Posts Categorized: In The News

Posted by & filed under In The News.

Jim Sinclair’s Commentary

Only the uptick rule levels the playing field with pool short sellers running wild. No uptick allows the seller to pound away at the bids on a stock until the longs are simply bowled over.

The pounders are the bastards that have been playing the gold juniors, pounding away.

God help these guys if they are brought out into the light.

Their lights may be put out. Their only protection is to hide behind the lack of regulation.

Those arguing NOT to reinstate the uptick rule are the perps.

Uptick Rule May Fail to Lift Stocks, Curb Volatility
By Edgar Ortega and Jesse Westbrook

Dec. 9 (Bloomberg) — Resurrecting the “uptick rule,” the 70-year-old restriction on short sellers, would probably fail to curb bets against equities or damp price swings, according to brokers that trade about 25 percent of U.S. stocks.

Members of Congress, T. Rowe Price Group Inc. and the head of NYSE Euronext blame the Securities and Exchange Commission’s 2007 decision to eliminate the regulation for contributing to the worst year for stocks since 1937. New York-based Morgan Stanley, Citigroup Inc. and Lehman Brothers Holdings Inc. blamed short sellers, who profit from declining stock prices, for spreading rumors that drove their shares to their lowest this decade.

Executives at UBS AG, Deutsche Bank AG and Knight Capital Group Inc. say bringing back the rule, which prevented traders from making bets against stocks when they were falling, is unlikely to reduce volatility. Ever since computers started trading millions of shares in seconds and exchanges began quoting stocks in penny increments in 2000, the regulation has become obsolete, they said.

“It was a good rule back when trading was manual, but now that trading is much more automated, I don’t see it as a viable solution,” said C. Thomas Richardson, global head of transaction services for New York-based brokerage Nyfix Inc.

The guideline barred traders at the New York Stock Exchange from driving down prices by shorting a stock unless its price had increased, or remained unchanged in the preceding trade.

More…

Jim Sinclair’s Commentary

With this rate of return the US Fed and Treasury better pray for the dollar’s health.

Treasury Bills Trade at Negative Rates as Haven Demand Surges
By Daniel Kruger and Cordell Eddings

Dec. 9 (Bloomberg) — Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression.

The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001.

“It’s the year-end factor,” said Chris Ahrens, an interest-rate strategist in Greenwich, Connecticut, at UBS Securities LLC, one of the 17 primary dealers that trade directly with the Federal Reserve. “Everyone wants to be in bills going into year-end. Buy now while the opportunity is still there.”

The benchmark 10-year note’s yield tumbled 11 basis points, or 0.11 percentage point, to 2.63 percent at 4:48 p.m. in New York, according to BGCantor Market Data. The 3.75 percent security due in November 2018 gained 31/32, or $9.69 per $1,000 face amount, to 109 23/32. The yield touched 2.505 percent on Dec. 5, the lowest level since at least 1962, when the Fed’s daily records began.

More…

Jim Sinclair’s Commentary

Citi is certainly an expert on "UNRAVEL."

Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup.
By Ambrose Evans-Pritchard
Last Updated: 7:29AM GMT 27 Nov 2008

An employee of Tanaka Kikinzoku Jewelry K.K. displays a gold bar at the company’s store in Tokyo Photo: Reuters

The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank’s chief technical strategist.

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

More…

Jim Sinclair’s Commentary

Pakistan is the greatest problem the planet faces. Raiding nuclear capable countries without a government is somewhat risky.

Israeli experts help India prepare commando raids into Pakistan
DEBKAfile Exclusive Report
December 6, 2008, 4:23 PM (GMT+02:00)

New Delhi has asked Jerusalem to assist in the operational and intelligence planning of Indian commando cross-border strikes against Islamist terrorist havens in Pakistan – including al Qaeda, Indian counter-terror sources report.

The Indian government’s decision to embark on these in-and-out incursions in reprisal for the Mumbai outrage of Nov. 26-29 was first revealed in DEBKA-Net-Weekly 375 published Dec. 4 (Indian Retaliatory Raids inside Pakistan Impending).

DEBKAfile adds: Israel is willing to help the Indians carry out punitive forays into Pakistan because it has its own scores to settle for the brutal murder of six Israelis in Mumbai’s Chabad Center by the Islamist terrorists and for the Pakistani Inter-Services Intelligence (ISI) agency’s hand in the atrocity.

Security sources in New Delhi disclosed Saturday, Dec. 6, that ISI officers actively trained the terrorists on military lines and selected their targets, including two big hotels and the Jewish-Israeli center.

Indian sources told DEBKAfile that Israel was asked for assistance because its special undercover forces were long seasoned in plotting and executing reprisals for terrorist attacks; above all, they were expert in getting away after covert operations without leaving a trail. New Delhi wants its commando operations in Pakistan to be stealthy and focused, and does not propose to admit responsibility.

More…

 

Jim Sinclair’s Commentary

This is to be expected in India and to grow. The article is clueless of why.

India Post is selling gold coins like hotcakes
2008-12-04 17:55:00

BANGALORE: The Indian government is extending a novel scheme to sell gold coins through post offices to several states in the wake of its stupendous success in the last two months.

India Post in association with World Gold Council and Reliance Money launched the innovative plan in October. The scheme offers 24-c gold coins in 0.5g, 1.5g and 8g varieties and people can buy gold coins through post offices.

In the first phase, gold coins in the denomination of half gram, one gram, 5 grams and 8 grams were be sold in over 100 post offices in Delhi, Tamil Nadu, Maharashtra and Gujarat. The initiative was then introduced in Punjab, Andhra Pradesh and Rajasthan.

On Friday, India Post chief postmaster general M P Rajan said that the gold coins selling scheme has been extended to the southern state of Karnataka.

"Under the scheme launched on October 15th in Delhi, Maharashtra, Gujarat and Tamil Nadu, in the first phase, 8,500 gold coins were sold in the first 15 days," said Rajan.

More…

 

Jim Sinclair’s Commentary

53% now, probably 70% soon. You expected doing the same thing over again would have different results? Ask Einstein.

Half of ‘rescued’ borrowers still default
Many modified mortgages in 2008 defaulted in 6 months, a top federal regulator says. A new study raises concerns over the quality of such loan adjustments.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: December 9, 2008: 5:11 PM ET

WASHINGTON, D.C. — More than half of delinquent homeowners whose mortgages were modified earlier this year ended up redefaulting within six months, a top bank regulator said Monday.

Some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months, according to U.S. Comptroller John Dugan, who spoke at a housing conference.

The report, which will be released in full next week, covers nearly 35 million loans worth a total of $6 trillion – or 60% of all primary mortgages in the United States.

The high redefault rate raises concerns about the long-term effectiveness of loan modifications, which many are pushing as a key solution to the nation’s financial crisis

More…

Jim Sinclair’s Commentary

On this one Chuck is right.

Restore the Uptick Rule, Restore Confidence
Short sales of stocks are fine given one tried and tested regulation

By CHARLES R. SCHWAB
The last time the stock market suffered from extreme volatility and risk of market manipulation as severe as we are experiencing today, our grandparents’ generation stepped up to the plate and instituted the uptick rule. That was 1938. For nearly 70 years average investors benefited immensely from that one simple stabilizing act.

Unfortunately, in a shortsighted move, the Securities and Exchange Commission (SEC) eliminated the rule in July 2007, just as we were about to need it most. Investors have now been whipsawed by what appears to be manipulative trading, what we used to call "bear raids," which drive stock prices down without warning and at breakneck speed. Average investors feel the deck is stacked against them and are losing confidence in the markets.

For the sake of our children and grandchildren, and to avoid a needless future repeat of a bad situation, it is time to restore the uptick rule.

The uptick rule may seem far from a kitchen-table issue, but it is critically important to ordinary investors. With more than half of all U.S. households invested in the stock market, either directly or through a retirement plan, it matters a great deal. The average 401(k) retirement account has lost 20%-30% of its value over the last 18 months — more than $2 trillion in retirement savings has been wiped out. Behind those numbers are real people who planned and saved, and who are suddenly facing an uncertain retirement and the prospect of working longer.

More…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

I have already told you about this. I feel you should know the reasons behind the attack.

Pakistan attack destroys more than 160 vehicles destined for US-led troops in Afghanistan
Riaz Khan
Associated Press – 12/07/2008

PESHAWAR, Pakistan – Militants blasted their way into two transport terminals in Pakistan on today and torched more than 160 vehicles destined for U.S.-led troops in Afghanistan, in the biggest assault yet on a vital military supply line, officials said.

The U.S. military said its losses in the raid near the northwestern city of Peshawar would have only a "minimal" impact on its operations against resurgent Taliban-led militants in Afghanistan.

However, the attack’s boldness will fuel concern that Taliban militants are tightening their hold around Peshawar and could choke the supply route through the famed Khyber Pass.

Up to 75 percent of supplies for Western forces in landlocked Afghanistan pass through Pakistan after being unloaded from ships at the Arabian sea port of Karachi. NATO is already seeking an alternative route through Central Asia.

The attack at the Portward Logistic Terminal reduced a section of the vast walled compound to a smoldering junkyard.

More…

 

Jim Sinclair’s Commentary

Arrested? Why? He deserves a medal for distinguished service to humanity.

Lawyer Dreier Charged by U.S. With $100 Million Fraud (Update3)
By David Glovin and Bob Van Voris

Dec. 8 (Bloomberg) — Marc Dreier, managing partner and namesake of the 250-lawyer New York firm Dreier LLP, was charged by federal prosecutors with cheating hedge funds out of more than $100 million.

Dreier, who has represented publishing executive Judith Regan and real estate broker Kenneth Laub, is set to appear today in Manhattan federal court to face securities and wire fraud charges. He faces as much as 10 years in prison if convicted of the most serious counts. Dreier’s lawyer, Gerald Shargel, didn’t return a call seeking comment.

The charges against Dreier, 58, a graduate of both Harvard and Yale Universities, came on the same day he was sued by Wachovia Corp. for defaulting on $12.6 million in loans. The U.S. alleged he lied to three unnamed hedge funds when he claimed to represent a New York real estate developer purportedly seeking to sell notes to investors. Dreier told the funds they may buy the notes at a deep discount from both the developer and the original note purchasers, prosecutors alleged in a criminal complaint.

One fund allegedly wired about $100 million to Dreier’s account in October after receiving phony financial documents written by the attorney, prosecutors said. Another fund allegedly wired about $13.5 million.

More…

Jim Sinclair’s Commentary

Pakistan has already accomplished two nuclear powers at DEFCON 1. This is nothing compared to what is to follow.

Not hoax call, claims Pak
KT NEWS SERVICE

NEW DELHI, Dec 7: Pakistan Friday night asserted that the threatening call to its President Zardari on November 28 was put out from "a verified official Phone Number of the Indian Ministry of External Affairs" and blamed the Indian High Commission in Islamabad for trying to paint it as a hoax call.

"The identity of this particular call, as evident from the CLI (caller identity) device, showed that the call was placed from a verified official Phone Number of the Indian Ministry of External Affairs", Pakistan Information and Broadcasting Minister Sherry Rehman claimed in a written statement issued in Islamabad and also circulated in Delhi.

She also blamed indirectly an Indian High Commission official for planting a report in the Pakistani media that it was a hoax call and condemned "efforts aimed at using media for negative diplomacy at a time when tensions are running high between Indian and Pakistan." According to her, the report in Pakistani English daily ‘Dawn’ that some imposter called up Zardari, posing himself to be External Affairs Minister Pranab Mukherjee, was "based on a briefing given to a few journalists by a responsible senior official of a neighbouring country based in Islamabad."

Pointing out that all calls received in the Presidency are processed in accordance with an intricately laid down procedure and as such "it is not possible for any call to come through to the President without multiple caller identity verifications," she said the call under reference too was "processed, verified and crosschecked under the same procedure."

More…

Posted by & filed under In The News.

Dear CIGAs,

Check out the following video of Fred Thompson commenting on the economy.

 

Jim Sinclair’s Commentary

Pakistan this weekend:

Dozens of NATO supply trucks torched in Pakistan
By RIAZ KHAN – 21 hours ago

PESHAWAR, Pakistan (AP) — Suspected militants attacked a Pakistan transport terminal used to supply NATO and U.S. troops in Afghanistan, killing a guard and burning 106 vehicles on Sunday.

The assault was the boldest yet on trucks carrying critical supplies to foreign troops in Afghanistan, feeding concern that Taliban militants could cut or seriously disrupt the route through the famed Khyber Pass.

Up to 75 percent of the supplies for Western forces in the landlocked country pass through Pakistan after being unloaded from ships at the Arabian sea port of Karachi.

About 30 assailants armed with guns and rockets attacked the Portward Logistic Terminal near the city of Peshawar before dawn Sunday, police official Kashif Alam said.

More…

Report: ‘India Was Ready to Strike Pakistan’
Sunday, December 07, 2008

The Pakistani High Commissioner in London, Wajid Shamsul Hassan, says India was ready to launch a military strike on Pakistan in retaliation for the Mumbai terror attacks, Sky News reported.

Hassan said British and American officials had to intervene to prevent India from carrying out an attack.

"On the day of the Mumbai attacks, I got some information in London that India was going to act very drastically against Pakistan in retaliation to what happened," Hassan told Sky News.

The senior diplomat alerted the Pakistani government and President Asif Ali Zardari to the threat.

More…

Villagers in Pakistan say captured Mumbai gunman lived in their town
12:51 AM CST on Sunday, December 7, 2008

FARIDKOT, Pakistan – The lone gunman captured alive by Indian police during the terrorist attack on Mumbai a week and a half ago comes from a dirt-poor village in Pakistan’s southern Punjab region where a banned Islamist group has been actively recruiting young men for jihad, according to residents of the village and official records seen by McClatchy Newspapers.

Ajmal Ameer Kasab, the 21-year-old man arrested by Indian authorities in the first hours of the assault, left the village four years ago, several residents said. He would return once a year to his small family home, and one villager recalled him talking about freeing the Muslim-dominated region of Kashmir from India.

His origins are a key to the investigation of the attack and could have a profound impact on relations between nuclear-armed India and Pakistan, already at the brink of confrontation. Until now, the Pakistani government has repeatedly said that there was no solid evidence to back Indian accusations that the gunmen came from Pakistan.

A reporter obtained official electoral records, which showed that Mr. Kasab’s parents, as named by the Indian authorities, indeed reside in the village.

More…

27 killed, dozens injured in Pakistan blast

ISLAMABAD, Pakistan (CNN) — A car exploded in front of a Shiite mosque in northern Pakistan on Friday, killing 27 people, police said.

Authorities said the car exploded in front of the Alam Dar Karbala mosque in Peshawar, in North West Frontier Province. Eighty-five people were injured from the blast.

After the explosion, video from the scene showed people crowding the streets. The video also showed some people carrying others who appeared to be injured.

More…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

There is only one kind of HONEST MONEY and that is GOLD.

Gold has no liability attached to it.

Gold has no hidden agenda.

Gold is universally accepted.

Gold is a time tested and proven storehouse of value.

Gold by being a proven storehouse of value is a reliable measure of value.

Paper currencies have never survived the test of time.

Paper currencies have always had a hidden agenda inherent in central banks.

Paper currency has a poor record as always acceptable, as a storehouse of value, and as a measure of value.

Good Money always forces out Bad. This is "Gresham’s Law."

So it has always been, so it will always be.

Why Can’t We Have Honest Money?
By Greg Hunter 12/07/08

Back in the late 60’s and early 70’s prime interest rates averaged 6 or 7 percent. Back before 1971 it was possible to save money at a reasonable guaranteed rate of return and easily keep ahead of what little inflation there was in the U.S. economy. That was the beauty of honest money that held its value and paid a real rate of return. In 1971 all that changed when President Richard Nixon took the country off the gold standard and went to a total fiat currency. A few years later the Employee Retirement Income Security Act (ERISA) was sign into law and that made possible the 401K plan. It allowed people to save in a brand new way largely through the stock market. The stock market is an invaluable tool of capitalism. It is how many companies raise capital and create jobs and prosperity. But what most people do not realize is a 401K is not a savings plan but an investing plan. When you save money, you put it away and get a guaranteed return. In an investment plan the money is put away but not guaranteed. Most people I know do not really understand their 401K plan. Folks are repeatedly told “invest for the long term.” They are also told there is really no other way to save for the future because if you simply save your money inflation will eat up your returns. By and large, working people are pushed into 401K’s. In the right business cycle with the right demographics (as in lots of baby boomers investing in stocks at the same time such as the 80’s and 90’s when business and inflation was stable) the 401K is a not a bad deal especially when you consider that companies often match or contribute funds to make the investment plan advantageous to participants. But in the wrong part of the business cycle (aging baby boomer population and big government bail outs of every big bank) the 401K can provide some gut wrenching lessons about “investing.” People are painfully finding out with every statement that these plans have not been such a good “long term” investment deal. The S&P 500 is back at levels not seen since 1998. And that doesn’t really account for companies whose share prices have been wiped out or bankrupted. A few examples spring to mind such as AIG, WaMu, Wachovia, Bear Stearns, GM, Ford, Fannie, Freddie, Lehman, Enron and World Com. Also, factor in a nearly 30 percent drop in the U.S. Dollar Index and how are people in 401K’s making money for retirement? The short answer: They are not!!! If you would have simply invested in money markets (and taken the company match) back in 1998 with your 401K you would have been hit with inflation but at least you would have a positive nominal return. Most people did take that route. Now, to help fund the multi trillion dollar bailout of Wall Street, the Fed has announced a new policy of “Quantitative Easing.” That means “printing money” to us simple folk. So getting any kind of return on cash will be impossible to do because the government will be printing it faster that you or anyone else can save it. Nobel Peace Prize winner Milton Friedman said it best, “inflation is always and everywhere a monetary phenomenon.” Printing lots of fiat currency is going to produce an ugly phenomenon for most people. I see a continuing freak show of bailout and default. If you are an investor then the stock market and all its risks and rewards are for you but if you are a saver then maybe you should have other options. Wouldn’t it be easier for most people to save if we just had honest money? Someday honest money will be necessary for the county and our citizens to survive.

Jim Sinclair’s Commentary

There is a TV advertisement that says "Don’t wait to buy gold, buy gold and wait."

Malaysia wants OIC countries to reconsider gold Dinar for trade
Bernama
KUALA LUMPUR, SAT: Malaysia wants Organisation of the Islamic Conference (OIC) member countries to reconsider the use of the gold dinar for trade, especially with uncertainties in the international currency market.

In stating this today, Second Finance Minister Tan Sri Nor Mohamed Yakcop said Malaysia would attempt to hold discussions with the OIC countries so that the issue of using the gold dinar could be studied indepth.

“At this time when the currency market is uncertain and challenging, maybe it will be good for the OIC countries to look again at the role of the gold dinnar in increasing trade among members,” he told reporters here today.

Earlier he officiated the opening of Wisma Yayasan Ekonomi Sejagat here.
Former prime minister Tun Dr Mahathir Mohamad proposed the use of the gold dinar in global trade in 2002.

Nor Mohamed said with the challenging economic conditions and weaknesses in the financial system, the use of the gold dinar could be reconsidered.

More…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

Here is our Friday surprise – a busted bank.

Georgia bank closed in 23rd failure of year
By John Letzing, MarketWatch
Last update: 5:36 p.m. EST Dec. 5, 2008

SAN FRANCISCO (MarketWatch) — First Georgia Community Bank was closed by regulators Friday, marking the 23rd bank failure of the year amid the ongoing financial crisis.

The closure also represents the fourth so far this year in the Atlanta area.

The four branches of Jackson, Ga.-based First Georgia will re-open Saturday as United Bank, which has assumed First Georgia’s deposits, the Federal Deposit Insurance Corp. said in a statement.

United Bank agreed to assume the deposits for a 0.811 premium, the FDIC said, and it will purchase roughly $60.6 million of First Georgia’s assets.

As of Nov. 7, First Georgia had $237.5 million in assets and $197.4 million in deposits, the FDIC said.

More…

Jim Sinclair’s Commentary

Every major employer everywhere will be bailed out as the Obama Fiscal Stimulation Package provides the fuse to light Quantitative Easing.

Leaders in Congress Agree on Auto Bailout Plan
The New York Times
Friday, December 5, 2008 — 8:33 PM ET

Details were not immediately available but senior aides said that the bailout would include billions in short-term loans.

More…

Jim Sinclair’s Commentary

Note the recreation facilities for our paper tigers, the Hedge Fund Managers.

They should have arrested the Hedge Fund Managers.

Manhattan madam gets probation
The Associated Press
11:30 AM EST, December 5, 2008

A Manhattan madam who ran three escort services that employed $900-an-hour hookers has been sentenced after pleading guilty to promoting prostitution.

Kristin Davis was sentenced Thursday to the three months in jail she has already served, plus five years’ probation.

Davis was arrested in March at her apartment. Police said her client book contained the names of lawyers, actors, sports stars and hedge-fund managers.

More…

Jim Sinclair’s Commentary

This is an excellent development for the entire African Continent.

Removal of Mugabe would establish for the first time that a league of nations taking action to remove a cancer from the continent can be successful. This action would transmit a strong new message to those living in the past history of Africa.

Leaders like President Jakaya Kikwete are on the ascendancy.

Africa is on the move.

Go Mugabe or face arrest – Tutu

Zimbabwe’s President Robert Mugabe must resign or be sent to The Hague for the "gross violations" he has committed, Archbishop Desmond Tutu has said.

The Nobel Prize winner also told Dutch television that Mr Mugabe should be removed by force if he refuses to go.

On Thursday, Kenya’s Prime Minister Raila Odinga said African governments should oust Zimbabwe’s leader.

Archbishop Tutu said Mr Mugabe had ruined "a wonderful country", turning a "bread-basket" into a "basket case".

US Secretary of State Condoleezza Rice has also repeated US calls for Mr Mugabe to go, saying a "sham election" has been followed by a "sham process of power-sharing talks".

Zimbabwe has declared a national emergency over the cholera outbreak, which has killed at least 565 people – the most deadly in the country’s history.

More…

Jim Sinclair’s Commentary

If you want to see the real numbers consider a subscription to www.shadowstats.com

November Jobs Plummet 732,000 Net of Revisions, Down 873,000 Net of Concurrent Seasonal Factor Bias

– Official Recession Start Is Late, As Usual Required Reserves Surge Anew

Jim Sinclair’s Commentary

As Trader Dan said, good riddance to this rotten garbage.

D.E. Shaw, Farallon Restrict Withdrawals as Fund Freeze Deepens
By Saijel Kishan and Katherine Burton

Dec. 4 (Bloomberg) — D.E. Shaw & Co. LP, the investment firm run by David Shaw, and Farallon Capital Management LLC limited withdrawals by clients, joining more than 80 hedge-fund managers to impose restrictions in the past two months.

D.E. Shaw, which oversees $36 billion, capped redemptions from its Composite and Oculus funds, said two people familiar with the New York-based company. Farallon, a $30 billion firm based in San Francisco, did the same with its biggest fund after investors asked to get back more than 25 percent of their money.

The firms are two of the biggest to block withdrawals, known as putting up gates, so they aren’t forced to liquidate investments at distressed prices to raise cash. New York-based Fortress Investment Group LLC said yesterday it froze an $8 billion fund after getting redemption requests for 40 percent of its assets. Tudor Investment Corp., the Greenwich, Connecticut, firm run by Paul Tudor Jones, locked the $10 billion BVI Global fund last week ahead of plans to split the fund into two.

“There’s no longer the stigma associated with putting up gates or suspending redemptions as it was before this crisis,” said Jaeson Dubrovay, head of the $19 billion hedge-fund group at consulting firm NEPC LLC in Cambridge, Massachusetts. “It’s actually being encouraged by some large institutions as a way to protect longer-term investors from those who panic and redeem.”

Darcy Bradbury, a spokeswoman for D.E. Shaw, and Steve Bruce, a Farallon spokesman, declined to comment.

Industry assets peaked at $1.9 trillion in June, data compiled by Chicago-based Hedge Fund Research Inc. show. Investment losses and withdrawals may shrink that amount by 45 percent by the end of this month, according to estimates by analysts at Morgan Stanley.

More…

 

Jim Sinclair’s Commentary

What goes around comes around.

Fortress suspends redemptions as investors seek to pull $3.5 billion
Miles Costello
December 4, 2008

Fortress, the New York-listed hedge fund, became the latest victim of the market crunch last night as it suspended redemptions on four of its flagship Drawbridge funds after investors moved to pull $3.5 billion (£2.4 billion) – almost half the funds’ assets.

Shares in Fortress, one of the few listed hedge funds, lost more than 25 per cent as it said that redemptions meant the assets managed by the four funds would fall to $3.65 billion by January.

Wes Edens, Fortress’s co-founder and chief executive, has already told shareholders that investors were preparing to redeem capital as they seek safer-haven assets to escape the hedge fund rout. Despite this, yesterday’s alert sent shares as low as $1.71 in early trading before they closed at $1.87.

At the end of September, Fortress was one of the world’s biggest hedge fund managers, with assets under management of $34.3 billion. Its latest decision underscores how wide-reaching the hit on the industry has become. Fortress said that its move was temporary but gave no date for unfreezing the funds.

More…

Jim Sinclair’s Commentary

The deluge of printed money and massive fiscal stimulation in the trillions by the incoming US Administration is unavoidable.

Record number of Americans using food stamps: report
Wed Dec 3, 2008 6:22pm EST
By Roberta Rampton

WASHINGTON (Reuters) – Food stamps, the main U.S. antihunger program which helps the needy buy food, set a record in September as more than 31.5 million Americans used the program — up 17 percent from a year ago, according to government data.

The number of people using food stamps in September surpassed the previous peak of 29.85 million seen in November 2005 when victims of hurricanes Katrina, Rita and Wilma received emergency benefits, said Jean Daniel of the USDA’s Food and Nutrition Service.

September’s tally — the latest month available — was also boosted by hurricane and flood aid, Daniel said on Wednesday.

But anti-hunger groups said the economic downturn is the main reason behind the higher figures.

"It’s a disturbing trend," said Ellen Vollinger, legal director with the Food Research and Action Center. She said she expects more people will turn to food stamps as unemployment figures rise and the economy remains weak.

More…

Jim Sinclair’s Commentary

We live in a dangerous world with major social and economic consequences.

Report: Israel Preparing to Strike Iran Without U.S. Consent
Thursday, December 04, 2008

Israel is drawing up plans to attack Iran’s nuclear facilities and is prepared to launch a strike without backing from the U.S., an Israeli newspaper reported Thursday.

Officials in the Israeli Defense Ministry told The Jerusalem Postthat while they prefer to act in consultation with the U.S., they are preparing plans that would allow them to act alone.

"It is always better to coordinate," a senior Defense Ministry official told the newspaper. "But we are also preparing options that do not include coordination."

It would be difficult, but not impossible, to launch a strike againstIran without permission from the U.S., as the American Air Force controls the Iraqi airspace Israel’s jets would have to enter on a bombing mission.

"There are a wide range of risks one takes when embarking on such an operation," a senior Israeli official told the Post.

More…

Posted by & filed under In The News.

Dear CIGAs,

You think the bailed out financial entities are viable businesses in the face of current and future circumstances?

No pleading was required by the good ole boys at the banks and brokerage houses. They were not asked to surrender their first born.

In that sense with the number of job involved in this it is good for motors.

Standing down would be a better approach than begging.

The politicos will panic when they find out the bankruptcy papers have already been written and would have been utilized if it had been a standoff.

What is good for the financial geeks is good for lousy manager’s gander.

GM, Chrysler considering bankruptcy to get bailout report
Thu Dec 4, 2008 8:06am EST reuters

(Reuters) – General Motors Corp and Chrysler LLC are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multi-billion dollar government bailout, Bloomberg reported, citing a person familiar with internal discussions.

In response to automakers’ bailout plea, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy — negotiated with workers, creditors and lenders — could be used to reorganize the sector without liquidation, Bloomberg said.

General Motors and Chrysler could not be immediately reached for comment by Reuters.

Industry executives and analysts say the immediate carnage from a bankruptcy of General Motors Corp, Ford Motor Co or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown.

More…

 

Jim Sinclair’s Commentary

Another tidbit from Alf Fields:

Commentary From 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 $700 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)

We have already blown through waves one and two. Wave three is projecting out to $3500 and wave 5 to $10,000 for an ounce of gold. This is the point. Last year we had a $400 billion deficit. Next year we will have a $2.5 trillion deficit and in the next four years a minimum of $10 trillion deficit. It is not hard now to see why the price of gold would go to $10,000 per ounce.

What this means is that the Federal government will burn the house down printing dollars which will lose value at a dizzying rate. Conveniently, this unbridled printing will allow the US government to pay all its bills domestically and to foreign holdings by simply printing away debt. This will also have a massively negative impact on all our creditor nations. I would not be surprised if they ended up in far worse shape than us.

We have seen it time after time when a big debtor runs its creditors into the ground and ends up smelling like a rose. This is most likely what will happen to the US although the citizenry will also go through some real tough times.

What to do? Find those asset classes which will hold their value during this process. It sounds ridiculous, but it is that simple and you will prosper.

Elliott Wave Gold Update 23
By Alf Field Dec 2 2008 10:39AM
http://www.kitco.com/

 

Jim Sinclair’s Commentary

The source is not exactly the Financial Times, but the idea is intriguing.

DESTRUCTIVE BET HEDGING SCHEMES CONTINUE
By emsnews

Now, everyone is screaming bloody murder and there is only one solution: arrest them all!

More…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

The Comex tells us gold is easily available, like rain in the summer. The US Mint tells us that real gold is scarce.

The manipulators must be taken out to the shed.

Comrades in Golden Arms, take physical delivery.

Just say NO to these demons that inhabit all our markets. It is time to discipline Sodom and Gomorrah, the COMEX.

MEMORANDUM TO ALL AMERICAN EAGLE AND AMERICAN BUFFALO BULLION COIN AUTHORIZED PURCHASERS
SUBJECT: 2008 and 2009-Dated Bullion Coin Products
November 24, 2008

With the exception of the American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins, all 2008-dated bullion coins have been depleted. Weekly allocations will continue for these two products.

The final 2008 allocation for these coins will be provided on Monday, December 15, 2008.

There will be no bullion allocations during the week of December 22, 2008.

2009-dated American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins will be made available for sale via the standard allocation process on Monday, December 29, for pricing December 30 and order pick-up on Friday, January 2, 2009.

Allocations for these products will continue until the United States Mint is able to meet demand.

The quantities of blanks that we have been able to acquire from our suppliers continue to be very limited, while demand for bullion coins remains high. As a result, it is necessary for the United States Mint to delay the launch of other bullion coins until later in 2009. We will continue to monitor the situation and keep you informed as additional information becomes available.

Thank you for your patience and your continued support of the United States Mint Bullion Coin Program.

The above mentioned coins should not be confused with the American Eagle or American Buffalo collector proof and uncirculated versions sold directly on the Mint?s website. However, these coins are also quickly becoming exhausted, as is evident from the chart of gold and platinum coins listed at U.S. Mint Collector Bullion Coin Prices, Premiums and Sales Figures.

Jim Sinclair’s Commentary

One way or another Pakistan will light the fuse that many of our Conservative Christian friends will see as the "End of Days." Let us hope it is not. Pakistan is the fulcrum point of the next major world explosion, as was 9/11. The make believe government of Pakistan is not the miscreant in this equation.

What is to come will be well in place by January 14th, 2011.

Could India-Pakistan conflict go nuclear?
MARTIN SCHRAM

Once again, terrorists struck, slaughtering 174 people in Mumbai in a crisis that may have been malevolently designed to blast the adversarial nuclear neighbors India and Pakistan into war.

Once again, world leaders fear that another conventional war between India and Pakistan could go nuclear — even as both governments utter all the usual assurances that they can keep their nukes under control.

Once again, world leaders need to recall the frighteningly candid words of a former Pakistan Army general who explained to me years ago how in a conventional weapons clash between India and Pakistan, even a well-intentioned, highly-trained general such as he was could inadvertently start a nuclear war. And how the initial nuclear launch would not only be responded to but would instantly escalate tenfold — a catastrophe that would not only obliterate the region but would have severe global consequences

The warning spoken by retired Brig. Gen. Feroz Khan in my interview with him in 2002 reads like a warning call today. We spoke at a time when India and Pakistan seemed headed toward yet another ground war over the disputed bucolic region of Kashmir — after Pakistan-based guerrillas of Lashkar-i-Taiba attacked India’s Parliament. Now India says last month’s Mumbai murderers were trained inside Pakistan by the same militant group, which is linked to elements of Pakistan intelligence.

"Once the conventional war breaks out, the fog of war sets in," Khan said then. "And during war you have deceptions. You have misperceptions. You have communications breakdowns. Things get heated up."

More…

Posted by & filed under In The News.

Dear Friends,

The following are all international shippers of precious metals. I hope to have answers for you soon on costs and procedures for shipping Comex bars to Zurich Airport Free Zone depository.

Do you ever get the feeling that the Comex today is giving you the High One and the Bronx cheer?

Nobody accepts that we can act as one.

* The Brink’s Company
* Loomis, Fargo & Co.
* Dunbar Armored, Inc.
* Blackwater Worldwide
* Garda Cash Logistics
* Brink’s, Incorporated
* United Armored Services
* Prosegur Compañía de Seguridad, S.A.
* Rochester Armored Car Company, Inc.

Regards,
Jim

Jim Sinclair’s Commentary

Good timing?

Brazil selling 100 missiles to Pakistan

BRASILIA, Brazil (AP) — Brazil’s defense minister says his nation is selling 100 aircraft-borne missiles to Pakistan.

Brazilian officials approved the euro85 million ($107 million) sale of the missiles, which can be installed on jets and used to take out radar installations.

Brazilian news media say Brazil’s air force negotiated the sale with Pakistan’s government. The deal needed the approval of Brazil’s trade ministry, which signed off on the deal on Tuesday.

The Brazilian arms maker Mectron will make the missiles.

Brazil has been trying to bolster its defense industry, which was the largest in the developing world 20 years ago. The industry has struggled since the end of the Cold War.

More…