Posts Categorized: In The News

Posted by & filed under In The News.

Dear CIGAs,

The geopolitical potential prior to January 14th, 2011 has been described here as:

  1. Pakistan goes Taliban.
  2. Israel makes a significant miscalculation.
  3. Turkey is a victim.

This article reveals the real G20 accomplishments and outlines Turkey’s present place of honor in the USA.

Obama’s Strategy and the Summits
By George Friedman
April 6, 2009

The weeklong extravaganza of G-20, NATO, EU, U.S. and Turkey meetings has almost ended. The spin emerging from the meetings, echoed in most of the media, sought to portray the meetings as a success and as reflecting a re-emergence of trans-Atlantic unity.

The reality, however, is that the meetings ended in apparent unity because the United States accepted European unwillingness to compromise on key issues. U.S. President Barack Obama wanted the week to appear successful, and therefore backed off on key issues; the Europeans did the same. Moreover, Obama appears to have set a process in motion that bypasses Europe to focus on his last stop: Turkey.

Berlin, Washington and the G-20

Let’s begin with the G-20 meeting, which focused on the global financial crisis. As we said last year, there were many European positions, but the United States was reacting to Germany’s. Not only is Germany the largest economy in Europe, it is the largest exporter in the world. Any agreement that did not include Germany would be useless, whereas an agreement excluding the rest of Europe but including Germany would still be useful.

Two fundamental issues divided the United States and Germany. The first was whether Germany would match or come close to the U.S. stimulus package. The United States wanted Germany to stimulate its own domestic demand. Obama feared that if the United States put a stimulus plan into place, Germany would use increased demand in the U.S. market to expand its exports. The United States would wind up with massive deficits while the Germans took advantage of U.S. spending, thus letting Berlin enjoy the best of both worlds. Washington felt it had to stimulate its economy, and that this would inevitably benefit the rest of the world. But Washington wanted burden sharing. Berlin, quite rationally, did not. Even before the meetings, the United States dropped the demand — Germany was not going to cooperate.

The second issue was the financing of the bailout of the Central European banking system, heavily controlled by eurozone banks and part of the EU financial system. The Germans did not want an EU effort to bail out the banks. They wanted the International Monetary Fund (IMF) to bail out a substantial part of the EU financial system instead. The reason was simple: The IMF receives loans from the United States, as well as China and Japan, meaning the Europeans would be joined by others in underwriting the bailout. The United States has signaled it would be willing to contribute $100 billion to the IMF, of which a substantial portion would go to Central Europe. (Of the current loans given by the IMF, roughly 80 percent have gone to the struggling economies in Central Europe.) The United States therefore essentially has agreed to the German position.

Later at the NATO meeting, the Europeans — including Germany — declined to send substantial forces to Afghanistan. Instead, they designated a token force of 5,000, most of whom are scheduled to be in Afghanistan only until the August elections there, and few of whom actually would be engaged in combat operations. This is far below what Obama had been hoping for when he began his presidency.

Agreement was reached on collaboration in detecting international tax fraud and on further collaboration in managing the international crisis, however. But what that means remains extremely vague — as it was meant to be, since there was no consensus on what was to be done. In fact, the actual guidelines will still have to be hashed out at the G-20 finance ministers’ meeting in Scotland in November. Intriguingly, after insisting on the creation of a global regulatory regime — and with the vague U.S. assent — the European Union failed to agree on European regulations. In a meeting in Prague on April 4, the United Kingdom rejected the regulatory regime being proposed by Germany and France, saying it would leave the British banking system at a disadvantage.

Overall, the G-20 and the NATO meetings did not produce significant breakthroughs. Rather than pushing hard on issues or trading concessions — such as accepting Germany’s unwillingness to increase its stimulus package in return for more troops in Afghanistan — the United States failed to press or bargain. It preferred to appear as part of a consensus rather than appear isolated. The United States systematically avoided any appearance of disagreement.

More…

 

Jim Sinclair’s Commentary

The Times of India is one of the most respected publications internationally.

Pakistan could collapse within six months: US expert
7 Apr 2009, 0149 hrs IST, TIMES NEWS NETWORK & AGENCIES

NEW YORK: Pakistan could collapse within six months in the face of the snowballing insurgency, a top expert on guerrilla warfare has said.

The dire prediction was made by David Kilcullen, a former adviser to top US military commander General David Petraeus.

David Kilcullen is the best known practitioner of counter-terrorism and counter-insurgency operations and had advised Gen Petraeus on the counter-insurgency programme in Iraq. Few experts understand the nature of the insurgency in Af-Pak as well and he is now advising Petraeus in Afghanistan.

Petraeus also echoed the same thought when he told a Congressional testimony last week that the insurgency could "take down" Pakistan, which is home to nuclear weapons and al-Qaida.

Kilcullen’s comments come as Pakistan witnesses an unprecedented upswing in terror strikes and now some analysts in Pakistan and Washington are putting forward apocalyptic timetables for the country.

More…

 

Jim Sinclair’s Commentary

Estimates of Toxic paper has grown from $2.2 trillion one week ago to $4 trillion today.

Toxic debts could reach $4 trillion, IMF to warn
Gráinne Gilmore, Economics Correspondent

Toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.

Banks and insurers, which so far have owned up to $1.29 trillion in toxic assets, are facing increasing losses as the deepening recession takes a toll, adding to the debts racked up from sub-prime mortgages. The IMF’s new forecast, which could be revised again before the end of the month, will come as a blow to governments that have already pumped billions into the banking system.

Paul Ashworth, senior US economist at Capital Economics, said: “The first losses were asset writedowns based on sub-prime mortgages and associated instruments. But now, banks are selling ‘plain vanilla’ losses from mortgages, commercial loans and credit cards. For this reason, the housing market will play a crucial part in how big the bad debt toll is over the next year or two.”

In its January report, the IMF said: “Degradation is also occurring in the loan books of banks, reflecting the weakening outlook for the economy. Going forward, banks will need even more capital as expected losses continue to mount.” At the same time, there is a clear shift in congressional attitudes in the United States about simply pumping money into the system, Mr Ashworth said. The British Government is also under pressure to repair its tattered finances. Injecting more money into the banks could further undermine its fiscal position.

More…

Posted by & filed under In The News.

Dear CIGAs,

Now that the G20 has saved us all it might be interesting to consider every OTC derivative still out there as the small size of a little penny. You must keep in mind that upon designation as an OTTI, other than temporarily impaired assets, (previously known as PIA, "permanently impaired assets") the value of the obligation moves from nominal to full value. The others will move there as a percentage of their worth.

It is so good to know that the G20 have saved our souls.

Look at the OTC derivatives illustrated as little pennies all piled in a brick. Nominal to full value would engulf the planet deeper in this crap.

pennies

Jim Sinclair’s Commentary

All G20 deficits are going to be larger than predicted for years to come, upward adjusted of course after shockingly large releases of data.

UK deficit ‘more than predicted’

clip_image001

The government may have to find an extra £39bn a year by 2016 to bring borrowing under control, the Institute for Fiscal Studies (IFS) says.

This is on top of the £38bn of fiscal tightening the chancellor announced in the pre-Budget report (PBR).

If the money were raised entirely through tax-raising measures then families would face an average increase of £1,250 in taxes a year.

Alistair Darling is due to present his Budget on 22 April.

He has warned that the recession will be more severe than forecast.

He may also be forced to revise his forecast for public sector net borrowing, with the IFS forecasting that the budget gap could reach £150bn a year (more than 10% of GDP) over the next three years.

He and Gordon Brown will meet the Bank of England governor later to discuss measures agreed at the G20 summit.

More…

Jim Sinclair’s Commentary

Less Bats, less bees, less food, more costly corporate farming rejoices.

Georgia might close caves to protect bats
Disease that’s killed critters in 8 states could head here
By MARK DAVIS
The Atlanta Journal-Constitution
Monday, April 06, 2009

A disease is heading toward Georgia, and state officials say they may close caves to stymie its arrival.

Yes, caves. The disease is white-nose syndrome, and it has decimated bat populations in eight states from New Hampshire to West Virginia. If unchecked, it could reach Georgia, home to 16 species of bats.

It’s such a mystery that the U.S. Fish and Wildlife Service has urged cave explorers to stay away from caves in those states, plus those in adjacent states.

The disease is apparently not harmful to humans, but scientists don’t know if cavers help transfer the disease from one site to the next, said Diana Weaver, a spokeswoman for the agency.

The Georgia Department of Natural Resources might follow the agency’s suggestion and close caves on state property, said DNR biologist Katrina Morris.

More…

 

Jim Sinclair’s Commentary

The odds favor the Taliban.

Zardari: Pakistan fighting Taliban for survival
Mon, 06 Apr 2009 22:28:33 GMT

Pakistan’s President Asif Ali Zardari tells top visiting US officials that his country is fighting Taliban insurgents for its ‘survival’.

"Pakistan is fighting a battle for its own survival," president Zardari told Richard Holbrooke, US’ special envoy for Afghanistan and Pakistan, and Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff during a meeting in Islamabad on late Monday.

"The President said the government would not succumb to any pressure by militants," a statement issued by the presidency quoted Zardari as saying on Monday.

The US officials flew into Islamabad on Monday following two days of discussions in neighboring Afghanistan.

It is the first top-level US visit since President Barack Obama put Pakistan, along with Afghanistan in his new war plan against al-Qaeda and Taliban militants.

Pakistan has been hit by a wave of violence seven and a half years after US-led forces invaded neighboring Afghanistan in 2001 in a mission that was said to oust al-Qaeda and Taliban.

More…

Posted by & filed under In The News.

So Much Ado About So Little

"A sale of 12.9 million ounces of gold as ‘probably the most viable’ option to ensure the long-term funding of the IMF. Proceeds would be used for an interest-bearing endowment."
–WSJ, 26 February 2008.

12.9 million ounces of gold at $906 per ounce, as I write, is slightly less than $12.4 billion. The Chinese would buy $12.4 billion in gold with a telephone call.

Central banks would be willing to buy twice or even ten times that amount.

How foolish the IMF and Gordon Brown have been in gold. Both sold to major buyers at historic lows in price. Brown sold at $248 and the IMF started their sales at $106 in the 70s.

What in the world are you worried about?

Their sales at any amount will, as in the past, be an enduring monument to their lack of acumen in knowing the gold price.

In fact they are both the two dumbest gold haters that exist.

My Dear Friends,

Spinmeisters always tell the Sheeples when they cannot control something that the government favors that something.

Watch this strategy unfold as the US dollar heads for .5100 on the USDX.

This will reach Spiritual Spinmeister levels as the Hollow Jolly 2009 season arrives.

OTTI Assets:

There has been a new term given to completely destroyed, absolutely valueless and always to be worthless OTC derivatives. These had previously been called "Permanently Impaired Assets."

The new name is OTTI Assets, which translates as "Other than Temporary Impairment Assets." These now under the new FASB rules will be carried as valued decided upon by the banks.

Sodom and Gomorrah at least enjoyed themselves in their drop into perdition. These criminals just count beans as they kill everybody.

"We the Sheeple" are the victims. Wall Street benefits, of course.

The disgrace is that bank shares rally on the permissions to deceive.

You think Mother Nature might be a little peeved?

Respectfully yours,
Jim

clip_image001

Jim Sinclair’s Commentary

Pakistan is CRITICAL now!

Tomorrow is too late.

How long is the Obama Administration going to discuss:

  1. The means of producing Nukes.
  2. Dr. Doom, the purveyor of Nukes.
  3. Knowledge of how and facilities to manufacture Nukes.
  4. Raw materials to produce Nukes.
  5. All the same on delivery systems for Nukes.
  6. Not just standing Nukes.

If you want the face of the world to change once again and forever and the price of crude to stay permanently over $100, all you need to do is send ambassadors, with money to discuss the problem.

Sending money only insures a comfortable retirement for the present Pakistani government.

US Afghan envoy Holbrooke in Kabul for talks
Reuters – USA
Richard Holbrooke, whose mandate also covers Pakistan, is making his second visit in his new role, at a time when violence in Afghanistan has reached its …
See all stories on this topic

Pakistan mosque blast ‘kills 20’
BBC News – UK
At least 20 people have been killed after a suicide bomber detonated a device at the entrance to a Shia mosque in north-east Pakistan, police say. …
See all stories on this topic

‘Pakistan find 46 dead Afghans in truck container’
AFP
QUETTA, Pakistan (AFP) — Pakistani and Afghan officials were Sunday preparing to send home the bodies of 46 Afghans found crammed into a truck container …
See all stories on this topic

Suicide Bomber Kills 8 Paramilitary Officers in Pakistan
By Shaiq Hussain and Pamela Constable
Washington Post Foreign Service
Saturday, April 4, 2009; 6:15 PM

ISLAMABAD, Pakistan, April 4 — A suicide bomber attacked a small paramilitary camp in an exclusive, heavily protected neighborhood of the Pakistani capital Saturday, killing at least eight paramilitary officers before blowing himself up, police said.

The bomber tried to enter the camp, a cluster of tents in a wooded area between two residential streets, just after dark, but then detonated his explosives. The blast was heard several miles away and sent panic through the nearby Jinnah Super Market, which caters to affluent residents.

Witnesses said the 7:30 p.m. blast was followed by a heavy barrage of gunfire.

No group asserted responsibility for the attack, but the leader of a Taliban militia faction in northwestern Pakistan warned earlier in the week that his fighters would soon strike in Islamabad. The leader, Baitullah Mehsud, also claimed that he had carried out an attack on a police academy near Lahore this past week.

More…

Jim Sinclair’s Commentary

Yes, but it is NOT a scam in the sense that all bailout money is applied to pay the debit on the failed OTC derivative as the credit is paid out to the winners inside and outside of the firm.

You do not see the inside payments. AIG is not an exception. It just paid out more externally. That is why it was visible.

Exclusive: Big Banks’ Recent Profitability Due to AIG Scam?
March 30, 2009

Zero Hedge is rarely speechless, but after receiving this email from a correlation desk trader, we simply had to hold a moment of silence for the phenomenal scam that continues unabated in the financial markets, and now has the full oversight and blessing of the U.S. government, which in turn keeps on duping U.S. taxpayers into believing everything is good.

I present the insider perspective of trader Lou (who wishes to remain anonymous) in its entirety:

AIG-FP accumulated thousands of trades over the years, all essentially consisted of selling default protection. This was done via a number of structures with really only one criteria – rated at least AA- (if it fit these criteria all OK – as far as I could tell credit assessment was completely outsourced to the rating agencies).

Main products they took on were always levered credit risk, credit-linked notes (collateral and CDS both had to be at least AA-, no joint probability stuff) and AAA or super senior portfolio swaps. Portfolio swaps were either corporate synthetic CDO or asset backed, effectively sub-prime wraps (as per news stories regarding GS and DB).

Credit linked notes are done through single-name CDS desks and a cash desk (for the note collateral) and the portfolio swaps are done through the correlation desk. These trades were done is almost every jurisdiction – wherever AIG had an office they had IB salespeople covering them.

Correlation desks just back their risk out via the single names desks – the correlation desk manages the delta/gamma according to their correlation model. So correlation desks carry model risk but very little market risk.

More…

Jim Sinclair’s Commentary

The present Administration may set a record for poor vetting of their superstars or just business as usual.

White House Financial Disclosures Paint Scarlet $ on Larry Summers

The White House did a Friday left-cheek sneak yesterday, announcing that Executive Branch Financial Disclosure reports are now available through an online ordering process. Making hay out of these reports is the nature of the beast in politics, and by dumping them on a Friday, they blunt the impact of criticisms like this:

Lawrence Summers, director of President Barack Obama’s National Economic Council, earned millions working at a hedge fund and speaking to banks such as Citigroup Inc. that later received taxpayer bailout money.

Hedge fund D.E. Shaw & Co. paid Summers more than $5 million in salary and other compensation in the past 16 months, according to a financial disclosure form released by the White House yesterday. Summers served as a managing director at the New York-based firm. Summers, a former Treasury secretary, also earned more than $2.7 million in speaking fees.

A report like this cuts both ways. Do we want advisers who couldn’t get arrested on the lecture circuit? Should the President be raiding The Learning Annex to staff his administration? One of Bloomberg’s experts makes the point succinctly:

The disclosure statement for Summers and several other top administration officials illustrates the quandary Obama and his predecessors have faced in their personnel decisions because "powerful people are almost always also rich people" who have earned money from private interests, said Steffen Schmidt, a political science professor at Iowa State University in Ames, Iowa

More…

 

Jim Sinclair’s Commentary

How can you possibly fear the pittance of gold the IMF has for sale? It is a total joke.

AIG Bailout Exceeds Value of Fort Knox Gold
April 02, 2009

At the end of this Fox Business News video with Chris Powell, Secretary/Treasurer of the Gold Anti-Trust Action Committee (GATA), it is learned that, if indeed all the gold in Fort Knox is still there, it is worth less than all the bailout money already paid to AIG.

That, in itself, is a weighty argument for the yellow metal being undervalued at today’s prices, perhaps by a quite considerable margin. The current GATA media blitz is related to their recent Freedom of Information Act request to see if they can get someone to audit the contents of Fort Knox, besides the Treasury Department, that is.

This report in the TimesOnline provides many of the details:

Is there any gold inside Fort Knox, the world’s most secure vault?

It is said to be the most impregnable vault on Earth: built out of granite, sealed behind a 22-tonne door, located on a US military base and watched over day and night by army units with tanks, heavy artillery and Apache helicopter gunships at their disposal.

Since its construction in 1937 the treasures locked inside Fort Knox have included the US Declaration of Independence, the Gettysburg Address, three volumes of the Gutenberg Bible and Magna Carta.

More…

Jim Sinclair’s Commentary

How in the name of all that is holy can you be afraid of the IMF?

A bear’s bear
There is a time for stocks and a time for gold. Now is the time for gold, Ian Gordon says
BRIAN MILNER
From Thursday’s Globe and Mail
April 2, 2009 at 7:14 AM EDT

Anyone wondering what a bear’s bear sounds like need only spend some time with Ian Gordon, a Vancouver-based investment adviser and market historian whose genial nature seems at odds with his decidedly grim outlook. Basing his views on an interpretation of market cycles going back more than 200 years, the president of Long Wave Analytics has been consistently accurate in his forecasts in recent years. And if he is right now, much worse is yet to come.

Can you explain how your thesis works?

I sort of extended Kondratieff’s economic cycle into something far bigger than he had ever intended. [Nikolai Kondratieff was a Soviet economist who concluded in the 1920s that capitalist economies endure recurring booms and busts over long cycles running up to 60 years.] I quickly discovered that it was very easy to recognize exactly where you were in the cycle.

You divide the cycle into the four seasons of the year and say that right now we’re at the beginning of a long winter. Why is that?

‘We’re only really at the beginnings of this massive collapse of the debt structure. Much as the central banks are trying to feed money into the system, the collapse basically takes money out faster than they can put it in,’ Ian Gordon says. (Laura Leyson for the Globe and Mail)

More…

Jim Sinclair’s Commentary

Washington is going to fire the CEOs. That is the job of the directors under pressure from the stockholders in a capitalistic system.

If the new system requires a name, the closest parallel is FACISM.

Welcome to change brought about by many Administrations, Nixon forward.

U.S. May Oust CEOs at Banks Needing ‘Exceptional’ Aid (Update1)
By Jesse Westbrook

April 5 (Bloomberg) — Treasury Secretary Timothy Geithner said he’s prepared to oust the senior management and boards of directors at banks that require “exceptional” assistance from the U.S. government.

“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said today in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”

Geithner noted that American International Group Inc., Fannie Mae and Freddie Mac had their chief executives removed after it became clear the companies couldn’t survive without government rescues. The Treasury is reviewing how much capital the biggest U.S. financial companies need in order to endure a severe economic downturn.

“Where we’ve had to do exceptional things,” the government has replaced management and boards of directors, Geithner said.

Geithner’s pledge comes as signs emerge that the world economy may be stabilizing. Confidence among U.S. consumers climbed last month from the lowest level on record, according to the Conference Board. U.K. house prices rose in March for the first time since October 2007, while Chinese manufacturing increased, reports last week showed.

More…

Jim Sinclair’s Commentary

Let’s see, everything starts in California, so you will within a year read about this in the US.

Cops storm G20 ‘rioters HQ’
3/04/2009

Police hunting G20 rioters threatened 70 squatters with tasers after storming their derelict HQ yesterday.

The dramatic arrests came as further violent protests failed to materialise.

Petros Persad, 20, who was in one of the East London squats, said: "They battered down the doors.

They didn’t beat us up but it was scary. They burst into the room, pointed tasers at us and told us to get down with our faces on the floor." The Met said officers were hunting for suspects wanted for "violent disorder".

Outside the G20 summit at the ExCel Centre in Docklands, more than 1,500 police officers were deployed. But only 500 demonstrators turned up.

More…

Posted by & filed under In The News.

Dear CIGAs,

Do you really want to know what came out of the G20? Read below.

China positioning its currency for a run at world supremacy
By Don Lee 
April 3, 2009

clip_image001

In a series of what might be called baby steps, Chinese officials recently have moved to globalize the yuan and promote its influence overseas, with Shanghai designated as command central.

Since last December, China has signed deals with six countries, including South Korea, Malaysia and most recently Argentina, for currency swaps that would inject Chinese money into foreign banking systems. That would allow foreign companies to pay for goods they import from China in yuan, bypassing the dollar — the currency that dominates international trade and finance, including foreign exchange reserves.

Beijing is also taking initiatives to use the yuan, also known as the renminbi, to settle trade accounts between some Chinese provinces and neighboring states, starting with Hong Kong.

"The central bank has set promoting the renminbi for payment settlements as the main task for this year’s work," said Shi Lei, an analyst in the global financial markets section at Bank of China in Beijing.

China is also spreading the yuan’s influence in Asia by making loans and investments in other countries, as well as through its many tourists who carry loads of Chinese currency abroad. In Cambodia, where the dollar has long dominated, a tour guide in Angkor Wat recently asked visitors if they could pay him in yuan.

Meanwhile, Chinese officials have called attention to the risks of an international monetary system that relies on the dollar, which many analysts have begun to see as unstable because of heavy deficit spending embraced by Washington to combat the recession.

More…

Jim Sinclair’s Commentary

The G20 is going to fix all the secondary fallout from this? What are you smoking?

Bankruptcy Filings by Businesses Increase 78% in First Quarter
By Bill Rochelle

April 3 (Bloomberg) — Bankruptcy filings by larger companies liquidating or reorganizing in Chapter 11 in the first quarter rose 78 percent from the same period a year earlier and almost tripled from 2007 as the U.S. was mired in the 15th month of a recession.

Almost 131,000 bankruptcies of all types were filed in March, the most for any month since 2005, when Congress erected barriers to individuals looking to rid themselves of debt.

Filings increased 9.2 percent in March over February, according to data compiled by Automated Access to Court Electronic Records, a service of Jupiter ESources LLC in Oklahoma City. March bankruptcies rose 38 percent from a year earlier and 79 percent from 2007.

The surge of filings in March “suggest that earlier estimates of 1.4 million to 1.5 million cases in 2009 should be revised to somewhere in the 1.5 million to 1.6 million range,” said Mike Bickford, president of AACER, a bankruptcy data and management service. If Bickford’s high estimate proves correct, 2009 filings would exceed 2008 by about 45 percent.

Public companies filing for bankruptcy or reorganization through March 31 had a combined $101 billion in debt, according to a report earlier this week by Bankruptcydata.com. That’s almost ninefold higher than the $11.7 billion in the same period last year.

More…

Jim Sinclair’s Commentary

You often ask what event has the potential of throwing all the spin right against the wall in terms of disturbing the social order. Here it is.

$1 trillion hit to pensions could cost taxpayers, workers
Published: Friday, April 3, 2009 at 10:15 a.m. 
Last Modified: Friday, April 3, 2009 at 10:15 a.m.

SANTA FE, N.M. — Massive investment losses sustained by public pension funds are pressuring state lawmakers from New Mexico to New York to spend more taxpayer money to shore up their programs, boost the retirement age for newly hired government workers and seek more from employee paychecks.

Pensions need $270 billion in additional contributions over the next four years, and more than $100 billion annually for two decades hence, according to the Center for Retirement Research at Boston College.

The pension trouble is just one more economic challenge for states. Income and sales tax collections are dropping fast as unemployment rises. Jobless benefits funds are running dry, requiring federal borrowing. And because of substantial budget holes, states are cutting back on a wide range of services, including child care subsidies for low-income families and aid to public schools, and in some cases laying off workers.

But as bad as the budget picture looks, it is dwarfed by the size of the gaps in states’ pensions, which have collectively lost at least $1 trillion as financial markets swooned over the past year. Public pensions cover about 14 million state and local employees and paid out almost $163 billion to seven million retirees in 2006-2007, according to the Census Bureau.

Because pensions involve long-term obligations and investments, there’s no immediate risk that states will be unable to pay retiree benefits. But replenishing pensions could squeeze states for years to come, forcing lawmakers and governors to juggle their spending priorities — pitting pensions against schools, colleges, health care, prisons and other government services.

More…

Jim Sinclair’s Commentary

Add to this Dr. Doom, the means of production, the knowledge of how to, and delivery systems. Now how much of that can you move or protect.

Security of Pakistan’s nuclear weapons
By Hari Sud
Column: Abroad View

Published: April 03, 2009

Toronto, ON, Canada, — In the midst of all the turmoil in Pakistan, who is watching the country’s nuclear weapons? It is a declared intention of Osama bin Laden’s al-Qaida terrorist group to acquire nuclear weapons. Are Pakistan’s nuclear weapons within their reach?

All the terrorists would have to do is bribe a few guards, kill any who could not be bribed, and get away – if not with a full-blown nuclear weapon, then at least with enough nuclear material to set off a dirty bomb.

Thanks to the links between Pakistan’s intelligence service and terrorist elements, it is no longer possible to distinguish friend from foe. The Taliban have been reorganized, trained and sheltered by Pakistan’s intelligence agency. They have been bold enough to mount terror operations in Islamabad, Lahore, Karachi and other big cities.

Over the past eight years, new recruits and new Taliban leaders in association with al-Qaida have started waging war with Pakistani forces. Their grievances include Pakistan’s cooperation with NATO and the United States. After killing a large number of Pakistani troops in frontier provinces, the Pakistani Taliban has forced the civilian government to permit the practice of ancient Islamic Sharia law there.

The Taliban’s objective is to split the Pashto-speaking frontier provinces from Pakistan and join them with Pashto-speaking areas in Afghanistan to create a nation called Pashtunistan. The bombings in recent months and the daring attack on a police academy near Lahore were designed to avenge the excesses of Pakistani forces in the frontier area. Slowly the Taliban are moving to achieve their objective. Today Sharia law, tomorrow a separate homeland and later full nationhood.

More…

 

Jim Sinclair’s Commentary

In a universal game of liar’s poker, an honest man had but one choice to make.

This speaks ill of any opportunity of recovery before abomination.

Hold on to your gold lifeline as all finance is a lie. The world is broken. The system is smashed. The OTC derivatives have done their dirty work.

You do not sign off on an audit for one reason only. It is a fraud.

Jonathan Weil, Honest Man Emerges From Muck of Banking Crisis
April 2, 2009.

Relevant excerpts:

Remember this man’s name: Charles Bowsher. He’s one of the few people leaving the banking crisis behind with his reputation enhanced.

Bowsher, who was comptroller general of the U.S. from 1981 to 1996, had a simple reason for resigning last week as chairman of the Federal Home Loan Bank System’s Office of Finance. He didn’t want to put his name on the banks’ combined financial statements, because he was uncomfortable vouching for them. Bowsher, 77, had held the post since April 2007.

“I was not comfortable as an audit-committee member in signing off on the financial statements, after I became aware of the standards and processes for valuing the mortgage-backed securities,” Bowsher told me.

Bowsher told me he was concerned, in part, with the methods used for determining when losses on hard-to-value securities should be included in banks’ earnings and regulatory capital. The way the accounting rules work, as long as such losses can be labeled “temporary,” they don’t count in net income.

The FASB’s rules on this subject, which have never been well defined, are now in flux. Today, after caving in to pressure by the banking industry and members of Congress, the Financial Accounting Standards Board is set to vote on a plan to relax its rules on mark-to-market accounting, so that companies can disregard market prices and ignore losses on their securities indefinitely.

While that wouldn’t make the banks any healthier, it would make their numbers look prettier. The FHLBanks have been among the most vocal lobbyists pressing for the change.

Bowsher said the process of valuing such assets was fraught with doubt already. “Now if you think about it, the FASB might be changing the whole thing, and everybody might mark their assets up,” he said. “Who wants to be part of that?”

Full article…

Jim Sinclair’s Commentary

The US Fed and now the US Treasury have taken the 5th Amendment.

You might consider this the new world order as transparency has now expired.

Don’t throw away your lifeline.

Watchdogs: Treasury won’t disclose bank bailout details
By Chris Adams | McClatchy Newspapers

WASHINGTON — The massive programs designed to rescue the nation’s financial sector are operating without adequate oversight, with vague goals and limited disclosure of their details to the taxpayers who are paying for them, government watchdogs told a Senate panel Tuesday.

The Troubled Asset Relief Program, or TARP, was launched in the midst of last fall’s collapse of the nation’s banking system and is designed to get loans flowing to businesses and individuals.

But "without a clearer explanation" about parts of the program, "it is not possible to exercise meaningful oversight over Treasury’s actions," said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.

Noting that TARP passed Congress six months ago, Warren said that her group has repeatedly called on the Treasury Department to provide a clear strategy for the program — and that "the absence of such a vision hampers effective oversight."

Although she has asked Treasury to explain its strategy, "Congress and the American public have no clear answer to that question."

More…

Jim Sinclair’s Commentary

Getting a straight story from FASB is becoming impossible. It seems that the FASB caved on permanently impaired assets (totally worthless paper) but held back some on mark to market. You need to be a CPA PhD to figure this one out. I know such a person and will keep up the effort to get you a straight answer.

Under New Accounting Rule, Toxic Assets May Be Revalued
By Binyamin Appelbaum and Zachary A. Goldfarb
Washington Post Staff Writers
Friday, April 3, 2009; A15

The board that sets U.S. accounting rules voted yesterday to let financial firms report higher values for some troubled assets, a controversial step likely to increase some banks’ reported earnings but also heighten suspicions that the companies are concealing problems.

The move by the Financial Accounting Standards Board was made with unusual speed under intense pressure from Congress and the financial industry, which have argued that the old rules exacerbated the financial crisis by forcing banks to overstate expected losses.

But the decision to ease what are known as mark-to-market requirements has raised concerns among some financial experts who warn that it will become harder for banks and investors to agree on what the troubled assets are actually worth and thus discourage their sale. The ability of financial firms to sell assets to investors is considered essential for an economic revival because this could restore the major source of funding for bank lending to consumers and businesses.

More…

Jim Sinclair’s Commentary

The G20 has fixed everything. I feel they have not fixed anything and only added another $1 trillion in monetary inflation. God help us all in this emotional world of hyper-spin.

One in 10 Americans gets help to buy food
Fri Apr 3, 2009 1:41am BST

WASHINGTON (Reuters) – A record 32.2 million people — one in every 10 Americans — received food stamps at the latest count, the government said on Thursday, a reflection of the recession now in its 16th month.

Food stamps, the major U.S. anti-hunger program, help poor people buy groceries. The average benefit was $112.82 per person in January.

The January figure marks the third time in five months that enrollment set a record.

"A weakened economy means that many more individuals are turning to SNAP/Food Stamps," said the Food Research and Action Center, an anti-hunger group, using the acronym for the renamed food stamp program, the Supplemental Nutrition Assistance Program.

The U.S. unemployment rate was 8.1 percent in February, the highest in 25 years. New claims for jobless benefits totaled 669,000 last week, the highest in 26 years, the government said on Thursday.

More…

Jim Sinclair’s Commentary

As more people get food coupons and the jobless fall off the unemployment benefits time out, it is only predictable that crime will rise, first in anger directed at the illegal and legally employed immigrants. This is the extreme of just that.

Gunman kills up to 13 hostages, some 26 others injured in U.S.
22:33 03/ 04/ 2009

NEW YORK, April 3 (RIA Novosti) – At least 13 people were killed and another 26 injured when a gunman stormed an immigration centre in Binghamton, near New York, American media reported.

CNN said that the one of the gunmen, who was armed with a high-powered rifle, had been killed by police. It also said two hand guns were recovered from the scene.

David Paterson, the governor of New York, told CNN "that there are fatalities. We are monitoring the situation and I have directed the State Police to assist the Binghamton Police Department, in any way, they can."

Eyewitnesses earlier told a CNN reporter that police had taken two Asian men, who were both handcuffed, out of the American Civic Association building, which is currently surrounded by police snipers. The men have been taken to a local detention center.

Sky News said that FBI negotiators and SWAT teams had entered the building, 140 miles from New York, and freed 20 hostages. However, around 40 hostages are reported to still being held hostage.

More…

G20 – Lies, damned lies and Gordon Brown lies

Gordon Brown has really surpassed himself in creative alchemy. He has turned $100 billion of G20 new commitments into $5 trillion of air!

Gordon Brown has really surpassed himself in creative alchemy. He has turned $100 billion of G20 new commitments into $5 trillion of air!

Take $100 billion of committed new money, add $500 billion of already committed money, add non-committed but discussed amounts of $500 billion and you present a headline lie of $1.1. trillion. But it gets worse, Gordon Brown then claims the largest fiscal stimulus in history of $5 trillion. This is another lie. The $5 trillion contains no new funds but only the IMF’s estimate of the rise in the G20’s government borrowings between 2008 and 2010.

Poor Benjamin Disraeli is turning in his grave when he hears these lies. (The phrase,”lies damned lies and statistics” originates from the former UK prime minister).

More…

Jim Sinclair’s Commentary

The key point of the story is dead wrong.

The nuance here, not seen as you would have to be a floor trader to know, is that the borrowers of gold for delivery would not be the COMEX but rather the short who then remains short but now to the ECB, still at risk to price.

The Default would have to be first the member, then the exchange itself, then the total assets of all members individually.

BY TAKING DELIVERY OUT OF THE COMEX WAREHOUSE YOU ARE FORCING THE SHORT TO PRESENT THE GOLD ANY WAY THEY CAN ARRANGE TO DO IT. THAT IS WHAT HAPPENED HERE. THAT IS WHAT WE WISH TO DO, NOT DEFAULT THE PLAYING BOARD.

This may be the most well read article on the web and the least understood.

Most, if not all of the expert commentary and this article is dead wrong.

Did the ECB Save COMEX from Gold Default?
April 02, 2009

On Tuesday morning, gold derivatives dealers, who had sold short in the face of a fast rising gold price, faced a serious predicament. Some 27,000 + contracts, representing about 15% of the April COMEX gold futures contracts remained open. Technically, short sellers are required to give “notice” of delivery to long buyers. However, in reality, buyers are the ones who control the amount of gold to be delivered. They “demand” delivery of physical gold by holding futures contracts past the expiration date. This time, long buyers were demanding in droves.

In normal times, very few people do this. Only about 1% or less of gold contracts must be delivered. The lack of delivery demand allows the casino-like world of paper gold futures contracts to operate. Very few short sellers actually expect or intend to deliver real gold. They are, mostly, merely playing with paper. It was amazing, therefore, when March 30, 2009 came and passed, and so many people stood for delivery, refusing to part with their long gold futures positions.

On Tuesday, March 31st, Deutsche Bank (DB) amazed everyone even more, by delivering a massive 850,000 ounces, or 8500 contracts worth of the yellow metal. By the close of business, even after this massive delivery, about 15,050 April contracts, or 1.5 million ounces, still remained to be delivered. Most of these, of course, are unlikely to be the obligations of Deutsche Bank. But, the fact that this particular bank turned out to be one of the biggest short sellers of gold, is a surprise. Most people presumed that the big COMEX gold short sellers are HSBC (HBC) and/or JP Morgan Chase (JPM). That may be true. However, it is abundantly clear that they are not the only game in town.

Closely connected institutions, it seems, do not have to worry about acting irresponsibly, in taking on more obligations than they can fulfill. Mysteriously, on the very same day that gold was due to be delivered to COMEX long buyers, at almost the very same moment that Deutsche Bank was giving notice of its deliveries, the ECB happened to have “sold” 35.5 tons, or a total of 1,141,351 ounces of gold, on March 31, 2009. Convenient, isn’t it? Deutsche Bank had to deliver 850,000 ounces of physical gold on that day, and miraculously, the gold appeared out of nowhere.

The announcement of the ECB sale was made, as usual, dryly, without further comment. There was little more than a notation of a sale, as if it were a meaningless blip in the daily activity of the central bank. But, it was anything but meaningless. It may have saved a major clearing member of the COMEX futures exchange from defaulting on a huge derivatives position. We don’t know who the buyer(s) was, but we don’t leave our common sense at home. The ECB simply states that 35.5 tons were sold, and doesn’t name any names. Common sense, logic and reason tells us that the buyer was Deutsche Bank, and that the European Central Bank probably saved the bank and COMEX from a huge problem. What about the balance, above 850,000 ounces? What will happen to that? I am willing to bet that Deutsche Bank will use it, in June, to close out remaining short positions, or that it will be sold into the market, at an opportune time, if it hasn’t already been sold on Tuesday, to try to control the inevitable rise of the price of gold.

Circumstantial evidence has always been a powerful force in the law. It allows police, investigators, lawyers and judges to ferret out the truth. Circumstantial evidence is admissible in any court of law to prove a fact. It is used all the time, both when we initiate investigations, and once we seek indictments and convictions. We do this because we deal in a corrupt world, filled with suspicious actions and lies, and the circumstances are often suspicious enough to give rise to a strong inference that something is amiss. Most of the time, when the direct evidence is insufficient to prove a case beyond a reasonable doubt, or even by a preponderance of direct evidence, circumstantial evidence fills the void, and gives us the conviction. We even admit evidence of the circumstances to prove murder cases. In light of that, it certainly seems appropriate to use circumstantial evidence in evaluating possible regulatory violations. The size and timing of the delivery of Deutsche Bank’s COMEX obligation is suspicious, to say the least, when taken in conjunction with the size and timing of the ECB’s gold sale. It is circumstantial evidence that the gold used by Deutsche Bank to deliver and fulfill its COMEX obligations, came directly or indirectly, from the ECB.

More…

Jim Sinclair’s Commentary

The following is from John Williams’ www.shadowstats.com by subscription

SGS-Alternate Unemployment Rate at 19.8%

Click here to visit the site…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

All is well and if it isn’t the G 20 will make it well. Come on, you’re dreaming.

Commercial real estate loan defaults skyrocket
Defaults on loans for office buildings, shopping malls soar as economic picture worsens
Alan Zibel, AP Real Estate Writer
Thursday March 26, 2009, 5:46 pm EDT

WASHINGTON (AP) — With loan defaults rising, analysts say the struggling commercial real estate industry is poised to fall into the worst crisis since the last great property bust of the early 1990s.

Delinquency rates on loans for hotels, offices, retail and industrial buildings have risen sharply in recent months and are likely to soar through the end of 2010 as companies lay off workers, downsize or shut their doors.

The commercial real estate market’s fortunes are tied closely to those of the sinking economy, especially unemployment, which hit 8.1 percent in February.

"Until jobs start coming back and industry starts doing better we don’t see performance increasing" among landlords, said Christopher Stanley, an associate with research firm Reis Inc.

While the commercial real estate industry’s woes led to the recession of nearly 20 years ago, this time the industry is "the victim of the economic and financial crisis," said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services in Walnut Creek, California.

More…

Jim Sinclair’s Commentary

And the 1 Trillion G20 SDR creation will fix this problem even though the more than 10 trillion spent by the USA has produced the following…

U.S. consumer loan delinquencies soar to record
Thu Apr 2, 2009 6:00pm IST

NEW YORK, April 2 (Reuters) – More U.S. consumers have fallen behind on loan payments than ever before, and the problem may worsen as millions more find themselves out of a job, a study released Thursday shows.

According to the American Bankers Association, which represents most large U.S. banks and credit card companies, the percentage of consumer loans at least 30 days late rose to a seasonally-adjusted 3.22 percent in the October-to-December period from 2.9 percent in the prior quarter.

The ABA said the fourth-quarter rate was the highest since it began tracking the data in 1974, with delinquencies rising in nearly every category. It said these credit trends are unlikely to improve before 2010. Many consider the deep recession the worst since the Great Depression of the 1930s.

"Job losses have really hurt the economy and will continue to inflict pain for several months," James Chessen, the ABA’s chief economist, said in an interview. "The greater the losses are, the more severe an impact it has on all credit markets."

The ABA study covers direct auto, indirect auto, closed-end home equity, home improvement, marine, mobile home, personal, and recreational vehicle loans. It excludes bank credit card and education loans. (Reporting by Jonathan Stempel; editing by John Wallace)

More…

So Much Ado About So Little

"A sale of 12.9 million ounces of gold as ‘probably the most viable’ option to ensure the long-term funding of the IMF. Proceeds would be used for an interest-bearing endowment."
–WSJ, 26 February 2008.

12.9 million ounces of gold at $906 per ounce, as I write, is slightly less than $12.4 billion. The Chinese would buy $12.4 billion in gold with a telephone call.

Central banks would be willing to buy twice or even ten times that amount.

How foolish the IMF and Gordon Brown have been in gold. Both sold to major buyers at historic lows in price. Brown sold at $248 and the IMF started their sales at $106 in the 70s.

What in the world are you worried about?

Their sales at any amount will, as in the past, be an enduring monument to their lack of acumen in knowing the gold price.

In fact they are both the two dumbest gold haters that exist.

Jim Sinclair’s Commentary

What are you worried about? Listen to your intellect, not your emotions.

IMF gold available for sale is worth less at $906 than 1% of the amount of monetary stimulation done by the US Fed and the US Treasury.

Jim Sinclair’s Commentary

The Lesson of 1923 is the Weimar Retenmark, a commodity currency.

The lesson of 1923 for those hammered by the Weimar experience is if you owned gold you had no problem at all.That is the key lessons of Weimar.

Weimar 1923 may have more lessons than US 1932
Are we heading for another Great Depression?
By Martin Hutchinson, breakingviews.com
Last Updated: 5:02PM BST 01 Apr 2009

Many baffled forecasters are asking just that, and studying what the US did wrong after the stock market crashed in 1929. But the more relevant policy errors might have been those made earlier across the Atlantic – in Weimar Germany from 1919 to 1923.

Policymakers have learned from the US mistakes. This time around, there has been no shrinkage of the money supply and no repetition of President Hoover’s increase in tariffs in 1930 and income taxes in 1932. On the contrary, money supply has expanded rapidly while fiscal policies have been expansionary and protectionism limited.

But look at the Weimar government. Suffering from the trauma of defeat in the First World War and the burden of reparations, it was too weak to raise taxes. It ran large budget deficits instead. Interest rates were kept far below the rate of inflation, while money supply expanded rapidly. About half of government expenditure was funded by newly printed money.

The great economist John Maynard Keynes provided an acid comment in 1920. "The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."

In Germany, the result was hyperinflation. By November 1923, the mark was worth one trillionth of its 1914 value. Pay packets were collected in wheelbarrows. Foreign depositors in German banks were wiped out.

More…

Jim Sinclair’s Commentary

Pakistan today:

Japan adviser says Pakistan key for Afghan security
Reuters – USA
By Yoko Kubota TOKYO (Reuters) – Stabilising Pakistan’s economy and fighting poverty there are key to combating the insurgency in neighbouring Afghanistan, …
See all stories on this topic

 

Attacks in Lahore "aimed at Pakistan’s heart"
Reuters – USA
By Robert Birsel LAHORE, Pakistan (Reuters) – Militants who have launched two audacious attacks in the Pakistani city of Lahore in the past month want to …
See all stories on this topic

U.S. aid to Pakistan: Democrat warns that $1.5 billion could …
Chicago Tribune – United States
chairman of the Senate Armed Services Committee, said he thought the Pakistanstrategy would be effective only if Pakistanis have decided to forcefully …
See all stories on this topic

Sen. Carl Levin questions Pakistan aid plan
Los Angeles Times – CA,USA
The US will increase its cross-border cooperation and intelligence-sharing with neighboring Pakistan, a top American military official said….
See all stories on this topic

World Report: Disunity at Arab League summit, terror in Pakistan
The Daily of the University of Washington – Seattle,WA,USA
Armed gunmen stormed a police academy in Lahore, Pakistan Monday, beginning a siege that lasted eight hours and ended with more than 12 dead, raising fears …
See all stories on this topic

Missile Strike Said to Kill 10 in Pakistan
New York Times – United States
By PIR ZUBAIR SHAH and ALAN COWELL PESHAWAR, Pakistan — Missiles fired from what was believed to be an American drone struck a militant training camp in …
See all stories on this topic

Jim Sinclair’s Commentary

This article is correct and worth reviewing today.

Gold To Gain As Currency, Inflation Play-Fund Manager

NEW YORK (Dow Jones)–Gold prices appear set to rise over the short to intermediate term as investors buy the metal as an alternative currency, and there may be more gains in store longer term if inflation increases when the economy exits its recession, a precious metals fund manager said Thursday.

Even though he sees prices rising, Mark Johnson, portfolio manager with the USAA Precious Metals and Minerals Fund (USAGX), said gold mining stocks are likely to outperform the commodity itself as input costs decline, boosting margins.

"We’re anticipating much wider profit margins in 2009," Johnson told Dow Jones Newswires in an interview. "This is the year for the stocks rather than the commodity."

In the short to intermediate term, gold prices are likely to be strong as the amount of paper currencies grows with government financial and economic stimulus efforts, he said. Investors often buy gold as an alternative currency.

As the Federal Reserve’s quantitative easing continues, the effective printing of money will likely lead to higher inflation in the longer term whenever the U.S. emerges from its recession, Johnson said. After that, he does not see the Fed draining money out of the system quickly because the central bank will want to make sure economic strength has taken hold and avoid a "double-dip" recession.

In addition to its role as an alternative currency, investors buy gold as a hedge against inflation because they see it holding its value more strongly in an environment of rising prices.

In recent years, gold as a commodity has outperformed stocks of the companies that explore for and produce the metal because company margins were squeezed by rising input costs, such as those for oil, and by tightening credit.

But that is changing as the metal’s price rises while input costs fall, Johnson said.

As for companies, Johnson said AngloGold Ashanti Ltd. (AU), the world’s third-largest producer of the precious metal, is probably the best-valued senior gold company.

"It’s a management turnaround story," he said. Some of his smaller picks include Anatolia Minerals Development Ltd. (ANO.T) and Great Basin Gold Ltd. (GBG.T).

He expects that smaller exploration companies, known as juniors, will reverse their recent underperformance of larger producers.

"Value is at the smaller end of the spectrum," Johnson said.

Posted by & filed under In The News.

Dear Friends,

Please watch the following video of the Pakistani Taliban threatening a massive attack on the White House in Washington, DC.

http://www.washingtonpost.com/wp-dyn/content/story/2009/03/31/ST2009033101628.html

Jim Sinclair’s Commentary

More help for the dollar from one of its Friends

Chavez to seek Arab backing for `petro-currency’
By BRIAN MURPHY, Associated Press Writer 

DOHA, Qatar – Venezuelan President Hugo Chavez sought Arab support Tuesday for a proposed oil-backed currency to challenge the U.S. dollar in his latest swipe at Washington’s dominance in global financial affairs.

It’s highly unlikely Chavez will gain any serious momentum for his "petro-currency" proposal at a summit of South American and Arab League leaders, but it represented another attempt to undercut the dollar’s standing as the world’s leading commercial currency.

China has struck deals — most recently this week with Argentina — to conduct trade in currencies other than the dollar. Iran has proposed replacing the dollar with the euro or other currencies to set worldwide oil prices.

Chavez plans to visit both Iran and China following the one-day Qatar gathering, whose agenda focuses on trade issues but also touches on Arab worries about rival Iran’s growing influence in Latin America.

Key oil-producing members of the Arab League, such as Saudi Arabia and Gulf states, have close ties to Washington and will almost certainly reject any plan to shun the dollar. But the summit kicks off another high-profile foreign trip for Chavez in his efforts to build economic and diplomatic links to confront the United States.

More…

 

Jim Sinclair’s Commentary

It can get lonely when holding onto your gold lifeline as the propaganda, lies and misinterpretations are thrown at you from every corner.

Remember, all of us at JSMineset stand with you. You are not alone.

http://vimeo.com/moogaloop.swf?clip_id=2539741

Jim Sinclair’s Commentary

Guess Who Did It?

clip_image001

Jim Sinclair’s Commentary

Tell these people that the economy has bottomed.

ADP Says U.S. Companies Reduced Payrolls by 742,000 (Update2)
By Bob Willis

April 1 (Bloomberg) — Companies in the U.S. cut an estimated 742,000 workers in March, pointing to no relief in sight for the labor market amid the longest recession in seven decades, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was larger than economists forecast and the most since records began in 2001. February’s reading was revised to show cut of 706,000 workers, up from a previous estimate of 697,000.

Companies are slashing staff as tight credit conditions and shrinking household wealth cause sales to shrink. The Labor Department may report in two days that employers cut payrolls in March for a 15th consecutive month, putting jobs losses in the current downturn at more than 5 million, according to a Bloomberg survey.

“The weakness is distributed across all components of the economy,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said in a conference call. “We are going to see several more months of serious bleeding before we see lesser job losses.”

The ADP report was forecast to show a decline of 663,000 jobs, according to the median estimate of 30 economists in a Bloomberg News survey. Projections were for decreases ranging from 525,000 to 750,000.

More…

Jim Sinclair’s Commentary

So very few have given consideration to the geopolitical domino effect Pakistan’s transmission to Taliban control infers:

Insurgents threaten Pakistan’s ‘existence’: US general

WASHINGTON (AFP) — Islamist insurgents pose a growing threat not only to Afghanistan but to Pakistan’s "very existence," the commander of US forces in the region, General David Petraeus, said on Wednesday.

"The Pakistani military has stepped up operations" against the militants but more action was needed, Petraeus told the Senate Armed Services Committee.

Taliban and Al-Qaeda-linked groups based near the Afghan border represent "an ever more serious threat to Pakistan’s very existence," he said.

The chief of US Central Command said "the situation in Pakistan is closely linked to that of Afghanistan" and praised a new strategy unveiled last week by President Barack Obama for the Afghan war as a "comprehensive" approach.

Describing the challenges of the US mission in Afghanistan, Petraeus said there would be no quick victory and that it would require "a sustained substantial commitment" after more than seven years of war.

More…

Jim Sinclair’s Commentary

My answer is absolutely no. No, because there is no recovery to blot out in the first place. This recovery is a statistical construct at this point.

Will the Dark Cloud of Commercial Real Estate Blot Out the U.S. Recovery?
[Editor’s Note: This is the first of a two-part look at how the U.S. real estate market will affect the nation’s economic recovery. Today’s focus: Commercial real estate. Next week: The residential rebound.]
By William Patalon III
Executive Editor
Money Morning/The Money Map Report

Stock prices have rallied for much of last month. The housing market has shown some early signs of life. And some of the latest economic reports haven’t been the disasters that many experts feared.

While this is hardly a portrait of an economy on a roll, there are enough bright spots to nurture a feeling that the U.S. economy is finally on a path to recovery – especially given the upbeat response the latest elements of the Obama administration’s fix-it plans have received.

But there’s a dark cloud in this picture. And it’s big – big enough, in fact, to potentially finish off the U.S. banking sector, blotting out the U.S. economy’s new dawn.

That dark cloud is the commercial real estate sector. With rent prices falling and vacancies rising due to the recession-weakened economy, delinquencies on commercial mortgages are already escalating steeply.  And the credit crunch bred from the recession is often making it impossible for property owners to avoid deeper trouble by refinancing.

"It’s a one-two punch combination: First, soaring vacancies take the wind out of positive cash flow; then the credit crisis hits like a rabbit punch, snapping off the main arteries to refinancing," says Money Morning Contributing Editor Shah Gilani, a retired hedge-fund manager and expert on the U.S. credit crisis who predicted the implosion of the commercial real estate sector several years ago. "This is like Samson hitting the ground. The giant asset class we call commercial real estate is not going to get up any time soon."

More…

Jim Sinclair’s Commentary

Home sales:

Keep in mind that when a home is foreclosed on it shows as a sale of that home due to the deed transfer. A foreclosure of a partially or fully completed building project will book as the sale of a new home as the product of a deed transfer of a home not resided in. Bank liquidations at auction of either will show as a sale of that home again due to the deed transfer according to definition of the deed.

Don’t expect this definition when homes sales are released.

 

Jim Sinclair’s Commentary

There was a time I wrote off the Russian professor’s prediction that the US would break down into separate independent groups of states. I still do, but with less intensity because I have to admit that there are currents right now of Rebellion against Washington.

The pushback against federal power began under Bush, but may now be accelerating.
By Patrik Jonsson | Staff writer of The Christian Science Monitor
from the March 27, 2009 edition

Atlanta – There’s an old joke in South Carolina: Confederate President Jefferson Davis may have surrendered at the Burt-Stark mansion in Abbeville, S.C., in 1865, but the people of state Rep. Michael Pitts’s district never did.

With revolutionary die-hards behind him, Mr. Pitts has fired a warning shot across the bow of the Washington establishment. As the writer of one of 28 state "sovereignty bills" – one even calls for outright dissolution of the Union if Washington doesn’t rein itself in – Pitts is at the forefront of a states’ rights revival, reasserting their say on everything from stem cell research to the Second Amendment.

"Washington can be a bully, but there’s evidence right now that there are people willing to resist our bully," said Pitts, by phone from the state capitol of Columbia.

Just as California under President Bush asserted itself on issues ranging from gun control to medical marijuana, a motley cohort of states – from South Carolina to New Hampshire, from Washington State to Oklahoma – are presenting a foil for President Obama’s national ambitions. And they’re laying the groundwork for a political standoff over the 10th Amendment, which cedes all power not granted to Washington to the people.

The movement’s success will largely depend on whether Washington sees these legislative insurgents as serious – or, as Pitts puts it, as just "a bunch of rednecks."

More…

 

Jim Sinclair’s Commentary

I like the slogan of the demonstrators. April 1st is Financial Fools Day. Seems appropriate…

The G20 protests in central London turned violent today ahead of tomorrow’s summit, with a band of demonstrators close to the Bank of England storming a Royal Bank of Scotland branch, and baton-wielding police charging a sit-down protest by students.

G20 protests: riot police clash with demonstrators

Much of the protesting, from an estimated 4,000 people in the financial centre of the capital, was peaceful, but some bloody skirmishes broke out as police tried to keep thousands of people in containment pens surrounding the Bank of England on Threadneedle Street.

A minority of demonstrators seemed determined to cause damage, seeking confrontation as they surged towards police lines. Late tonight, much of the City remained cordoned off.

By about 8pm, running battles between riot police and demonstrators were taking place across London Bridge. Bottles, sticks and bricks were thrown.

Nearer the heart of the City, police moved in to break up a ‘climate camp’ on Bishopsgate, with baton-wielding officers said to be pushing through a line of tents and bicycles. At least five armoured police vehicles were also at the scene.

More…

Posted by & filed under In The News.

Dear CIGAs,

For anyone that thinks the mortgage reset problem is over, a review of the following from Credit Suisse is mandatory. First the average guys get killed then the leveraged big boys go down hard.

 

Jim Sinclair’s Commentary

The growth business of 2009 – 2012 is prison-run Organized Crime, symbol PROC, now estimated at 150,000 trained and dedicated staff.

clip_image001

 

Jim Sinclair’s Commentary

Reliance on the US dollar is in an intact downtrend that is unlikely to change. The dollar is dead as a reserve currency. Dollars held will be kept and diversified away from in creative ways such as China buying THE MINING WORLD.
China and Argentina in currency swap
By Jude Webber in Santiago
Published: March 31 2009 01:25 | Last updated: March 31 2009 01:25

China, which is pushing to end the dominance of the dollar as a worldwide reserve, has agreed a Rmb70bn ($10.24bn, £7.18bn, €7.76bn) currency swap with Argentina that will allow it to receive renminbi instead of dollars for its exports to the Latin American country.

Xinhua, the official Chinese news agency, said the deal was signed on Sunday by Zhou Xiaochuan, governor of the People’s Bank of China, and Martín Redrado, Argentine central bank president, in Medellín, Colombia, where they are attending a meeting of the Inter-American Development Bank.

An Argentine official confirmed a deal had been discussed and said the fine print was being worked out and negotiations were “very advanced”.

Beijing has signed Rmb650bn ($95bn, €72bn, £67bn) of deals since December with Malaysia, South Korea, Hong Kong, Belarus, Indonesia and, now, Argentina in an attempt to unblock trade financing that has been severely curtailed by the crisis.

More…

Jim Sinclair’s Commentary

The Pakistani Taliban are threatening a massive attack on the White House. (Click image to play video).

image

Pakistani Taliban Leader Threatens Attack on Washington
By Pamela Constable
Washington Post Foreign Service
Tuesday, March 31, 2009; 4:13 PM

KABUL, March 31 — The reclusive commander of the Pakistani Taliban claimed Tuesday that his fighters had carried out Monday’s bold assault on a police academy in eastern Pakistan and boasted that he was planning a terrorist attack in Washington that would astonish the world.

Beitullah Mehsud, an Islamist leader from the South Waziristan tribal area in northwest Pakistan, called several international news agencies in Pakistan to assert responsibility for the armed occupation of the police training compound that ended with 11 people dead.

He also told reporters that he was planning to attack targets in the U.S. capital in retaliation for more than 30 strikes by unmanned U.S. drones that have targeted suspected al-Qaeda and Taliban sanctuaries in northwest Pakistan near the border with Afghanistan.

More…

 

Jim Sinclair’s Commentary

There are no greater COWARDS than financial guys. Today they are useless beings with no redeeming human values.

G20: Dozens of banks to shut branches in London in fear of summit protesters
Banks are planning to board up branches in central London and run their operations with a skeleton staff because of the fear of violence around the G20 summit.
By Christopher Hope, Whitehall Editor
Last Updated: 10:16AM BST 31 Mar 2009

The news comes after protesters circulated a map which identifies more than 125 targets across the City, including dozens of international corporations, banks, and oil companies.

More than 50 financial institutions are pinpointed, including some of those – like Royal Bank of Scotland, Lloyds TSB – blamed for precipitating the current economic crisis. The map urged potential demonstrators to vent their anger at the “carpeted, warmed and well-lighted offices” of corporate capitalism, quoting the writer CS Lewis’s attack on the “managerial age”.

None of the main banks would comment. However senior banking figures told telegraph.co.uk that they were taking the security threat seriously, and admitted that they were concerned about the possibility of trouble.

One banking source said: “Everyone is taking precautions in the Square Mile. Many branches will be closed. It will be essential staff only who travel into work in those two days.

“Lets hope that it goes off peacefully. We cannot guarantee that but we hope it will be the case.”

More…

Jim Sinclair’s Commentary

The script of the Formula continues to play out.

Budget experts predict no Social Security cost-of-living increases for 3 years
STEPHEN OHLEMACHER | Associated Press Writer
5:16 PM EDT, March 31, 2009

WASHINGTON (AP) — The recession is projected to wipe out annual cost-of-living increases for 50 million Social Security beneficiaries for the next three years, something that hasn’t happened since automatic adjustments were adopted in 1975.

The Congressional Budget Office says in its latest budget estimates that inflation will dip so low that Social Security recipients will not qualify for annual increases in 2010, or for two years after that. In 2013 through 2019 — when projections are less reliable — CBO estimates annual increases of 2 percent each year, which would be among the lowest.

David Certner, director of legislative policy for the AARP, said many recipients rely on those increases to help pay for rising health care costs, which tend to outpace inflation. Many older Americans have also seen the values of their homes and savings decrease because of the nation’s financial crisis.

More…

Posted by & filed under In The News.

Dear CIGAs,

Last weekend the President’s meeting with the bankers at the White House was a repeat of the JP Morgan meeting with the then bankers, but this time the meeting ran into a problem. Even if the banks could cooperate, who is going to borrow?

The meeting with Jesse Livermore ran into the richest lobby effort ever and never took place. No meaningful action on the uptick rule means Jesse did not agree. No agreement from Jesse and no rally can have legs.

Putting out a new form of the uptick rule for discussion is no action at all. Both initiatives fail then all bear market rallies run into thunderous reactions and quick culmination.

The Evil Knievel Formation compliments of CIGA Currie:

clip_image001[6]

Jim Sinclair’s Commentary

We are so far from the end of this disastrous period.

Soros Predicts 30 Percent Fall in US Commercial Real Estate Prices
By Barry Wood 
Washington
26 March 2009

Legendary hedge fund investor George Soros said Thursday that US commercial real estate prices will fall 30 percent, a development that he says shows that the financial crisis is continuing.

Soros told a Washington forum that it is inevitable that commercial property prices in the United States will fall drastically. The 78-year-old investor said the price declines will come shortly. Other experts, including analyst Christopher Whalen, agree, saying the demand for commercial property is falling rapidly while overbuilding has created a huge surplus of supply.

More…

Jim Sinclair’s Commentary

Not everyone agrees with Timmy’s plan.

Bankrupting the world
By Jerry Mazza
Mar 30, 2009, 00:25

The so-called Public Private Partnership Investment Program (PPPIP) introduced last Monday, by Treasury Secretary Timothy Geithner not only stands to bankrupt America but the global financial system as well. This is the worst yet of the bailouts, a swindle if ever there was one, which will cause President Obama’s approval rating to plummet. In fact, count me among those coming to the president’s aid. I really don’t think he understands what this means.

Consider Geithner as the face, the voice though not the brain, for this program which advocates turning over the keys to the banking system to a bunch of hedge fund sharks, and all at taxpayer’s expense. The cost could more likely end up being $6 trillion than the $1 trillion in starter money. In fact, it’s more likely that the dastardly plan was launched like a missile from jolly old London, which is in line to lose big if their offshore hedge fund empire is shut down.

So, we are not dealing with just your typical political blunder. This is a policy fiasco built to bring down the United States altogether. I believe it’s coming from a London-based financial oligarchy out to do in the US altogether. Speaker of the House Nancy Pelosi and House Financial Services Committee Chairman Barney Frank and the one and only Larry Summers, head of the Whitehouse Economic Council, are completely complicit in what amounts to an act of treason in recommending this.

More…

Jim Sinclair’s Commentary

This is not in the definition of a Democracy.

New Task Seen for Fannie, Freddie
By JAMES R. HAGERTY

The regulator of Fannie Mae and Freddie Mac is considering giving the government-backed mortgage companies another role: helping to finance small mortgage banks.

A spokeswoman for the regulator, the Federal Housing Finance Agency, said it is looking at ways that the two companies might help revive the market for so-called warehouse loans, which are loans made to mortgage banks. This possible role for Fannie and Freddie is the latest sign of how they are being used increasingly as instruments of government policy rather than corporations focused on shareholder returns.

More…

 

Jim Sinclair’s Commentary

Look for Asia to back Russia on gold. Only the US Sheeple are clueless. Gold is your lifeline. Don’t let the paper players on the COMEX fool you. Anyone without gold is a castaway on the Ocean of Samaras. It is just that serious.

Russia backs return to Gold Standard to solve financial crisis
Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.
By Ambrose Evans-Pritchard
Last Updated: 8:23AM BST 30 Mar 2009

Arkady Dvorkevich, the Kremlin’s chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.

Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

More…

Jim Sinclair’s Commentary

The following video is Ambrose Evans-Pritchard on Gold.

Jim Sinclair’s Commentary

We are nowhere near overcoming the deep credit market lock up. Gold is your only way out. Take it or stay inside the problem.

Deutsche Bank’s Banziger Says Crisis ‘Far From Over’
By Aaron Kirchfeld

March 30 (Bloomberg) — Deutsche Bank AG Chief Risk Officer Hugo Banziger said the global credit crisis is “far from over” and global financial regulations must be overhauled to regain investor trust.

“We are in the middle of it,” Banziger, 53, said today at an event at the Frankfurt School of Finance and Management. The industry has “an opportunity” to build a stable financial system that seeks higher capital buffers, and encourage investors to return money to the market and help stem the crisis, he said.

Deutsche Bank in February reported its first annual deficit in more than 50 years after the worst financial crisis since the Great Depression pummeled bond and stock trading. The crisis has caused $1.3 trillion in losses for financial companies worldwide, a total that may climb to more than $3 trillion, Banziger said today, citing forecasts.

Deutsche Bank has gained 40 percent this month in Frankfurt trading, valuing the bank at 18 billion euros ($24 billion), and eclipsing the 5 percent advance in the Bloomberg Europe Banks and Financial Services Index of 65 companies. The bank fell 10 percent to 28.75 euros in trading today.

The German bank skirted the worst of the U.S. subprime mortgage collapse by betting against the bonds that contributed to credit losses and writedowns at the world’s largest financial companies and forced government-led bailouts from Berlin to London to Washington.

More…

Jim Sinclair’s Commentary

Pakistan in crisis: When Pakistan falls it will start a ball rolling that can produce a $100 up move in crude that holds its price in the middle of a depression.

12 die in bloody siege at Pakistan police academy
By BABAR DOGAR – 2 hours ago

LAHORE, Pakistan (AP) — A group of gunmen, some in police uniforms, attacked a police academy Monday and held it for hours, seizing hostages, throwing grenades and killing at least six trainee officers before being overpowered by Pakistani commandos.

Four suspected militants were arrested while at least three blew themselves up in the eight-hour battle to retake the compound on the outskirts of Lahore in eastern Pakistan, said Rao Iftikhar, a top government official in Punjab province. He said three other bodies were still unidentified.

Interior Ministry chief Rehman Malik said one of the arrested man was an Afghan, and that investigators believe the attack may have its roots along Pakistan’s border with Afghanistan, where Taliban militants have hideouts. But Malik also pointed fingers at a Punjab based Sunni extremist group and also refused to rule out an Indian role.

As the siege ended, black-clad Pakistani commandos fired their guns in the air in celebration at the top of the building, shouting "God is Great!" and "Long live Punjab police!"

Officials said more than 90 officers were wounded and that some of the attackers wore police uniforms.

More…

 

Jim Sinclair’s Commentary

The statement that "We are on a Road to Hell" did in fact state the position of the G20 even if cloaked in plausible deniability.

The Hell in this statement is a worldwide Weimar if the G 20 was to do what the Obama Administration’s finance guys wished for. America is headed to this Weimar Hell, but only North Americans seem not to know it.

Being on this road that now has "no exit," Gold becomes your lifeline.

I mean this literally. It is your LIFEline.

Respectfully yours,
Jim

 

Jim Sinclair’s Commentary

The USA is not made up of people. It is made up of sheeple.

clip_image001

Jim Sinclair’s Commentary

This is what is known as Permanently Impaired. There are plenty of them so get used to the new term of valueless and hopeless assets.

clip_image001

 

Jim Sinclair’s Commentary

You think Fitch just realized this might carry a bit of risk, certainly when granted naked?

What raving BSers! Who do they think they are kidding.

Fitch rethinks structured credit counterparty risk
Mon Mar 30, 2009 11:40am EDT

LONDON, March 30 (Reuters) – Fitch Ratings proposed changing its evaluation of counterparty risk in structured finance deals after the rapid demise of Lehman Brothers and Icelandic banks last year hurt investors and forced some notes to default.

The ratings agency aims to help investors reduce exposure to counterparty risk embedded in collateralised debt obligations (CDOs), asset-backed securities and other types of structured credit.

Experience in 2007 and 2008 showed that counterparties such as Lehman could jump rapidly from an investment-grade rating to default and that a ratings downgrade could rachet up pressure on a bank to come up with more funding and push it into a downward spiral, known as "cliff" risk, Fitch said on Monday.

The ratings agency made several alternative proposals and asked people in the market to provide feedback by May 1. It scheduled a conference for Tuesday to discuss its presentation.

"There are a number of alternatives to the current approach," Stuart Jennings, Fitch managing director, said in a statement. "All provide enhanced mitigants to problems such a cliff risk, but equally each option has its own drawbacks as well as advantages." Under the existing rating system, when a counterparty’s rating falls below a minimum of ‘A’ for long-term deals and ‘F1’ for short-term, the investor has 30 days to replace that counterparty or get it to post collateral for mark-to-market losses before Fitch downgrades the deal.

More…

G20 meeting will fail

This week there will be a meeting between G20 leaders and central bankers in London to save the world economy.

Let us make it very clear – the meeting is bound to fail. There is no chance that the G20 leaders will reach an agreement that will save the world economy. Even two world leaders can’t agree on how solve the biggest global financial crisis that the world has ever encountered, never mind twenty.  Each one of twenty leaders has a different political agenda and they will all blame each other, so there is no possibility whatsoever that the meeting will result in more than the normal platitudes about cooperation  to solve the crisis. Both Merkel and Sorkozy have already rejected Gordon Brown’s proposed stimulus package and that is before the meeting has even started.

But the main reason why the meeting will fail to reach a result is the worthless derivatives of over $ 1 quadrillion and unlimited amounts of toxic debt which will never be repaid with real money.

We have long said that we will have a worldwide depression which will be worse than the 1930’s. But worse than that it will be a hyperinflationary depression in many countries.

The famous financier George Soros agrees with us.  He sees a global financial meltdown and a major depression as he explains in an interview in the Times today (Soros interview). Soros also states that the UK will probably have to be bailed out by the IMF as we outlined in our February newsletter. But as we stated then, the IMF has also run out of money!

Although governments at the G 20 meeting will not solve the insoluble world financial crisis, they will continue with the only thing they know – TO PRINT MORE MONEY!

More…

Jim Sinclair’s Commentary

Everyone knows what has happened except Americans and Canadians. This article, published in Jakarta, calls for accountability of the raw criminality behind the scenes.

What Asia and the world need from America now
Tom Plate ,  Beverly Hills ,  California   |  Sat, 03/28/2009 1:29 PM  |  Opinion

What the American governing and legal establishment must do, before too much time goes by, is to come completely clean not only with the American people but with Asia, especially, which has poured so much of its wealth into the US China and Japan are its biggest financial investors.

Everyone needs to know what really happened and who should be held accountable for the raw criminality behind the scenes.

The US needs to come clean by devising a wide-ranging – but fair — criminal investigation of hedge-fund leaders and managers, derivatives sales groups and their allies, and of course any and all Ponzi-schemers that have defrauded people of their life savings. We don’t need a visceral witch-hunt; we require fair and honest accounting.

What’s at stake is not so much an eventual honest return on investments (which, in many instances, may be impossible, as many funds have vaporized down the rat-holes of criminal enterprises), but the credibility of the United States of America. And this is something that, when healthy, is priceless, and when destroyed, is worthless.

America, which has often and loudly described itself as a "nation of laws, not men *or women*," now needs to demonstrate for the world what that phrase represents. Criminal conspirators like members of the Mafia know what the lash of our law can mean.

More…

Jim Sinclair’s Commentary

The supposed shock of other European nations at the statement of the President of the European Union is purely plausible denial and politics.

You read the position of France and Germany carried in the Euro press. The US is on a road to hell, so to hell with the US demand for drastic ramped up spending and tax reductions across Euroland.

We are on that "Road to Hell" so now gold is your lifeline and survival suit in the Bering Sea winter storms.

EU presidency: US stimulus is ‘the road to hell’
By AOIFE WHITE, AP Business Writer – Wed Mar 25, 3:38 pm ET

BRUSSELS – The head of the European Union slammedPresident Barack Obama’s plan to spend nearly $2 trillion to push the U.S. economy out of recession as "the road to hell" that EU governments must avoid.

The blunt comments by Czech Prime Minister Mirek Topolanekto the European Parliament on Wednesday highlighted simmering European differences with Washington ahead of a key summit next week on fixing the world economy.

It was the strongest pushback yet from a European leader as the 27-nation bloc bristles from U.S. criticism that it is not spending enough to stimulate demand.

Shocked by the outburst, other European politicians went into damage control mode, with some reproaching the Czech leader for his language and others reaffirming their good diplomatic ties with the United States. The leaders of EU’s major nations —France, Britain and Germany, among others — largely ignored Topolanek and his remarks.

Obama pays his first official visit to Europe next week, aiming to thrash out reforms to the global financial system with the Group of 20 nations and call on NATO allies to commit more troops to the U.S. war in Afghanistan.

More…