Posts Categorized: In The News

Posted by & filed under In The News.

Dear Friends,

In hard times remember the things that are most important to you. The following pictures are from my last trip to Africa.

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Jim Sinclair’s Commentary

You think the OTC derivative salesman would get a special welcome in some of these Italian towns? Maybe we should pay for their tickets and let the mayors know they are coming.

‘Impossible to Understand’ Swap Burns 290-Person Italian Hamlet
By Alan Katz, Lorenzo Totaro and Elisa Martinuzzi

June 19 (Bloomberg) — Ortenzio Matteucci points to towns down the wooded Nerina valley in Italy’s Umbria region and blames peer pressure for his decision to let Polino, population 290, buy a U.S.-inspired financial swap he didn’t understand.

A retired steelworker with wavy gray hair, Polino’s Mayor Matteucci says he agreed to the interest-rate swap because Milan, with more than 1 million residents, and local towns Arrone and Stroncone all bought derivatives to try to save money. Polino’s contract has cost the village 6,579.66 euros ($9,200) more than it has earned since the town made the deal in 2005.

“At the time I thought: Can the Province of Terni, the City of Terni and all the other municipalities bigger than us, such as Milan, be all wrong?” said Matteucci, 59, dressed in a blue polo shirt and jeans. “You can make a mistake if you don’t have an appropriate and deep knowledge of this and just follow what other local governments do.”

Derivatives have burned towns from Polino to Milan to Erie, Pennsylvania. Jefferson County, Alabama, said it might need to declare bankruptcy because of costs associated with the contracts. Responsibility for the expenses in Italy’s second- biggest city and in Umbria’s smallest village sits with elected officials who agreed to financial instruments they didn’t fully grasp, said Stefano Taurini, a lawyer who specializes in corporate law in Milan.

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Jim Sinclair’s Commentary

JB Slear comments "Just another Friday night, no big thing."

United Community Banks, Inc. Announces Acquisition of Southern Community Bank
June 19, 2009 6:20 PM EDT

BLAIRSVILLE, GA — (MARKET WIRE) — 06/19/09 — United Community Banks, Inc. (NASDAQ: UCBI) announced today that its wholly-owned subsidiary, United Community Bank, has entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase the assets and assume the deposit liabilities and secured wholesale borrowings of Southern Community Bank. The Georgia Department of Banking and Finance declared Southern Community Bank closed today and appointed the FDIC as receiver. The FDIC then assigned the assets, deposit liabilities and secured wholesale borrowings of Southern Community Bank to United Community Bank under a loss sharing agreement.

"We are delighted to welcome the customers of Southern Community Bank to the family of valued customers of United Community Bank," says Jimmy Tallent, President and Chief Executive Officer of United Community Banks, Inc. "It is our number one objective to make this transition as transparent and easy as possible for both Southern Community customers and employees. Because United Community Bank elected to assume both insured AND non-insured deposits, no customers of Southern Community Bank will lose any of their deposits.

"Under the loss sharing agreement," Tallent continued, "the FDIC will reimburse United Community Bank for losses on Southern Community Bank’s loans and foreclosed properties. Also, as part of the loss sharing agreement, the acquired assets receive a 20 percent risk weighting for regulatory capital purposes, therefore the impact on our regulatory capital ratios will not be significant."

As of March 31, 2009, Southern Community Bank reported total assets of $372 million, loans of $224 million, customer deposits of $197 million and other deposits and borrowings of $155 million. Under the terms of the agreement, United Community Bank has the option to purchase, or to assume the leases on, all five Southern Community bank locations, most of which are contiguous to existing United Community Bank locations.

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Jim Sinclair’s Commentary

This is a major development in a geopolitical flashpoint. I assume that since the top guy has spoken out violence is not out of the question.

Stratfor has dropped their subscription price sharply. Their website is www.stratfor.com

Iran: The Supreme Leader Draws the Line

Summary

Iranian Supreme Leader Ayatollah Ali Khamenei spoke to the Iranian people during Friday prayers June 19, siding with Iranian President Mahmoud Ahmadinejad and ordering protesters to end their demonstrations. Khamenei has decided that using force to suppress the uprising is worth the risk, even if it leads to greater infighting among the power brokers of the system. It remains unclear if Ahmadinejad’s opponents will stage a showdown, but the protests have grown enough in size and energy to take on a life of their own.

Analysis

Iranian Supreme Leader Ayatollah Ali Khamenei delivered a rare but critical Friday sermon prayer June 19 in which he addressed the continuing public unrest in the wake of President Mahmoud Ahmadinejad’s victory in the June 12 presidential election, as well as the schism among the country’s political leadership. As expected, he took a clear position in favor of the president, rejecting accusations of electoral fraud and framing the conflict in terms of foreign powers exploiting the Islamic republic’s internal troubles. More importantly, he warned both the protesters and their leaders to halt the demonstrations and that they would be responsible for any bloodshed.

Khamenei has clearly opted for the forcible suppression of the uprising. STRATFOR had pointed out in a previous report that the country’s elite ideological military force, the Islamic Revolution Guards Corps (IRGC) has taken command of domestic law enforcement in Tehran. Consequently, from today forward, we can expect to see security forces crush protests. That the two main defeated challengers of Ahamdinejad, former prime minister Mir Hossein Mousavi and former speaker of parliament Mehdi Karroubi did not attend the prayer session shows that they are not about to accept the verdict.

At the same time, Mousavi and Karroubi cannot be perceived as openly defying the supreme leader and they have an interest in the preservation of the cleric-led political system. Furthermore, their supporters on the streets are far more radical than they are because Mousavi and Karroubi are part and parcel of the system (something which Khamenei pointed out when he said that that all four candidates in the recent presidential election belonged to Iran’s Islamic establishment). Therefore, they will have a hard time balancing between the need to sustain their opposition to the results of the election and controlling the protesters on the streets, especially during a major security crackdown. Regardless of whether the opposition leaders choose to take charge of the demonstrations, the protests have swelled enough in size and energy to take on a life of their own.

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Jim Sinclair’s Commentary

This is an extremely sad situation akin to the show now being run on the History Channel titled "Life After People."

The Packard plant, which might be considered as the start of the death of Detroit, also downed by debt, questionable management and design, is literally becoming a jungle of growth inside with a cadaver for an outside.

Michigan jobless rate is highest in decades
Auto, construction layoffs drive increase
BY KATHERINE YUNG • FREE PRESS BUSINESS WRITER
June 18, 2009

Michigan’s unemployment rate in May shot up to 14.1%, the highest level in more than a quarter-century, according to state figures released Wednesday.

As has been the case for many years, the increase was driven by layoffs in auto manufacturing and, to a lesser extent, construction. The jobless rate was the worst since the July 1983 level of 14.2% and significantly exceeds the May U.S. unemployment rate of 9.4%. The state’s unemployment rate will likely remain the nation’s highest.

"A lot of this was expected, considering where our auto companies are," said Rick Waclawek, director of the state’s Bureau of Labor Market Information and Strategic Initiatives.

After years of steadily inching upward, Michigan’s jobless rate has been accelerating higher in recent months as layoffs have mounted. Just a year ago, in May 2008, the unemployment rate stood at 8.2%.

The auto industry’s woes continue to cost Michigan dearly. Its manufacturing industry has shed 37,000 jobs during the last two months, including 16,000 in May.

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Jim Sinclair’s Commentary

In the arena of Green Shoots, the newest Bankster’s cliché, you need to ask yourself where economic recovery will come from as unemployment reaches into double digits on the understated skewed present indices. This is another reason why Shadow Statistics is so important to your trend thinking.

NY state unemployed soars to 33-year high
Thu Jun 18, 2009 3:15pm EDT
By Joan Gralla

NEW YORK (Reuters) – More than 800,000 New York state residents were unemployed in May, the highest level in 33 years, and another sign the state is still mired in recession, the state labor department said on Thursday.

The New York state unemployment rate rose to 8.2 percent in May from 7.7 percent in April, the highest level since February 1993, the agency said in a statement.

The jobless rate in New York City, which powers the state’s economy, climbed to 9 percent in May, its highest since October 1997, from 8 percent in April.

Wall Street’s securities industry helped boost city and state tax surpluses in the last boom, but James Brown, state labor market analyst, said the sector cut 900 jobs in May, and has lost 21,800 over the year.

The entire financial sector, including banking, real estate and insurance, sliced 1,900 workers, for a year-over-year loss of 28,000 jobs, Brown said.

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Jim Sinclair’s Commentary

For your information.

‘Something different" happening with new flu – CDC
Thu Jun 18, 2009 5:41pm EDT
By Maggie Fox, Health and Science Editor

WASHINGTON, June 18 (Reuters) – The new strain of H1N1 flu is causing "something different" to happen in the United States this year — perhaps an extended year-round flu season that disproportionately hits young people, health officials said on Thursday.

An unusually cool late spring may be helping keep the infection going in the U.S. Northeast, especially densely populated areas in New York and Massachusetts, the officials at the U.S. Centers for Disease Control and Prevention said.

And infections among healthcare workers suggest that people are showing up at work sick — meaning that workplace policies may be contributing to its spread, the CDC officials said.

The new strain of swine flu is officially a pandemic now, according to the World Health Organization.

So far the virus is causing mild to moderate disease, but it has killed at least 167 people and been confirmed in nearly 40,000 globally.

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Jim Sinclair’s Commentary

Honest Abe’s Used Auto Emporium has now been taken over by the entire US public. I wonder if the present Administration can fund a guy in a plaid suit, white socks and black shoes to be the Clunker Czar.

Von Mises and Ricardo are revolving in the graves at a Japanese auto’s 14,000 RPM. The Chicago School has decided to shut down and enter the used car business.

The used car market auctions are presently a disaster but now will give some enterprising crooks a stop loss at $4500. No one needs to steal from Medicare if they can turn in an old junker and get $4500 in a fake new car sale with the assistance of a crooked car dealer.

TRADE THAT CLUNKER
PROGRAM’S PROMISE: $4,500-PER-CAR
By PAUL THARP
Last updated: 2:07 am
June 19, 2009

Your old clunker can bring as much as a $4,500 check from Uncle Sam if you dump it to buy a new car — so long as it’s not another gas guzzler.

The government’s "cash for clunkers" incentive program designed to boost sales of fuel-efficient vehicles got the green light of Senate approval yesterday, and is on its way to be signed into law by President Barack Obama.

Ford Motor and General Motors have pressured Congress all year for the novel trade-in incentive to help break Detroit’s long and punishing sales slump.

A similar rebate program in Germany to clear clunkers off its roads caused new-car sales there to jump as much as 40 percent. Similar plans in China and France lifted sales by 15 percent and 8 percent, respectively.

Proponents are hoping for a busy autumn in vehicle sales. The first checks could start arriving by Sept. 1, with the program’s end set for Sept. 30.

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GOLDEN SHOOTS
June 19th, 2009 by Egon von Greyerz

No green shoots

There are no green shoots. Every single piece of economic and market news we observe confirms our view that the current optimism in the world economy is purely based on sentiment and not on facts.

The current corrective rallies in world stock markets were forecast by us in our January Newsletter. Corrective rallies create false optimism and hope. This is what we are seeing currently.

So, what indicators are telling us that things are going to get a lot worse:

· Unemployment is increasing rapidly in all countries

· Government deficits are rising at an accelerating pace

· Many local governments, counties and cities are virtually bankrupt

· Household finances are worsening rapidly

· Bank balance sheets are as leveraged and as unsound today as when the crisis started

· Banks are not recognizing that a major part of consumer loans will never be repaid

· Company failures are rising fast

· Housing market is continuing to deteriorate in most countries and especially in the  USA, UK and Spain

· Commercial real estate is in a precarious state. Banks are not writing down their loan books to market values

· US 30 year treasury bond rates are in a strong uptrend indicating the world is becoming increasingly unwilling to finance the excesses of a bankrupt US government

So what are the golden shoots?

Gold has been consolidating for the last four months and is now ready for the next major move up.

We have some very strong technical indicators which tell us that the consolidation in gold will finish at the latest next week and thereafter we will see gold going up strongly in July and for the next few months until the next consolidation in late autumn.

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Jim Sinclair’s Commentary

In all fairness we do have one Green Shoot that should be recognized.

MCDONALD’S GO LARGE ON JOB APPLICATIONS
Friday, June 19, 2009

It is hard not to sneer, but apparently more than 2,200 people every day are applying for a job at McDonald’s.

The lure of the burger empire is proving too much for jobseekers from diverse employment backgrounds and the global junk food giant is finding university graduates, bank workers and teachers among their applicants. I’ll declare now that my vested interest here is that I was refused a job by McDonalds when I was just 16 years old.

Why I was knocked back still remains a mystery, as my brother, to his eternal embarrassment, was the branch’s star employee at the time and I knew the manager, who interviewed me, very well. He obviously didn’t see my future and that of the Golden Arches in karmic synchronicity.

Anyhow, with unemployment at a record level of 2.2 million, I guess it’s all stops out as people look for that first rung on the career ladder or cling to it with a vice-like grip to keep a wage, any wage, coming in. And McDonald’s are doing their best, with the company hiring 140 people a day to flip burgers, cook fries and ask customers "Would you like a large meal" at every order.

But let’s face it, even the Oxford English Dictionary looks down its nose at the McJob, describing it as ‘an unstimulating, low-paid job with few prospects’. And though McDonald’s keep fighting to have that perception changed, it’s an uphill battle.

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Israel’s military planning for a multi-front war

Israel’s military has intensified coordination between the army and air force to conduct simultaneous operations in the Gaza Strip and Lebanon.

Officials said the effort reflects an assessment that Israel’s next war would include such adversaries as Hamas, Hizbullah and Syria.

"The Israeli military’s future operations will be broader and more demanding in terms of their scope and pace, with more risks than Operation Cast Lead," Israeli Defense Minister Ehud Barak said.

Operation Cast Lead marked the Israeli military attack on the Hamas regime in the Gaza Strip. The 22-day war spanned December 2008 and January 2009.

In an address to Israeli military officers on June 9, Barak envisioned a war with far greater Israeli casualties than that against Hamas. The minister said the next war would take place under more difficult conditions than the Israeli air, naval and ground campaign in the Gaza Strip, a flat area of 360 square kilometers.

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Posted by & filed under In The News.

"The limits of tyrants are prescribed by the endurance of those whom they oppress."
–Fredrick Douglass, August 4, 1857

Jim Sinclair’s Commentary

Here is a rock and hard place. The dollar is becoming less acceptable as a reserve currency because of all the QE.

A failure to apply QE at warp speed will result in the 30 year US Treasury breaking its 28 year uptrend line. That will send rates into the stratosphere and then China’s treasury instruments into the trash heap. QE must continue. The uptrend line will break harder on the downside in November of 2009.

China sells US bonds to ‘show concern’
Jun 17 04:20 AM US/Eastern

A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday.

The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

"China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times.

According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

It was the first month since June 2008 that Beijing failed to purchase more US T-bills.

Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China’s move showed a more cautious attitude.

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Jim Sinclair’s Commentary

I could not have said this better. The dollar will not survive this Fall and will fall sharply this winter.

"US officials wanted to attend Yekaterinburg as observers. They were told no. It is a word that Americans will hear much more in the future."

Washington is unable to call all the shots
Financial Times
By Michael Hudson
Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

Challenging the American empire will be the focus of meetings in Yekaterinburg, Russia, today and tomorrow for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other leaders of the six-nation Shanghai Co-operation Organisation. The alliance comprises Russia, China, Kazakhstan, Tajiki-stan, Kyrgyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia.

The attendees (who will be joined on Tuesday by Brazil for trade discussions) have assured American diplomats that dismantling the US financial and military hegemony is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the US or for the dollar as a vehicle for trade among these countries.

The meeting is an opportunity for China, Russia and India to "build an increasingly multipolar world order", as Mr Medvedev put it in a St Petersburg speech this month. What he meant was this: we have reached our limit in subsidising the US military encirclement of Eurasia while also allowing the US to appropriate our exports, companies and real estate in exchange for paper money of questionable worth.

An "artificially maintained unipolar system", Mr Medvedev said, was based on "one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks".

Keen observers of America, if not effective managers of their own economies, these countries argue that the root of the global financial crisis is that the US makes too little and spends too much. Especially upsetting is US military expenditure – such as military aid to Georgia or the presence in the oil-rich Middle East and central Asia – using money that foreign central banks recycle.

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Jim Sinclair’s Commentary

You ask what is next from a person screaming for attention, lacking all his paddles in the water and seemingly being ignored by the public? A shot at Hawaii that misses hopefully.

North Korea may fire a missile toward Hawaii
By HYUNG-JIN KIM, Associated Press Writer
Thu Jun 18, 7:48 am ET

SEOUL, South Korea – North Korea may fire a long-range ballistic missile toward Hawaii in early July, a Japanese news report said Thursday, as Russia and China urged the regime to return to international disarmament talks on its rogue nuclear program.

The missile, believed to be a Taepodong-2 with a range of up to 4,000 miles (6,500 kilometers), would be launched from North Korea’s Dongchang-ni site on the northwestern coast, said the Yomiuri daily, Japan’s top-selling newspaper. It cited an analysis by the Japanese Defense Ministry and intelligence gathered by U.S. reconnaissance satellites.

The missile launch could come between July 4 and 8, the paper said.

While the newspaper speculated the Taepodong-2 could fly over Japan and toward Hawaii, it said the missile would not be able to hit Hawaii’s main islands, which are about 4,500 miles (7,200 kilometers) from the Korean peninsula.

A spokesman for the Japanese Defense Ministry declined to comment on the report. South Korea’s Defense Ministry and the National Intelligence Service — the country’s main spy agency — said they could not confirm it.

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Jim Sinclair’s Commentary

Now here is an example of World Class closing of the barn door after the horses have left. Who are they kidding?

Standard & Poor’s Cuts Ratings On 22 Banks
6/17/2009 1:36 PM ET

(RTTNews) – Credit ratings agency Standard & Poor’s lowered its ratings and revised its outlooks on 22 U.S. banks on Wednesday, citing concerns that operating conditions will be less favorable than they were in the past due to volatile financial markets during credit cycles and tighter regulatory supervision.

Standard & Poor’s also said the changes reflect its ongoing broad-ranging reassessment of industry risk for U.S. financial institutions. The agency indicated that the banking industry is now in a transition period and will likely undergo material structural changes.

Further, the agency said its overall assessment of the industry includes expectations that loan losses are likely to continue to increase and could rise beyond current expectations.

Standard & Poor’s credit analyst Rodrigo Quintanilla said, "We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions."

"Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace’s new reality," Quintanilla added. "Such a transition period justifies lower ratings as industry players implement changes."

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Jim Sinclair’s Commentary

Actually, I am amazed that something as correct and intelligent as this is entertained by the dullest people on the planet.

I smell politics and pressure on the Fed to ramp up QE without waiting for a second crisis.

Ron Paul’s "Fed Transparency" Bill Gets Majority House Support
Posted Jun 12, 2009
From The Business Insider, June 12, 2009:

The US House of Representative has joined the Cult of Paul.

Ron Paul, the famously anti-Federal Reserve Congressman from Texas has got 221 of his colleagues to sign onto a bill (via Zero Hedge) that would require a fresh, outside audit of the Federal Reserve. That’s more than enough to get the bill out of the House, though it now faces the more adult and deliberative House of LordsSenate, who are likely to have less interest in such seditious shenanigans.

The first Senate co-sponsor is rumored to be Jim DeMint of South Carolina, a favorite among the hard right and a possible Presidential candidate.

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Posted by & filed under In The News.

“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”
–Franklin Delano Roosevelt

Dear CIGAs,

Let’s talk street smarts. There is nothing mysterious about this. This is not your cookie cutter type of counterfeit operation, if they are, in fact, fakes.

Governments in times of war counterfeit the opponents currency and government bearer bonds to balloon the money supply, inflicting injury by inflation. These instruments, even not in official figures, act the same as a massive increase in the money supply. $134 billion is not massive by today’s standards but how do you know this is the only suitcase? Nobody is that stupid with funds of this size, even if counterfeit. You can be sure there is more where this came from. The probability then is that the $134 billion is not all of it and might just be the tip of the iceberg.

The above is common knowledge amongst intelligence services.

These are bearer bonds so you only need to have a few purchased in the market to successfully kill the serial number by counterfeiting your own serial numbers.

You use these counterfeit instruments to make loans in modest amounts at various less-than-ethical international operations, preferably those that specialize in illicit funds. Lay a hundred million on the banker and get all the loans you want.

If the government bearer bonds are real then some big guy is making a run for it. This is top dog money, and would indicate a serious and well informed reasoning on the part of the entity running for the hills. People with this type of money are not usually stupid. That amount of real bearer bonds is a reach for drug funds. It would be governmental.

Yeah, mysterious, only to the naive world.

The Mysterious Case of the Seized Bearer Bonds, Worth $134 Billion
Sat Jun 13, 2009 at 03:50:09 PM PDT

The US media has been generally silent about $134 billion in bearer bonds seized by Italian police at the Swiss border. On June 8, AsiaNews reported:

Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

Karl Denninger has been following the story, and it appears to be true that this vast sum was, in fact, seized.

It is a mystery why the story is receiving coverage in Europe and Asia, but not in the US. Rumors have been swirling about possible involvement of the Japanese, Chinese, and/or Korean governments, with the last being more likely if the bonds are counterfeit. Whether real or fake, the apparent fact of the smuggling raises all kinds of questions, with no easy answers. Mr Denninger applies his considerable intelligence to the matter, in Sherlock Holmes fashion:

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Jim Sinclair’s Commentary

-German outlaws getting titanium chains put on their Mercedes Unimogs.
-German readership of JSMineset increases ten-fold.
-Vending machine maximum life expectancy 25 minutes from installation

Gold sold like chocolate from German vending machines
By Murray Wardrop
Published: 7:30AM BST 17 Jun 2009

Shoppers in Germany will soon be able to buy gold as easily as bars of chocolate after a firm announced plans to install vending machines selling the precious metal across the country.

TG-Gold-Super-Markt aims to introduce the machines at 500 locations including train stations and airports in Germany.

The company, based near Stuttgart, hopes to tap into the increasing interest in buying gold following disillusionment in other investments due to the economic downturn.

Gold prices from the machines – about 30 per cent higher than market prices for the cheapest product – will be updated every few minutes.

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Jim Sinclair’s Commentary

Hedgies object to using their title in drug related article.

Mexico cocaine ‘hidden in sharks’

The Mexican Navy says it has seized more than a tonne of cocaine hidden inside the carcasses of frozen sharks.

Armed officers found slabs of cocaine inside more than 20 sharks aboard a freight ship in the Gulf coast port of Progreso in Yucatan state.

Correspondents say cartels are coming up with increasingly creative ways of smuggling drugs into the US.

Shipments of cocaine have also been discovered hidden inside sealed beer cans, religious statues and furniture.

"We are talking about more than a tonne of cocaine that was inside the ship," said Mexican Navy Commander Eduardo Villa.

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Jim Sinclair’s Commentary

As in all these things where false flags fly, who was, if there is, the doer?

Report: Carter escapes assassination attempt on visit to Gaza
By YAAKOV KATZ, JPOST.COM STAFF AND AP
Jun 16, 2009 17:34 | Updated Jun 16, 2009 19:59

Hamas said it foiled an attempt by Palestinian terrorists to assassinate former US president Jimmy Carter during his visit to the Gaza Strip on Tuesday, Palestinian sources told news agencies.

Israeli security sources said that the Shin Bet (Israel Security Agency) had learned of plans to target Carter and had passed on the information to the former president’s security detail in "real time."

According to Palestinian sources, terrorists linked with al Qaida hid a number of improved explosive devices along a road that Carter’s convoy was scheduled to travel on inside Gaza. Hamas forces reportedly uncovered the IEDs and destroyed them.

Ismail Shahwan, spokesman for the Hamas Ministry of the Interior, denied that an Al-Qaeda-linked group had planned to assassinate Carter.

Shawan said no explosives were discovered near the Erez border crossing. He said that the visit went according to the plan.

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Jim Sinclair’s Commentary

According to financial TV the president has nothing better to do than simply make noise on this subject. From me please accept the fact that what is said herein is serious.

China President Hu: Should Diversify Intl Monetary System
* JUNE 16, 2009, 8:56 P.M. ET

BEIJING (Dow Jones)–The international monetary system should be further "diversified," China President Hu Jintao said Tuesday at a summit with leaders of four large developing countries, in a likely reference to the dominance of the dollar as a reserve currency.

"The system for regulating the issuance of major reserve currencies should be improved," Hu said at the BRIC summit with the leaders of Brazil, Russia, and India, according to a text of his remarks posted on the Chinese government’s Web site.

Hu didn’t elaborate on desired reforms of the system, only adding that the exchange rates of major reserve currencies should be kept stable.

Russian President Dimitry Medvedev said before the start of the meeting that he would raise the issue of the U.S. dollar as the global reserve currency.

Hu’s comments are in line with previous Chinese government statements on the reserve currency issue.

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Jim Sinclair’s Commentary

Today you pay and all is forgiven. What’s ten billion anyway when the funds are merry-go-round money?

Goldman’s Blankfein issues apology as bank prepares to repay $10bn
Goldman Sachs chairman Lloyd Blankfein has publicly apologised for the first time for the investment bank’s participation in the "market euphoria" that spurred the global financial crisis.
By James Quinn Wall Street Correspondent
Published: 6:00AM BST 17 Jun 2009

Ahead of Goldman’s repayment of its $10bn (£6bn) in US taxpayer’s funds later today, Mr Blankfein also admitted that the bank failed to speak out on the problems occurring in the market.

"We know that we have an explicit contract with our shareholders to be responsible stewards of their capital . . . we regret that we participated in the market euphoria and failed to raise a responsible voice."

The stark admissions are contained in letters to four leading US politicians who are the chairmen and ranking members of Capitol Hill’s two leading financial services committees.

It comes as President Barack Obama prepares to unveil sweeping changes to the US financial regulatory framework in an attempt to make sure the crisis never happens again.

In the letters, copies of which have been seen by The Daily Telegraph, Mr Blankfein also warns that stability in the financial markets can only return if the industry accepts that some of its practices are "unhealthy".

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Jim Sinclair’s Commentary

Ah yes, government statistics so universally accepted are showing great strains.

Discrepancies in America’s accounts hide a black hole
By Daniel Gros
Published: June 15 2006 03:00 | Last updated: June 15 2006 03:00

The global financial system seems to have a black hole at its centre. Over the last two decades, US residents have sold a total of about $5,500bn worth of IOUs to foreigners, yet the officially recorded net investment position of the US has deteriorated only by a little more than half of this amount ($2,800bn). The US capital market seems to have acted like a black hole for investors from the rest of world in which $2,700bn vanished from sight – or at least from the official statistics.

How can $2,700bn disappear?

It is often argued that the US can simply make large capital gains on its gross positions because its assets are denominated in foreign currency and its liabilities in dollars. However, the available data indicate that over the last two decades this factor has netted the US at most $300bn-$400bn. This still leaves a loss of well over $2,000bn to be explained.

The explanation comes in two tranches of about $1,000bn each.

The first source of accountingrevenues for the US derives from an anomaly in the item "reinvested earnings" on foreign direct investment in the US balance of payments. This item improves the current account by about $100bn a year because foreign companies systematically report abnormally low profits for their US operations to avoid US corporate income taxes. If one assumes that foreign companies earn the same rate of return on their direct investment in the US as on their portfolio investment in equity, the US current account would deteriorate by about $100bn. Properly measured, the country’s current account deficit would thus be about 1 per cent of gross domestic product larger than officially reported.

The underreporting of the current account deficit implies that US indebtedness is also underestimated. Over the past two decades the cumulative correction for the anomaly in "reinvested earnings" would lead to a higher US net debtor position of about $1,000bn.

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Jim Sinclair’s Commentary

The line is drawn in the sand across the 28 year uptrend line of the US 30 year long bond.

Every tool to keep that line intact will be used including the Beige Book.

Fed Weighs Using Statement to Damp Rate Speculation (Update1)
By Craig Torres

June 17 (Bloomberg) — Federal Reserve officials are considering whether to use next week’s policy statement to suppress any speculation they’re prepared to raise interest rates as soon as this year.

While policy makers have signaled they accept an increase in longer-term Treasury yields as the economy improves, some are concerned at any premature anticipation of rate rises. Fed staff have examined the Bank of Canada’s public intention of foregoing an increase until 2010, according to a person familiar with the matter, without concluding the statement has proven effective.

One option would be to emphasize in the June 24 statement that increasing slack in the job market and U.S. manufacturing will keep inflation low and a recovery muted, said Michael Feroli, an economist at JPMorgan Chase & Co. in New York and former member of the Fed Board staff. At stake: keeping borrowing costs low enough to foster a sustained recovery, without binding the central bank to a single course of action.

“There are ways of highlighting their low rate expectations without over-committing,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.

Chairman Ben S. Bernanke and his fellow Federal Open Market Committee members gather in Washington June 23-24. Economists forecast they will keep their target for the benchmark federal funds rate at zero to 0.25 percent. Policy makers will also discuss any changes to their commitment to purchase as much as $300 billion of Treasuries and $1.45 trillion of housing debt.

More…

Jim Sinclair’s Commentary

Administration pressure is on the Fed not to do the same, not to do less, but to do more money printing now named QE. That you can take to the bank!

On one hand here is more power. On the other hand, Ben, do you like your job, status and new found wealth? If you do, prime that pump to infinity.

Obama Praises Bernanke, Declines to Comment on Reappointment
By Scott Lanman

June 16 (Bloomberg) — U.S. President Barack Obama praised Federal Reserve Chairman Ben S. Bernanke for doing an “extraordinary job” while declining to comment on whether he plans to nominate the central bank chief for a second term.

Bernanke has “done an extraordinary job under extraordinary circumstances,” Obama said today in an interview with Bloomberg Television at the White House. On a potential reappointment, Obama said, “I’m not making news on that today.”

Bernanke, 55, has been responsible for the Fed’s unprecedented response to the financial crisis and recession, including lowering the main interest rate almost to zero; purchasing as much as $1.75 trillion in Treasuries and housing debt; and starting emergency-loan programs to aid bond dealers, mutual funds and corporations.

A former Princeton University economist, Bernanke was appointed by Obama’s predecessor, George W. Bush, to succeed Alan Greenspanas the U.S. central bank chief in February 2006. Bernanke’s initial four-year term as chairman ends Jan. 31, and his re-nomination or a new candidate would require Senate approval.

Bernanke, a Republican, has a separate 14-year term as a Fed governor that ends in 2020. Bush appointed him to the Fed Board of Governors in 2002 and then as chairman of the White House’s Council of Economic Advisers in 2005.

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Jim Sinclair’s Commentary

Thank God, my upcoming trip to China is on China Air. The unpaid flight attendants will be flying the plane. The plane will be fueled with AvGas. The unpaid food will be from Juan’s Greasy Spoon. For your sake don’t drink the water.

The unpaid cleaners will have the lavatories looking like the super discount flights in Indian Air in the 70s.

British Airways asks staff to work unpaid for up to a month

LONDON, England (CNN) — British Airways is asking thousands of its staff to work for free for up to four weeks, spokeswoman Kirsten Millard said Tuesday.

In an e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave — but with the option to work during this period. British Airways employs just more than 40,000 people in the United Kingdom.

Last month, the company posted a record annual loss of £400 million ($656 million).

Its chief executive declared at the time there were "absolutely no signs of recovery" in the industry.

"In 30 years in this business and I’ve never seen anything like this. This is by far the biggest crisis the industry has ever faced," said Willie Walsh, British Airways’ chief executive.

A spokesman for one of Britain’s biggest unions said its workers could not afford to work for free for a month.

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Jim Sinclair’s Commentary

All trends start in California, and then explode in all the states with the exception of Alaska.

Florida unemployment fund running dry

WEST PALM BEACH, FL — The state of Florida is burning through money to pay unemployment claims.

There is $534 million in the Unemployment Compensation Trust Fund but the state is paying out $65 million a week.

The fund could be dry by August and the state will have to borrow money from the federal government to pay claims.

Nearly a million Floridians are out of work these days.

"There will be no lapse in benefits. Everyone will receive their benefits who is entitled to them," says AWI Spokesman Robby Cunningham.

Uncle Sam isn’t the only one coming to the rescue.

More…

 

Jim Sinclair’s Commentary

You will note this morning that the party line being blasted over the airwaves is that the position of the BRICs concerning divestiture of dollars is nothing but talk. As proof of this position, a measure of the action of the dollar in this bear market rally is being interpolated in dollar treasury instruments. Airwave media is calling US dollar bonds showing a gain of 11% with interest added, utilizing the ten year as a measure. This position has been repeated at least 15 times since the Asian session opened last US evening.

There is no question that the "line drawn in the sand" by the Chairman of the US Federal Reserve has been drawn directly across the long term up trend line of 28 years on the 30 year long US Treasury bond.

Flash Report :

It is my strong opinion that Bernanke is committed to not letting this up trend line break down, using all the power of the Fed in Quantitative Easing. That means the Fed will buy practically unlimited offerings at auction and in the market should it be necessary.

The problem is market, money and speculators can overwhelm all central banks combined should confidence be lost. Confidence has been maintained by an almost unlimited creation of new money.

Be assured consequences cannot be avoided. The long term uptrend line of the 28 year long bond market is the confidence line and therefore becomes the most important line ever drawn in an attempt to determine the future of an empire.

Nobody in their right mind wants what is coming, but airwaves and hot air is no mendicant. Failure to allow economics to take its natural course in bankruptcy of the deficient, central bank support for the OTC derivative vehicle by the previous Chairman and bubble making all brought this plague upon us.

Economic seer, Chris, starts his presentations with the desire to be totally wrong but the conviction he is not.

Master Technician Alf takes no joy in what he sees but he sees it.

Nobody could have a more miserable circumstance than economic historian and master timer, Armstrong, but April 19th was dead on like many of his prediction. If he is wrong he will not remain wrong for more than a few weeks. I see him as calling one more time in the black of the bull eye.

Jim Sinclair’s Commentary

Get the real figures by subscription. It is worth it to know the true story:

– May CPI-U Annual Deflation of 1.3% versus SGS-Alternate 
Estimate of 6.1% Inflation
– Seasonal Adjustments Continue to Skew Inflation Reporting
– May Annual Production Fell at Fastest Pace Since
Post-World War II Production Shutdown
– May Annual Decline in Housing Starts Continued Record Fall-Off,
Monthly Gain Lacked Statistical Significance

http://www.shadowstats.com/

Posted by & filed under In The News.

Dear CIGAs,

Note that the talk of regulation on over the counter derivatives now speaks of a clearinghouse for standardized derivatives. Someone just recognized that all the previous derivatives written cannot be cleared because they are almost a transaction without standards. That means all those transactions outstanding are still weapons of mass financial destruction and lack any practical solution.

No break in general confidence can be tolerated therefore QE is moving full speed ahead.

Keep in mind that all actions have consequences – something that the last three generations have no concept of.

The strongest tool for influencing other nations, tax shelter nations and those deemed enemies is to block bank wire transfers in and out of the country digitally. Blocking electronic money transfers in today’s world basically puts the country out of business.

Note where North Korean sanctions are mentioned, money transfers are to be embargoed. Now you know why Switzerland is throwing out its American clients.

This is a reason why Asia’s interest in gold has grown by orders of magnitude. This is another reason why any gold the IMF wishes to sell will disappear instantaneously, never so much as seeing the marketplace.

Jim Sinclair’s Commentary

Yesterday’s dollar strength came from a statement at the end of the G8 meeting concerning Russia’s unending confidence in the US dollar. That triggered the algorithms to ram the US currency up more than 100 points.

There was a day when that would have been considered a currency crisis against upper bands and central bank intervention would be called in. Today 100 points in a currency move is just another day signifying absolutely nothing. Now the algorithms are trading with each other.

The dollar is history as the Universal Reserve Currency. You do not need a Nobel Prize to see that. The long term dollar trend is down, and will NOT be reversed here by spin.

I join trader Dan in cautioning you that you are not financed to play against the hedgies as traders. Invest with the trend and do not use margin.

Gold is getting ready to secure $1224 on its way to $1650 and then on to Alf’s numbers.

BRICs May Buy Each Other’s Bonds in Shift From Dollar
By Lyubov Pronina and Alex Nicholson

June 16 (Bloomberg) — Brazil, Russia, India and China are considering buying each other’s bonds and swapping currencies to lessen dependence on the U.S. dollar, Russian President Dmitry Medvedev’s top economic adviser said.

The leaders of the so-called BRIC countries will discuss measures to promote regional currencies when they meet later today,Arkady Dvorkovich told reporters in the Ural Mountains city of Yekaterinburg before the first BRIC summit.

“There will be talk about increasing the share of mutual trade in national currencies, possibly placing part of reserves in the financial instruments of partner countries,” Dvorkovich said.

Medvedev is hosting back-to-back summits of developing economies in Yekaterinburg as he seeks to lessen the world economy’s dependence on the U.S. dollar. Medvedev will hold talks later today with Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lulada Silva.

Medvedev and Hu earlier today attended a summit of the Shanghai Cooperation Organization, which also includes the four former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The Russian leader reiterated his intention to push for the creation of a “supranational currency” to challenge the U.S. dollar and encouraged China and the other Shanghai group members to use each other’s currencies for trade.

More…

Jim Sinclair’s Commentary

Turkey is also involved in the journey of world geopolitics going into 2012. Let’s keep a close eye on developments there.

Remember, the key to the success of the surge in Pakistan is SUSTAINABILITY.

Turkey issues warning, cuts rates
JUNE 17, 2009

Turkey’s prime minister defended the country’s military chief and warned against provocation Tuesday, as allegations of a military plot against the pious Muslim ruling party threatened to undermine civilian and military efforts to purge antidemocratic factions inside the state apparatus.

"Efforts to stir up mistrust between institutions will harm…Turkey as a whole," Prime Minister Recep Tayyip Erdogan said, after meeting the country’s top general to discuss the allegations. "The military High Command has shown responsibility and sensitivity from the moment this story broke.

More…

A good exit: Turkey is critical to peace in Iraq
By The Kansas City Star Editorial Board

ISTANBUL — Turkey, in what is being called neo-Ottomanism, is attempting to reconnect with the Muslim world, something Istanbul has largely avoided since the collapse of the Ottoman Empire in the early 20th century.

This is vital to the future of Iraq: Turkey is Iraq’s largest trading partner and probably will expand that role, which means Iraq’s economy is tied to Turkish trade.

Iraq even has oil pipelines running through Turkey. There has been a series of recent visits, back and forth, and Turkey this year agreed to release more reservoir water, essential to replenishing the dwindling Tigris that waters much of Iraq, including Baghdad.

But Turkey can, and probably will, reverse course if it disapproves of the future direction of northern Iraq, or Kurdistan, the region of jagged mountains just across the southern border here. Turkey has an estimated 12 million to 15 million Kurds. That has fed a 25-year-long Kurdistan Workers’ Party (PKK) insurgency, pushing for an independent Kurdish nation, which has left more than 35,000 dead.

More…

June1609Cartoon

Jim Sinclair’s Commentary

One of the major criterion for 2009-2011 is that Israel will make a major miscalculation.

Circumstances have gathered whereby Israel may have to make some hard decisions. Israel will never give up its demand for recognition of the right of Israel to exist in trade for anything.

The "Our Crowd" side tells me that literally.

On this part I am prone to say Israel will go it alone disagreeing, respectfully, with Mr. Friedman.

Video: Iranian Elections, Israel and the United States
June 16, 2009 | 1440 GMT

STRATFOR VIDEO
To view additional videos in the STRATFOR Insights series, click here.
RELATED INTELLIGENCE FILE
The Iranian Presidential Elections

In the latest installment of the STRATFOR Insights video series, CEO George Friedman discusses the tense future of the Middle East following the recent Iranian elections.

With Israel offering a Palestinian state on terms that are unacceptable to the Palestinians, and freshly re-elected Iranian President Mahmoud Ahmadinejad expected to continue his hard-line policies, how President Barack Obama moves forward merits close observation.

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Jim Sinclair’s Commentary

The world is mad. Do you think it might be a good idea if the Russian President and Finance Minister got on the same page?

The dollar will not survive the fall. The winter is going to be mean, cold and terminal to the US dollar.

Gold is going to fire up and out in a short period of time. On this I have total certainly

Medvedev calls for new reserve currencies
Tue Jun 16, 2:23 am ET

YEKATERINBURG, Russia – Russian President Dmitry Medvedev says the world needs new reserve currencies.

Medvedev told a regional summit Tuesday that the creation of new reserve currencies in addition to the dollar is needed to stabilize global finances.

Medvedev has made the proposal before. It reflects both the Kremlin’s push for greater international clout and a concern shared by other countries that soaring U.S. budget deficits could spur inflation and weaken the dollar.

Airing it at a summit meeting underlined the challenge to U.S. clout.

Medvedev spoke at a summit of the Shanghai Cooperation Organization, which includes China and four Central Asian nations.

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Jim Sinclair’s Commentary

"A new world economic order" is another way of saying goodbye to the dollar as the linchpin of business settlements.

Brazil’s Lula calls for new world economic order
Mon Jun 15, 2009 9:17am EDT
By Jonathan Lynn

GENEVA (Reuters) – Brazilian President Luiz Inacio Lula da Silva urged unions and workers on Monday to take advantage of the global financial crisis to help forge a new world economic order.

"I address myself now to the labor leaders," Lula told a global jobs summit at the International Labour Organization (ILO), a United Nations agency grouping governments, employers and worker representatives to promote good working conditions.

"This is an exceptional opportunity for all of you to think and develop proposals together with the employers and business leaders so that we can change definitely the relations between state and civil society and so that we can build our countries with much more fairness and much more solidarity," he said.

Lula said destabilizing surges last year in oil and commodity prices had been due to speculation.

"We cannot live with a financial system that speculates paper on top of paper without generating one single job, without manufacturing one screw, one shoe, one shirt, one tie," the former union leader told the conference to frequent applause.

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Jim Sinclair’s Commentary

You think that North Korea is screaming for attention and getting a busy answer on the world phone? What does a fellow who may not have all his paddles in the water do next?

DPRK threatens to launch pre-emptive strike against U.S

PYONGYANG, June 15 (Xinhua) — The Democratic People’s Republic of Korea (DPRK) has warned it would launch a pre-emptive attack against the United States.

Pak Jae Gyong, vice-minister of the DPRK People’s Armed Forces, made the remark at a mass rally that attracted some 10,000 people to denounce a newly endorsed U.N. Security Council Resolution, the official KCNA news agency said Monday.

"Under the present situation where the Korean People’s Army (KPA) is technically at war with the U.S. imperialists, and as the Armistice Agreement has lost its legal binding force, the KPA will promptly exercise the right to a pre-emptive strike to beat back the enemies’ slightest provocation," Pak said.

He threatened to deliver blows to the "vital parts of the U.S." and "wipe out all its imperialist aggressor troops no matter where they are in the world."

Meanwhile, Kim Ki Nam, secretary of the Central Committee of the Workers’ Party of Korea, told the rally that the U.N. resolution was "another grave provocation."

More…

Posted by & filed under In The News.

Dear CIGAs,

To sum up the day, there is no question that the Fed hit the panic button as the long bond fell to the 28 year up trend line. The reason the bonds came apart testing that level was the statement by Russia, China and Brazil that they wished to switch US Treasuries for IMF SDR bonds when, and if issued in size.

The Fed, in my opinion, bought the last 30 year auction, indicating to them the need to QE at a rate beyond your wildest imagination.

At the G8 yesterday it appears there was a request to attempt to reverse the Russian statement which was attempted by the Russian Finance minister. Actions however overcome statements. Russia, China and India reduced their purchases of US paper consistently in the past months of reporting.

June is historically a month of change. It appears the equity markets may have caught on to that. Gold will seek its low in this month, and the dollar its high. I suspect neither of those are far off in time or price.

 

Jim Sinclair’s Commentary

You ask yourself, my God, what next? You get your answer quite quickly.

The next is worse than you can imagine in your wildest dreams. Can any part of this civil suit accusation really be true?

AIG lawyer: Ex-top exec plundered retirement plan
By MADLEN READ, AP Business Writer

NEW YORK – The former top executive of American International Group Inc. plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors Monday at the start of a civil trial. Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities.

"Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of the emotional state of the man who, over a 35-year-career, built AIG from a small company into the world’s largest insurance provider. He said the saga is a story of "anger, betrayal and cover-up."

Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for tens of millions shares to be sold from a trust fund. The fund was set up decades ago to provide incentive bonuses to a select group of AIG management and highly compensated employees that they would receive upon their retirement.

Wells showed the jury several clips of Greenberg speaking on videotape about the responsibilities of the trust fund. He called it Greenberg’s "videotaped confession."

Wells asked the jury to award AIG $4.276 billion and 185 million AIG shares.

Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because they were owned by Starr International, a privately held company he controlled.

More…

Jim Sinclair’s Commentary

Get this! Net foreign sales of US Treasuries were reported as if this is nothing much. A few more months and you can kiss the US dollar goodbye regardless of the algorithms.

The closely watched figure, excluding transactions that don’t occur on an open market, recorded net purchases of $11.2 billion in long-term U.S. securities after purchases of $55.4 billion in March, according to the monthly Treasury International Capital report, known as TIC.

It will take more than unified lies to hold the bond market after the third consecutive month of TIC increasing outflow. It will take QE at an unimaginable level.

This is a horrible report.

April Net Foreign Sales Of Long-Term US Secs $8.8B
* JUNE 15, 2009, 9:00 A.M. ET

WASHINGTON (Dow Jones)–Net foreign sales of long-maturity U.S. securities totaled $8.8 billion in April, following purchases of $36.5 billion the month before, according to a U.S. Treasury Department report released Monday.

Meanwhile, the report shows that China, Japan and Russia – three large purchasers of U.S. Treasurys – all trimmed their holdings of U.S. debt.

The monthly Treasury report highlights cross-border acquisitions of securities with maturities of more than one year including nonmarket transactions such as stock swaps and principal repayment on asset-backed securities.

The closely watched figure, excluding transactions that don’t occur on an open market, recorded net purchases of $11.2 billion in long-term U.S. securities, after purchases of $55.4 billion in March, according to the monthly Treasury International Capital report, known as TIC.

The report’s most comprehensive category, "monthly net TIC flows," includes nonmarket flows, short-term securities and changes in banks’ dollar holdings. This measure of net foreign capital outflow was $53.2 billion in April, versus an inflow of $25.0 billion the previous month.

More…

Jim Sinclair’s Commentary

You wanted change? Well you certainly are getting it.

I am delighted to be my age. My grandchildren will never have the opportunities that I have had. The people who brought you these problems are being put in charge of assuring it will not happen again.

Now that is a world class oxymoron.

Details Set for Remake of Financial Regulations
By DAMIAN PALETTA

WASHINGTON — President Barack Obama is expected Wednesday to propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch almost every corner of banking from how mortgages are underwritten to the way exotic financial instruments are traded.

At the center of the plan, which administration officials are referring to as a "white paper," is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies — much like the Federal Deposit Insurance Corp. does with failed banks — and create a new regulator for consumer-oriented financial products, according to people involved in the process.

The plan stops short of the complete consolidation of power that some lawmakers have advocated. For example, it will allow several agencies to continue supervising banks. It also won’t place specific limits on the size or scope of financial institutions, but it will make it much harder for large companies to be so overleveraged that they threaten the broader economy.

After Mr. Obama details his proposal, the process will quickly move to Capitol Hill, where Congress would have to pass legislation to enact the changes. Treasury Secretary Timothy Geithner is scheduled to appear before both Senate and House panels on Thursday, where he is likely to face questions and criticisms.

Lawmakers are expected to take issue with several of the plan’s more thorny issues, including how to create a system that won’t simply bail out large financial companies when they topple. Giving the Fed more clout — in light of recent criticism from lawmakers, both Republican and Democratic, of its secrecy and accumulation of power — will also be a controversial idea.

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Jim Sinclair’s Commentary

Here are the remarks made by the President of Russia and a Chinese representative prior to this weekend’s G8 get together.

It is remarkable to see the reversal from raging dollar bears to full and unquestioned confidence in the dollar. The whole world has fallen into the spin trap that has brought the financial disaster we live in now to you.

You can fool fools. You do not have to fool algorithms because they are foolish anyway.

You cannot fool us.

If every government on the face of the planet practices deception, the move will not only be out of dollars, but out of paper and into gold.

Stay the course. We will navigate for you.

This month will be a turning point in Gold and the financial sector.

Regards,
Jim

Medvedev: ‘Super Currency’ Should Replace Dollar
By HELENE COOPER
Published: April 2, 2009

LONDON — So much for that fresh start.

Barely 24 hours after announcing that Russia and the United States would cooperate on a variety of long-simmering issues, President Dmitri A. Medvedev of Russia reproposed a Russian idea that the United States had thought it had batted away: starting a new basket of strong regional currencies to replace the dollar as the world’s reserve currency.

In a speech before leaders here at the Group of 20 summit meeting, Mr. Medvedev said that the countries most responsible for the global economic crisis (read: the United States) are not taking their fair share of the burden for “macroeconomic policies” needed to fix the problem.

“On this basis we conclude that it would be wise to support the creation of strong regional currencies and to use them as the basis for a new reserve currency,” Mr. Medvedev said. “One could also consider partially backing this currency with gold.”

This is not the first time Russia has brought up the idea of replacing the dollar — it floated the idea two weeks ago, and a recent essay by a Chinese economic official said the same thing.

More…

Medvedev Questions Dollar’s Role as World Currency
By Lyubov Pronina

June 5 (Bloomberg) — Russian President Dmitry Medvedev questioned the U.S. dollar’s future as a global reserve currency and said using a mix of regional currencies would make the world economy more stable. Russia may consider ruble-yuan swaps.

The dollar “is not in a spectacular position, let’s be frank, and its prospects cause various questions as do the prospects for the global currency system,” Medvedev, who today hosts an international economic forum in St. Petersburg, said in an interview published by the Moscow-based Kommersant newspaper. Regarding the global financial system, “therefore our task is to make it more mobile and at the same time more balanced.”

Medvedev is expected to reiterate his call for creating a new world currency at the forum today in his keynote address on the first lessons of the global crisis. Russia’s president has called for creating regional reserve currencies as part of the drive to address the global financial crisis. Russia’s proposals for the Group of 20 meeting in London in April included the creation of a supranational currency.

It is too early to be fully optimistic that the global financial crisis is easing, Medvedev said in the interview. The most dramatic scenarios for a collapse haven’t occurred, he said.

More…

Can’t rely on the dollar, warns Medvedev
Reuters Posted: Sunday , Jun 07, 2009 at 0225 hrs IST

Russian president Dmitri A Medvedev, who rarely misses a chance to accuse the United States of causing the global financial crisis, told an economic forum on Friday that wobbly American financial policy had made the dollar an undesirable currency for reserves held by central banks. Russia, along with China and other nations, has floated the idea of forming a supernational currency to supplant the dollar, perhaps using the so-called special drawing rights units of the International Monetary Fund as a basis.

Given the weaknesses in the American economy, Medvedev said, relying on the dollar as extensively as is the case today could mean building a postcrisis financial system on legs of clay. Banks should look also at regional currencies, like the ruble, he said.

More…

China Takes Aim at Dollar
By ANDREW BATSON

BEIJING — China called for the creation of a new currency to eventually replace the dollar as the world’s standard, proposing a sweeping overhaul of global finance that reflects developing nations’ growing unhappiness with the U.S. role in the world economy.

The unusual proposal, made by central bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China’s increasingly assertive approach to shaping the global response to the financial crisis.

David Semple of Van Eck Emerging Markets Fund outlines opportunities in China’s real-estate and retail sectors, along with greater stability in Russia. But the situation in Eastern Europe is still uncertain. Polya Lesova reports.

Mr. Zhou’s proposal comes amid preparations for a summit of the world’s industrial and developing nations, the Group of 20, in London next week. At past such meetings, developed nations have criticized China’s economic and currency policies.

More…

China threatens ‘nuclear option’ of dollar sales
By Ambrose Evans-Pritchard
Published: 9:11AM BST 08 Aug 2007

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China’s "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

More…

China inoculates itself against dollar collapse
By W Joseph Stroupe

There is mounting evidence that China’s central bank is undertaking the process of divesting itself of longer-dated US Treasuries in favor of shorter-dated ones.

There is also mounting evidence that China’s increasingly energetic new campaign of capitalizing on the global crisis by making resource buys across the globe may be (1) helping its central bank to decrease exposure to the dollar, while (2) simultaneously positioning China to make much greater profit on its investment of its reserves into hard assets whose prices are now greatly beaten down, while (3) also affording it greatly increased control of strategic resources and the geopolitical clout that goes with it. This is turning out to be a win-win-win situation for China as it capitalizes upon the important opportunities afforded it by the present global crisis.

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Jim Sinclair’s Commentary

Who says the G8 has not accomplished anything? Look at the coordinated SPIN.

"The US dollar’s position as the world’s reserve currency isn’t under threat. Our trust in US Treasuries is absolutely unshakable.”
–Japanese Finance Minister Kaoru Yosano – June 10, 2009

On top of those two, German Finance Minister Peer Steinbrueck was reported to “not be concerned” with the Euro’s value against the US Dollar and IMF Managing Director Dominique Strauss-Kahn “doesn’t see a weak US Dollar”.

Who said the fellows protest too much?

Here are the fundamentals:

Sinclair4

Posted by & filed under In The News.

Dear CIGAs,

The G8 is yesterday. Brics are today. There is no desire or means to stop the hyperinflation on its way because of quantitative easing.

G8 Can’t Stop Future Inflation
JUNE 14, 2009…3:22 AM

There are many mysteries to life.  One of them is NOT how we got in this economic mess.  Anyone looking at the history of finance can see that credit bubbles always lead to crashes that we call ‘depressions’.  And that using credit to finance wars is the #1 way of creating a credit bubble.  All nations don’t need to go to war, to create a global credit bubble.  Generally speaking, when major global empires go to war, they create global credit bubbles if they refuse to tax their imperial core to pay for wars.  And generally speaking, no empire ever dares to tax the populace at home, for international wars.  So they create immense amounts of credit based on future taxes.

The problem with all this is, if a major empire doesn’t tax its populace while going to war, if these wars never end or take forever to end like the Vietnam War or the Cold War, these quickly build up immense mountains of IOUs.  So, this weekend, the G8 nations are meeting yet again, in desperation, trying to figure out how to have the pre-2008 status quo while changing nothing essential.  Let’s look at some of the news stories before we visit the Bank of International Settlements:

Bank Rescue Costs EU States $5.3 Trillion, More Than German GDP – Bloomberg.com

European governments have approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, to support banks during the credit crunch, according to a European Union document.

Germany, the world’s #2 or #3 world trade profit center, next to Japan and China, is floundering.  This trio of nations depends very much on the US sucking down manufactured goods.  This keeps them afloat.  This has dried up nearly to $0 profits over the cost of importing raw materials.  Throwing $5.3 trillion down the rabbit hole to keep the European banking and trade system going is an immense sacrifice and one that may not pay off, as far as Germany is concerned.

The U.K. pledged 781.2 billion euros ($1.1 trillion) to restore confidence in its lenders, the most of any of the 27 EU members, according to a May 26 document prepared by officials from the European Commission, the European Central Bank and member states and obtained by Bloomberg News. Denmark, where 13 of the country’s 140 banks were bailed out by the central bank or bought by rivals last year, committed 593.9 billion euros.

The measures, designed to save banks and revive economic growth, surpass Germany’s $3.3 trillion economy, the region’s biggest. They also helped to widen the Euro area’s budget deficit to the most in three years in 2008. The commission, the EU’s executive arm, is seeking to create the first EU-wide agencies with rule-making powers to monitor risk in the economy after the crisis led to $460 billion of losses and writedowns across the continent, according to data compiled by Bloomberg.

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Jim Sinclair’s Commentary

2012 is coming up faster than you think. Are you ready for the 2nd coming of the leveraged debt disaster?

Recovery? You have to be kidding. It must be inflated away. There is no other political possibility. The high yield bond market equals the junk bond market

This is primarily an American problem. Think of the dollar impact.

That worrying wall of debt
By Vipal Monga
Published June 5, 2009 at 11:59 AM

The leveraged loan market got accustomed to big numbers over the past decade. There’s $3.6 trillion, the amount of leveraged loans made since 2000, according to Thomson Reuters’ Loan Pricing Corp. There’s 735-fold, the amount of growth between 2003 and 2007 in the volume of collateralized loan obligations — the funds that helped fuel the loan market’s surge after the tech and telecom bust of 2001. And there’s $375 billion, the amount of bank debt used to fund leveraged buyouts completed between 2005 and 2007.

But right now, the leveraged loan market is fixated on one number: $430 billion, the amount in leveraged loans due to mature between 2012 and 2014. Despite the big numbers of the past, this might be simply too big. Indeed, the $430 billion figure is already worrying lenders, borrowers and loan-market investors alike as they struggle with the possibility that a large portion of those loans will neither be repaid nor refinanced, raising the specter of a wave of defaults among the debt-fueled LBO borrowers of 2005 through 2007.

“People are in a panic about it right now,” says one lawyer who specializes in corporate finance. “There’s not enough capacity to refinance this.”

Is the panic justified?

Standing where we are today, it certainly seems as though the looming maturities will break upon an already fragile market, causing further damage and potentially extending the crisis. But just how serious a threat the maturities pose is an open question. Markets are dynamic, ever-evolving systems, and it’s virtually certain the conditions that exist today will have changed substantially, even fundamentally, tomorrow. As Alexander Gendzier, capital markets lawyer at Jones Day, says, “2012 is a couple of lifetimes from where we are today.”

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Jim Sinclair’s Commentary

The New England theme park has a new theme, and that is the GM/Chrysler theme of “Belly Up.” It certainly can’t be an embarrassment today. They asked Washington for TARP money but it was discovered they were a bunch of Republicans and therefore deemed too small to matter. Thanks to CIGA Ken for the cartoon.

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Theme park firm Six Flags files for bankruptcy
Sun Jun 14, 2009 11:25am EDT

CHICAGO (Reuters) – Six Flags Inc, the world’s largest regional theme park company, said on Saturday it filed for bankruptcy protection.

The New York-based company operates amusement parks across the United States, Canada and Mexico.

Six Flags said it filed for Chapter 11 protection with the unanimous support of its lenders’ steering committee.

The plan will result in a deleveraging of the company’s balance sheet by about $1.8 billion, as well as the elimination of more than $300 million in preferred stock obligations.

“The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets,” Mark Shapiro, the chief executive of Six Flags, said in a news release.

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Jim Sinclair’s Commentary

To those members of the public who insist they can trade Gold and low cap Gold shares to insure themselves in this crisis, may you break even when the dealings are done in your Zero Sum Game

Royal Canadian Mint Fears ‘Run’ On Gold
by Eric deCarbonnel

AFP reports that mounties to probe Canada’s missing gold.
(emphasis mine) [my comment]

Mounties to probe Canada’s missing gold
June 10, 2009

OTTAWA (AFP) — The Canadian government is investigating the disappearance of an amount of gold and precious metals from the Royal Canadian Mint and has asked the federal police to probe a possible heist.

Minister of State for Transport Rob Merrifield said Tuesday he called in the Royal Canadian Mounted Police (RCMP) to conduct a “full investigation.”

External auditors had been ordered to investigate a discrepancy between the mint’s 2008 financial accounting of its precious metal holdings and its actual stockpile. Many had expected the audit would point to sloppy bookkeeping.

The investigation was ordered after mint officials said the audit would not be able to reconcile the discrepancy.

“As soon as they instructed me this morning that it looked like the audit wasn’t going to tell us everything we need to know and be able to rectify the numbers, I thought it was important to bring the RCMP in,” Merrifield said.

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Jim Sinclair’s Commentary

No regime change in Iran will slow growing tensions.

Poll: Half of Israelis back bombing if needed to stop Iran nukes

JERUSALEM (CNN) — Roughly half of Israelis support bombing Iran’s nuclear facilities if international efforts fail to stop the Islamic republic from developing nuclear weapons, according to a Hebrew University poll released Sunday.

Some 52 percent of Israelis say the country should bomb Iran’s nuclear reactor, while 35 percent are against, the poll found. The margin of error in the poll of Israelis is 4.5 percentage points.

Palestinians are somewhat more evenly divided, with 43 percent saying a nuclear Iran would be good for the Arab world and 33 percent saying it would be bad, according to the Palestinian Center for Policy and Survey Research in Ramallah, which conducted the poll along with Hebrew University. The margin of error for the Palestinian sample is 3 percentage points.

Hebrew University released the poll shortly before Israel’s Prime Minister Benjamin Netanyahu was due to make what he called a major speech to lay out his plan for the country’s peace and security.

“We want to achieve peace with the Palestinians and with the countries of the Arab world, while attempting to reach maximum understanding with the United States and our friends around the world,” Netanyahu said on June 7 in announcing the speech. “My aspiration is to achieve a stable peace that rests on a solid foundation of security for the State of Israel and its citizens.”

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Posted by & filed under In The News.

"The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it."
— Thucydides, 471 B.C.

Dear CIGAs,

We have come a long way thanks to our leaders of industry and financial paper shuffling.

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‘A RECIPE FOR DISASTER’
by Egon von Greyerz

Take the following ingredients:

A banking system which is on the verge of collapse
Add a few $ trillion of government liquidity and guarantees
Inject $ 100’s of billions in loans and capital
Keep all the bank management that have caused the crisis
Pay them astronomical bonuses because otherwise they might be snapped up by a
bankrupt competitor

You may view the latest post by clicking here…

Posted by & filed under In The News.

Jim Sinclair’s Commentary

Here is the best advice I know of for those that insist on TRADING EVERYTHING ALWAYS:

Study these lyrics, and if you are really good at trading you will break even.

Trading is a zero sum game. You only can win a zero sum game by quitting.

The Gambler
by Kenny Rogers

On a warm summers evenin on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin out the window at the darkness
til boredom overtook us, and he began to speak.

He said, son, Ive made a life out of readin peoples faces,
And knowin what their cards were by the way they held their eyes.
So if you dont mind my sayin, I can see youre out of aces.
For a taste of your whiskey Ill give you some advice.

So I handed him my bottle and he drank down my last swallow.
Then he bummed a cigarette and asked me for a light.
And the night got deathly quiet, and his face lost all expression.
Said, if youre gonna play the game, boy, ya gotta learn to play it right.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

Now evry gambler knows that the secret to survivin
Is knowin what to throw away and knowing what to keep.
cause evry hands a winner and evry hands a loser,
And the best that you can hope for is to die in your sleep.

So when hed finished speakin, he turned back towards the window,
Crushed out his cigarette and faded off to sleep.
And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count you r money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

Jim Sinclair’s Commentary

To clear up the arguments, the IMF bonds to be bought by Russia, China, Brazil, India and others will be SDR based instruments and NOT dollar denominated. When the word swap is used by the BRUC nation that means give their treasury instruments to the IMF and take SDR bonds in exchange.

The new instruments are a basket of currencies. That is about as dollar negative as it gets.

IMF Bonds Are Coming Soon, but You Won’t Be Able to Buy Any
JUNE 1, 2009, 5:00 AM ET
By Bob Davis

The International Monetary Fund is putting final touches on its plans to issue its first bonds. Russia has already said it would buy $10 billion of the bonds, which would be priced in the IMF’s quasi-currency, “special drawing rights.” SDRs are a basket of currencies consisting of the euro, yen, pound sterling and U.S. dollar. As of Friday, 1 SDR equals $1.55.

China, Brazil and India also have said they are interested in buying IMF bonds, with China likely to purchase more than $20 billion of instrument. The IMF wants to issue bonds as a way to build up its lending war chest as the global economic nosedive continues.

But don’t start lining up at the IMF to buy some yourselves. Only the IMF’s 185 member nations and some central banks will be eligible to purchase them and trade them — among themselves. Some at the World Bank worry that the IMF bonds might push up borrowing rates somewhat for the Bank, though IMF officials doubt the IMF bond issuance will be large enough to affect World Bank borrowing costs much

And don’t expect to see a physical bond certificate or coupons. The IMF isn’t designing a paper bond with some fancy lettering or a picture of, say, the IMF headquarters or John Maynard Keynes. All the transactions will be handled electronically.

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Jim Sinclair’s Commentary

It always starts on the West Coast and moves East. Always!

California nears financial "meltdown" as revenues tumble
By Jim Christie – Thu Jun 11, 12:15 pm ET

SAN FRANCISCO (Reuters) – California’s government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state’s controller said on Wednesday.

Underscoring the severity of California’s cash crisis, Controller John Chiang, who has previously warned the state’s government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.

Additionally, the revenues of the government of the most populous U.S. state fell short of estimates in Schwarzenegger’s budget plan by $827 million, Chiang said.

He warned California’s state government is speeding toward a financial disaster unless officials act urgently to balance its books.

"Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government," Chiang said in a statement.

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Jim Sinclair’s Commentary

You want to know the truth?

– Annual Retail Sales Plunge Worst of Post-World War II Era 
– May "Core" Monthly Retail Sales Gained 0.15% versus 0.46% Total 
– Corrected Merchandise Trade Data Added $20 Billion to 2008 Deficit 
– Annual Surge in Gross Federal Debt Nears $2 Trillion, Spiking Treasury Yields 
http://www.shadowstats.com/ (only by subscription)

Two very important few liners:

The Fed defends the long term up trend line today on long bond issue using QE at today’s auction. That 28 year long bond up-trend-line will be defended by the Fed no matter the cost. I believe they would buy one trillion if they need to.

The World Health Organization declares a Flu Pandemic. Nobody really cares except those that will die in the Fall. This Flu will cull the gene pool. Anybody hear from the scientist that said this was a lab escape pandemic?

 

Jim Sinclair’s Commentary

Sent in from a CIGA: "I only trust the Bank of Myself for my Gold and Silver!

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Jim Sinclair’s Commentary

The US dollar is at .7938. Yesterday it was well over .8100. Currencies, supposedly storehouses of value, are not supposed to trade like pork bellies. If you cannot see the hand writing on the wall, the spinmeisters have blinded you.

Mr. Fred sees it all clearly. Gold is going to $1650 and beyond. The US dollar has lead weights on it and is going to .7200 – .6200 and .5200.

Do not join the madness. Stay the course and keep your insurance!

Jim Sinclair’s Commentary

This is getting hot. Who has ever considered chasing the Fed for wrong doing at this level?

This is modestly dollar negative and certainly not dollar positive. The reputation of management is a criterion in currency value.

Lawmakers Order Fed to Relinquish Merrill Documents
By Amit R. Paley
Washington Post Staff Writer
Wednesday, June 10, 2009

A congressional oversight committee issued a subpoena yesterday to force the Federal Reserve to turn over internal documents related to Bank of America’s acquisition of Merrill Lynch, part of a growing investigation into whether government officials pressured the bank to withhold details about the deal from investors.

The subpoena, which was issued by the House Oversight and Government Reform Committee, is highly unusual and the first issued by the panel this year. It comes after the Fed refused to send the committee internal e-mails and notes related to its role in the purchase.

A Fed spokesman said the central bank was already complying with the subpoena. The agency had previously allowed congressional investigators to review 6,000 pages of documents but would not give them copies because the documents were of "a confidential and supervisory nature," the spokesman said.

In written testimony prepared for a committee hearing tomorrow, Bank of America chief executive Kenneth Lewis says he informed Treasury and Fed officials that he "had concerns about closing the transaction" in mid-December after he "became aware of significant, accelerating losses at Merrill Lynch."

"At that time, we considered declaring a ‘material adverse change,’ which as a matter of contract law can, if upheld, allow an acquirer to avoid consummating a deal," Lewis said in the testimony, which was obtained by The Washington Post. "Treasury and Federal Reserve representatives asked us to delay any such action, and expressed significant concerns about the systemic consequences and risk to Bank of America of pursuing such a course."

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Jim Sinclair’s Commentary

Alt A mortgages are hanging out to dry. They were in the main obtained on a declaration of assets paying interest only. Now they are resetting.

Foreclosure crisis spreads from subprime to prime mortgages
By Stephanie Armour, USA TODAY

The pace of prime borrowers going into foreclosure is accelerating, especially in states with mounting unemployment or property values that saw a big run-up during the housing boom.

It’s a marked shift from earlier this year, when foreclosures were driven by defaults on subprime loans. And it has major implications — ravaging the credit scores of borrowers who once had unblemished records and dragging down property values in more affluent neighborhoods.

It also threatens to undermine the housing recovery.

"It’s definitely a concern," says Brian Bethune at IHS Global Insight. "(Unemployment) is a major driver of foreclosures, and it will frustrate the housing recovery process."

In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4% of prime mortgages were seriously delinquent, more than double the 1.1% at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

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Jim Sinclair’s Commentary

A Federal organization threatening a Federal organization at this level in the midst of crisis conditions that are barely camouflaged has more than justice at its foundation.

Investigators say Fed threatened bank CEO
By ANNE FLAHERTY, Associated Press Writer
Wed Jun 10, 7:35 pm ET

WASHINGTON – The Federal Reserve threatened to force the ouster of Bank of America CEO Kenneth Lewis if he didn’t follow through with plans to buy Merrill Lynch & Co., Republicans said Wednesday after reviewing internal documents.

Republicans also said there was evidence that the government tried to restrict information related to the merger from being publicly released.

However, none of the documents showed that the government explicitly instructed Bank of America to hide Merrill Lynch’s losses from shareholders, they said.

The House Oversight and Government Reform Committee is investigating claims that top government officials, including then-Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, urged Lewis to go through with the acquisition and not disclose to shareholders the details of Merrill Lynch’s deteriorating financial state.

Lewis was scheduled to testify on Thursday before the panel, which is chaired by Rep. Edolphus Towns, D-N.Y.

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Jim Sinclair’s Commentary

They shot a killer WHAT? Shoot my dog and it is instant WAR.

City of Blue Ash Police Department
4343 Cooper Rd
Blue Ash, OH 45242
(area code 513)
Main: 745-8555
Fax: 745-8598

Chihuahua is shot by police
11/06/2009

A family have slammed police who failed to subdue their pet Chihuahua with a Taser stun gun – then shot him dead.

The dog, called Jack, escaped from their garden and bit the hand of an officer who caught him.

Owner Sharon Bullock said: "It is heartbreaking. He wasn’t vicious."

Her husband Scott said: "Two grown men that can”t gather up a 5lb dog – and they’re trained police officers…it’s ridiculous."

Police in Blue Ash, Cincinnati, said the officers acted according to rules.

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Jim Sinclair’s Commentary

Think about the outrageous implications if these are real! It is even more so than if they are fake!

US government securities seized from Japanese nationals, not clear whether real or fake

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

Bonds worth US$ 134.5 billion are seized. This is the largest financial smuggling case in history. But are they real? Concern over ‘funny money’ or counterfeit securities is spreading in Asia. The international press is silent.

Milan (AsiaNews) –  Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

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