressure from the U.S. to step up the fight against Taliban and al-Qaeda insurgents along the border with Afghanistan. The government forecasts the economy will grow at its slowest pace in seven years after raising interest rates as part of IMF conditions for a $7.6 billion loan in November.

“The government should seek aid from the U.S. and not loan from the IMF as compensation for fighting terrorists,” said Muzzammil Aslam, an economist at KASB Securities Ltd. in Karachi. “The IMF loan can only be used for balance of payments and building foreign reserves. Before asking for more loans, the government needs to say how it will pay back.”

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Jim Sinclair’s Commentary

Do you recall a year or two ago I suggested you see the movie, "Enemy of the State"? The technology was real.

When outdoors, always look down unless you do not mind being on someone’s front page.

Click on this link and play with it….

Now think what is really out their tech-wise.

 

Jim Sinclair’s Commentary

Power in the hands of an office of Administration is rarely, if ever, released.

In Spy Case, Obama’s Justice Department Holds Fast to State Secrets Privilege — Update
By David Kravets February 13, 2009 | 1:29:51

The Obama administration is invoking the state secrets privilege for the second time this week, this time in a closely watched spy case weighing whether a U.S. president may bypass Congress and establish a program of eavesdropping on Americans without warrants.

The move, which the judge in the case rejected Friday afternoon, came days after U.S. Attorney General Eric Holder announced the department was reviewing all the litigation it inherited from the Bush administration in which the privilege was invoked.

Also this week, the Justice Department invoked the privilege before a federal appeals court to scuttle a case brought by five U.S. prisoners who claim the CIA was behind their kidnapping, which brought them overseas where they claim they were tortured. 

The litigation tactics underscore that, while the Obama administration has denounced many of the policies of the Bush administration, it has so far not changed litigation tactics in defending lawsuits challenging those policies.

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Jim Sinclair’s Commentary

Murder and mayhem in markets causes murders and mayhem for real people. It is very personal when you are the injured.

First pension scheme files Madoff claim
Financial News (subscription) – London,England,UK
Separately, almost a quarter of institutional investors in hedge funds have less confidence in hedge funds as a result of market turbulence over the past 12 …

Posted by & filed under In The News.

Dear CIGAs,

US Federal Reserve Chairman, and Secretary TT of the US Treasury take warning!

As you can see, hyperinflation is a "currency event" caused by the failure of spin and sometimes even force producing a violent loss of confidence in the national currency during the worst of business conditions usually called a depression.

The US dollar, regardless of present technical money flows, is far from immune to hyperinflation. Hyperinflation is not a product of "demand-pull" price increases of goods and services, but currency based cost-push.

Do you finally understand?

Can we put the silly semantic argument of inflation versus deflation to bed now

Please do not ask any more questions on that ignorant argument common only to those that never took Economics 101.

Now I know why teachers sometimes scream.

Zimdollar Suffers Pariah Status
Thursday, 12 February 2009 18:14
Zimbabwe Independent

IN ZIMBABWE, many streets are littered with discarded Zimbabwean dollar bills, and nobody bothers to pick them up.

With economists estimating inflation at above five billion percent and the recent dollarisation, the local currency has become a big joke to retailers and services providers who are refusing to accept it as legal tender.

For ordinary Zimbabweans, life has become more difficult as they do not have access to the foreign currency now being demanded by shopkeepers for payment.

This is despite government and Reserve Bank pleas that the new currency should run parallel to the multiple currencies that are on the market, as part of measures to liberalise the economy.

The de facto “dollarisation” which was formally announced this year has been thriving for nearly two years.

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Eric Bloch: Economy Shackled
Thursday, 12 February 2009 16:24
Zimbabwe Independent

THE recent 2009 national Budget Statement, closely followed by the Monetary Policy Statement for the first half-year of 2009, contained much that was highly commendable, targeted at stimulating and facilitating the very long-awaited and very overdue, greatly needed, economic turnaround.

Tragically, however, that turnaround will be markedly less than is so desperately needed to restore wellbeing for the grievously distressed, grossly impoverished, majority of Zimbabweans, for both statements were cataclysmically imbalanced in that, notwithstanding many positive contents, there were equally many facets of the intended new policies which are not only inconducive to economic recovery, but will also retard the extent of that recovery.

Of the numerous economic issues which have to be urgently and constructively addressed, the first and foremost is the horrendous hyperinflation which has raised the cost of living to atmospheric heights, beyond the means of almost all. (No authoritative  inflation data exists, in the absence of any releases  from Central Statistical Office (CSO) for more than six months,  but it is indisputable that  the annualised rate of inflation is many trillions per cent, or even more.)

The need for dynamic inflation-reduction actions was unequivocally acknowledged by the Acting Minster of Finance, Patrick Chinamasa, in his Budget Statement, but inconsistently with that recognition of the necessary, he then tabled several proposals which will markably increase inflation, instead of reducing it.

Amongst the inflationary measures is the imposition of the previously foreshadowed fuel levy of 22 US cents per litre.

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Jim Sinclair’s Commentary

Any thought that this is not going to occur in the US is akin to the once strongly held belief that terrorism was only a European problem.

You will see social disorder in 2009. More than likely in the hot summer months In the 1800s in a similar situation crowds dragged out Wall Street bankers and hung them in the US. Maybe this time it will be Hedgies. I am ready. Sounds positively productive to me.

Job Losses Pose a Threat to Stability Worldwide
By NELSON D. SCHWARTZ
Published: February 14, 2009

PARIS — From lawyers in Paris to factory workers in China and bodyguards in Colombia, the ranks of the jobless are swelling rapidly across the globe.

Worldwide job losses from the recession that started in the United States in December 2007 could hit a staggering 50 million by the end of 2009, according to the International Labor Organization, a United Nationsagency. The slowdown has already claimed 3.6 million American jobs.

High unemployment rates, especially among young workers, have led to protests in countries as varied as Latvia, Chile, Greece, Bulgaria and Iceland and contributed to strikes in Britain and France.

Last month, the government of Iceland, whose economy is expected to contract 10 percent this year, collapsed and the prime minister moved up national elections after weeks of protests by Icelanders angered by soaring unemployment and rising prices.

Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.

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Jim Rogers Says Geithner Caused Crisis, Must Let Banks Fail, Feb. 11, 2009

Jim Sinclair’s Commentary

One more down for Madoff.

British Family Blames Madoff for Suicide
By Mary Jordan
Washington Post Foreign Service
Sunday, February 15, 2009; Page A17

LONDON, Feb. 14 — A former British soldier killed himself after losing his life savings in Wall Street financier Bernard L. Madoff’s alleged $50 billion fraud scheme, according to the man’s family.

William Foxton, 65, a decorated soldier who lost an arm during his military service and worked on United Nations humanitarian missions, died from a single bullet wound to the head Tuesday in the southern English city of Southampton, police said. He apparently walked to a park near his home, sat on a bench and fired the fatal shot.

Foxton’s son Willard told reporters that his father recently discovered that his life’s savings, estimated at more than $1 million, which he invested in two hedge funds, had then been poured into Madoff’s fund.

"We were looking forward to him spending a long and happy retirement with us, but unfortunately very recently . . . I got in contact with him to ask him some ordinary family stuff, and halfway through the conversation he said: ‘Look, I’m really sorry, I can’t concentrate. I’m afraid I’ve lost everything. I’ve lost all the money. I might have to declare myself bankrupt,’ " Willard Foxton told Sky News.

More…

Madoff’s wife pulled out $15 million before his arrest
Wed Feb 11, 2009 6:11pm GMT
By Svea Herbst-Bayliss and Martha Graybow

BOSTON/NEW YORK (Reuters) – The wife of Bernard Madoff withdrew more than $15 million from an account linked to the accused swindler in the days before his arrest, Massachusetts authorities said on Wednesday, adding a new layer of intrigue into the probe of the purported $50 billion scam.

Ruth Madoff pulled $10 million on December 10, the day before her husband was arrested and charged with running a global investment fraud, and $5.5 million on November 25, according to Massachusetts Secretary of State William Galvin.

Galvin did not file any charges against Ruth Madoff. The disclosure of her withdrawals came in reports produced by Cohmad Securities, a firm co-owned by Bernard Madoff that had funneled millions of dollars from its clients to Madoff.

Bernard Madoff, 70, is the only person charged so far in the alleged scam that has hit banks, charities, wealthy investors and celebrities worldwide.

Madoff told authorities he acted alone in confessing to the fraud, prosecutors have said.

More…

 

Jim Sinclair’s Commentary

Turkey, Israel and Pakistan:

War of words between Israel and Turkey sparks formal complaint
updated 10:00 p.m. EST, Sat February 14, 2009

ISTANBUL, Turkey (CNN) — Turkey’s Foreign Ministry summoned Israel’s ambassador to the Turkish capital of Ankara on Saturday to issue a formal complaint over a top Israeli commander’s reported remarks criticizing Turkey.

The complaint is part of the escalating war of words between the two regional allies, stemming from Turkey’s outspoken criticism of the recent conflict in Gaza.

The Turkish Foreign Ministry said Saturday that it had requested an "urgent explanation" from Ambassador Gabby Levy for recent remarks reportedly made by a top Israeli military commander.

According to the Israeli newspaper Ha’aretz, Maj. Gen. Avi Mizrahi told an international conference that Turkish Prime Minister Recep Tayyip Erdogan should "look in the mirror" before criticizing Israel.

More…

Posted by & filed under In The News.

Dear CIGAs,

Happy Valentine’s Day!

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It is major hunker down time.

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Jim Sinclair’s Commentary

As you ponder this keep in mind the significant error of "Bring em on."

Remember:
1. Israel makes a serious miscalculation.
2. Pakistan goes nuclear.
3. Turkey is a victim.
4. It is now January 14th, 2011

U.S. missile strike kills 25 militants in Pakistan

By Hafiz Wazir

A U.S. missile attack killed at least 25 al Qaeda-linked militants in a Pakistani tribal region on Saturday, security and Taliban officials said, the highest death toll of militants in a single such strike.

The strike by pilotless drones in the South Waziristan region on the Afghan border was the third such attack since U.S. President Barack Obama took office last month and could ignite fresh popular anger in Pakistan over the cross-border raids from Afghanistan.

The Taliban official said those killed were mostly Uzbek fighters.

"Our people have informed us that at least 25 people were killed. It could be more," the official told Reuters. A resident, who spoke on condition of anonymity for security reasons, said 25 to 30 people were killed.

More…

 

Jim Sinclair’s Commentary

You really accept the media line that the problems of the US dollar are less than other national currencies? Come on, you have bought the spin. Wake up!

Federal obligations exceed world GDP
Does $65.5 trillion terrify anyone yet?
Posted: February 13, 2009 11:35 pm Eastern
By Jerome R. Corsi

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office,according to the "2008 Financial Report of the United States Government" as released by the U.S. Department of Treasury.

The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit cited by "2008 Financial Report of the United States Government" is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.

More…

Jim Sinclair’s Commentary

Dean Harry Schultz advises that the gold gang take delivery of Comex gold out of Comex warehouse. Team work, that is the key.

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Dean Harry Schultz advises us all to keep our eye on the ball and if we wish to succeed in 2009 it is simple.

Stay focused on your job:

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Aim for greater heights:

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Largest Tax Increase in USA History Proposed by Oregan State Government

Excise Tax on Beer to rise 1900%

Cost of one barrel of beer to be taxed $49.

Oregon maintains the increase in the beer excise tax is necessitated by the cost of assisting those that suffer from alcoholism and attendant matters.

Oregon your nose grows, your nose grows. This is a direct hit on Joe Six to pay for the Madoffs of the world. Where is your rage?

The Economy’s Affect on NASCAR

The Daytona Cup Series race tickets have been reduced in price. All testing has been banned off season. Famous teams have been sold.

There has been a reduction in the sales of NASCAR goodies.

God help us if the NASCAR gang hears about the Oregon beer tax.

Google Latitude

Soon new services for the clients of Google will allow you to locate the exact position of anyone you have the cell number for 24 hours a day, .

Jim Sinclair’s Commentary

Legislation watch:

Mr. Hastings of Florida introduced the following bill on January 22, 2009:

*Text of H.R. 645: To direct he Secretary of Homeland Security to establish national emergency centers on military…

More…

 

Jim Sinclair’s Commentary

Here is the flawed Time list in order of responsibility:

Time Magazine’s List 25 People to Blame for Financial Crisis…

1. Angelo Mozilo – Co-founder and former head of Countrywide
2. Phil Gramm – Chairman of the Senate Banking Committee from 1995 through 2000
3. Alan Greenspan – Former chairman, Federal Reserve
4. Chris Cox – Former chairman, Securities and Exchange Commission
5. American Consumers
6. Hank Paulson – Former Secretary of the Treasury
7. Joe Cassano – Founding member, AIG’s financial-products unit
8. Ian McCarthy – CEO, Beazer Homes
9. Frank Raines – Former chairman and CEO, Fannie Mae
10. Kathleen Corbet – Former CEO, Standard & Poor’s
11. Dick Fuld – Former CEO, Lehman Brothers
12. Marion and Herb Sandler – Former heads, World Savings Bank
13. Bill Clinton – Former U.S. President
14. George W. Bush – Former U.S. President
15. Stan O’Neal – Former CEO, Merrill Lynch
16. Wen Jiabao – Premier, China
17. David Lereah – Former chief economist, National Association of Realtors
18. John Devaney – Hedge fund manager
19. Bernie Madoff – Ponzi scheme orchestrator
20. Lew Ranieri – Father of mortgage-backed securities
21. Burton Jablin – Programmer at Scripps Networks, which owns HGTV
22. Fred Goodwin – Former chairman and CEO, Royal Bank of Scotland
23. Sandy Weill – Former chairman and CEO, Citigroup
24. David Oddsson – Former Prime Minister, Iceland
25. Jimmy Cayne – Former chairman and CEO, Bear Stearns

The worst economic turmoil since the Great Depression is not a natural phenomenon but a man-made disaster in which we all played a part. In the second part of a week-long series looking behind the slump, Guardian City editor Julia Finch picks out the individuals who have led us into the current crisis.

More…

Jim Sinclair’s Commentary

This is a major component of the January 14th, 2011 event.

Taliban is in "huge" amounts of Pakistan – Zardari
Fri Feb 13, 2009 5:39pm EST

NEW YORK, Feb 13 (Reuters) – The Taliban has established itself across a large part of Pakistan, forcing the country to fight a war against the hardline Islamist group that is about Pakistan’s own survival, President Asif Zardari told CBS News.

"(The Taliban) do have a presence in huge amounts of land in our side. Yes, that is the fact," Zardari told "60 Minutes" in an interview to be broadcast on Sunday, excerpts of which were released on Friday.

U.S. President Barack Obama said this week there was no doubt terrorists were operating in safe havens in the tribal regions of Pakistan, and the United States wanted to make sure Islamabad was a strong ally in fighting that threat.

Obama and Zardari spoke by telephone on Wednesday, the Pakistani foreign ministry said. The two discussed the surge in violence by al Qaeda and the Taliban, which has stepped up its insurgency against U.S. forces and the Afghan government.

Zardari said Pakistan had been in denial about the Taliban in the past. "Our forces weren’t increased … . We have weaknesses and they are taking advantage of that weakness," he said.

More…

 

Jim Sinclair’s Commentary

"As goes Motors so goes the US" is as true now as it was in the 50s.

GM considering Chapter 11 filing, new company: report

CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM’s viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM declined to comment, the story said.

General Motors and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans.

Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low.

More…

Jim Sinclair’s Commentary

There are ramifications to fraud that will not go away.

Retired UK Veteran Kills Himself Over Madoff Losses

A retired British Army major has killed himself after losing his life savings to the Bernie Madoff Ponzi scheme.

Just before Christmas Rene-Thierry Magon de la Villehuchet, a hedge fund manager, committed suicide after his fund lost $1.4 billion to Madoff.

William Foxton, 65, who retired last November had invested his entire savings in the Herald USA Fund and Herald Luxemburg Fund, both of which suffered hundreds of millions in losses as a result of Madoff’s Ponzi scheme.

Last Tuesday, he left his Southampton home and walked to a park, where, sitting on a bench, he shot himself in the head with a pistol.

Foxton’s son, Willard, 28, told the Times Online:

"I think it’s disgusting that Bernie Madoff is sitting in his New York property, thinking that all he did was steal money, when, in fact, what he was really doing was ruining lives.

More…

Posted by & filed under In The News.

Dear CIGAs,

Check back here every Friday for the FDIC failed bank web link.

http://www.fdic.gov/bank/individual/failed/banklist.html

 

Jim Sinclair’s Commentary

The following site provides the up to date map of where citizen’s money has gone to make good on OTC derivative winnings as per our video post today.

http://www.treasury.gov/initiatives/eesa/docs/transaction_report_02-10-09.pdf

 

Jim Sinclair’s Commentary

They all have blood on their hands. How about the courage to go with life after your fortune is gone, you are unemployable and your pension has gone broke owning OTC derivatives called Securitized Investment Vehicles. These killers might as well have built crematoriums.

They carry just that – Karma. Death is easy. Life is hard. They will pay, this I assure you of.

OTC derivative manufacturers.
OTC derivative distributors.
Predatory Hedge Funds.

Their only protection is anonymity. God will not help them when they are all identified. They cannot live in the sunlight just like the demons of Lanka could not. They are demons by night, hiding in the foul lairs waiting to devour the lame, halt and widowed.

Who will stand to help the widows son? We meet upon the Square.

Bernard Madoff has ‘blood on his hands’ over William Foxton suicide
A former British soldier who shot himself was facing bankruptcy after becoming the victim of Bernard Madoff’s alleged fraud, his son said

Susan Thompson
From Times Online
February 12, 2009

Bernard Madoff, the disgraced financier accused of the biggest fraud in corporate history, was accused of having "blood on his hands" after a former soldier killed himself over the loss of his family’s life savings.

The son of William Foxton, 65, said that his father was so distraught after losing his family’s entire savings in the alleged Ponzi scheme that he shot himself with a handgun in a park in Southampton on Tuesday.

Mr Madoff, 70, is under penthouse arrest and 24-hour surveillance after being arrested on December 11.

He was accused of one count of securities fraud after authorities said that he admitted to running a scheme over many years with losses of $50 billion (£35 billion).

Willard Foxton, of London, said that his father, a grandfather of two and a former French Foreign Legionnaire, was “brought low by the greed of Bernie Madoff”.

Mr Foxton said: “I spoke with my father recently and he confided in me that he was in ‘an absolute s***fight’ with his banks’, as his life savings had been invested in two hedge funds: the Herald USA Fund and Herald Luxembourg Fund.

More…

Jim Sinclair’s Commentary

Real wealth is called to our attention by Marty M. and Lao Tzu.

"Being deeply loved by someone gives you strength, while loving someone deeply gives you courage."
–Lao Tzu

Jim Sinclair’s Commentary

On the brink? You have to be kidding. They are broke. just go to the controller of the currency month report of derivative exposure versus capital. It screams broke right at you.

Keep in mind that the USA Controller of the Currency is now using a value to maturity to calculate notional value. This has reduced the amount of notional value outstanding by 80%. Anything stated at 20% of its value is a bullshit statistic. It still screams BROKE.

All of this hell is a gift to you from the pig rich OTC derivative manufacturers and distributors. they have killed us all to some degree.

Large U.S. banks on brink of insolvency, experts say
By Steve Lohr
Friday, February 13, 2009

Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking.

A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent.

None of the experts’ research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are insured by the U.S. government. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.

But without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to restart the wheels of commerce. The answer, say the economists and experts, is a larger, more direct government role than in the Treasury Department’s plan outlined this week.

The Treasury program leans heavily on a sketchy public-private investment fund to buy up the troubled mortgage-backed securities held by the banks. Instead, the experts say, the government needs to plunge in, weed out the weakest banks, pour capital into the surviving banks and sell off the bad assets.

More…

Jim Sinclair’s Commentary

Pakistan owns up.

Pakistan Sees Terror Role
Official Recognition on Mumbai Attack Is Concession to India
By ZAHID HUSSAIN in Islamabad and MATTHEW ROSENBERG in New Delhi

Pakistan publicly acknowledged for the first time Thursday that last year’s terrorist attack on Mumbai was partly planned on its soil and said it had arrested most of the key plotters, the clearest sign yet that Pakistan intends to cooperate with international efforts to prosecute those behind the attacks.

Interior Ministry chief Rehman Malik’s announcement appeared to mark a break from Pakistan’s equivocation over the role of its people in the attacks. While India and the U.S. urged Islamabad to take responsibility, some Pakistani officials had suggested the plot was hatched elsewhere.

"Some part of the conspiracy has taken place in Pakistan," Mr. Malik said. "I want to assure our nation, I want to assure the international community, that we mean business."

Detailing a strong Pakistani link to the three-day rampage in November, Mr. Malik said six people have been charged in Pakistan with "abetting, conspiracy and facilitation" of a terrorist act, and several other suspected plotters are in Pakistani custody or under investigation.

India’s Foreign Ministry called Pakistan’s statement "a positive development" and said it would share whatever additional information it could.

More…

 

Jim Sinclair’s Commentary

Friday the 13th, 2009 is a good Friday for the banking system. Four down and few thousand to go.

Nebraska, Florida, Illinois banks are latest failures
12 banks have failed so far in 2009, 37 shut since credit crisis began
By John Letzing, MarketWatch
Last update: 7:37 p.m. EST Feb. 13, 2009

SAN FRANCISCO (MarketWatch) — Loup City, Neb.-based Sherman County Bank, Cape Coral, Fla.-based Riverside Bank of the Gulf Coast and Pittsfield, Ill.-based Corn Belt Bank and Trust Company were closed by regulators Friday, bringing the number of U.S. bank failures for 2009 to 12 and 37 total since the start of the credit crisis, the Federal Deposit Insurance Corp. said.

Nebraska has not seen a bank failure since 1990, according to the FDIC. However, Riverside Bank follows Fla.-based Ocala National Bank, which failed on Jan. 30. Prior to Corn Belt Bank, the last Illinois bank to fail was National Bank of Commerce on Jan. 16.

Nebraska’s Sherman County Bank had roughly $129.8 million in assets as of Feb. 12 and $85.1 million in deposits, the FDIC said.

Wood River, Neb.-based Heritage Bank has agreed to assume all of the failed bank’s deposits, and will purchase roughly $21.8 million worth of its assets, the FDIC said.

The FDIC estimated the cost of the failure to its deposit-insurance fund will be $28 million.

More…

Jim Sinclair’s Commentary

The G7 is no longer the ball in world economics. The back seat may become permanent.

G-7 Takes ‘Back Seat’ as Financial Crisis Pushes G-20 to Fore
By Simon Kennedy

Feb. 13 (Bloomberg) — The Group of Seven, whose finance chiefs convene this weekend in Rome, is ceding its traditional power to rebuild the world economy to a broader body of governments that now wield greater sway over global growth.

As U.S. Treasury Secretary Timothy Geithner and European Central Bank PresidentJean-Claude Trichet join their G-7 counterparts, it’s the Group of 20 that occupies the vanguard responding to the financial crisis.

The shift in influence to the group, whose membership ranges from the U.S. to China to Saudi Arabia, reflects the fact that industrial nations lack the resources to fix the world’s economic woes alone. That curbs the G-7’s scope to deliver new initiatives this week, say economists and former officials.

“The world has changed,” said Paul Martin, Canada’s former prime and finance minister who attended G-7 meetings and helped establish the G-20 a decade ago. “The G-20 reflects the realities of the global economy. Its finance ministers are becoming the dominant policy-making body.”

More…

Jim Sinclair’s Commentary

Here is today’s prime question:

Why, all of a sudden, is Mr. Monk (at Davos) so bullish on gold, assuming it has little to do with the gold price?

NOTICE!

Due to recent state and city budget cuts, the cost of electricity, still high gas and oil prices for the consumer, as well as current job market conditions and the continued decline of the U.S. economy with lack of immediate impact for Federal Stimulus plans and ill targeted Treasury financial firm bailouts…

The Light at the End of the Tunnel has been turned off.

Sincerely,
The Management

Jim Sinclair’s Commentary

This is the story of every single one of the walking financial wounded entities being or soon to be bailed out. Here is where they made their billions that has broken their companies, but in no way injured those that benefitted from the deluge of money made in the manufacturing and distribution. You are paying for their secured profits.

"The company made huge profits selling credit default swaps – insurance contracts which protected investors against the risk of companies being unable to pay their bills. But at the end of 2007 it began to report drastic quarterly losses. In April last year Mr Cassano was nudged into retirement but kept on in a consultancy role for £700,000 a month for nine months."

Fraud probe into UK firm’s role in collapse of world’s largest insurer AIG
By Arthur Martin and Ben Laurance
Last updated at 11:50 PM on 12th February 2009

A fraud investigation was launched last night into a UK firm’s alleged criminal involvement in the multi-billion-pound collapse of the world’s largest insurer.

The probe by the Serious Fraud Office into AIG Financial Products will focus on those with ‘inside knowledge’ of the collapse.

Investigators will try to establish how it lost almost £8billion and brought its American parent, AIG, to its knees.

The downfall of AIG, now 80 per cent owned by the U.S. government, was one of the pivotal events in the start of the global financial crisis.

The company was forced to seek £59billion ($85billion) in emergency credit from the Federal Reserve.

Part of the inquiry into the Mayfair-based subsidiary is likely to focus on its boss, Joseph Cassano.

Since starting AIG Financial Products in 1987, Mr Cassano, 53, is thought to have earned almost £200million.

More…

Jim Sinclair’s Commentary

With all the media screaming “the problems are worse for others,” an examination of the following should clear that misconception up.

Rescue Efforts Ding U.S.’s Triple-A Rating
By LIZ RAPPAPORT

The creditworthiness of the U.S. is deteriorating more rapidly than most of its triple-A rated brethren.

The effects of the U.S.’s efforts to solve the financial and economic crisis are taking a toll on the country’s ability to uphold a triple-A rating, according to a report published by Moody’s Investors Service, though the agency shied away from warning of any ratings downgrade. As the government moves forward with President Barack Obama’s $789.5 billion stimulus package and the Treasury gears up to borrow as much as $2 trillion with new debt sales this year, Germany, France, Canada and Scandinavian countries are pulling ahead of the U.S. as stronger credits, said the report. While all face headwinds, they remain triple-A.

"By the end of a two year period, the U.S. debt ratios will be higher and moving the country’s metrics to the lower end of the pack," said Steven Hess, sovereign credit analyst at Moody’s. Mr. Hess said that while the analysis on the U.S. is the current view, "this triple rating isn’t assured forever."

Regardless of the U.S. spending spree, investors around the world still buy U.S. Treasury bonds when they become anxious about the financial system, as it is the world’s largest bond market and functions in dollars, the world’s reserve currency. The 10-year Treasury rose in price Thursday to yield 2.732%, while the two-year bond rose as well, to yield 0.883%. The U.S. and the United Kingdom are what Moody’s called "resilient triple-A" rated nations facing big tests as the economic downturn stresses their ability to harvest revenue from taxes and as they take on debt to rescue large financial institutions and restore markets to health. Moody’s notes, though, that the U.S. is uniquely positioned to restore its financial health once the crisis abates, given the size of its economy and its tax base.

More…

Jim Sinclair’s Commentary

Is this intended to be read as the US Federal Reserve acting in a proper way by doing unlimited amounts of dollar swaps with other central banks in order to support all the nations deemed critical to the national security of the US?

This is exactly how Chairman Volcker bankrupted the USSR. It is exactly how forces at the heart of Anti-Americanism and Anti Globalism will bankrupt the USA.

Intelligence czar: Economy is top threat to U.S.
Says prolonged crisis could cause some nations’ governments to collapse
Updated 6:07 p.m. MT, Thurs., Feb. 12, 2009

WASHINGTON – The economic crisis has trumped bullets and bombs in the intelligence agencies’ latest assessment of threats to the United States.

That shift is a reflection of the depth of the unfolding recession, but also of the progress made in the war against terrorists and the Obama administration’s more expansive definition of national security.

Sounding more like an economist than the war-fighting Navy commander he once was, National Intelligence Director Dennis Blair told a Senate panel Thursday that if the crisis lasts more than two years, it could cause some nations’ governments to collapse. And a number of allies the United States depends on might no longer be able to afford to meet their own defense and humanitarian obligations, he said.

Blair said the financial meltdown, which started in the United States and quickly infected other countries, already has eroded confidence in American economic leadership and belief in free markets.

"Time is probably our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," he told the Senate Intelligence Committee, as Congress prepares to vote Friday on a $789 billion stimulus package.

More…

Posted by & filed under In The News.

Dear CIGAs,

The following are two observations of mine today:

  1. Talk about gold stocks outperforming gold on this move with charts and diagrams is on financial media and should get some attention from all those illegal, legal and pool gold share short sellers.
  2. The newest SPIN is the conversation of if the banks will pay back the Federal money they have received in order not to be subject to events like yesterday’s severe public dressing down. How the hell can they pay it back? They are broke.

Jim Sinclair’s Commentary

The press is alight with articles declaring that European financial institutions are up to their eyeballs to the tune of $24 trillion in Toxic Paper known as failed OTC derivatives.

This may be so, but the writer has no way of fact checking that assumption.

The bottom line of this as it pertains to the dollar/euro price is who bails out those institutions.

So far the producer of the capital to bail out Euroland financial institutions has not been the ECB, although they applied the money.

It has been the US Federal Reserve via swaps with the ECB that has provided the paper (money for lack of a better name).

The answer to all these question is always, "Follow the Money," not “Read the headlines.”

Three men went to jail for the invention of the exact vehicle, the OTC derivative, but not one of the insider financiers is suffering one second of incarceration or loss of their own trillions.

This reaffirms my sad conclusion that the best investment a man can make with $1,000,001 in the past many years has been a donation of $1,000,000 to the success political party.

European bank bail-out could push EU into crisis
A bail-out of the toxic assets held by European banks’ could plunge the European Union into crisis, according to a confidential Brussels document.
By Bruno Waterfield in Brussels
Last Updated: 3:50PM GMT 11 Feb 2009

“Estimates of total expected asset write-downs suggest that the budgetary costs – actual and contingent – of asset relief could be very large both in absolute terms and relative to GDP in member states,” the EC document, seen by The Daily Telegraph, cautioned.

"It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems.”

The secret 17-page paper was discussed by finance ministers, including the Chancellor Alistair Darling on Tuesday.

National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors – particularly those who lend money to European governments – have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.

The Commission figure is significant because of the role EU officials will play in devising rules to evaluate “toxic” bank assets later this month. New moves to bail out banks will be discussed at an emergency EU summit at the end of February. The EU is deeply worried at widening spreads on bonds sold by different European countries.

More…

Chinese Dollar Holdings:

Concerning China making sales of dollar denominated instruments they hold in reserve, that is most unlikely. What is more likely is that the momentum of Chinese buying will fall sharply. Any opportunities the Chinese Central Banks have to offload dollars for things or lend dollars to their industry will be taken advantage of as that is the way to decrease their holdings without overt impact on the US dollar market. Any sales of gold by the IMF would offer just such an opportunity.

Posted by & filed under In The News.

Dear CIGAs,

This shall be.

Jim Sinclair:
Gold will appreciate to $1224 and then to $1650. All this will be history by January 14th 2011

Alf Fields: 
Major ONE up from $256 to $1,015 (actually 4 times the $255 low); 
Major TWO down from $1015 to $699, say $700 (a decline of 31%); 
Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low); 
Major FOUR down from $3,500 to $2,500 (a 29% decline); 
Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)

Martin Armstrong:
A major high is possible as early as 2010-2011 with the potential for an exponential rally into 2015 if there is any kind of a low going into 2011.

 

Jim Sinclair’s Commentary

The only protection the predatory hedgies have is to hide.

They have killed more people than the Battle of Antietam in the USA Civil War.

It time legs plus a few other things will be broken as their identities becomes public knowledge.

Problems with securitization
February 10, 2009, 6:01 PM

breakleg

More…

 

Jim Sinclair’s Commentary

It takes BALLS to advise Gordy, the gold buffoon.

Recession ‘worst for 100 years’

The current global recession is "the most serious for over 100 years", cabinet minister Ed Balls has said.

Mr Balls, a former economic adviser to Gordon Brown, said it was "more extreme and more serious than that of the 1930s", the Yorkshire Post reported.

He told a Labour conference that these were "seismic events that are going to change the political landscape".

Shadow Treasury minister Phillip Hammond said the remarks were "staggering and very worrying".

Mr Balls, the schools secretary, made the comments at Labour’s Yorkshire conference at the weekend, the newspaper reported.

The BBC’s political editor Nick Robinson said Mr Balls and Downing Street have attempted to play down the significance of his remarks, insisting he had been pointing out the unique nature of the global financial crisis and was not predicting that the impact on ordinary people would be worse than that experienced during the Great Depression of the 1930s.

More…

 

Jim Sinclair’s Commentary

I am no fan of this man with the exception of his methods of interrogation. I would love to have him jumping up and down over the lack of and lack of enforcement of the uptick rule in shorting equities.

A Proposal to Shore Up Banks With Pension Funds
By MARY WILLIAMS WALSH
Published: February 9, 2009

Financial institutions in the United States probably need hundreds of billions of dollars in additional assistance, and one congressman wants to harness state and local pension funds to help them.

“Some of us are getting tired of writing checks with public money” and seeing no results, said Representative Gary L. Ackerman, Democrat of New York.

Rather than rely more heavily on the Treasury, which has already put $350 billion in the nation’s banks, Representative Gary L. Ackerman sees an opportunity in the trillions of dollars in public pension funds. Most of the funds suffered giant losses last year in the market turmoil. But they do not need all of their assets immediately, because their time horizon for paying benefits is decades long.

Mr. Ackerman, Democrat of New York, is sponsoring legislation that would allow public pension funds to pool some of their money and use it to create a sole-purpose entity that would buy $50 billion to $250 billion worth of preferred stock in America’s banks. That would strengthen the banks’ balance sheets and, Mr. Ackerman hopes, get them lending again.

“Some of us are getting tired of writing checks with public money” and seeing no results, Mr. Ackerman said. He said pension fund officials who had heard about the measure so far were eager to participate.

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Jim Sinclair’s Commentary

Dear Moody’s, Standard and Poors,

Assuming that your rating of US Treasury instruments is correct, why would China be concerned?

Either you are right or the Chinese are right. Which is it?

China Needs U.S. Guarantees for Treasuries, Yu Says (Update2)
By Belinda Cao and Judy Chen

Feb. 11 (Bloomberg) — China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.

The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.

Benchmark 10-year Treasury yields climbed above 3 percent this week on speculation the government will increase borrowing as President Barack Obama pushes his $838 billion stimulus package through Congress. Premier Wen Jiabao said last month his government’s strategy for investing would focus on safeguarding the value of China’s $1.95 trillion foreign reserves.

China may voice its concerns over U.S. government finances and the potential for a weaker dollar when Secretary of State Hillary Clinton visits China on Feb. 20, according to He Zhicheng, an economist at Agricultural Bank of China, the nation’s third-largest lender by assets. A People’s Bank of China official, who didn’t wish to be identified, declined to comment on the telephone.

Clinton Talks

“In talks with Clinton, China will ask for a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe,” said He in Beijing. “That would be one of the prerequisites for more purchases.”

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Jim Sinclair’s Commentary

When will the West learn. You cannot buy allies in Pakistan.

Pakistan Wants More From US
Washington Post – United States
By Karen DeYoung Inside the warm welcome and promises of a "new beginning" that Pakistan extended US special envoy Richard C. Holbrooke yesterday was a …
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Pakistan’s ISI problem
Boston Globe – United States
PAKISTAN has a terrorist problem, as many of the country’s leaders acknowledge. But Pakistan also has an ISI problem – the country’s powerful Inter-Services …
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Bomb injures six in NW Pakistan: police
AFP
PESHAWAR, Pakistan (AFP) — At least five people were killed and 10 others wounded Monday in a bomb blast in a troubled town in northwest Pakistan near the…
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News Analysis: New US-Pakistan partnership hinges on anti-terrorism
Xinhua – China
11 (Xinhua) — The special US envoy Richard Holbrooke is visiting Pakistan with a heavy agenda which mainly focuses on the war against terrorism in the …
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US watchful of Pakistan’s assurances on AQ Khan
Hindu – Chennai,India
Washington (IANS): Pakistan has assured the US that released Pakistani scientist AQ Khan, accused of selling nuclear secrets in the black market, …
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Human rights committee calls Miliband and Smith for questioning …
guardian.co.uk – UK
Binyam Mohamed was detained in Pakistan and questioned by MI5 officers before being "rendered" by the United States to Morocco, where his lawyers claim he …
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Jim Sinclair’s Commentary

This and all these will be met as infinitum. The die is cast and there is no turning back. Hyperinflation is in the cards and soon.

Fannie, Freddie Funding Needs May Pass $200 Billion, FHFA Says
By Dawn Kopecki

Feb. 10 (Bloomberg) — Fannie Mae and Freddie Mac, the mortgage-finance companies seized by regulators, may need more than the $200 billion in funding pledged by the U.S. government if the housing market continues to deteriorate, Federal Housing Finance Agency Director James Lockhart said.

The companies’ needs will depend largely on the direction of home prices, Lockhart said in an interview in Las Vegas yesterday. His comments followed statements from Fannie Mae in November and Freddie Mac Chairman John Koskinen last week that the government’s funding commitment through 2009 may fall short of what the companies need to make good on their obligations.

“When we sized the amount in September, we obviously looked at stress tests and what was happening in the marketplace,” Lockhart said. “There’s been some significant events since then that weren’t in our forecast.”

The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth, according to a Feb. 3 report from Zillow.com. Following a record boom, home prices are down 25 percent on average since mid-2006 amid a tightening of lending standards and an economic recession, the S&P/Case-Shiller Composite 20-city price index shows.

Freddie Mac and Fannie Mae are the largest U.S. mortgage- finance companies, owning or guaranteeing $5.2 trillion of the $12 trillion home-loan market. The government seized control of Fannie Mae and Freddie Mac after their losses threatened to further disrupt the housing market, and pledged to invest as much as $100 billion into each company as needed if the value of their assets drops below the amount they owe on obligations.

More… http://www.bloomberg.com/apps/news?pid=20601087&sid=aId2BJIzu0cQ&refer=home