Posts Categorized: Jim’s Mailbox

Posted by & filed under Jim's Mailbox.

Geithner’s Stress Test "A Complete Sham," Former Federal Bank Regulator Says
Posted Apr 06, 2009 10:00am EDT by Aaron Task

GeithnerVid

The bank stress tests currently underway are “a complete sham,” says William Black, a former senior bank regulator and S&L prosecutor, and currently an Associate Professor of Economics and Law at the University of Missouri – Kansas City. “It’s a Potemkin model. Built to fool people.” Like many others, Black believes the “worst case scenario” used in the stress test don’t go far enough.

More…

 

Jim,

Today you challenged any of your readers to present a "practical method of draining $20 trillion from the international monetary system.” You offered one ounce of gold to "that person able to present a PRACTICAL method, not academic horseshit that draining this mad monetary expansion is possible."

Based on the illustration below, God has accepted your challenge:

OTC DERIVATIVES CAN BE DRAINED INTO OBLIVION

clip_image001

"Black holes are places where ordinary gravity has become so extreme that it overwhelms all other forces in the Universe. Once inside, NOTHING can escape a black hole’s gravity." – not even OTC DERIVATIVES!!

More…

All the Best,
CIGA Wallace

PS – God said to tell you he’ll accept an I.O.U. for the one ounce of gold!

Jim,

Spin and currency devaluation are used to create the illusion of endless economic prosperity.

“You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.”

Updated through March 2009

The global quantitative easing (currency devaluation) can influence nominal returns as depicted by the U.S. dollar priced Large Cap Stocks Total Return Index (LCSTRI) and Long-Term Government Bond Total Return Index (LTGBTRI) charts. Unfortunately this influence on this trend is largely an illusion during periods of excessive currency devaluation. When LCSTRI and LTGBTRI are priced in a constant currency such gold, the illusion of nominal returns provided by quantitative easing (global currency devaluation) is revealed by sharp down trends. The downtrends reveal the consequences or price of global quantitative easing.

clip_image002

 

clip_image004

 

clip_image006

 

clip_image006[1]

 

Stand Tough CIGAs!

CIGA Eric

Jim,

The assumption is that the government reaction must produce inflation eventually. You’ve commented that it cannot be drained. I don’t recall what you were referring to.

Could you comment on the website about the following? Of course they may not drain, BUT the issue is whether they can or not.

Shelly

Bernanke: Many Fed lending programs extend credit primarily on a short-term basis and thus could be wound down relatively quickly. In addition, since the lending rates in these programs are typically set above the rates that prevail in normal market conditions, borrower demand for these facilities should wane as conditions improve

Bernanke: The Federal Reserve can conduct reverse repurchase agreements against its long-term securities holdings to drain bank reserves or, if necessary, it could choose to sell some of its securities. Of course, for any given level of the federal funds rate, an unwinding of lending facilities or a sale of securities would constitute a de facto tightening of policy, and so would have to be carefully considered in that light by the FOMC

Click here to read the full speech…

Dear Shelly,

Ok, you tell me by what miracle of divine intervention are we going to drain $12.7 trillion in the US alone out of the WORLD monetary system.

There is no practical system to do this. There will be none invented. It simply cannot happen and the consequences will result.

Are you going to ask the shadow trillionaires to return it?

Are you going to drain it from your Fed Member Banks?

Is Goldman going to give it back along with AIG if they are even still here?

Are you dreaming?

This is how the Sheeples are lulled to sleep to today throw away their lifelines.

I have to admit that I am getting so strained at holding the same hands all the time.

The Sheeple must start to think and simply not just feel fear and greed with my email address and phone number on their computerized Rolodex. Shelly, if you in your heart really believe you know more than I do and that all this monetary stimulation has any PRACTICAL method of draining please sell all your gold positions on the next rise, which is certain to come. That will save me the 30 minutes it takes to think out these answers and compose them.

I challenge anyone to present a practical method of draining what will be more than $20 trillion from the international monetary system. Hell, I challenge anyone to come up with a practical plan to drain even half of it I underscore practical because we are presently dying of lies, academic impracticalities and outlandish spin. One ounce of gold will be delivered to that person able to present a PRACTICAL method, not academic horseshit that draining this mad monetary expansion is possible.

Keep in mind the concept of "PRACTICAL," which means it does not kill any incipient recovery also due to come some day, somewhere.

Jim

Posted by & filed under Jim's Mailbox.

Dear CIGAs,

The big lie that dollar bulls would love to make permanent is the dollar is a refuge place depository. Expect more attempts to bull the dollar as the world implodes financially and geopolitically. None of these efforts will succeed, but it will frustrate the hell out of realists while convincing the Sheeples.

Hey Guys,

Bear market rallies in the dollar have ended with the violation of the PUT on the weekly chart. This is confirmed by the marginal money flows in the US dollar Index contract. A move called three drives to a top tend to reflect inflection points in trends. The UDX is in the process of completing the third drive. Once the third drive is complete, it will be tough to pressure gold.

clip_image002

 

clip_image004

 

clip_image006

 

Regards,
CIGA Eric

Hi Jim,

Not sure if you saw Bill M’s interview with William K Black this Friday.

Best to you,
CIGA Bernie

The Best Way To Rob A Bank Is To Own One
By Bill Moyers
Video – Audio and Transcript
April 3, 2009

BILL MOYERS: Welcome to the Journal. 
For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you’re about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s.

WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud.

More…

Bernie,

Although it is good, Mr. Moyers has no clue what really happened.

You need 50 years of hands on experience not only in general markets, but in arbitrage to understand the complex nature of these instruments of mayhem.

I sometimes wish I did not have those qualifications. As a result, I am delighted to be 68.

Jim

Posted by & filed under Jim's Mailbox.

Dear Jim,

Don’t know if you’ve seen this one yet.

Regards,
CIGA Pedro

"… if we did discover that Deutsche Bank got its gold from the ECB, one glaringly strong inference arises. When a major derivatives dealer goes begging for gold, to the ECB, it is very strong circumstantial evidence that not enough physical gold is available for purchase on the OTC wholesale market."

More…

Dear Pedro:

You are one of the few that really understand this situation. See my posting on it today.

Regards,
Jim

A letter to a Friend

A few thoughts:

1. All hyperinflations are currency events, not economic events.

2. All hyperinflations have occurred in what can be called deep deflationary depressions.

3. Quantitative Easing, the wanton printing of money, has been the key to all hyperinflations in history, no exceptions.

4. The recent example of Zimbabwe certainly occurred in the deepest economic doo-doo ever.

5. Don’t mix up hyperinflation with a deflationary business environment as mutually opposed when they are locked in step."

Jim Sinclair’s Commentary

My former partner and floor trader Yra Harris in today’s discussion:

“The world sits on a conundrum of epic proportions – Quantitative Ease or Perish

Where does this lead us in the trading realm? Well if the Fed goes to full QE, the dollar will be sold and the long end of the debt market will rally (I prefer the tens and possibly to be long the tens and short the twos as many traders have steepeners on and although the steepeners in the longer term make perfect sense and will be right, in the short term the pain will be real.) The gold will rally on a QE but I think the currencies will outperform in the near term and gold will truly not get its legs until the ECB joins the QE party. Then it will be official that most fiat currencies will be under stress against the "barbarous relic." Again, I must stress the gun is to the Fed’s head to prevent the onslaught of a deflationary spiral at all costs. As my friend Bernard Connolly continues to allude to, what is the real rate of return on long-term debt and if it is as high as the incipient deflation suggests, the Fed must begin to act and quickly. If they do, the equities worldwide will get the rally that many are looking for but its duration will depend on whether or not the inflation view takes hold. If not, the equity rally will be short-lived. To complete the global-macro picture, a depreciating dollar prompted by QE will give a lift to the deleveraged commodity markets as money seeks out anything of value and believes that depressed commodities offer good returns and have the need TLC (transparency, liquidity, and creditworthiness) to support an investment. The commodity markets will get an added push if the Europeans join the QE party.”

–Yra Harris

Hi Jim,

Remember the big stink about the strong durable goods orders?

I saved the linked in my Facebook group: Higher durable goods orders augur well for economy….

While the world focuses on the shock and awe of G20, data is quietly revised. That’s the beauty of spin – it assumes people are too intellectually lazy to notice.

Manufacturers’ New Orders: Nondefense Capital Goods Excluding Aircraft have already been revised lower. The February and January 2009 new orders have been revised lower by $302M and $517M respectively. The first revision occurs only a week after the highly praised and heavily spun headline release on March 25th. Remember the light at the end of the tunnel?

This is likely one of many future revisions.

Click here to view the source…

Best Regards,
CIGA Eric

Dear Mr. Sinclair,

On days like yesterday, maybe a new icon on the website would alert the more jittery gold bugs appropriately. See my suggestion below.

Warm regards,
CIGA Annette

image

 

Hi Jim,

Is my conclusion correct of the g20 world phony fix that according to them I should not see another bailout, stimulus package, government program like tarp etc.? I heard the consensus was that they will not need to devalue their currencies and $1 trillion has fixed it all.

CIGA BJS

Dear BJS,

Yes and if you believe this put a tooth under your pillow for the tooth fairy. Note the BS meter above from CIGA Annette.

Jim

Posted by & filed under Jim's Mailbox.

Dear Jim,

Credit Suisse says that most economists on the street which have been ridiculously bearish on China, and Wall Street as well as brokers worldwide will have to change their tune. This is only happening after China has rallied 30% in the last few months. China has bought massive amounts of industrial minerals worldwide and will buy gold if and when the IMF sells. China’s GDP will grow at least 8% in 2009 and faster in 2010. This leaves the rest of the shrinking developed world in the dust.

Respectfully yours,

Monty Guild
www.GuildInvestment.com

Dear Jim,

What a mess. You called it before with your brilliant Formula while most others were calling for a recovery in 6 months! The 20 trillion (yikes) estimate looks well within easy reach you and Monty predicted…

Best,
CIGA BT

Financial Rescue Nears GDP as Pledges Top $12.8 Trillion (Update1)
By Mark Pittman and Bob Ivry

March 31 (Bloomberg) — The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.

More…

Here is more of what you have been warning us CIGAs for a long time. Social security is soon to be obsolete…

Recession Puts a Major Strain On Social Security Trust Fund
As Payroll Tax Revenue Falls, So Does Surplus
By Lori Montgomery
Washington Post Staff Writer
Tuesday, March 31, 2009; Page A04

The U.S. recession is wreaking havoc on yet another front: the Social Security trust fund.

With unemployment rising, the payroll tax revenue that finances Social Security benefits for nearly 51 million retirees and other recipients is falling, according to a report from the Congressional Budget Office. As a result, the trust fund’s annual surplus is forecast to all but vanish next year — nearly a decade ahead of schedule — and deprive the government of billions of dollars it had been counting on to help balance the nation’s books.

While the new numbers will not affect payments to current Social Security recipients, experts say, the disappearing surplus could have considerable implications for the government’s already grim financial situation.

More…

Hey Dan,

I thought you and Jim would like to see this.

Thanks for all you guys do for us!

CIGA Brian

Déjà Vu?
Chicago Tribune, 1934. Has anything changed?

Thanks Brian

That is amazing! It is EXACTLY the same as today… Thanks for sending this incredible cartoon. I will pass it along to Jim!

Sincere best,
Dan

Jim,

Taking delivery is working.

CIGA Eric

Dear Eric,

If there is any sense to this article then the gold is borrowed by the short, not by the Comex.

Regards,
Jim

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

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

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

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

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

More…

Posted by & filed under Jim's Mailbox.

Hey Jim,

You posted a link: Click here to view the link… 

ADP is wildly inconsistent, but Challenger, Grey, and Christmas Announced Layoffs time series is not. Announced layoffs grew 103% year-over-year (YOY) in March. This growth rate represents only a slight downtick from the December 2008 high of 132% YOY. Announced layoffs are soaring. This means it will be increasingly difficult for the birth/death model to hide the magnitude of the job loss.

Regards,
CIGA Eric

Dear Mr. Smith,

Thank you for your comment on the uptick rule. The Commission has announced that it will consider proposals relating to short sale price tests at an open meeting scheduled for April 8, 2009. The meeting will be webcast from the SEC’s website at www.sec.gov/news/openmeetings.shtml.

Should the Commission vote to publish a proposal for comment, a comment file for the rulemaking will be created once the proposal is published by the Commission. Your comment will be placed in that file.

Sincerely,

RICHARD G SUGARMAN
Office of Investor Education and Advocacy
U.S. Securities and Exchange Commission
(202)551-6551

Jim,

Only a fool would be without physical Gold in hand now with so many geopolitical challenges and paper currency’s hollow value.

Regards,
CIGA Pedro

"In an interview conducted shortly before he was sworn in today as prime minister of Israel, Benjamin Netanyahu laid down a challenge for Barack Obama. The American president, he said, must stop Iran from acquiring nuclear weapons—and quickly—or an imperiled Israel may be forced to attack Iran’s nuclear facilities itself."

More…

Dear Green Hornet,

The key to the transmission of latent money creation such as the payment to AIG in bailouts which moves into AIG from bailout schemes out the back door to winners on the toxic OTC derivatives is velocity of money. As velocity of money increases, the latent M3 becomes present time M3.

Normally it takes a recovery in business activity to stimulate the Velocity of Money, which is an engine of inflation price wise.

These are not normal times.

Never has any government dared to create in one year monetary inflation equal to the GDP of that country. This is going to be an accomplishment of the USA in this year.

Every hyper-inflation that has ever occurred has happened when Velocity of Money was stimulated by a loss of confidence in the currency unit in the midst of a period of horrid business activity.

This is what will bring hyperinflation to the US dollar and price inflation in the midst of a deflationary depression. There is no means to drain this liquidity regardless of what the Fed would have you believe. There is no exit on this Highway to Hell as the president of the EU labelled it.

From Wikipedia:

* M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.

* M1: The total of all physical currency part of bank reserves + the amount in demand accounts ("checking" or "current" accounts).

* M2: M1 + most savings accounts, money market accounts, retail money market mutual funds,and small denomination time deposits (certificates of deposit of   under $100,000).

* M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.

When the Federal Reserve announced in 2005 that they would cease publishing M3 statistics in March 2006, they explained that M3 did not convey any additional information about economic activity compared to M2, and thus, had not been used in determining monetary policy for years. Therefore, the costs to collect M3 data outweighed the benefits the data provided.[12] Some politicians have spoken out against the Federal Reserve’s decision to cease publishing M3 statistics and have urged the U.S. Congress to take steps requiring the Federal Reserve to do so. Congressman Ron Paul claimed that "M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation."[17] Some of the data used to calculate M3 are still collected and published on a regular basis.[12] Current alternate sources of M3 data are available from the private sector[18].

More…

Regards,
Jim

Dear Jim,

A lot of people think there will be a recovery. They also think it can’t get any worse!

Banks walking away from foreclosures are pretty serious. My heart bleeds for these people losing all they own…

You have been warning people since 2002 to be defensive, get rid of debt and buy physical gold! Too bad more did not listen. I fear buying right now is like catching a falling safe!

Best,
CIGA BT

Banks Starting to Walk Away on Foreclosures
By SUSAN SAULNY
Published: March 29, 2009

SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

More…

Posted by & filed under Jim's Mailbox.

Jim,

This is very disturbing. You may have seen this already but it is a tutorial that explains how the toxic assets are taken off of the bank’s books and given to the American citizen via the FDIC guarantee. The real kicker is the banks can do all this by purchasing the toxic assets from themselves.

CIGA, Eddie Hoff

Jim,

This plan, if undertaken globally, will undermine or completely derail any US dollar swaps (with IMF – surely a topic that is going to be discussed at G-20) with Nations that are undergoing dollar squeezes. These Chinese are smart and it looks like their "sales force" is just getting ramped up.

CIGA Danny S.

China and Argentina in currency swap
By Jude Webber in Santiago
Published: March 31 2009 01:25 | Last updated: March 31 2009 01:25

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

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

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

Dear Danny,

Quietly and without fanfare the mechanisms gather at the sequential death of the US dollar. Gold is the only lifeline as what is below is a long term form of expansion of one’s monetary policy.

Respectfully yours,
Jim

Hello Mr. Sinclair,

As has been mentioned before, commercial real estate is one of the next shoes to drop. Here is an example of Boston’s tallest building that sold for 50% less than the original purchase price.

Kindest regards,
CIGA Jeff

Hancock Tower has new owner
By Thomas Grillo
Tuesday, March 31, 2009

NEW YORK CITY – The Hub’s John Hancock Tower, New England’s tallest skyscraper, sold at auction this morning for $660.6 million, about half what it sold for nearly two years ago.

Normandy Real Estate Partners, which owns two buildings on Summer Street in Boston, and Five Mile Capital Partners combined to make the winning bid for the Back Bay trophy property.

The companies agreed to pay $20.1 million for the mezzanine debt on the 60-story building and assume the mortgage of $640.5 million, according to a statement issued at the auction.

More…

Posted by & filed under Jim's Mailbox.

Dear CIGA Green Hornet,

The Guarino article on Black Scholes model, derivatives in general and market forecast stands on a premise that is totally incorrect.

This article can be characterized as the “Black Hole” thesis. It says that all the bailout funds disappear into some loss entity within the balance sheet of the losing side of the derivative.

If that thesis does not hold then it shifts to a concept that says all these funds revolve back to the Fed as a practice of holding all the free reserves of member banks.

The writer somehow assumes that Motors, AIG and the like are members of the Federal Reserve system.

This writer entirely ignores the swaps done by the Fed to bail out non USA entities by providing dollars to other central banks who in turn use those funds to bail out their own non USA entities.

The writer would be better advised to use the statistic that can be obtained by subscription to www.shadowstats.com.

The writer should know that a loser on a derivative does not hold the funds on account for the winner.

The writer would be well advised to study the history of hyperinflation that always occurs directly in the middle of what appears to be his definition of deflation.

The writer would also be well advised to study what happens to the velocity of money in every hyperinflation scenario as they all occur in a depression economic setting. Velocity in these circumstances explodes. Hyperinflations are currency events and not economic events.

Every cent of bailout funds lies latent in the economy in the hands of the new shadow trillionaires. These shadow trillionaires now have a serious problem. Their enormous wealth is all paper.

The bailout money in all these entities comes in the front door of the loser and goes immediately out the back door to the winner on the derivative. The firms identified as the winner is not the principle on the trade. It is the broker only. You will never know who the principle is, ever.

There is no Black Hole that devours all the bailout money nor does it flow back into the Federal Reserve System.

The article’s conclusions are invalid because the premises supporting those conclusions are totally wrong. There is a complete misunderstanding of what an OTC derivative is.

The article has neither historical understanding of hyperinflation nor the role velocity of money plays. The writer does not understand that hyperinflation is a currency event, not an economic event and stands on confidence in the currency only. Because of this the writer’s conclusions are off the wall.

Please read the following New York Times article. The writer should also read it.

Cuomo Widens His A.I.G. Investigation
March 26, 2009, 6:17 pm

Attorney General Andrew M. Cuomo of New York said Thursday afternoon that he was widening his investigation of the American International Group to examine whether its trading counterparties improperly received billions of dollars in government money from the troubled insurer.

Those counterparties include Goldman Sachs, which received $12.9 billion, as well as Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion.

“Our investigation into corporate bonuses has led us to an investigation of the credit default swap contracts at A.I.G.,” Mr. Cuomo said in a statement. “CDS contracts were at the heart of A.I.G.’s meltdown. The question is whether the contracts are being wound down properly and efficiently or whether they have become a vehicle for funneling billions in taxpayers dollars to capitalize banks all over the world.”

Other counterparties that received money from A.I.G. include Barclays of Britain ($8.5 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), UBS of Switzerland ($5 billion), Citigroup ($2.3 billion) and Wachovia ($1.5 billion).

More…

 

Dear Jim,

As you know, these folks have been pretty accurate in past forecasts. This is a link to the March 16 update which includes a frightening chart of what is in store for Americans.

Click here to view the report…

On March 24, an open letter was issued to G20 members with recommendations for mitigating the crisis into a 3-5 year time frame. The call for an IMF audit of Wall Street/Washington, London and Zurich is an eye opener.

Click here to view the report…

If your readers believe the USA chart is even half accurate and don’t convert dollars to gold while there is still time, their future is going to be very uncomfortable.

CIGA Doug

Dear Jim,

Derivatives have destroyed our economic system at nearly every level of the economy.

CIGA Marc

N.C. Judge Blocks Wachovia Shopping Center Foreclosure

North Carolina Judge Blocks Wachovia Foreclosure in Lawsuit Involving Derivative Interest Rate Swap and Alleging Extortion, Fraud, Unfair and Deceptive Trade Practices.

GREENSBORO, N.C., March 26, 2009 (PRNewswire via COMTEX) — A judge in Guilford County, N.C., today entered a preliminary injunction preventing Wachovia Bank, N.A., from foreclosing on a Greensboro shopping center owned by an affiliate of Granite Development, LLC.

The order by Superior Court Judge Richard W. Stone blocks Wachovia from foreclosing on property developed by the Granite affiliate until a trial on claims that Wachovia wrongfully terminated a derivative interest rate "swap" agreement, over Granite’s objection, which was designed to provide a fixed interest rate for permanent financing. Wachovia has argued it is entitled to a $5.48 million termination fee.

The lawsuit, filed by Granite Development affiliates last month and recently amended, asserts Wachovia has engaged in extortion, fraud, and unfair and deceptive practices. It asks that the swap agreement be rescinded or modified and the "contrived and unwarranted" termination fee demanded by Wachovia be declared an unenforceable penalty.

Judge Stone found that there are "serious issues" regarding Wachovia’s right to pursue foreclosure against its customer, and that the Granite affiliate owning the center would suffer irreparable harm if the foreclosure were not prohibited. He also ordered that Wachovia cease efforts to collect rent from shopping center tenants.

More…

Posted by & filed under Jim's Mailbox.

Dear CIGAs,

This note from CIGA Annette is so timely.

Today, Volcker fell from grace.

The wheel of a lifelong chariot (right action) descended and touched the ground as Paul publicly blessed the utterances of asset value lies to the public with clean audits. That is so WRONG. There is no redeeming aspect of this decision. Paul’s blessings support the permitting of crime. Permission does not make a crime a right act, nor criminals good people.

Yes, Gold is the only lifeline now, as there is no honorable person left amongst the power brokers who have broken the financial world. There is no earned Karma that demands this group be bailed out.

If Volcker is so petrified of what he sees that he would be willing to give up a life of right actions, as he did today, can you imagine what is really out there?

What happened to Death before Dishonor Paul?

Dear Mr. Sinclair,

This is an excellent article from the NYT (June 1987) to remember whenever Mr. Greenspan makes the rounds in the financial press:

TREASURY NOW FAVORS CREATION OF HUGE BANKS
By NATHANIEL C. NASH, Special to the New York Times
Published: Sunday, June 7, 1987

Top officials at the Treasury Department have concluded that the Government should encourage creation of very large banks that could better compete with financial institutions in Japan and Europe.

The Treasury plan, which would permit the acquisition of banks by large industrial companies, was also endorsed by Alan Greenspan, in an interview before President Reagan nominated him this week to be chairman of the Federal Reserve Board.

Mr. Greenspan said the plan would provide multibillion-dollar pools of investment capital for a banking industry that was ”severely undercapitalized.” Mr. Greenspan has declined to be interviewed while he awaits confirmation by the Senate.

More…

 

Please also note Mr. Volcker’s opposition to the proposals being floated and later enacted.

Of course Mr. Volcker was replaced shortly thereafter by Mr. Greenspan.

The latest effort they have this most experienced man (Volcker) working on now is a proposal on increasing tax collection…

Gold is truly our only hope.

Best regards,
CIGA Annette