Posts Categorized: In The News

Posted by & filed under In The News.

Jim Sinclair’s Commentary

Maybe nationalized? Who are you kidding, they are!

The Economist Of The Year award is going to Lenin.

Citigroup, Bank of America May Look ‘Nationalized’ (Update1)
By Ari Levy

Jan. 23 (Bloomberg) — The U.S. government’s decision to pledge billions of additional dollars with strings attached to Citigroup Inc. and Bank of America Corp. may be nationalization by another name, according to former bankers and regulators.

Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.

“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”

While avoiding steps taken by the U.K., which this week acquired a 70 percent stake in Royal Bank of Scotland Plc, U.S. regulators are no longer passively injecting capital into the nation’s biggest banks. Investors have fled, sending Citigroup and Bank of America down by more than 50 percent this year, on concern that tougher U.S. oversight is coming after the government takeover last year of mortgage financers Fannie Mae and Freddie Mac, and insurer American International Group Inc.

Citigroup, based in New York, tumbled 56 cents, or 15 percent, to $3.11 yesterday on the New York Stock Exchange. Bank of America plunged 97 cents, or 15 percent, to $5.71. The 24- company KBW Bank Index has dropped 38 percent in 2009, following last year’s 50 percent decline.

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Jim Sinclair’s Commentary

My apology to those that object, but I believe there are three human rights.

1. Potable Water
2. Health
3. Education

A society that fails to provide this is not a society but simply a grouping of people.

I firmly believe that these requirement come before Bernard Madoff hedge fund rescues, any Administration, declaration of preemptive wars and rampant white collar theft.

Having said that the following cannot be funded without a resort to inflating away old debt, NOW. Too bad.

House Committee on Ways and Means
For Immediate Release:
Thursday, January 22, 2009

Ways and Means Passes Economic Recovery Legislation

Bill would provide critical tax, health and unemployment benefits for families, gives incentives to create jobs

WASHINGTON, D.C. – The House Committee on Ways and Means voted today in support of a comprehensive economic recovery package to provide tax, health and unemployment relief to families while also encouraging businesses to create new jobs.  The legislation, H.R. 598, passed the Committee by a party-line vote of 24 to 13.  The legislation will now be combined with other components of the recovery package from other House Committees into H.R. 1, the American Recovery and Reinvestment Act for consideration by the full House of Representatives next week.

“This legislation will provide critical benefits and incentives to middle-America, poor-America, and businesses, large and small, who are struggling during this economic downturn,” said Chairman Charles B. Rangel (D-NY).  “This plan will go a long way to help relieve the pain these families and businesses are experiencing so that we can restore some confidence and economic security and help America maintain its prominence in the global marketplace.  Simply put, the American people cannot keep the engine of our economy running if they don’t have money to spend and this package provides tax relief and critical benefits to help them take home a little more each month and help the economy grow.”

Critical Benefits to Families, Businesses, Incentives to Create New, Green Jobs:

The Plan, as passed by the Committee will provide critical tax relief to working families and assistance with healthcare costs as well as extended and enhanced unemployment benefits for those who have lost their jobs during the economic downturn.  The Plan would also give businesses, large and small, tax incentives to invest in plants and equipment and expand to hire new workers, helping to strengthen our economy and create new jobs.   In particular, the Plan would help create new, green jobs by making a critical investment in renewable energy and energy efficiency.

Important Health Benefits, Improvements to Care:

The Plan would also provide payment incentives to encourage the widespread adoption of Health Information Technology (HIT) and establish standards for interoperability and privacy.  The investment in HIT is a critical step toward modernizing American healthcare, cutting red tape, eliminating redundant care and reducing health insurance premiums for millions.

Finally, the Plan would provide temporary subsidies to help families who have lost their jobs maintain their healthcare coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA).  This benefit will be of tremendous assistance to families struggling to find new work and maintain economic security during the downturn.

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Jim Sinclair’s Commentary

It is really never going to happen in absolute terms. Wait until you see what gold does as the dollar treasuries reveals themselves to not be a safe haven.

DJ MARKET TALK: Higher Comex Gold Decoupling From Dollar

1426 GMT [Dow Jones] – Comex gold is decoupling from its normal inverse relationship to the U.S. dollar, says Bart Melek, global commodity strategist with BMO Capital Markets. Despite a stronger dollar, February gold is up $21.70 to $880.50 an ounce as investors turn to the metal as a safe haven and monetary asset, he says. He also describes the market as tightening physically, with mining output down lately but strong investment demand for physical gold and holdings rising in ETFs. Metal that is backing the SPDR Gold Trust, the world’s largest gold ETF, rose 13.15 metric tons Thursday and now stand at a record 819.11 metric tons. March silver is up a more modest 21 cents to $11.575. (ALS)

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Jim Sinclair’s Commentary

Do you really think that the US and GB are going to avoid social unrest? Wait until you see how politicians react to these upcoming events.

It will be physically nasty, and the balance of payments together will be expensive.

Iceland Is Burning — Day 2
Iris Erlingsdottir
The Huffington Post
01-23-09

The extensive protests that shook Iceland Tuesday have continued into Wednesday and are beginning to have an effect on one of the two political parties making up Iceland’s coalition government.

Late Wednesday night, as thousands of protesters re-lit a large bonfire in front of the Parliament, the Reykjavik chapter of the Progressive Party voted to recommend to the party’s national representatives that they withdraw from the ruling coalition, and called for new elections in May 2009. As the night wore on, though, matters descended into violence. Around 1:30 am, police dispersed the crowd with tear gas, the first time tear gas had been used against Icelanders in 60 years. The crowd soon reformed and pelted riot police with stones. One officer was severely injured by a cobblestone, the newspaper Morgunbladid said.

Although the leader of the Social Democratic Alliance, Foreign Minister Ingibjorg Solrun Gisladottir, was out of the country, Prime Minister Geir Haarde, leader of the Independence Party, told reporters that he believed she remained committed to the current ruling coalition. He insisted that the government was "functional" and that holding elections this spring would result in nationwide chaos.

The rank and file members of the Social Democratic Alliance appear to differ, however. Calls for the current representatives within the Party to step aside were widely applauded at tonight’s meeting, as were calls for spring elections and a new coalition.

The protests have been sparked by Iceland’s catastrophic economic collapse over the past three months, and the failure of the government to call for immediate elections or to investigate the rumored widespread malfeasance by the country’s leading bankers, businessmen, and politicians. "It should be clear to everyone that a government that has failed as utterly as the Icelandic government has can neither investigate, nor clear up the past, nor forge a new path into the future," said retired professor Njörður P. Njarðvík.

Wednesday morning began with angry protesters throwing paint at the government building and surrounding Prime Minister Geir Haarde’s car. They banged on the vehicle’s windows and pelted it with eggs for several minutes before his bodyguards and police pushed them away. The protesters gathered in front of the Parliament building banged on pots and pans while shouting "Unfit government!" "You’re fired!" and more creative insults. Although the racket calmed down to show respect to mourners at a funeral in the neighboring Reykjavik Cathedral, a mourner encouraged them to "produce enough racket to be heard across the country" when it was over.

Iceland has come to expect little change from the members of Althingi, the elected representatives, who have been widely criticized for being little but a rubberstamp for the conservative government agenda, but they claim they are getting the message. "So why aren’t the protests getting through to you, why hasn’t there been any change?" a state television reporter asked a Social Democratic Alliance representative. "We very clearly noticed the protests, and we get the message that people want change," he said without elaborating. The Conservative Party Representative’s reply to the question painfully demonstrated whose interests the Icelandic Althingi represents: "Well, representatives are just representatives," Ms. Ragnheidur Rikhardsdottir, said, "and ministers are ministers, and theirs is the power."

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

Now this is one way to get rid of a VP.

Obama Sends Biden on ‘Special Mission’ to Antarctica
Andy Borowitz
Posted January 22, 2009 | 08:57 AM (EST)

In the first major initiative of his presidency, President Barack Obama today dispatched Vice President Joe Biden on what he called "an important and special mission" to Antarctica.

The news of Mr. Biden’s unexpected trip appeared to take the Vice President by surprise, as he was in the middle of making a joke about Chief Justice John Roberts to members of the press corps when the president interrupted him with the news.

"Here’s how John Roberts sings the National Anthem," Mr. Biden was saying. "’Oh see can you say…’"

Mr. Obama, yanking away Mr. Biden’s microphone, then informed him of the extraordinary journey to the South Pole he was about to undertake.

The president was vague about what the mission to Antarctica would entail, but he did indicate that it could take "up to four years."

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Jim Sinclair’s Commentary

As if we did not already know this!

JPMorgan chief says worst of the crisis still to come: FT
Jan 14, 2009

LONDON (AFP) — The chief executive of US bank JPMorgan Chase, Jamie Dimon, told the Financial Times on Thursday that the worst of the economic crisis still lay ahead as hard-hit consumers default on their loans.

"The worst of the economic situation is not yet behind us. It looks as if it will continue to deteriorate for most of 2009," he told the business daily.

"In terms of our sector, we expect consumer loans and credit cards to continue to get worse."

Dimon said the bank — which bought rivals Bear Stearns and Washington Mutual last year — was prepared for a deterioration in consumer-orientated businesses but if things were worse than expected, it would have to cut costs further.

The interview was published after a fresh wave of selling hit US and European stock markets Wednesday, as an unrelenting flow of bad economic and corporate news sparked fears of a deepening global downturn.

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

From the Golden Children to the Dung Heap Inhabitants. Madoff is spelled BRE-X to the hedge funds

FOCUS: Hedge Funds Not Behind Sell-Off In Banks Say Experts
Wall Street Journal – USA
to arrest concerns about the health of UK financial institutions. This general malaise and investor jitters, rather than short-selling by hedge funds,
See all stories on this topic

Hedge fund loses over $350M in Madoff affair
The Associated Press
ZURICH, Switzerland (AP) — Auriga International Advisers, a hedge fundregistered in the British Virgin Islands, has lost over 400 million Swiss francs
See all stories on this topic

US SEC charges missing Florida fund manager
Reuters – USA
Nadel’s disappearance came a little more than a month after authorities arrested New York money manager Bernard Madoff, who is accused of running a $50
See all stories on this topic

US Jews struggle to come to grips with Madoff
International Herald Tribune – France
Many more investors worldwide found themselves linked to Madoff through their exposure to hedge funds that gave him money to manage. …
See all stories on this topic

US charges missing Florida fund manager with fraud
Reuters – USA
The SEC complaint said the six hedge funds Nadel oversaw, which he valued at more than $300 million, actually contain less than $1 million.
See all stories on this topic

Posted by & filed under In The News.

Jim Sinclair’s Commentary

Food for thought?

Carrying Several Passports? It’s Not Just for Spies
By MICHAEL T. LUONGO
Published: January 19, 2009

Alessandro Pappalardo, an artist in New York, holds passports from Italy and Argentina and, last year, added an American one. Previously an executive with Aerolíneas Argentinas, he said, “I used to go a lot to Brazil, and I would always decide what passport to show depending on what line was shorter.”

Stefan Stefanov, a citizen of the United States and Bulgaria who works for FirstApex Group in Warsaw, said he decided which passport to use depending on where he was going. “Of course, I don’t hide that I am a U.S. citizen,” Mr. Stefanov said. “But I don’t parade it either.”

Dual passports are no longer the sole province of people who grew up in more than one country. Millions of American citizens potentially qualify for various reasons — ethnic heritage, religion, country of birth or where their spouse was born.

“The fact is people don’t think about it until it is pointed out to them,” said Jan Dvorak, president of Travisa, a passport services company in Washington. Some Americans, he said, “don’t realize that they actually have dual nationality.”

While there are no hard numbers, more Americans seem to be trying to qualify for additional passports. “Savvy travelers and business travelers want to make sure they have two passports based on nationality because there are certain advantages,” Mr. Dvorak said.

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Jim Sinclair’s Commentary

Keep a close eye on both Russia and former USSR nations making a MAJOR thrust into property and company mineral acquisitions as North American and South African majors slumber on.

Russia Prepares To Rival Rio And BHP
Vidya Ram , 01.16.09, 01:15 PM EST

A merger of Russian miners could be unwelcome competition for beleaguered European miners.

If plummeting commodity prices haven’t been keeping Rio Tinto’s Tom Albanese and BHP Billiton’s Marius Kloppers awake at night, the latest news out of Russia almost certainly will. Plans to create a super-miner, by merging three troubled miners, seems to be gaining momentum.

Making a big push internationally into the mining sector may not be ideal for the firms, timing wise, but with the backing of the comparatively-deep-pocketed Kremlin, a super-miner could pose a new and un-welcomed threat for the likes of BHP and Rio Tinto (nyse: RTP – news – people ). The super-miner would be in line for a bailout from the Kremlin should it come into existance.

Talks over a possible merger of mining firms Rusal, Norilsk Nickel and Metalloinvest are taking place in Moscow, reported a number of papers, including Russia’s Vedomosti. Rusal and Norilsk Nickel were unavailable for comment at the time of publication, while Metalloinvest said it would be responding to requests next week.

That same report suggested that the state could acquire a stake by converting the firms’ joint debts into a stake in the new company.

Norilsk Nickel Chief Executive Denis Morozov, which heads the palladium and nickel miner, had previously talked of his ambitions of making his firm the BHP Billiton (nyse: BHP – news – people ) of Russia. However, hopes of any merger in the mining sector had been held up by constant bickering over control, until now. (See "Russian Billionaires Tussel Over Nickel Giant.")

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Jim Sinclair’s Commentary

As a note of reference, please read the total history of the Lincoln administration as a historical reality, not a political construct.

Our new administration has undertaken that administration as its example to emulate.

The wartime President Lincoln set the blue print for the Cheney/Bush Administration.

Before you scream, study!

 

Jim Sinclair’s Commentary

It will take both fancy bookkeeping and a miracle to hold it there.

Roubini Predicts U.S. Losses May Reach $3.6 Trillion (Update1)
By Henry Meyer and Ayesha Daya

Jan. 20 (Bloomberg) — U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed.

Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion last week, its first since 1991, and received $138 billion in emergency government funds. Citigroup Inc.posted an $8.29 billion fourth-quarter loss, completing its worst year, and plans to split in two under Chief Executive Officer Vikram Pandit’s plan to rebuild a capital base eroded by the credit crisis.

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Jim Sinclair’s Commentary

This is not without logic as an enduring recovery in China first would make a freely trading Chinese currency attractive as a reserve item. Time then could make the Chinese unit a major reserve currency.

Should that occur "Lenin" would take the position of the world’s leading economist. Think about that and know Greenspan is responsible for this phenomena with the support of all the OTC derivative traders around the world.

Jim Rogers sees Renminbi replacing US Dollar as world reserve currency
Tuesday, January 20, 2009

Legendary global investor Jim Rogers said the Renminbi may possibly replace the US dollar as the international reserve currency 15 years from now.

Addressing the Asian Financial Forum in Hong Kong, an event that brought together about a thousand participants from around the globe, Rogers said he found Asia to be the place where "the world is changing" as he toured the world in 1990 through 1992.

"This is going to be the new centre of the world, not just the financial but the political world," he said.

The only currency that could replace the US dollar "this year" would be the euro, while the only conceivable currency that can replace the dollar as the reserve currency "15 years from now" is renminbi.

Rogers said he believed China will rise despite possible setbacks.

The United States also experienced setbacks and had various problems back in the 19th century, which, nevertheless, did not stop it from becoming the greatest success of the 20th century, he said.

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Jim Sinclair’s Commentary

Let’s not take our eyes off Pakistan.

Pakistan kills 22 militants near Afghan border: officials

PESHAWAR, Pakistan (AFP) — Pakistani troops backed by war planes and helicopter gunships on Tuesday killed 22 militants in a major offensive against insurgents near the Afghan border, security officials said.

"We have launched a major operation in Mohmand district early this morning," a paramilitary force official told AFP.

"At least 22 insurgents have died so far. Aircraft participated in the operation in Mohmand for the first time," he said.

Troops pounded suspected militant locations in the northwestern tribal region and destroyed several bases, said the official requesting anonymity.

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India tests missile amid tensions with Pakistan
Tue Jan 20, 2009 2:59am EST

NEW DELHI (Reuters) – India successfully tested a supersonic cruise missile Tuesday in a remote desert close to the Pakistan border, officials said, amid continuing tensions with its nuclear-armed rival over the November attacks in Mumbai.

Indian officials say the launch of the Brahmos was only part of ongoing reliability tests, but some analysts say the timing was sensitive and could alarm Pakistan.

"The test was successful," a defense ministry spokesman said, without giving details.

The Brahmos, which can travel at up to 2.8 times the speed of sound and has a range of 290 km (180 miles), was tested at Pokhran, a desert town along India-Pakistan border and also the site of India’s 1998 nuclear tests.

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

Israel makes a major miscalculation.
Pakistan goes nuclear
Turkey is a victim.
It is all percolating.

Cyr: Turkey at crossroads as a nation
Submitted by SHNS on Tue, 01/13/2009 – 13:14.

At the start of the New Year, Russia publicly squabbles with Ukraine over the terms of shipping gas to the European Union, while Turkish police have announced the discovery of a very large weapons cache buried in a pine forest near Ankara.

The former dispute appears to be resolved for the moment. Ukraine has just agreed to shipping terms that Moscow has demanded. At the same time, steadily growing Russian nationalism is reflected in such high-handed handling of plentiful oil and gas resources. The collapse of the Moscow stock market has fueled the emotional fire encouraging such actions.

The Turkey case is very ominous. Government authorities have stated publicly that the arms are tied to a sizable plot to overthrow the Islamic government of the nation.

These two problems together provide the incoming Obama administration with an opportunity. Washington immediately should give high priority to Turkey as an alternate energy transshipment route. Turkey is a vital ally of the United States, second in importance only to Israel in the Middle East, but the Bush administration leaves office with our relations badly damaged.

Over the past two years, the Islamist Justice and Development Party (AKP) of Prime Minister Recep Tayyip Erdogan has ruled Turkey. The selection of former foreign minister and practicing Moslem Abdullah Gul as president reinforced fears of Islamic extremism and political instability. The president’s wife Hayrunnisa publicly wears the religious headscarf, formally banned in public buildings, and has become an iconic figure for the rise of religion in modern Turkey.

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Jim Sinclair’s Commentary

The following opinion on the Pakistan situation seems quite well informed:

"On another front, the seeming quiet between India and Pakistan is deceptive. I expect an out-of-the-blue strike by India on 4GW training camps in Pakistan, a Pakistani defeat and possibly a collapse of the Pakistani government in consequence. How many collapses of governments Pakistan can endure before the state itself crumbles is a key strategic question. The answer, I suspect, is not many more. Pakistan could offer Islamic 4GW forces an earth-shaking victory in 2009."

Click here to read the full article…

Jim Sinclair’s Commentary

I am in shock!

The Secretary of the US Treasury and President of the NY Federal Reserve Bank!

However after once again reviewing Mr. Geithner’s bio below, you know he will be confirmed regardless of tax problems.

Obama’s Treasury Pick Didn’t Pay Taxes
By JULIE HIRSCHFELD DAVIS

WASHINGTON (Jan. 14) – Revelations about Timothy Geithner’s tax problems derailed Senate Democrats’ plans Wednesday to speed him to confirmation as treasury secretary so he could be sworn in on Inauguration Day.

President-elect Barack Obama had hoped for Geithner to be approved quickly so he could join other officials in urgent efforts to revive the failing national economy beginning immediately after Obama’s own inauguration next Tuesday. Now, Geithner’s confirmation hearing isn’t scheduled until next Wednesday, with Senate debate and a vote some time after that.

A top Republican objected to a hearing this Friday for Geithner at the Senate Finance Committee after the panel disclosed he failed to pay $34,000 in taxes several years ago.

Still, Democrats and Republicans on the panel voiced strong support for Geithner, who was phoning senators individually to persuade them that his tax problems were the result of innocent mistakes, not deliberate attempts to avoid paying the Internal Revenue Service.

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Timothy F. Geithner

Timothy F. Geithner became the ninth president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the vice chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy.

Mr. Geithner joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers.

He was director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003. Before joining the Treasury, Mr. Geithner worked for Kissinger Associates, Inc.

Mr. Geithner graduated from Dartmouth College with a bachelor’s degree in government and Asian studies in 1983 and from the Johns Hopkins School of Advanced International Studies with a master’s in International Economics and East Asian Studies in 1985. He has studied Japanese and Chinese and has lived in East Africa, India, Thailand, China, and Japan.

Mr. Geithner serves as chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements. He is a member of the Council on Foreign Relations and the Group of Thirty.

Jim Sinclair’s Commentary

The COMEX is pulling your golden chair one more time.

Buying the near contract and taking delivery out of the Comex warehouse is your only weapon.

Gold Rush
Buying the Real Thing
Edited by ROBIN GOLDWYN BLUMENTHAL 
A look back at last week’s important events.

INVESTORS ARE TAKING A CUE FROM THE RAPPERS and adding more bling to their lives — not to hang around their necks, but to stash away in safes.

Physical gold is hot. Not gold stocks or ETFs, but the glittering stuff itself. You’ll read about it in our write-up of the latest Barron’s Roundtable, and the numbers are irrefutable. London-based World Gold Council said investment demand for gold, mainly bars and coins, surged 121% in the third quarter as investors rushed to safety.

But how, exactly, do you buy gold? Though you can visit a goldsmith and buy 24-karat jewelry, gold bugs favor bars, both big and small, and guaranteed coins issued by various world mints. Coins are easier to trade, but both coins and bars can be bought through hundreds of dealers’ sites, including onlygold.com, kitco.com and finest known.com. One site, goldmoney.com, even stores your gold.

Bars range in size from one gram to 400 troy ounces, while bullion coins come in weights of 1/20 ounce to 1000 grams. James DiGeorgia, the founder and publisher of goldandenergyadvisor.com, recommends the popular American Eagle or Buffalo coins. They generally fetch $25 to $70 above spot-gold prices, but you might score a better deal by buying directly from the U.S. Mint. DiGeorgia’s other advice: Never buy coins that are scratched.

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Jim Sinclair’s Commentary

Mumbai today:

India ‘notes Pakistan troop move’
By Sanjoy Majumder

BBC News, Delhi

The head of the Indian army says it has noted that Pakistan had moved some troops to its border with India in the wake of the Mumbai attacks.

Gen Deepak Kapoor acknowledged that there had been an increase in tension.

He said that Delhi was keeping all its options open but that military action would be the last resort.

Delhi believes the Mumbai attacks that killed more than 170 people were planned and executed from Pakistani soil. Islamabad denies involvement.

No state of alert

Addressing a news conference in the Indian capital Gen Kapoor said that Pakistan had moved some troops from the federally administered tribal areas along the Afghan frontier to its eastern border with India.

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Jim Sinclair’s Commentary

A 1.2 trillion dollar Federal Budget deficit which is just for starters, plus Pakistan should keep the new Administration busy.

Military Report: Mexico, Pakistan at Risk of ‘Rapid and Sudden Collapse’
Wednesday, January 14, 2009

Mexico and Pakistan are at risk of a "rapid and sudden collapse," according to a recent report from the U.S. Joint Forces Command.

The assessment comes as President-elect Barack Obama prepares to tackle international challenges including the conflict in Gaza, the wars in Iraq and Afghanistan and tensions between India and Pakistan.

"In terms of worst-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico," the report says.

A spokeswoman for the U.S. Joint Forces Command said the latest assessment was likely written before the Mumbai attacks which further inflamed tensions in South Asia.

The Joint Operating Environment report, meant to examine worldwide security trends, says Pakistan, in the event of such a rapid collapse, would be susceptible to a "violent and bloody civil and sectarian war" made more dangerous by concerns over the country’s nuclear arsenal.

The report says that "perfect storm of uncertainty" by itself might require U.S. engagement.

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Jim Sinclair’s Commentary

This is no joke. I am in Johannesburg with my African family doing just this.

2008_Before_And _After1

Jim Sinclair’s Commentary

God help us all!

The cost of bailouts will be no less than $17.2 trillion, and that will not make things alright.

1. This would never have happened if OTC derivatives did not exist.
2. Confidence is going to crack wide open, all at once, as if the world financial stepped into a hidden crevasse.
3. Hyperinflation is totally unavoidable – totally, absolutely, and without a shadow of a doubt.
4. Gold is the only answer. There is no other answer. Use it or lose everything you have and are.
5. The perps should be sent to one large island and then that island sent to hell.
6. This pervasive financial crime, OTC derivatives, is a CAPITAL crime that will in time be dealt with accordingly, if not by law then by the injured.
7. Long term unemployed get very angry.
8. The dollar is headed to .52 USDX
9. Gold, the value of insurance, is headed to $1200 then $1650 then to Alf’s more precise levels of:

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)

Those of you not insured in gold are simply, blind, silly fools

Banks in Need of Even More Bailout Money
By EDMUND L. ANDREWS and ERIC DASH
Published: January 13, 2009

WASHINGTON — Even before word came on Tuesday that Citigroupmight split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.

In all likelihood, a lot more money.

Mr. Obama seems to know it; a week before his swearing-in, he is lobbying Congress to release the other half of the financial industry bailout fund. Democratic leaders in Congress seem to know it, too; they are urging their rank and file to act quickly to release the rescue money. And Ben S. Bernanke, the chairman of the Federal Reserve, certainly knows it.

On Tuesday, Mr. Bernanke publicly made the case that one of the most unpopular and most scorned programs in Washington — the $700 billion bailout program — needs to pour hundreds of billions more into the very banks and financial institutions that already received federal money and caused much of the credit crisis in the first place.

The most glaring example that the banking system needs even more help is Citigroup. Though it already has received $45 billion from the Treasury, it is in such dire straits that it is breaking itself into parts.

Like many banks, Citi is finding that its finances keep deteriorating as the economy continues to weaken.

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Jim Sinclair’s Commentary

Pakistan today.

Pakistan dismisses Indian data as ‘not evidence’
The Associated Press
Wednesday, January 14, 2009

ISLAMABAD, Pakistan: Pakistan’s prime minister has played down the significance of a dossier handed over by India about the Mumbai attacks, saying it was just information and "not evidence," state media reported.

"All that has been received from India is some information. I say information because these are not evidence," Yousuf Raza Gilani told parliament late Tuesday, according to the Associated Press of Pakistan.

Gilani’s remarks were likely to anger New Delhi, which says the dossier provides evidence that Pakistani militants staged the November slaughter of 164 people. India specifically blames Lashkar-e-Taiba, a militant group believed to have links to Pakistani intelligence.

Pakistan only recently acknowledged that the only surviving Mumbai gunman was Pakistani, but it insists none of its state agencies played a role in the attacks. Under international pressure, Pakistan has detained some suspects allegedly linked to the attacks, while repeatedly calling on India to provide evidence to allow legal prosecutions.

The dossier, handed over on Jan. 5, includes transcripts of phone calls allegedly made during the siege by the attackers and their handlers in Pakistan. Previously, India had given Pakistan a letter from the lone surviving gunman, Mohammed Ajmal Kasab, that reportedly says he and the nine other gunmen were Pakistani.

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

You can be sure this is the number after being sent back 12 times for revision as unacceptably too high. This is dollar rot of the most virulent kind.

Three-month budget gap exceeds FY 2008 full year
Tue Jan 13, 2009 3:23pm EST

WASHINGTON (Reuters) – The United States racked up a record $485 billion deficit for the first three months of fiscal 2009, exceeding the $455 billion gap for all of the previous year, the U.S. Treasury said on Tuesday.

In December, the government posted a deficit of $83.62 billion versus a year-ago surplus of $48.26 billion — a wide swing that the Treasury attributed to a steep drop in corporate tax receipts and outlays from its financial rescue fund.

The December budget gap was in line with consensus forecasts of an $83 billion deficit from economists polled by Reuters.

The combined October, November and December deficit was nearly five times the year-ago budget hole of $107 billion, according to Treasury data.

The ballooning deficit could constrain President-elect Barack Obama’s ability to revive the U.S. economy with a massive fiscal spending program this year. The deficit for fiscal 2009, which started October 1, is expected to hit a staggering $1.186 trillion, according to the non-partisan Congressional Budget Office. This is even before an estimated $800 billion in proposed tax cuts and stimulus spending from Obama.

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Jim Sinclair’s Commentary

I am surprised that the S&P, the same guys that sit on Commodity Index committees, do not also say "Whilst upgrading US Debt."

More around the corner dollar pushing.

S&P are the same guys that rated SIVs along with Treasuries.

S&P threatens to strip Spain of top AAA rating

Standard & Poor’s has threatened to strip Spain of its coveted AAA rating as country’s budget deficit explodes, offering the clearest warning to date that even wealthy states are running out of room to borrow.
By Ambrose Evans-Pritchard
Last Updated: 7:31AM GMT 13 Jan 2009

The move caused fury in Madrid and revived fears in the currency and bond markets about the underlying health of Europe’s monetary union.

Spanish officials are irked that S&P has placed Spain’s debt on "CreditWatch Negative", a notch lower than the "outlook" alert issued on Irish bonds last week. It is the first time that a AAA country has suffered such a harsh verdict since the start of the global financial crisis.

Such a move typically precedes a downgrade within weeks but the finance ministry insisted last night this would not be allowed to happen. "There’s not going to be a rating downgrade because we are taking measures to overcome the crisis," it said.

Trevor Cullinan and Myriam Fernández, the agency’s analysts, said the housing crash had set off a downward spiral in Spain that would drive the budget deficit above 6pc by 2006, double the EU’s Maastricht limit.

"We expect a substantial worsening in the Kingdom’s public finances," it said, predicting 2pc contraction in 2009 and a long slump as years of credit excess are slowly purged.

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Jim Sinclair’s Commentary

Regardless of any interim technical dollar strength, it is doomed my friends, doomed. That will not and cannot change. A break up of the euro is a very long shot and would not reverse the terminal nature of the US dollar.

Bernanke Urges ‘Strong Measures’ to Stabilize Financial System
By Craig Torres

Jan. 13 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke, 55, said in the text of a speech at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”

Bernanke’s speech indicates he sees further government aid to the U.S. financial system as essential to an economic recovery. The U.S. Treasury has already channeled $350 billion in taxpayer funds to recapitalize banks and other financial institutions, while the Federal Deposit Insurance Corp. has guaranteed principle and interest payments on $111.2 billion in bonds issued by financial companies.

The Fed chairman recommended three approaches on troubled assets. Public purchases of the bad assets are one possibility, as was originally planned under U.S. Treasury Secretary Henry Paulson’s Troubled Asset Relief Program, the Fed chairman said.

The government could also agree to absorb, in exchange for warrants or a fee, part of the losses on a specified portfolio of troubled assets, he said. Regulators used that method recently with Citigroup Inc.

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Jim Sinclair’s Commentary

The almost seasonal nature of media babble about how negotiations and deals with North Korea have neutralized any nuclear threat is just that – babble.

Algorithms cannot see mushroom clouds on the horizon, but markets will.

NKorea says it won’t give up nuclear weapons

By JAE-SOON CHANG

SEOUL, South Korea (AP) — North Korea said Tuesday it will hold onto its nuclear arsenal until it is satisfied the U.S. is not hiding atomic weapons in South Korea.

The North has long accused Washington of stationing nuclear weapons in South Korea for a possible attack on the communist nation. Both the South and the U.S. deny having nuclear weapons in South Korea.

Regional powers have been trying for years to rid North Korea of its nuclear program, but negotiations have recently stalled. The Foreign Ministry indicated it would consider giving up its nuclear weapons if the U.S. threat is removed and diplomatic relations between the two nations are established.

"We won’t need atomic weapons when U.S. nuclear threats are removed and the U.S. nuclear umbrella over South Korea is gone," the statement said.

The statement, carried by state-run Korean Central News Agency and monitored in Seoul, comes a week before President-elect Barack Obama’s inauguration, and amid signs that the regime wants good relations with the next U.S. administration.

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Jim Sinclair’s Commentary

Now NATO is arming the militants. 8 hours ago in Pakistan.

Sure beats buying ammo.

Militants attack NATO truck depot in Pakistan: police

PESHAWAR, Pakistan (AFP) — Taliban militants launched a rocket attack on a NATO supply depot in northwest Pakistan early Tuesday, torching one truck and damaging three others, police said.

The attack on the outskirts of the city of Peshawar was the first since Pakistan launched a massive military operation late last month in the rugged Khyber tribal region bordering Afgahanistan to clear militants from the area.

That offensive was mounted after a series of spectacular attacks on depots in and around Peshawar in which hundreds of vehicles used to ferry supplies to NATO and US forces in Afghanistan were torched.

"The militants fired six rockets on a NATO terminal during the night. One truck was hit and it caught fire, while three other vehicles suffered minor damage," senior police officer Fida Mohammad told AFP.

Police and paramilitary soldiers tracked down the attackers and a brief gun battle ensued, he said. After about 30 minutes, the militants fled.

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Jim Sinclair’s Commentary

Pakistan Saturday:

We won’t bow to pressure: Zardari

Islamabad (IANS): Stressing that Pakistan would not "bow down" to any pressure, President Asif Ali Zardari said that if India wants to build up world pressure on Pakistan, it is a "mistake", a media report Sunday said.

"If India wants to build world pressure on Pakistan, it is a mistake," Zardari said during a dinner reception hosted Saturday for Islamabad-based foreign ambassadors at the Aiwan-e-Sadr.

Zardari separately met Indian High Commissioner to Pakistan Satyabrata Pal and discussed the regional situation with him.

During the dinner meet with ambassadors, the president said Pakistan had sincerely and unconditionally offered cooperation into the Mumbai terror attack probe but India had not responded to the call. "Pak-India tension could sabotage the peace process in the region," The Nation newspaper quoted Zardari as saying.

Zardari Saturday asked the world powers to play their role through effective diplomacy to defuse tension between Pakistan and India.

"Pakistan will take strict action against anyone or any group found guilty in the terror attacks on Mumbai. We want the issue to be resolved peacefully through bilateral dialogue," he said.

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Jim Sinclair’s Commentary

Pakistan’s infallible Nuclear Defense Program, except for the two guys on the left with their backs turned chewing the fat. There is safety and soundness. What wise ass said they came by bullock cart?

nw_20090112_6900_image_0

Pakistani Nuclear Security Worries U.S. Officials
Monday, Jan. 12, 2009

Preventing Pakistan’s nuclear arsenal from falling into extremist hands is a more important security priority for the United States than stabilizing Afghanistan and Iraq, according to a Bush administration report delivered to the team preparing for Barack Obama’s presidency, the New York Times reported yesterday.

"Only one of those countries has a hundred nuclear weapons," the report’s lead author said. Concerns persist over Islamabad’s ability to protect the arsenal, according to the Times.

U.S. intelligence officials have briefed Obama on the possibility that some Pakistani scientists with radical Islamic sympathies have sought to join the ranks of the nation’s nuclear elite.

There are "steadfast efforts of different extremist groups to infiltrate the labs and put sleepers and so on in there," said one of the most senior officials in the Bush administration.

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India ready to break with Pakistan over lack of help with Mumbai inquiry
David Byers, in Delhi

India plans to break off business, transport and tourist links with Pakistan and isolate it from the rest of the world if it fails to help to investigate the Mumbai terrorist attacks, the country’s Home Minister told The Times today.

Speaking in an interview that will raise the temperature further between the two countries, Palaniappan Chidambaram accused Pakistan of doing nothing to assist India bring to justice the perpetrators of the attacks on the country’s financial capital, which killed 165 people between November 26 and 29.

Asked what Pakistan was doing to help with the investigation, in which India handed over a dossier of evidence to its neighbour last week, Mr Chidambaram said: "Zero. What have they provided? Nothing."

The minister — who will brief David Miliband on the investigation’s progress when the British Foreign Secretary arrives in Delhi tomorrow — gave an indication of action that would be taken if Pakistan continued to refuse to investigate the attacks, blamed by India on Islamic militants with links to the Pakistani Inter-Services Intelligence agency (ISI).

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

Below zero? It would have to be to make it less attractive than the dollar.

Euro Falls Versus Dollar, Yen on Speculation ECB Will Cut Rates
By Anchalee Worrachate and Ron Harui

Jan. 12 (Bloomberg) — The euro fell for a second day against the dollar as the International Monetary Fund’s Managing Director Dominique Strauss-Kahn said Europe is “underestimating the needs” of fiscal stimulus for the economy.

The currency also dropped to a one-month low versus the yen as traders increased bets the European Central Bank will cut its main interest rate to the lowest level since 2005 this week to help pull the 16-nation economy out of a recession. The yen rose against all 16 major currencies tracked by Bloomberg as falling Asian and European stocks damped demand for carry trades.

“The way to play it in the near term is to short the euro going into the announcement because the likelihood is that the ECB is going to cut,” said Daragh Maher, deputy head of global currency strategy in London at Calyon, the investment-banking unit of Credit Agricole SA. “My preference is short the euro against the yen. Economic reports throughout the week are likely to add to the environment of high risk aversion.”

The euro dropped to $1.3342 as of 8:43 a.m. in London, from $1.3476 in New York on Jan. 9. The currency declined to 120.28 yen from 121.81 and traded as low as 120.11, the weakest since Dec. 12. Against the British pound, the euro rose to 89.16 pence from 88.78 pence. The yen strengthened to 90.13 per dollar, from 90.39 last week.

The yen strengthened to 62.52 against Australia’s dollar from 63.59 and strengthened to 52.79 versus New Zealand’s dollar from 53.49 as investors trimmed holdings of higher-yielding assets funded in Japan.

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Jim Sinclair’s Commentary

What the hell has this world become!!!!!

Madoff to Remain Free on Bail With New Restrictions

NEW YORK (AP) — A judge allowed disgraced investor Bernard Madoff to remain free on bail Monday, rejecting an attempt by prosecutors to send him to jail for mailing more than $1 million in jewelry to family and friends over the holidays.

The decision means Madoff will avoid having to leave the comfort of his $7 million penthouse and await trial in a cramped jail cell with nothing but bunkbeds, a sink and toilet. Madoff will remain under house arrest and under the constant watch of security guards.

The ruling further outraged investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history. They find it shocking that Madoff is free on bail, despite distributing assets that could be used to help repay investors who lost billions.

Stephen A. Weiss, a lawyer for several dozen Madoff investors, said there "are people on the street who are very unhappy" with the ruling.

"There is a thirst for blood that transcends just those who have been victimized. There is a feeling … that folks like Bernard Madoff get a different brand of justice than the guy in the street," Weiss said.

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Jim Sinclair’s Commentary

What is the Globe and Mail smoking today?

Comments to the Globe & Mail as the reason for gold’s pounding today:

Physical demand for gold was seen softening after holding firm in the normally very strong fourth quarter.

“It tends to tail out in the first quarter … the market over the next few weeks will probably focus on weaker demand,” said analyst Michael Widmer at BNP Paribas.

AND

“Physical demand in the key demand centres continues to be lethargic with limited purchases,” Mr. Unni (Pradeep Unni at Richcomm Global Services) said, adding that gold could drop substantially in the next couple of months.

Click here to read the article…

 

Jim Sinclair’s Commentary

Pakistan Today

Hundreds cross from Afghanistan to attack Pakistani military
Monday, January 12, 2009

KABUL, Afghanistan — Vice President-elect Joe Biden promised U.S. support for Afghanistan’s struggle against terrorism, drugs and corruption in a visit Sunday to an area of the nation that is a Taliban stronghold.

The future of the region where al Qaeda planned the Sept. 11 attacks "affects us all," Biden said.

Underscoring the difficulty of the situation, hundreds of militants crossed into the frontier area of Pakistan from eastern Afghanistan and attacked paramilitary forces on the same day that Biden visited Afghanistan’s southern Kandahar and Helmand provinces.

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Afghan rebels strike Pakistan military camp
Assault shows Taliban allied across border
By Laura King
Los Angeles Times / January 12, 2009

ISLAMABAD, Pakistan – Hundreds of militants crossed over from Afghanistan to attack a Pakistani military outpost yesterday, officials said, in an illustration of the merging of the Taliban insurgency on the two sides of the border.

The attack pointed up the growing boldness of militants operating in the lawless tribal areas abutting Afghanistan at a time when the Pakistan government has diverted some forces to the frontier with India.

While stepping up their campaign against government troops, the insurgents also employed extreme forms of cruelty to intimidate civilians in the tribal areas.

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Pakistan’s Jamaat ‘ban’ lie nailed
12 Jan 2009, 1012 hrs IST, Times Now

NEW DELHI: TV channel Times Now has exposed yet another of Pakistan’s lies — Islamabad may want the world to believe that it has cracked down on the Jamaat-ud-Dawa, but that is far from the truth.

There is concrete evidence now that the Lashkar-e-Taiba’s front organization has re-emerged in the form of Tehreek-e-Tahafuz Qibla Awal.

Times Now has got visuals from Lahore, where the Tehreek recently held a rally. Addressing that rally were some of the top Jamaat and Lashkar leaders. The Jamaat-ud-Dawa is clearly going about with business as usual, just under a different name.

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Posted by & filed under In The News.

Monty Guild’s Commentary

This is why China will dominate. They behave more intelligently than the politically driven west.

China makes strategic use of commodity collapse
Tue Jan 6, 2009 2:45am EST
By Eadie Chen – Analysis

BEIJING (Reuters) – China’s government is using the collapse in commodity prices to further its domestic agenda, with support for stricken sectors tailored to speed up reform plans rather than rescue ailing companies or prop up prices.

To survive plummeting demand for exports — a sharp turnaround after several years of booming global demand — many industries are looking for state help and consolidation.

But China’s policymakers are sticking to their economic blueprints and not letting sympathy for troubled corporates overwhelm longer-term priorities. Instead, they are favoring the strongest in each industry in a drive toward consolidation, and at the same time using low prices as a chance to stock up.

On Monday, it emerged that China was poised to buy up thousands of tonnes of rubber and sugar to create a bigger state buffer of supplies for the future, adding to efforts to enlarge stocks of everything from oil to corn to industrial metals.

At the same time, however, it’s letting small coal mines go to the wall, seizing a chance to make good on years of rhetoric, as well as allowing smaller, less efficient metal producers go under.

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Jim Sinclair’s Commentary

Today in Pakistan:

Crowd tries to attack US consulate in Pakistan
Jan 11 11:56 AM US/Eastern
By ASHRAF KHAN

KARACHI, Pakistan (AP) – Security forces used tear gas and batons to repel anti-Israel protesters who tried to attack a U.S. consulate in Pakistan on Sunday, as tens of thousands of people demonstrated worldwide against Israel’s offensive in the Gaza Strip.

Israel launched its campaign in Gaza on Dec. 27 to stop rocket fire from the militant Palestinian group Hamas. Gaza health officials say nearly 870 Palestinians have been killed, roughly half of them civilians. Thirteen Israelis have also died.

Tens of thousands of angry demonstrators protested Sunday across the Arab world, in Europe and Asia.

Some 2,000 protesters in the Pakistani port city of Karachi burned U.S. flags and chanted anti-Israel slogans, and several hundred of them marched on the U.S. Consulate, senior police official Ameer Sheikh said.

"They were in a mood to attack," Sheikh said. "They were carrying bricks, stones and clubs."

A U.S. Embassy spokesman in Islamabad, Lou Fintor, said the protesters did not get close to the consulate, which was closed Sunday.

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Jim Sinclair’s Commentary

Turkey is a victim.

Turkey coup plot arrests now at more than 100
By SELCAN HACAOGLU

ANKARA, Turkey (AP) — A Turkish court formally arrested 14 more people Sunday for ties to an alleged secularist plot by ultranationalists to bring down the Islamic-rooted government, bringing the total of people involved in the case to more than 100.

The prime minister said the crackdown will shed light on a network of renegade agents within the state and make Turkey transparent. Critics say it is designed to silence the government’s opponents.

The case highlights a difficult question about who holds the levers of power in a nation where tensions between secularists and Islamists, and liberals and rightists, have created deep fault lines in the country.

The problem is aggravated by key demands from the European Union — which Turkey hopes to join — to reduce the military’s influence in politics, make security officials accountable for torture and grant more rights to the country’s Kurds.

Over the weekend, an Istanbul anti-terror court formally arrested and jailed 18 coup plot suspects, including a former police chief and four active duty military officers. Fourteen of the 18 were arrested Sunday.

Police detained another 33 suspects in the case Sunday and displayed confiscated weapons. Prosecutors say the plot aimed to destabilize Turkey through a series of attacks and trigger a coup in 2009.

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Jim Sinclair’s Commentary

Plausible Denial?

U.S. Rejected Aid for Israeli Raid on Iranian Nuclear Site
By DAVID E. SANGER
Published: January 10, 2009

WASHINGTON — President Bush deflected a secret request by Israel last year for specialized bunker-busting bombs it wanted for an attack on Iran’s main nuclear complex and told the Israelis that he had authorized new covert action intended to sabotage Iran’s suspected effort to develop nuclear weapons, according to senior American and foreign officials.

White House officials never conclusively determined whether Israel had decided to go ahead with the strike before the United States protested, or whether Prime Minister Ehud Olmert of Israel was trying to goad the White House into more decisive action before Mr. Bush left office. But the Bush administration was particularly alarmed by an Israeli request to fly over Iraq to reach Iran’s major nuclear complex at Natanz, where the country’s only known uranium enrichment plant is located.

The White House denied that request outright, American officials said, and the Israelis backed off their plans, at least temporarily. But the tense exchanges also prompted the White House to step up intelligence-sharing with Israel and brief Israeli officials on new American efforts to subtly sabotage Iran’s nuclear infrastructure, a major covert program that Mr. Bush is about to hand off to President-elect Barack Obama.

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Jim Sinclair’s Commentary

This is the problem. It is as much internal politics, the emergence once again of the feared (by present political parties in power) BJP that demands strong secular actions as it is terrorism sponsors, not the Pakistan government at the top but at almost every level below that.

Either "UPA" acts or "BHP" governs is the political challenge being laid down now.

Time for action against Pakistan: BJP
11 Jan 2009, 0448 hrs IST, TNN

BHOPAL: Time has come for India to move away from waging a war of words with Islamabad to taking action, BJP president Rajnath Singh said in Bhopal on Saturday supporting military action against terrorist outfits based in Pakistan.

"India has no other option but to take military action against Pakistan,” he said.

"The Prime Minister and his council of ministers have only been giving statements, which is not enough. The Union government should stop this ineffective verbal war with Pakistan. There is no need to just create a war hype in the country without real action. Since Pakistan is not taking any initiative to stop terrorist organisations within its territory, the time has come for us to take the world community into confidence and go for military action against the country which will not stop terror organisations from killing our innocent citizens,” Rajnath said.

The BJP president said, "Our country needs to show some diplomatic skill and urge the international community to support India against Pakistan. There is more than enough evidence that Pakistan’s intelligence agency, ISI, is directly linked to terror organisations and has been helping terrorist groups to carry out attacks in India and other parts of the world. Indian diplomacy should concentrate on bringing ISI on the international radar as an intelligence agency with questionable credentials.”

The UPA-led government should have snapped its diplomatic ties with Pakistan immediately after the Mumbai serial train blasts which killed 200 people, he said. "India has blundered, our assessment of Pakistan has been wrong. We should have taken strong steps against Pakistan after the Mumbai train blasts. Instead, our Prime Minister justified that Pakistan too is a victim of terror attacks. It was a mistake on our behalf to sign an agreement for a joint terror mechanism with Pakistan.”

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Jim Sinclair’s Commentary

Turkey comes on the heels of Pakistan, even if intelligence agencies are snoozing.

Turkey imprisons four army officers in Ergenekon case

ANKARA, Jan. 10 (Xinhua) — A Turkish court early on Saturday sentenced to prison four army officers in the ongoing "Ergenekon" investigation, the semi-official Anatolia news agency reported.

Five prosecutors, including Zekeriya Oz, the top prosecutor of the ongoing Ergenekon case, demanded a criminal court in the Turkish largest city of Istanbul to imprison four army officers on charges of being members of the "Ergenekon terrorist organization," according to the report.

The court decided to send the four officers to prison, and release two others, said the report.

An alleged criminal network known as "Ergenekon" was uncovered after police seized 27 grenades, TNT explosives and fuses in a shanty house in Istanbul on June 12, 2007.

Police waged operations in several provinces and detained a number of people, including retired senior army officers, journalists and businessmen, for their alleged involvement in the network.

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Police discover weapons, hand grenades in Turkey coup probe: report
Posted Sat Jan 10, 2009 6:49pm AEDT

Turkish police have unearthed weapons and hand grenades near the capital of Ankara in a probe into an alleged plot to topple the Islamist-rooted government that has fuelled political tensions, Anatolia news agency reports.

The dig at a forest in the suburb of Golbasi resulted in the discovery of two light anti-tank weapons, 10 hand grenades, bullets and explosives, Anatolia said.

Using metal detectors and sniffer dogs, anti-terror police dug the area on the basis of documents seized from former police chief Ibrahim Sahin, one of some 40 suspects detained Wednesday, it said.

Sahin was one of the most prominent figures involved in a major scandal in 1996 which unveiled collaboration between members of the security forces, politicians and gangsters in acts outside the law, including murders of Kurdish dissidents.

Some media reports suggested the dig could shed light on the fate of weapons procured from Israel, which went missing during Sahin’s term and are believed to have been used in illicit operations.

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