Posted at 2:30 PM (CST) by & filed under General Editorial.

Dear Friends,

It is time for another reality check.

Those of you who are selling your gold and gold shares today are doing so because the dollar is in demand today based on the statement by the Russians. This shadows the previous statement by the Chinese concerning a preference for an IMF basket currency debt rather than US dollar debt.

That means the dollar is rising because the Russians and Chinese do not want dollars due to its depressing impact on Treasuries and the rise of rates there.

You are therefore agreeing that interest rates will attract the Russians and Chinese back into the dollar.

If you think this is anything more than the madness of the crowd and the gambleholics that inhabit the markets, you have lost your mind with the rest.

Today’s statement by Russia is a dollar negative event without any question whatsoever. Once all the hedgies and algorithms get them long up to their eyeballs it will be followed by more culling of their ranks.

Stay the course and ignore the ignoramuses. Use reason as your guide, not raw emotions.

Survival takes courage.

Respectfully yours,

Posted at 4:06 AM (CST) by & filed under Jim's Mailbox.


Let’s see if they orchestrate a controlled ascent and descent of gold and U.S. Dollar, respectively.

I will publish both the dollar and gold analysis when a gold signal is generated.  Should happen soon.

Best Regards,




30 Year US Treasury Bond, Gold, and The Five Golden Pillars:

Recognized Top in the U.S. Dollar – Yes
Trust in U.S. paper assets declining – Yes
General Bullish Commodity Markets – Yes
Triple Deficits firmly in place – Yes
Recognized Top in the U.S. Treasury Long Bond – Coming



Posted at 4:04 AM (CST) by & filed under Guild Investment.


On June 16th, Brazil, Russia, India and China, four of the world’s fastest growing nations, will summit in Russia.  The BRIC nations come in to the meeting producing about 20 percent of world GDP.  Their economies have been growing, while developed Europe and the U.S., currently representing 28 and 25 percent of world GDP respectively, are in economic decline.  After the current global slowdown, by the end of 2011, the BRIC nations will be producing closer to 25 percent of world GDP.  The BRIC nations want more control and more global influence…but individually, their strengths and their goals differ.

China and India want to continue to export manufactured goods and services to the developed world, and while they desire more political power, they want to gather it slowly without a big show and certainly without bellicose rhetoric.  China and India realize that with 35 percent of the world’s population between them their time on the world stage has come.  They are confident of their growing economic and political power today and in the future, either alone or as part of the BRIC group.

Of the BRIC nations, Russia is by far the weakest economically.  When commodity prices fell in the second half of 2008 and into 2009, Russia experienced a depreciation of their currency.  Russia wants to be a political power and have influence in the development of global trade in commodities and energy.  However, they are burdened with an ineffective an autocratic government.  Many of the powerful and wealthy oligarchs who manage the country, manage it to benefit their own best interests, often ignoring the best interests of the Russian people.

Brazil desires to continue their exports, but China is their big customer, so they want to do more trade and economic joint ventures directly with China without having to go through multi currency protocols.



Brazil, India and China wish to create a deep and liquid market for economic and business dealing without resorting to the use of the current world reserve currency—the U.S. dollar.  In order to begin this process, they have done bilateral direct business and currency swaps, and would like to gradually create a new world reserve currency using a basket of several currencies to facilitate trade.  Such a facility might be an intermediate step before the Chinese Yuan becomes the world reserve currency in the more distant future.

Economic theorists will disagree about the efficacy of a multi currency reserve currency.  We will not argue on this point.  However, there is no question that the eventual creation of a global reserve currency made up of one or several currencies other than the U.S. dollar would facilitate BRIC members’ best interests in both trade and the development of their political power.  This is why articles like the following are appearing with more frequency.

In short, the world realizes that the U.S. dollar is in danger of losing the mantle of the world reserve currency at some future date, and these statements and articles are part of along process to sell the idea of another type of reserve currency to global decision makers.  Each of the events described in this article represents a chink in the armor of the U.S. dollar.

CCB head looks at renminbi trade move
By Henny Sender in New York
Published: June 8 2009

Guo Shuqing, chairman of China Construction Bank, said his bank, the second largest in China, was exploring offering renminbi-denominated trade finance credit in a practical step that could make the Chinese currency more widely used internationally.

His voice, the first from the head of a large Chinese bank, joins a chorus from senior government officials on currency matters that together reflect concerns about the stability of the US dollar and several efforts to promote the use of the renminbi more widely.

On the eve of the G20 meeting about two months ago, Zhou Xiaochuan, head of the People’s Bank of China – China’s central bank – published a paper proposing to replace the dollar with an international reserve currency and expanding the use of special drawing rights, a unit of account of the International Monetary Fund.

Mr Zhou’s proposal came after Wen Jiabao, premier, called on the US to guarantee the safety of dollar-denominated Chinese assets. About 70 per cent of the $2,000bn or so in Chinese reserves are in dollar-denominated assets.

In addition, the Chinese have negotiated a series of currency swap arrangements with seven countries – including, most recently, Argentina – which would allow these trade counterparties to settle some trading bills in renminbi. China has agreements with other countries, including Iran, to not use the dollar in their trade.

While most developments have been theoretical, Mr Guo said he was in talks with the PBoC and others to develop the concept.

The Chinese desire to diversify away from the dollar comes as many oil exporters have expressed a similar wish. Venezuela has frequently complained about the dollar and last year Kuwait abandoned its currency peg with the dollar.


Although it is a complex subject, we will touch lightly on the requirements of being a reserve currency.  Historically, being the world reserve currency has had major benefits and major costs.  The country is in a position to influence world events and the outcome of world conflicts.  This has required maintaining a big military and covering big military expenses.  As a result, the country is in a position to spend money with more influence than others, and it is more likely than others to overspend beyond its income.  These characteristics have been present for the U.S. for some time.

We expect the coming BRIC summit to provide some verbal fireworks.  The fireworks will come primarily from Russia, which likes to make the U.S. look bad whenever possible, and Brazil who exports mostly to non-U.S. customers and wants to be respected for the better economic management they have displayed in recent years.  China and India will be more circumspect and will be careful not to say anything so inflammatory as to anger their good trading partners in Europe, Japan, and the U.S.

Should current growth trends continue, it is obvious that the in a decade, BRIC could have close to 30 percent of the world output.  In our opinion, there are three well managed BRIC economies which will grow much faster than the developed world.  China and India could replace Europe and the U.S. as the world economic engines later this century.

Russia is the weakest of the four BRIC nations and we do not look for them to have good economic growth until they get away from the corrupt and badly managed oligarchic structure they currently employ.


Along the same lines, investors are quite aware that emerging stock markets, including the BRIC markets, have greatly outperformed the developed stock markets of Japan, Europe, and the U.S. thus far in 2009.  Capital goes where stock markets are rising and thus Brazil, China, and India are finding no shortage of capital while the developed nations are experiencing shortages of capital for many projects.


President Obama paid a political debt and in our opinion, made a political mistake by favoring the workers and forcing the bondholders of GM to lose 70 percent of their value, without the benefit of bankruptcy court proceedings that would surely have allowed them to retain more value.  The president should have remembered that many government employees, city and state governments, and Democratic voters owned GM bonds in their retirement accounts.  They resent the fact that their tax dollars were used to bail out GM and now they are paying a double price.  Obama is now closely attached to GM in the public mind, and if GM fails, his political capital will be seriously impaired.


It was reported on June 6th by the Associated Press “World demand for oil to double by 2050 according to Jeroen van der Veer CEO of Royal Dutch Shell”.  We could not agree more.  The article states that:

“Despite the current economic crisis he said demand was projected to double by 2050 as the world population grows from 6 billion to 9 billion by that time. He said oil corporations should invest now in technology and develop new sources to reap benefits when the recovery comes.” “The oil and gas industry cannot supply all this additional demand… this means the next price spike is in the making.”

We have reported many times that world oil supply has peaked and will continue to decline for the foreseeable future.  With rising demand and declining supply all available sources of energy must be considered and, when economically feasible, employed.

Thanks for listening.

Monty Guild and Tony Danaher

Posted at 5:52 PM (CST) by & filed under General Editorial.

Dear CIGAs,

I am preparing for a test today so I am in the office but focusing on the required material. Please be patient, we will have updates soon.

In regards to my comment concerning Mr. Krugman: When you pin a major economic award on a GREAT journalist, you could produce a QUESTIONABLE ECONOMIST.


Posted at 11:47 PM (CST) by & filed under JSMineset Editor.

Dear CIGAs,

Some international Compendium orders from  late February and early March are taking a substantial amount of time to arrive. It seems a large number are just now making it to their intended destination. We never expected delivery to take such an extended amount of time and apologize for the delay. We have since changed shipping agents so all new Compendium orders should arrive in a reasonable amount of time.

If you haven’t already, click here to order your copy of Compendium 1, Compendium 2 or both…

Many of you have emailed in with questions regarding your Compendium orders. While we cannot provide tracking numbers, any other inquiries are welcome at Only Compendium related inquiries will be answered at this address. Please do not use our normal site email address – we simply receive too many emails there and your inquiries tend to get missed.

Would the following people please email me at the address above:

– Richard Lawson
– Villhelm Hogsten
– Jack Sloan

Thank you all for your continued support and patience!

Dan Duval
JSMineset Editor

Posted at 8:41 PM (CST) by & filed under In The News.

Dear CIGAs,

Later in the day it was reported that Mr. Krugman, who is now being referred as an economist rather than what he is, a sharp columnist, was quoted as saying that the recession would in hindsight be seen to have ended this coming summer.

If you were to listen to exactly what he said you can see that his London address was construed to meet the needs of financial media SPIN and in no way was outstandingly bullish.

Today’s bad news is simple to see if you take away the good news that is commonly fabricated in economic politically driven statistical analysis.

Today’s good news is a tragedy like the bankruptcy of GM and Chrysler because the alternative is considered catastrophic. The human suffering does not even enter the equation.

Jim Sinclair’s Commentary

This is the present situation. You can’t blame Israel for questioning where it now stands.


Jim Sinclair’s Commentary

Although judging from all that has transpired in terms of tromping on law and court precedents, one would assume the Administration is all over the Supreme Court tonight.

Having said that I am interested in how you can deduce that the stay is only miniscule in time from the following quote:

"Ginsburg said in an order that the sale is “stayed pending further order,” indicating that the delay may only be temporary."

The only reason one could conclude the timeframe is "very short" is because it is NOT a permanent order. That is called SPIN.

Chysler sale on hold, but for how long?
Supreme Court Justice Ginsburg grants delay in controversial Fiat deal

NEW YORK – Chrysler’s five weeks of breakneck-speed bankruptcy proceedings came to a screeching — but possibly temporary — halt Monday, when a Supreme Court justice delayed its sale of assets to Italy’s Fiat.

The move could derail the government’s ambitious plan for the U.S. automaker to blaze a path to profitability without the burden of many of its debts.

Justice Ruth Bader Ginsburg issued a stay just a week before Chrysler says the government-backed sale must go through. After June 15, Fiat could walk away from the deal and leave the struggling U.S. automaker with little option but to liquidate.

It was unclear late Monday just how long the stay would last, or if the high court planned to take up the case.

Chrysler said it had no comment until it receives further information from the court.


Jim Sinclair’s Commentary

How about the USA goes massively short the US dollar versus the Yuan?

That sounds stupid enough for the issuer to be considered by Washington.

Top Chinese banker Guo Shuqing calls for wider use of yuan
The head of China’s second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency.
By Malcolm Moore in Shanghai
Published: 5:38AM BST 08 Jun 2009

Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), also said he is exploring the possibility of issuing loans to trading companies in yuan, allowing Chinese and foreign companies to settle their bills in yuan rather than in dollars.

Mr Guo said the issuing of yuan bonds in Hong Kong and Shanghai would help to develop the debt markets in China and promote the yuan as a major international currency.

It was the first time the head of a major Chinese bank has called for the wider use of the yuan, although a chorus of senior government officials have already voiced their concerns about the stability of the dollar and have said the yuan should be used more widely.

"I think the US government and the World Bank can consider the issuing of renminbi bonds," he said, asking for a "mutual cooperation" between the US and China to promote Chinese financial services. He said bond issuance could be relatively small, at between 1bn and 3bn yuan (£100m to £300m).

HSBC and Standard Chartered have both said they are preparing to issue bonds denominated in yuan.



Jim Sinclair’s Commentary

Less demand for dollars with increasing supply is not what bull markets are made of.

IMF Says New Reserve Currency to Replace Dollar Is Possible
By Alexander Nicholson

June 6 (Bloomberg) — The International Monetary Fund said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time.

The IMF’s so-called special drawing rights could be used as the basis for a new currency, First Deputy Managing Director John Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today.

“There are many, many attractions in the long run to such an outcome,” Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today. “But this is not a quick, short or easy decision,” he said, adding that it would be “quite revolutionary.”

The SDRs would have to be delinked from other currencies and issued by an international organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.

As much as 70 percent of the world’s currency reserves are held in dollars, according to the IMF, leading to calls for nations to diversify their cashpiles to avoid excessive exposure to the U.S. economy as it quadruples its budget deficit in a bid to counter the worst recession since the Great Depression.


Jim Sinclair’s Commentary

Are these Government constituted court proceedings supposed to trample over the rights of the private party and contract law?

To take the position that any holder of bonds is not entitled to their rights because they were bought on the cheap threatens basic tenets upon which business is done.

Such an excuse for bad policy forgets the horror of the seller of those bonds who sold them cheap, could have held them and legally demanded their voice to be heard. It is their rights that are also being trampled on when any bond holder is forced to roll over by government pressure.

Now here is a surprise.

Supreme Court Delays Sale of Chrysler to Fiat
Published: June 8, 2009

The United States Supreme Court agreed Monday afternoon to delay the sale of most of Chrysler’s assets to Fiat pending further consideration of an appeal by three Indiana state funds, in a move that injects a new element of uncertainty over the carmaker’s bankruptcy case.

Justice Ruth Bader Ginsburg, who handles emergency matters arising from the United States Appeals Court for the Second Circuit, in a one-sentence order, said the orders of the bankruptcy judge allowing the sale “are stayed pending further order of the undersigned or of the court.”

The action indicates that the delay may be temporary, but for now the stay will keep Chrysler and Fiat from completing the transaction.

The stay prevented Chrysler and Fiat from completing the transaction immediately.

Lawyers for the three Indiana funds, which represent teachers and police officers, filed their appeal to Justice Ginsburg late Saturday night, after the Second Circuit reaffirmed a lower court’s approval of the sale. The appeals court then delayed the closing of the deal until 4 p.m. Monday or until the Supreme Court declined to issue its own delay.

The Indiana funds have sought greater compensation for their portion of Chrysler’s $6.9 billion in secured debt. They have also argued that the Obama administration illegally used federal bailout money earmarked for financial institutions to help Chrysler.


Jim Sinclair’s Commentary

Of course. Are we not watching one right now?

Royal Dutch Shell chief warns of future oil price spikes if investment continues to slacken
By Associated Press
1:23 AM PDT, June 8, 2009

KUALA LUMPUR, Malaysia (AP) — Oil prices will spike in the future without investment in the sector to meet demand once the global economy recovers, said Royal Dutch Shell Chief Executive Jeroen van der Veer on Monday.

Despite the current economic crisis, he said demand was projected to double by 2050 as the world population grows from 6 billion to 9 billion by that time. He said oil corporations should invest now in technology and develop new sources to reap benefits when the recovery comes.

"The oil and gas industry cannot supply all this additional demand … this means the next price spike is in the making," he told more than 1,000 delegates at a two-day oil and gas conference here.

"We think it is a good philosophy to be a high investor (now) and benefit from the lower construction prices," he said, without elaborating.

After soaring to $147 a barrel last July, oil prices plunged to as low as $32 late last year, which delayed or halted new oil exploration and refining projects. Since then, crude oil has climbed to the high $60s a barrel amid hopes of economic recovery and production cuts by OPEC.


Jim Sinclair’s Commentary

Think about Dark Pools and the veracity of the information as to read what marking up junk is hiding.

Bank Profits From Accounting Rules Masking Looming Loan Losses
By Yalman Onaran

June 5 (Bloomberg) — Big banks in the U.S. say they’re on the mend. The five largest were profitable in the first quarter, rebounding from record losses for the industry in the fourth quarter. Share prices have jumped, with the KBW Bank Index doubling since March 6.

Treasury Secretary Timothy Geithner, after “stress testing” 19 banks on their ability to withstand a worsening economy, declared in early May that Americans can be confident in the banks’ stability and resilience. Wells Fargo & Co. and Morgan Stanley were among banks raising $43 billion in new capital since then through share sales.

“With our capital and assets, stressed as they have been, we can go back to focusing all our attention on managing our business and restoring value,” Citigroup Inc. Chief Executive Officer Vikram Pandit said after Geithner’s examinations were completed.

The revival may be short-lived. Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are.

The government probably wants to win time for the banks, keeping them alive as they struggle to earn their way out of the mess, says economist Joseph Stiglitz of Columbia University in New York. The danger is that weak banks will remain reluctant to lend, hobbling President Barack Obama’s efforts to pull the economy out of recession.


Jim Sinclair’s Commentary

The culling of the gene pool. If you wish to reduce health care costs why not just reduce the geezers?

600,000 Seniors About To Lose Their Homes
Monday, June 8, 2009 11:32 AM
By: Julie Crawshaw

More than 600,000 seniors are delinquent in their mortgage payments or already in foreclosure, USA Today reports.

Unlike younger people, many are on fixed incomes and lack the money or job opportunities to catch up on payments when they fall behind.

"I’ve got a lot of seniors who have just been nailed," mortgage specialist Dean Wegner told the newspaper.

"They’re upside down (owing more on their mortgage than their homes are worth), they can’t refinance and they’re on a fixed income."

Conventional wisdom holds that most seniors have paid off their mortgages or have significant equity in their homes. But the reality is, hundreds of thousands of older homeowners are suffering in the housing crisis.

A recent report from AARP showed that 25.5 million seniors ages 50 and older have a mortgage — and that older Americans with subprime first mortgages are nearly 17 times more likely to be in foreclosure than Americans of the same age with prime loans.


Jim Sinclair’s Commentary

Israel will do whatever Israel feels necessary to survive.

The thought that a lack of US backing will overcome Israel’s fear of annihilation is to think as a Westerner and politician.

To assume you can make friends with or even simply neutralize fundamental Islam as a non-Muslim is nuts.

One of the long standing flashpoints for 2012 has always been that Israel would make a significant miscalculation.

West Bank Settlements and the Future of U.S.-Israeli Relations
June 8, 2009 | 1814 GMT
By George Friedman

Amid the rhetoric of U.S. President Barack Obama’s speech June 4 in Cairo, there was one substantial indication of change, not in the U.S. relationship to the Islamic world but in the U.S. relationship to Israel. This shift actually emerged prior to the speech, and the speech merely touched on it. But it is not a minor change and it must not be underestimated. It has every opportunity of growing into a major breach between Israel and the United States.

The immediate issue concerns Israeli settlements on the West Bank. The United States has long expressed opposition to increasing settlements but has not moved much beyond rhetoric. Certainly the continued expansion and development of new settlements on the West Bank did not cause prior administrations to shift their policies toward Israel. And while the Israelis have occasionally modified their policies, they have continued to build settlements. The basic understanding between the two sides has been that the United States would oppose settlements formally but that this would not evolve into a fundamental disagreement.

The United States has clearly decided to change the game. Obama has said that, “The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.” Israeli Prime Minister Benjamin Netanyahu has agreed to stop building new settlements, but not to halt what he called the “natural growth” of existing settlements.


Posted at 5:15 PM (CST) by & filed under General Editorial.

Dear CIGAs,

I will be taking a water safety class that is now required in Connecticut to operate a boat of any size if it has a motor on it, even if it is as low as 10hp.

It seems silly, but without a license to operate on the water even if you were in a canoe with an electric trawling motor you could get arrested. They have armed water police on Candlewood Lake in Connecticut.

What happened to freedom in the outdoors or did that go with the total loss of your indoor freedoms as well?

You probably need a permit now to camp in the Talketna, Alaska wilderness.

The only time for the boating class is this evening and tomorrow, so I will have to attend.

The gold price is doing exactly what it should considering the lack of real negative good reasons and coordinated negative PR from the media and the gold banks.

The dollar is going to suffer a very cold and awful winter.

It is amazing the moment one major fraud kills the world by the meltdown in OTC derivatives the Banksters are growing in size in another that is appropriately named the DARK POOLS.

The Dark Pools operate in a delayed reporting, after the fact and who knows if correct data world as to volume and price. Do you trust the Banksters on their word of honor to after the fact admit the volume of a trade?

All of this is with the blessings of those just charged with a mission of transparency.

Now you can understand why I and Mr. Fred want to motor ourselves into a quiet cove on a clear lake on a Saturday to enjoy freedom from all this that is around us. Sometimes we need to shut off the noise and just float for a couple of hours.

The filth in this financial world makes organized crime look like a vacation relief. The famous mobsters never killed and tortured as many people as the Banksters. It is not even close.

Banksters simply cannot play to win based on merit. Banksters cannot build anything. The Banksters game has to be fixed.

You always offer me, among the many other lamentations in your communication, the fear that gold and the dollar will always be manipulated to withhold true pricing.

My answer is manipulation only works in the direction anything wants to go in the first place, which gold and the dollar have so far proven correct. Step back and from the day to day ticks and look at the big picture.

The problems out there are so big that no central bank, treasury or group of Banksters anywhere on the planet can afford to handle them. Right now if it were not for the charisma of the new Administration things would have unwound completely.

In time the problems of today’s financial world to which there is no practical solution will overwhelm the manipulation by simple size of money motivated into the gold market and the number of newly created dollars for sale.

The size of the dollar pool is infinite, and the amount of gold is finite. That is the equation which will make Alf right in his take on the price. It only takes a failure of confidence to motivate the equation. This is why I have been trying to give you clear direction free of the fog of emotion and spin in order to protect you.

At every turn the media, government and Banksters have been trying to get you to dump your protection.

Stay the course. Gold is going to save more than your financial position.

Goldman Now Dominating Dark Pool Trading; Who Is Sigma X?
Posted by Tyler Durden at 12:52 PM
Sunday, June 7, 2009

The last time I discussed dark pools, it was in the context of SEC regulation due to the increasing sense of opacity of what happens in this subset of the stock market. A new Reuters article adds fuel to the fire, indicating that not only are dark pools aggressively taking away from exchange trading action, but it is in fact bank-run dark pools that are the primary culprit.

"Dark pools," where orders are anonymously matched so that traders do not alert the wider market to their intentions, have triggered concerns that stock pricing may not be transparent.

But the growth of those run by broker-dealers such as Goldman Sachs and Credit Suisse are squeezing other "dark" electronic trading venues, as well as exchanges, resulting in lower fees.

"The dark pools are definitely going to grow; the wild card is any new regulation," said Dmitri Galinov, director and head of liquidity strategy at Credit Suisse’s advanced execution services, running the bank’s CrossFinder dark pool.

Overall, dark market share rose last year, but in the last eight months hit a ceiling near 9 percent of the U.S. market.

And while dark pools controlled by independent private ventures such as ITG would be a perfectly normal response to market demand for liquidity facilitation, it is surprising to discover that a vast majority of the pools are in fact controlled by the very same recipients of TARP funding (who are now doing all they can to issue stock so they can repay their TARP bonus burden).

Dark pools owned by brokers and large market makers accounted for 70 percent of all dark U.S. equity volume in April, up from 64 percent in December and from 58 percent a year earlier, according to Rosenblatt Securities, a widely referenced agency broker that tracks 18 dark pools.

Dark pools, which usually publish trades to the consolidated tape with little detail well after they are executed, have been around for decades, but their brands have gained more exposure in the last few years.

As frequent Zero Hedge readers know, when it comes to program trading on a traditional exchange such the NYSE, Goldman Sachs is by far the most dominant force. It is by Goldman’s own admission that the primary reason for this monopoly is to facilitate high-frequency trading in the open market. It would only be fitting that Goldman would be the dominant market player in the dark pool high-frequency market as well. And, as it turns out, it is.

Goldman’s Sigma X was the largest in April, followed by market maker GETCO’s Execution Services, and Credit Suisse’s CrossFinder — the winners benefiting from the collapse of other investment banks such as Lehman Brothers.

Justin Schack, vice president of market structure analysis at Rosenblatt, said broker-run dark pools had grown because they’re faster, cheaper and open to algorithms — the computerized trading programs that dominate the market, especially during volatile periods such as last year’s crash.

"Market structure has changed over the last five or six years in ways that favor small size, rapid-fire trading," Schack said. [SPY IOI anyone?]

The most successful bank-run dark pools have steady participation from individuals, or retailers, whose standing trade orders are gobbled up by high-frequency players who use algorithms and account for about 65 percent of the market.


Posted at 4:40 PM (CST) by & filed under Jim's Mailbox.


The crisis benefits the most powerful in the financial sectors:

1. "Morgan Stanley, Goldman Sachs and JPMorgan, all based in New York, have captured 36 percent of the M&A market in 2009, up from 24 percent last year and the highest for any six-month period since the second half of 2001:

Wall Street M&A Winners Led by Morgan Stanley (Update1)
By Christine Harper and Zachary R. Mider

June 8 (Bloomberg) — When Pfizer Inc., the world’s largest drugmaker, decided to buy Wyeth last year, it didn’t turn to its usual advisers at Lazard Ltd. and Bear Stearns Cos. Instead, Pfizer executives called bankers at Goldman Sachs Group Inc. and JPMorgan Chase & Co.

The $65 billion takeover, this year’s largest, helped Wall Street’s top three merger advisers — Morgan Stanley, which worked with Wyeth, Goldman Sachs and JPMorgan — tighten their grip after the collapse of non-government credit markets and subsequent liquidity squeeze wiped out Bear Stearns, Lehman Brothers Holdings Inc. and Merrill Lynch & Co.


2. Carlyle is buying banking operations directly from federal regulators (see Florida’s BankUnited case)

Silverton to be closed by FDIC rather than sold
Lita Epstein
Jun 5th 2009 at 10:00AM

The FDIC found buyers for Atlanta’s failed bankers’ bank, Silverton, but none of Silverton’s suitors wanted to pay enough for it. After analyzing the offers, the FDIC decided it would be less costly to shut the bank down than to accept the bids received.

Bidders included the Carlyle Group with a consortium of private equity investors, including Lightyear Capital, Harvest Partners and Colony Capital. "We have to do what is least costly to our insurance fund and to shut it down for good was less costly than the bids we received," a spokesman for the FDIC told the Financial Times.


That gives you a lot to think about…

CIGA Christopher

Dear Mr. Sinclair,

Thank you for your mentoring these last few years. Without you we wouldn’t be able to survive.

My question is I’m trying to keep 2 years worth of cash available to survive. Would it be feasible to buy some more gold at this point, cutting myself short, and sell if I need it in the next two years? Or would I be better off just staying pat.
I know this sounds stupid but at this point I’m really not sure. I don’t want to get into the jackpot.

Again, Thank you for all the knowledge you pass along. Stay healthy and think positively!

Yours truly,
CIGA Nancy M

Dear Nancy,

Your question is not stupid at all.

The greater risk is the cash you hold. The government’s ability to print cash is unlimited while the supply of gold is limited.

Take 50% of your cash into gold. You will have no problem when it comes to a need for spending money.

All the best,