Posted at 4:05 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Gold gave the gold bulls a nice Christmas gift in today’s holiday shortened trading session by closing up. As I have stated for the past week now, reading too much into any of these holiday markets is fool’s work but I must admit I would much rather prefer to see a “+” sign in front of the gold price rather than a “-“ sign even if it comes on such anemic volume. I heard reports stating that the longs spiked the egg nog of the bears and because it was so quiet down in the pit, they all just fell asleep and could not do any selling. Hey – who cares – it worked. Between spiked egg nog and physical delivery of gold, the bulls might have finally hit upon a nice weapon against the perma shorts at the Comex. Personally I think it would be more effective to simply lock the exchange doors and leave them all outside the building in the cold and snow. Since it is Christmas, they could let them back in after prices had spiked a couple hundred dollars so they could watch “How the Grinch Stole Christmas”.

Gold seemed to take its cue more from the weakness in the Dollar than much of anything else today although from a technical perspective, it did hit the bottom of the trading range yesterday and bounced away from it giving range players a reason to buy. It is still in consolidation mode as it bee-bops back and forth between $830 and $850. For now the probabilities favor more of that into the end of the year although an upside breach of $850 in the February will see it run to test the lap between $855 – $860 shown on the daily chart. Gold continues trading above the 100 day moving average which has not yet turned higher although the 10 day through 50 day’s are all moving up, a bullish technical sign.

We had a pretty decent amount of deliveries assigned today against the December contract – 128 to be precise. The total for the month of December to this point is 13,452 or 1.34 million ounces with 369 contracts remaining open in that month as of yesterday. Registered gold at the Comex continues to hover around the 2.83 million ounce mark.

Open interest took a hit yesterday as weak-handed longs were run out.

The mining shares are trading in a comatose fashion today – nothing worth commenting on.

Crude oil was knocked lower again today in what has become a familiar occurrence as the drop below $40 was the signal for the shorts to lean on it as frustrated bottom pickers throw in the towel and look to perhaps try again at a lower level. The recently expired January crude contract ended its life with a settlement print of $33.87 so bears will be targeting that level. A failure there and $30 will be here almost immediately. Should crude be able to hold above there, it will encourage those who are looking for a bottom.

A point of interest – there are some grumblings in the oil patch that the Nymex crude oil contract needs to have some modifications made to it to make it more reflective of the broader global oil market. This particular contract is for what we call “light or sweet” crude as compared to the vast majority of oil traded globally which is “heavy or sour”. Also, the delivery point in Oklahoma only has so much storage capacity and a glut at that location can cause prices in the delivery month to digress quite widely from larger global market prices elsewhere. Some are saying that the Nymex is no longer serving as an accurate benchmark for crude oil prices. This might be worth following to see if anything comes out of these murmurings. From what I am hearing front month Nymex prices are lower than a large amount of the crude being traded elsewhere. If modifications are made to the contract that would result in more delivery points and some latitude in the grade of oil that could be delivered against the contract we might see a bit of a move higher in prices, especially in the front or delivery month, although that would be something that is a bit down the road at this point in time. Just something that I felt deserved mention.

I should note here that for the most part since July of this year, the fortunes of crude oil have pretty much been the fortunes of the entirety of the commodity complex. Today all of the metals, precious and industrial, were higher in spite of crude oil weakness and even sugar and corn were higher. I am glad to see this divorce occurring between individual markets and the crude complex because it further confirms my views that the bulk of the hedge fund deleveraging and index fund redemption-related selling is behind us and that many markets have now gone back to trading their own particular set of supply/demand fundamentals.

Bonds continue to pause below their recent peak with no sign of any concerted selling at this point. Like gold and most of the other markets, bond trading is subdued in front of the holiday.

The grains continue to show strength with soybeans taking over the leadership role.

In closing I would like to personally thank all of you who took the time to write such warm Christmas greetings. You have read my remarks from time to time about some of the harsh and vile emails that I occasionally receive from disgruntled readers but I feel I have been remiss in not saying that the vast majority of notes that I receive are filled with gracious words from the most wonderful collection of folks that no doubt have ever graced this planet. Time often precludes me from responding to each and every email although I do make a real effort to do so. So let me state here how grateful I am for all the kind sentiments expressed by so many of you and to wish all of you a most wonderful Christmas and a Happy, Healthy and Prosperous New Year.

Merry Christmas to all and to all a good night!

Click chart to enlarge today’s action in Gold as of 12:30pm CDT with commentary from Trader Dan Norcini

December2408Gold1230pmCDT.jpg

Posted at 2:52 PM (CST) by & filed under General Editorial.

Dear CIGAs.

Some say the cost of gold production per ounce has risen. Has this costs of specific mining projects risen because of the short of gold derivative hedges that lost huge money are now factored in as the newest major cost per ounce?

YES!

Simply stated, if you lose your ass on the short of gold hedge now evaluated by the strict FASB 133-155-157 terms the cost of gold production per ounce goes up, up and away!

It appears the project’s mining costs have gone wild on the upside while in truth it is the short of gold hedge that has gone deeply into the red and is now being charged to the project.

One of Tanzania’s major new projects has massive short of gold hedge taken at under $400.

Now what do you think that does to the cost of mining per ounce? My back of the envelope calculation suggests it rises by the better part of $250 per ounce at a gold price average of $825. That number is conservative – very conservative.

Now think $1650 and maybe as much as $6000.

Don’t be Fooled!

It is the massive short of gold OTC derivative hedge losses that make up the largest increased cost of mining category today.

Until recently the cost of production per ounce of gold was either cash cost or total cost.

Cash costs in mining are the costs of production at site level per unit of output. It includes operational cash costs at site level. This includes items such as transport, refining and administration costs and royalties. It excludes non-cash costs such as depreciation and amortization excludes costs not at site level (such as head office costs).

The value of the by-products is deducted from the final cash cost of the metal. For example, if a copper mine produces gold as a by-product, then the value of the gold produced will be deducted from the cash cost of the copper. This is the usual accounting treatment for by-products in most industries.

The total cost of gold produced is the sum of all costs to the point of sale, including the cost of capital, depreciation, depletion, administrative and so on.

This was all quite straight forward until the advent of the use of short of gold derivatives for non-recourse project financing in the form of clarification and additions of FASB 133 -155 – 157 and 159. These accounting standards deal with valuation of OTC derivative hedges and methods for application of derivatives to the project for which it is undertaken.

GAAP (Generally Accepted Accounting Principles) are a collection of accepted rules, conventions, standards, and procedures for reporting financial information. In the US, GAAP standards are set by the Financial Accounting Standards Board (FASB).

To make matters easier to deal with, all GAAP procedures are moving towards International GAAP.

The key element in the final analysis is that it is now required to reveal what hedge was taken for what project then apply the loss or gain from that hedge DIRECTLY to that project.

As such, the Cost of Production for gold per ounce of any given project will be influenced by the profit or loss per ounce developed on the hedge taken for that project guided by valuation of type two assets.

Posted at 2:40 PM (CST) by & filed under In The News.

bernanke-helicopter

Dear CIGAs,

My thanks for the thousands of helicopters sent here. Actually the Fed through the practice of "Quantitative Easing" are now using the Russian heavy lifter helicopters as they are the largest rotorcraft flying. The weight of the 24/7 money drops are putting such a strain on helicopters that a change in name is under consideration. The newest possibility is B-52 or Russian long range bear saturation cluster money bombing internationally. More on this in 09.

Jim Sinclair’s Commentary

Happy New Year.

U.S. debt approaches insolvency; Chinese currency reserves at risk
by Maurizio d’Orlando

In a few months, America’s public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States.
Milan (AsiaNews) – In the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008 [1]), the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt – about 5-6 trillion dollars – of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship.

In 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. Public debt in 2007 was therefore 76.75% of GDP. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security)[2]. By way of comparison, the Maastricht accords require member states of the European Union (EU) to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP.

In 2007, 61.82% [3] of America’s public debt was held by foreign investors, most of them Asian. So the U.S. public debt held by nonresident foreigners is equal to about 109.39% (113.86%) of GDP. According to a study by the International Monetary Fund, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. On the historical level, there are no recent examples of countries with currencies valued at reserve status that have lapsed into public debt insolvency. There are also few or no precedents of such a vast and rapid expansion of public debt.

The United States also runs large deficits in its public balance sheet and balance of trade. Families and businesses are also deeply in debt: in 2007, American private debt was equal to a little more than 100% of GDP. At the moment, it is not clear how much of America’s private debt has been "nationalized" with the recent bailouts.

In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods "based upon very short-term thinking," without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster. [4]

More…

Posted at 4:59 PM (CST) by & filed under Guild Investment.

Dear CIGAs,

According to the US Treasury/Federal Reserve Board, as of September 2008 US government debt was held by the following countries.

The biggest three owners of US Treasury bonds are:

1. China – $585 billion
2. Japan – $573 Billion
3. United Kingdom – $338 billion

In this light the announcement that was made today in the English language official organ of the Communist party, the China Daily, is particularly thought provoking. "China’s increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis…”

This follows an announcement made about 2 weeks ago by the head of China’s sovereign wealth fund to the effect that the current high value for the US dollar might not continue.

Perhaps the Chinese are sending a warning that might be attended to.

Your pal,
Monty Guild
www.GuildInvestment.com

Posted at 4:51 PM (CST) by & filed under General Editorial.

Dear Friends,

To be politically correct, I pinched this from CIGA Green Hornet.

Best wishes for an environmentally conscious, socially responsible, low stress, non-addictive, gender neutral celebration of the winter solstice holiday, practiced with the most enjoyable traditions of religious persuasion or secular practices of your choice with respect for the religious/secular persuasions and/or traditions of others, or their choice not to practice religious or secular traditions at all.

I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year of 2009, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make our country great (not to imply that Canada, USA, Mexico is necessarily greater than any other country) and without regard the race, creed, color, age, physical ability, religious faith or sexual preference of the wishee.

By accepting this greeting, you are accepting these terms:

This greeting is subject to clarification or withdrawal. It is freely transferable with no alteration to the original greeting.

It implies no promise by the wisher to actually implement any of the wishes for her/him or others and is void where prohibited by law, and is revocable at the sole discretion of the wisher. The wish is warranted to perform as expected within the usual application of good tidings for a period of one year or until the issuance of a subsequent holiday greeting, whichever comes first, and warranty is limited to replacement of this wish or issuance of a new wish at the sole discretion of the wisher.

The best of the holidays to everyone,

James E. Sinclair,
Signed in blue ink.

Posted at 4:10 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

We had gold prices going one way today and mining shares going the other way once again in a repeat performance of yesterday’s play only this time it was the mining shares going up while the gold itself was going down (or should I say the paper gold). Considering the weakness in the broader equity markets, the mining shares performance at this point looks pretty impressive especially given the fact that Comex gold was knocked down quite a bit today.

Trading was lackluster today at the Comex as was expected with reports from the pit stating that traders were sitting around working crossword puzzles. Holiday trade is here without a doubt as volume was so anemic yesterday that I had to do a double take when I first saw the numbers thinking that it might have been a reporting error by the wire service! The next thing you know we will be getting reports from the pit telling us that traders are betting on cockroach races.

That is why you cannot read too much into price action this time of year – there simply is not enough liquidity to get a real price discovery mechanism in place. Most of the trade consists of pit locals just shoving prices around in the path of least resistance hoping to pick off a few stops or to scalp a few ticks out of the market to buy their kids that GI Joe with the Kung Fu grip. Air space both above the below the market is the current weather forecast.

Technically gold is chopping in a range. Another way of saying this is that it is consolidating and marking time. The top of the range is near the $850 level while the bottom is near $830.

A point of interest – the spread between the December gold contract and the April gold contract is a mere $2.00 which is pretty tight. It is only a bit over a $1.00 between the Dec and the February. If anything changes further in this regard I will let us know but for now the tightening is quite interesting. I think that the spreads will actually tell us more about gold this time of year than the outright price action in the lead month to be honest.

Bonds floated higher today but remain below their recent peak. It is when the deflationary mindset eventually gives way that the bonds will break with a vengeance. When that occurs is anyone’s guess but it most certainly will. The Central Banks dread deflation more than anything else and will do everything in their power to slay that dragon no matter what the longer term consequences might be. Count me out of the group that believe that the mortals manning the helm at the Fed will be able to withdraw all the liquidity that they are injecting into the system to prevent a huge surge in inflation in the future and a loss of confidence in the Dollar.

On the delivery front, another 59 contracts were assigned in the December gold contract bringing the total for this month to 13,325 or 1.33 million ounces. There are only 413 contracts left open in the December so internet chatter about a short squeeze in that month have been proven to be unfounded. Bear in mind that we have never advocated, “busting the Comex” at this website. We have advocated serious gold buyers who are looking to obtain the metal to go to the Comex and take delivery so as to reduce the amount of registered gold available and level the playing field by making this market an honest one. Those who insist on playing the paper game with the bullion banks will never win unless they force the shorts to respect the fact that they might be required to make good on deliveries. That is the only way to prevent these parasites from preying on the unsuspecting dupes that actually believe the Comex is a freely traded market. Like I have said many times, the hedge funds are not known for original thinking, being unable to wean themselves from their computer algorithms like the mindless droids that they are. If they spent a mere fraction of the money that they use in purchasing long positions at the Comex and actually rode enough of those longs into delivery, they could give the shorts a trip to the woodshed that they would never forget. The question is do they have the savvy to do so and the will to actually stop relying on their black boxes to do their thinking for them. I seriously doubt it but perhaps I might be surprised.

At this point it does look to me like the index fund redemptions and most of the hedge fund deleveraging trade has finished up with only pockets of that sort of selling remaining. We will have to see what they do with the advent of the new year. Obviously the fate of the Dollar will be the determining factor in nearly all of the commodity markets moving forward into 2009. The grains should be quite interesting as the low prices have many farmers in the position of having gone from what could be considered boom times to almost bust times in the matter of 4 months. That being said, it still looks to me like they have bottomed out which bodes well for the entire commodity sector.

So far the verbal intervention by the Japanese monetary authorities last week seems to have succeeded in shoving the year away from its lofty levels. It will be interesting to see how the yen fares early next year. I should note here that if the yen were to rally back up to its recent highs, especially next week, with liquidity being so low, the monetary authorities could inflict all kinds of damage on it should they choose to do so. The particularly could get a lot more effect from any actual intervention when the volume is so low.

Crude oil basis February broke below the $40 level yesterday paving the way for a move down to $35 or even $30. Keep in mind that many projects that were originally profitable when crude was trading above $75 – $80 are no longer so and those projects will never see the light of day at current levels. Oil companies are not going to punch holes in the ground to bring out oil and lose money on it. They will simply idle the drillers. The old adage that the best cure for low prices is low prices will hold true for crude oil. Eventually the excess supply will get mopped up and crude prices will recover.

Click chart to enlarge today’s action in Gold as of 12:30pm CDT with commentary from Trader Dan Norcini

December2308Gold1230pmCDT.jpg

Posted at 1:29 PM (CST) by & filed under General Editorial.

Dear CIGAs,

The following is John Embry of Sprott Investment Management’s latest. In his report he discusses what we have been saying here for some time with regards to leveling the Comex playing field.

The following is an excerpt from the article:

"Jim Sinclair, an American precious metals maven, and a man who’s forgotten more about gold than most of us will ever know, recently explained how these ridiculous circumstances could end.

He believes it’s axiomatic that most of the time, the most leveraged market (i.e. the futures market) sets the price in the cash market – something that’s certainly been the case here.

However, this only applies as long as the COMEX gold warehouse isn’t significantly depleted by the holders of long gold contracts demanding delivery at settlement.

Traditionally, less than one per cent of contracts are settled in this fashion, but as conditions in financial markets deteriorate this may change.

Mr. Sinclair believes that the price will not be able to be manipulated on the COMEX much longer. He says this because the large gold buyers in Asia recognize the dangers inherent in financial institutions and are channeling their business into cash bullion.

When this market inevitably proves insufficiently large for their needs, they will move into markets like the COMEX and stand for delivery, thereby depleting the inventories.

I agree with Mr. Sinclair completely and believe that this event is much more likely to occur than most people realize."

U.S. Calls The Tune As Gold, Silver Plunge
By John Embry

Now that physical shortages of gold and silver are more pronounced, the theatre of the absurd continues to play out, as the paper price of both metals plunge.

The sharp drop in price should come as no surprise to anyone who is aware of what is really occurring in gold and silver.

Put simply, the entire fiat money system is in crisis – perhaps a terminal one – judging from the calls for a new Bretton Woods agreement by European leaders.

As a result, the powers that be in the US appear to be prepared to do virtually anything to obscure this reality from an increasingly terrified populace – one that’s now seeing its savings destroyed by the carnage in real estate.

In the eyes of the authorities, gold and silver must not be seen as attractive alternatives to financial assets; thus, the prices of both metals are crushed.

As I have said many times, it’s actually very easy to manipulate gold and silver prices in the paper market because the bad guys (i.e. the anti-gold cartel) have a lot more muscle than their adversaries.

More…

Posted at 1:17 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

If you have put on your New Year’s resolution list to obtain Paper Certificates for your investments, either personal or IRA, you will be TOO LATE. You have until December 31st to make this request and even that can be declared too late.

How much of the road to protection have you taken?

If you held certain Reserve Fund Money Funds more than your weekend was ruined.

My perfect Christmas present from you would be to know that you have to the fullest degree possible fully protected you and yours.

Make me happy, please. Take your physical certificates while you still can.

Money market funds reel as yields near zero yields
By Deborah Brewster in New York
Published: December 21 2008 19:12 | Last updated: December 21 2008 19:23

Money market funds, an increasingly popular place to park cash, will need to raise fees or close to new money to remain profitable as yields hover at near-zero, according to industry managers.

The funds, which manage $3,800bn and have seen big cash inflows, are reeling from frozen credit markets, subprime exposure and a crisis of confidence triggered by one fund “breaking the buck”, or returning investors less than they paid in.

The US Federal Reserve last week cut its target interest rate to between zero and 0.25 per cent, from one per cent.

Jim McDonald, who runs taxable money market funds for T Rowe Price, said: “You can’t make money in this situation. If short-term interest rates stay where they are, it’s virtually impossible to run a government [bond] fund and make any money. You can close the fund, that’s one option.”

Vanguard last week closed two of its money market funds to institutional investors, while Credit Suisse said it would quit managing money market funds in the US and liquidate $8bn in assets across its three funds.

David Glocke, a portfolio manager at Vanguard, said: “It just doesn’t make any sense to take in money in this environment, it would dilute yields for existing investors.”

More…

Jim Sinclair’s Commentary

Remember this?

Money market funds wait anxiously for rescue by Fed
By Deborah Brewster in New York
Published: November 12 2008 02:00 | Last updated: November 12 2008 02:00

Investors have pulled more than $400bn from money market prime funds in the past two months, leaving the funds waiting urgently for a Federal Reserve rescue plan to help them sell commercial paper to meet redemptions.

The Fed said on Monday that it would begin the rescue plan on November 24, a few weeks later than planned. Money market funds are low-risk, lowreturn fundsthat normally invest heavily in commercial paper, a type of debt used by businesses to meet short-term funding needs.

The funds currently manage a total of $3,600bn (£2,335bn, €2,900bn) and have been struck by high redemptions and illiquid markets, making it difficult for them to sell their paper to pay out investors.

The Fed plan, announced on October 21, will see it buy up to $600bn in certain companies’ short-term debt, as a way to provide liquidity in the credit markets and help money market funds find it easier to sell their commercial paper. Money market funds will be able to sell short-term debt issued by 50 financial institutions to the Fed programme, called the money market investor funding facility.

The Fed said the programme might over time be extended to buy debt from other investors besides money market funds.

A separate Fed programme to buy commercial paper in the markets has already begun operating.

More…

 

Jim Sinclair’s Commentary

I am hearing this from too many good sources to dismiss the possibility that India will soon move against Pakistan.

Stratfor Geopolitical Diary: Countdown to a Crisis on the Subcontinent

The week began with a series of signals from New Delhi that India’s restraint in taking military action against Pakistan is no longer guaranteed. In fact, such action could very well be imminent.

In a press conference Monday, Foreign Minister Pranab Mukherjee said that while India “has so far acted with utmost restraint,” it will “explore all options” in pressuring Pakistan to deal with Islamist militancy. The same day, Indian media reported that Indian troops and the air force’s Quick Reaction Teams had deployed along the border with Pakistan, with commandos reinforced at airstrips in Jaisalmer and Uttarlai in Rajasthan and Bhuj in Gujarat. The Pakistani military, meanwhile, reportedly went on a heightened state of alert, with reports of air force jets scrambling in Islamabad, Rawalpindi, Lahore and Muzaffarabad, the capital of Pakistan-administered Kashmir.

Over the past few weeks, India has played a complex diplomatic game, issuing a series of statements that seemingly downplayed the likelihood of military action against Pakistan in response to the Nov. 26 Mumbai attacks, while making a point in the public sphere that New Delhi was focused on using diplomatic tools to pressure Islamabad. While New Delhi’s behavior led many to believe that the threat of war had subsided, Stratfor maintained that Indian military operations were being prepared, and that New Delhi’s plan was first to exhaust its diplomatic options before engaging in any kind of military action. India’s restraint, in large part, was attributed to its talks with the United States, which would much rather not see the nuclear-armed rivals come to blows when the Americans are fighting an uphill battle against al Qaeda and Taliban forces in the region.

But time is running out for Pakistan.

Reliable sources -— whose information on this issue cannot be verified at this time -— have told us that in the wake of the Mumbai attacks, New Delhi relayed a message to the Pakistanis via the United States, saying they would be given 30 days to crack down on Islamist militant proxies on Pakistani soil that continue to threaten India. While India used the time to prep its military forces, the United States came down hard on Pakistan behind the scenes, making clear that if Islamabad did not deliver, Washington would not be able to stand in New Delhi’s way if and when the time came for India to act. The Pakistanis carried out a few raids targeting militant leaders and Pakistani intelligence operatives, making a few arrests, but did nothing that substantially reduced the threat to India, from New Delhi’s point of view. And even if Pakistan’s government was prepared to accede to India’s demands in full, it could go only so far in placating New Delhi before its eff orts to avoid an international crisis created a domestic one.

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Jim Sinclair’s Commentary

Today in Pakistan:

Pakistan asked to accept responsibility
* WP editorial says ‘Pakistan not acknowledging truth’, ‘excuses must come to an end’
By Khalid Hasan

WASHINGTON: The Washington Post on Monday urged Pakistani civilian leaders to face up to their country’s responsibility for the Mumbai attacks.

In a hard-hitting editorial, the newspaper pointed out that by now, “the evidence that the terrorist assault on Mumbai was planned and directed from Pakistan is overwhelming.” The lone surviving attacker, a Pakistani national, has signed a statement describing how he was recruited and trained by the Lashkar-e-Tayyaba group. Intelligence officials say cell phone intercepts show that the attackers were communicating with Lashkar commanders in Pakistan during the attacks. During a visit to Islamabad, British Prime Minister Gordon Brown spoke for the West when he openly blamed Lashkar-e-Tayyaba for the siege and added that “the time has come for action, and not words,” from Pakistan.

The Post said, “Stunningly, however, Pakistan’s civilian government is refusing to acknowledge the truth. In an interview with the BBC last week, President Asif Ali Zardari claimed that there is still no proof that the attackers came from his country.

Several days earlier, he told Lally Weymouth of Newsweek and The Post that ‘I don’t have any specific information’ showing that the terrorists were trained in Pakistan.

More…

India Gives Pakistan Letter Said to Be Gunman’s
By SOMINI SENGUPTA
Published: December 22, 2008

NEW DELHI — India on Monday gave Pakistan what it called proof of Pakistani involvement in last month’s terrorist attacks in Mumbai. The move built public pressure on India’s neighbor, where the senior-ranking member of the American military arrived for talks for the second time since the attacks.

The Indian Foreign Ministry announced late Monday that it had given Pakistani officials here what it described as a letter from the lone surviving attacker. In the letter, the Indian ministry said, the gunman, Muhammad Ajmal Kasab, said he and his nine accomplices were “from Pakistan.” India did not make the specific contents of the letter public.

Pakistan’s Foreign Ministry acknowledged receipt of the letter, saying only that “the contents of the letter are being examined.” The government in Islamabad, Pakistan’s capital, has denied any links to the terrorist attacks and pressed India to offer proof. American officials have in turn pressed Pakistan to do more to crack down on terrorist groups operating within its territory.

India and the United States have attributed the three-day attack on India’s financial capital to Lashkar-e-Taiba, a banned group based in Pakistan that has fought Indian forces in Indian-controlled Kashmir for years.

More…