Posts Categorized: In The News

Posted by & filed under In The News.

Dear CIGAs,

Happy Valentine’s Day!


It is major hunker down time.


Jim Sinclair’s Commentary

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

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

U.S. missile strike kills 25 militants in Pakistan

By Hafiz Wazir

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

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

The Taliban official said those killed were mostly Uzbek fighters.

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



Jim Sinclair’s Commentary

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

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

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

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

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

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


Jim Sinclair’s Commentary

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


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

Stay focused on your job:


Aim for greater heights:


Largest Tax Increase in USA History Proposed by Oregan State Government

Excise Tax on Beer to rise 1900%

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

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

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

The Economy’s Affect on NASCAR

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

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

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

Google Latitude

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

Jim Sinclair’s Commentary

Legislation watch:

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

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



Jim Sinclair’s Commentary

Here is the flawed Time list in order of responsibility:

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

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

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


Jim Sinclair’s Commentary

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

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

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

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

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

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

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



Jim Sinclair’s Commentary

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

GM considering Chapter 11 filing, new company: report

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

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

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

GM declined to comment, the story said.

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

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


Jim Sinclair’s Commentary

There are ramifications to fraud that will not go away.

Retired UK Veteran Kills Himself Over Madoff Losses

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

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

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

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

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

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


Posted by & filed under In The News.

Dear CIGAs,

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


Jim Sinclair’s Commentary

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


Jim Sinclair’s Commentary

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

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

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

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

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

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

Susan Thompson
From Times Online
February 12, 2009

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

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

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

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

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

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


Jim Sinclair’s Commentary

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

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

Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

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


Jim Sinclair’s Commentary

Pakistan owns up.

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

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

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

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

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

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



Jim Sinclair’s Commentary

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

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

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

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

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

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

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


Jim Sinclair’s Commentary

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

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

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

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

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

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


Jim Sinclair’s Commentary

Here is today’s prime question:

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


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

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

The Management

Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

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

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


Jim Sinclair’s Commentary

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

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

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

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

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

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


Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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


Posted by & filed under In The News.

Dear CIGAs,

The following are two observations of mine today:

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

Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Chinese Dollar Holdings:

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

Posted by & filed under In The News.

Dear CIGAs,

This shall be.

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

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

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


Jim Sinclair’s Commentary

The only protection the predatory hedgies have is to hide.

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

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

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




Jim Sinclair’s Commentary

It takes BALLS to advise Gordy, the gold buffoon.

Recession ‘worst for 100 years’

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

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

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

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

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

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



Jim Sinclair’s Commentary

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

A Proposal to Shore Up Banks With Pension Funds
Published: February 9, 2009

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

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

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

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

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



Jim Sinclair’s Commentary

Dear Moody’s, Standard and Poors,

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

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

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

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

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

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

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

Clinton Talks

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



Jim Sinclair’s Commentary

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

Pakistan Wants More From US
Washington Post – United States
By Karen DeYoung Inside the warm welcome and promises of a "new beginning" that Pakistan extended US special envoy Richard C. Holbrooke yesterday was a …
See all stories on this topic

Pakistan’s ISI problem
Boston Globe – United States
PAKISTAN has a terrorist problem, as many of the country’s leaders acknowledge. But Pakistan also has an ISI problem – the country’s powerful Inter-Services …
See all stories on this topic

Bomb injures six in NW Pakistan: police
PESHAWAR, Pakistan (AFP) — At least five people were killed and 10 others wounded Monday in a bomb blast in a troubled town in northwest Pakistan near the…
See all stories on this topic

News Analysis: New US-Pakistan partnership hinges on anti-terrorism
Xinhua – China
11 (Xinhua) — The special US envoy Richard Holbrooke is visiting Pakistan with a heavy agenda which mainly focuses on the war against terrorism in the …
See all stories on this topic

US watchful of Pakistan’s assurances on AQ Khan
Hindu – Chennai,India
Washington (IANS): Pakistan has assured the US that released Pakistani scientist AQ Khan, accused of selling nuclear secrets in the black market, …
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Human rights committee calls Miliband and Smith for questioning … – UK
Binyam Mohamed was detained in Pakistan and questioned by MI5 officers before being "rendered" by the United States to Morocco, where his lawyers claim he …
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Posted by & filed under In The News.

Jim Sinclair’s Commentary

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

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

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

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

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

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

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


Posted by & filed under In The News.

Dear CIGAs

The US Fed is bailing out the world. Therefore the US dollar is History

1:27pm EST. Bloomberg:

The Flushed questions given to Bernanke were actually put up with a picture of the inquiring party, but no sound. A hack was talking in a picture inside a picture.

Now Bernanke is delivering his prepared speech and in full view with sound.

Bernanke just admitted that the swaps with foreign banks were for the purpose of bailing out non-US banks when he stated that the ultimate borrower on those swaps was the central banks and "NOT the banks the funds were lent to." Think about this secret just revealed and the original denial.

He is discussing the ability of the Fed to lend to individuals and partnerships in emergency situations. Individuals, partnerships, who?

Armstrong and Alf are both so correct in their predictions.

Bernanke says "Wall Street Analysts are expert specialist trained to do Asset Value Analysis" in reference to OTC derivatives.

My God, these are the exact same people that that created this entire problem and claim they could not foresee the total loss of value. Now the US Central Bank’s Chairman points at their fine, cultured and unassailable expertise.

How much more of this will people tolerate?

The answer is that tolerance is not infinite in time.

Chairman Bernanke answers critics that question the total secrecy concerning Fed injections of capital into major banks by saying the "Federal Reserve is making a full study of transparency."

Serious investors and people of position are watching this all over the Globe. What do you feel their impression is of today’s less than stellar performance by the Fed and Treasury?

A question in review of the Fed’s balance sheet said the only thing that prevents the Fed from being on the weak bank watch list is that it is the Fed.

Bernanke just smiles and assures us all is well. Of course it is.

Bernanke says that because interest rates are at 0% there is no limit to the size that the Fed balance sheet can grow because the Fed can borrow at 0%. This is true, but so academic as to fail to see the market and currency impact of that statement.


Jim SincIair’s Commentary

If you were watching Bloomberg at 1:12 PM EST, you just witness the most important question being asked of Bernanke totally FLUSHED off the screen.

What a disgrace!
What a shame!
What a sin against the future of all!

Armstrong is 100% correct.
Alf is 100% correct.

There is no practical plan that can make any difference now. There never was.

It is business as usual!


Jim Sinclair’s Commentary

No commentary, this is just for your information:

Justice Department Follows Bush Administration in Invoking ‘State Secrets’ Privilege in Rendition Lawsuit

The Obama administration is siding with its predecessor in a federal case over the CIA’s rendition program, claiming lawsuits should not proceed because they could disclose secret national security information.
Monday, February 09, 2009

The Obama administration is siding with its predecessor in a federal court case in California over the CIA’s rendition program, saying lawsuits over renditions should not proceed because they could disclose "state secrets" and other classified national security details.

The administration made its argument Tuesday in front of the Ninth Circuit Court of Appeals, which was hearing an appeal in a 2007 case filed by the American Civil Liberties Union.

"It is vital that we protect information that, if released, could jeopardize national security," said Department of Justice spokesman Matthew Miller in an e-mail to FOX News.

In May 2007 the ACLU filed a claim against Jeppesen Dataplan, Inc., a subsidiary of Boeing Company. It charged that Jeppesen knowingly provided logistical services that aided the CIA’s clandestine flights that took five ACLU clients to secret overseas locations where they were subjected to torture and other forms of cruel, inhuman and degrading treatment.

In February 2008, the U.S. District Court granted the government’s motion to dismiss the case, after the Bush administration argued that any litigation would harm national security by revealing state secrets. The ACLU appealed that decision to the Ninth Circuit, which heard Monday’s arguments.


Jim Sinclair’s Commentary

Oh you foolish people pushing the panic button in gold shares today.

DJ PRECIOUS METALS:Weak DJIA, Inflation-Hedge Role Lifts NY Gold
By Allen Sykora

Weakness in equities and worries about the U.S. economic stimulus plan eventually reviving inflation resulted in sharp gains for gold futures Tuesday.

Chart-based buying played a role in the gains of much of the precious metals. Platinum accelerated higher after busting through the previous highs for the year so far. And while gold didn’t top the late-January high, it nevertheless drew some buying when support at recent lows in the $890s held, observers said.

Most-active April gold rose $21.40 to $914.20 an ounce on the Comex division of the New York Mercantile Exchange.


Posted by & filed under In The News.

Jim Sinclair’s Commentary

Now compare President Obama’s presentation in light of Mr. Armstrong’s article!

Obama: This isn’t your ‘run-of-the-mill recession’

(CNN) — President Obama appeared before a national audience Monday night to make the case for his economic stimulus plan, saying this is not your "run-of-the-mill recession."

The president stressed the urgency of passing the roughly $838 billion measure, which his administration and Democratic leaders say will help pull the U.S. economy out of its current skid.

"My bottom line is to make sure that we are saving or creating 4 million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief," he said in his first prime time news conference.

Obama’s remarks came the day before the Senate votes on its version of the stimulus bill. The House passed its version of the stimulus bill nearly two weeks ago — without a single Republican vote. If the measure passes the Senate, the two chambers will have to reconcile the differences between the two bills.

Obama urged Congress "to act without delay," saying that only the federal government can break the "vicious cycle" gripping the U.S. economy.

"It is absolutely true that we cannot depend on government alone to create jobs or economic growth. That is and must be the role of the private sector," he said.


Posted by & filed under In The News.

Dear Friends,

Gold is going to $1650 and that is for starters.

The US dollar is going to .6200 and then .5100.

The Safe Haven Dollar is as stupid now as the Goldilocks Economy and rear view mirror economic events were.

I am getting calls from people who either don’t read or should only be in US dollar treasury bills.

My leash is getting tight so please read JSMineset first. Email me if you do not understand something and if it was ill presented, it will be corrected. Do not call me and ask me if I have changed my mind since I posted something this morning. Remaining polite is becoming hard.

The following amount of money can:

1. Pay off every mortgage in the USA.
2. Send a check for $1400 to ever person on this planet.

Hyperinflation cannot be avoided.

Respectfully yours,

U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes
By Mark Pittman and Bob Ivry

Feb. 9 (Bloomberg) — The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged to provide up to $5.7 trillion more if needed. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps. The Senate is to vote early this week on a stimulus package totaling at least $780 billion that President Barack Obama says is needed to avert a deeper recession. That measure would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus package to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates approved in 2008 have been voted on by lawmakers. The remaining $8 trillion in commitments are lending programs and guarantees, almost all under the authority of the Fed and the FDIC. The recipients’ names have not been disclosed.

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”



Jim Sinclair’s Commentary

And finally for this evening a word from Bloomberg for the all the Pollyanna’s out there.

Bank Failures May Reach 1,000 on Bad Loans, RBC Says (Update2)
By David Mildenberg and Margaret Chadbourn

Feb. 9 (Bloomberg) — As many as 1,000 U.S. banks may fail in the next three to five years, almost double the one-year tally at the height of the saving-and-loan collapse, as losses mount on commercial real-estate loans, RBC Capital Markets analysts said.

Most of the failures will probably occur at banks with less than $2 billion in assets as their commercial customers default, said Gerard Cassidy, an analyst at RBC, in an interview today.

“There are billions of dollars of losses embedded in the system, and the system has to flush them out,” Cassidy said. “The people that are going to take the losses are the taxpayers and bank stockholders, and if regulators say there won’t be much loss to taxpayers, they will be lying.”

Regulators are taking steps to help lenders avoid losses as President Barack Obama’s administration readies a rescue package that may include guarantees for toxic assets, according to people familiar with the plan. The Federal Deposit Insurance Corp. closed nine banks so far this year after shutting 25 in 2008 and identified 171 “problem” institutions as of the third quarter.

The FDIC has already raised the estimate for the cost of U.S. bank failures through 2013 after fourth-quarter financial reports from banks signaled possible additional losses to the deposit insurance fund. The agency said failures through 2013 may cost more than the $40 billion estimated in October.


Jim Sinclair’s Commentary

What, me worry? If I’m not why would you?


Jim Sinclair’s Commentary

Here is a neat approach. The Fed buys its own paper in amounts in excess of what it issues thereby financing itself and no longer requiring China’s help.

The catch is that the value of the US government would head for the floor as rates went through the roof because there are too many treasuries already out there.

How damn stupid can a central bank be? To the degree they buy their own paper they depreciate the paper already out there. Have you ever seen a stock buyback stop a bear market in the buyback company? All a stock buyback ever does is to allow the insider a firm bid to sell into.

If the Fed does what amounts to a buyback is China the seller?

Fed Lacks Consensus on Treasuries as Yields Rise
By Scott Lanman and Craig Torres

Feb. 9 (Bloomberg) — Federal Reserve officials have failed to resolve an internal debate over whether to purchase long-term Treasuries, even as rising yields on the securities threaten to undermine the central bank’s objective of cutting borrowing costs for consumers and businesses

Policy makers are instead focusing on a program to purchase $200 billion in consumer and small-business loans and on a plan to buy $600 billion in home-finance debt, according to people familiar with the deliberations.

Forgoing purchases of Treasuries may exacerbate a jump in borrowing costs for the government as federal debt managers seek to finance an unprecedented budget deficit. Benchmark 10-year note yields this week exceeded their level of Dec. 1, when Fed Chairman Ben S. Bernanke first talked about the option. That’s raised other borrowing costs, potentially delaying a recovery.

“The Fed will get a lot more bang for its buck by buying mortgages than buying Treasuries,” said John Ryding, founder and chief economist of RDQ Economics LLC in New York and a former Fed economist. “We were kind of a little surprised when the Fed wanted to go down this route” in comments starting in December, Ryding said.


Jim Sinclair’s Commentary

Hello, I am from the Federal Government here to help you.

GM, Chrysler May Face Bankruptcy to Protect U.S. Debt (Update3)
By Mike Ramsey and Tiffany Kary

Feb. 9 (Bloomberg) — General Motors Corp. and Chrysler LLC may have to be forced into bankruptcy by the U.S. government to assure repayment of $17.4 billion in federal bailout loans, a course of action the automakers claim would destroy them.

U.S. taxpayers currently take a backseat to prior creditors, including Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to loan agreements posted on the U.S. Treasury’s Web site. The government has hired a law firm to help establish its place at the front of the line for repayment, two people involved in the work said last week.

If federal officials fail to get a consensual agreement to change their position regarding repayment, they have the option to force the companies into bankruptcy as a condition of more bailout aid. The government would finance the bankruptcy with a so-called “debtor in possession” or DIP loan, a lender status that gives the U.S. priority over other creditors, said Don Workman, a partner at Baker & Hostetler LLP.

“They are negotiating to see if they can reach an agreement,” said Workman, a bankruptcy lawyer based in Washington. “If not, they are saying ‘We are pretty darn sure that a bankruptcy judge will allow us’” to be first in line for repayment.


Jim Sinclair’s Commentary

Here is an FYI from CIGA Jesse. Maybe GM deserves to go broke?

General Motors to Invest $1 Billion in Brazil Operations — Money to Come from U.S. Rescue Program
By Russ Dallen
SAO PAULO — General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn’t be logical to withdraw the investment from where we’re growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

Meanwhile, he cut the company’s revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales.

GM already announced three programs of paid leave, and Ardila added that GM Brazil "is going to wait and see how the market behaves in order to know what decision to take" with regard to possible layoffs.

For Ardila, the injection in Brazil’s automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.



Jim Sinclair’s Commentary

Let the truth be known!

You know all these car company got the major axe, not from bad business, but first from the use of OTC derivatives by their credit arm which in turn killed business.

If you cannot borrow money to buy a car, no cars are bought!

Nissan to Cut 20,000 Jobs as Carmaker Forecasts Loss (Update3)
By Makiko Kitamura

Feb. 9 (Bloomberg) — Nissan Motor Co., Japan’s third- largest automaker, said it will slash 20,000 jobs and post its first loss in nine years as the global recession cripples car demand and a stronger yen ravages the value of overseas earnings.

The company expects a net loss of 265 billion yen ($2.91 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. It also scrapped its second-half dividend.

Nissan’s sales in the U.S., its biggest market, plunged 31 percent in January as demand for Altima sedans and Xterra sport- utility vehicles dried up. Chief Executive Officer Carlos Ghosn’s elimination of 9 percent of the workforce caps a month in which all of Japan’s carmakers slashed forecasts and Panasonic Corp. and NEC Corp. cut workers.

“The economic storm is wreaking havoc on everyone,” said Yuuki Sakurai general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., which manages the equivalent of $54 billion in assets. “Things could get even worse.”


Jim Sinclair’s Commentary

It is so stupid as not to be stupid.

Money given to Pakistan for any reason goes to them for one reason and into very few pockets.

Damn, country leadership can be a great private enterprise.

Police injured in Pakistan attack
BBC News – UK
A suicide bomber has driven a car loaded with explosives into a police check post in north-western Pakistan, injuring at least 15 policemen.
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Video Is Said to Be Polish Hostage’s Beheading in Pakistan
New York Times – United States
By AP DERA ISMAIL KHAN, Pakistan (AP) — A graphic video delivered to reporters on Sunday appeared to show the execution of a Polish engineer by Pakistani
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Tougher on Pakistan
News & Observer – Raleigh,NC,USA
27 news article "Taliban clamp down in Swat" suggested the need for new US foreign policy toward Pakistan. US policy undermined India’s democracy and
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Losing Hearts and Minds in Pakistan
Washington Post – United States
President Asif Ali Zardari gave a frank assessment of the challenges that Pakistanfaces, as well as outlining the need for US support in improving
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Pakistan to Present Mumbai Probe Report to Committee, Geo Says
Bloomberg – USA
9 (Bloomberg) — Pakistan has completed its investigation into the Mumbai attacks and will submit its report to a defense committee today, GEO television
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US Skeptical About Pakistan’s Restrictions on Nuclear Scientist
Washington Post – United States
Pakistan has "given us some initial commitments but we’re going to be following [the situation] very closely. The important thing is that they know we are
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Pakistan Vows to Monitor Scientist
New York Times – United States
Mr. Khan is a hero in Pakistan for developing the country’s nuclear program, and many claimed the Zardari government was detaining him at the behest of
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Nuclear Scientist Khan Isn’t Threat, Pakistani Minister Says
Bloomberg – USA
8 (Bloomberg) — Pakistan will ensure that nuclear scientist Abdul Qadeer Khan doesn’t resume selling atomic technology to other countries after his release
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Pakistan enjoys world support against Indian ‘designs’: Gilani
Daily Times – Lahore,Pakistan
Gilani described reported Indian plans to get Pakistan declared a ‘terrorist state’ as wishful thinking, and said Pakistan’s diplomacy and foreign policy
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US envoy Holbrooke to reach in Pakistan today
Times of India – India
MUNICH: US special envoy Richard Holbrooke will arrive in Pakistan on a two-day visit on Monday, Geo TV reported. He will hold separate meetings with
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