Posted at 2:57 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

I wonder how much of our own tax money, also known as TARP, TALF, CRAP or whatever, has found its way into the coffers of the government’s friends at the Comex and is being used to trash the price of paper gold. I would think that if someone threw $20 billion here or $40 billion there my way that I could do some strange things to whatever markets I wished. Needless to say, the mugging that regular occurs when trading rolls into New York continues. Maybe we should set up an algorithm that computes how far down they can take gold based on a certain number of points up on the DOW… let’s see – 80 DOW points up means $20 down in gold…. 100 DOW points up translates to what, $40 down on gold, etc.?

I read an article last evening about some of the big hedge funds moving into gold. Too bad that they still have not figured out that they could break the death grip of the bullion banks by standing for delivery and removing the warehouse gold. Those guys will simply never learn. I suppose we should not expect anything different. After all, they are products of the American public education system and the inherent bias against the yellow metal among the elites in the West. “Students – repeat after me – Paper – GOOD; GOLD –BAD; now write that 1,000 times and turn it in at the end of class today”.

It is evident that the Chinese will have to do the heavy lifting for these mental lightweights. News out of China that the head of the National Administration has advised diversification of China’s massive foreign reserves into gold, oil, and other strategic commodities is further confirmation of the thinking that now prevails in the upper echelons of China’s political powers. They know full well what is going on and are intelligent enough to secure the real deal, not paper scraps like the hedge funds seem to love lining their bird cages with. Any weakness in gold will absolutely delight the Chinese who are looking at ways to reduce their glut of Dollar holdings but do so in a way that does not throw the forex markets into a tizzy.

It should be noted that the Chinese are not momentum traders – they trade the way the professionals in this industry formerly traded – they buy into weakness when the long term trend favors a market. Hedgies will end up selling into the hands of the Chinese.

Technically gold ran into selling resistance at the 20 day moving average on Friday and at the now downtrending 10 day moving average in today’s session. The bearish crossover of the 10 day below the 20 day is a sell signal for the short term oriented. Downside support now lies back at the 40 day and 50 day moving averages coming in near $910 and $900 respectively. If we can hold above those levels, the most likely outcome then becomes a range trade and a period of consolidation since it is evident that the official sector price capping is too strong right now for the bulls to push it out of the way. A downside breach of the 50 day moving average puts $890-$880 into play. Prices will have to break above $960 to resume the upward trend.

We are back to the 11:00 AM CDT bashing of gold which occurs when the physical market closes in London. That is when the paper sellers double down on their orders and go gunning for stops. I have seen this occur so many times since 2002, that it might as well be part of the official Comex rules.

Traders are now myopically focused on the reported holdings in GLD to the point of obsession. If they do not see those rise, they sell… Now that’s what I call a strategic, forward-thinking, long term oriented, macroeconomic approach to trading/investing. That’s what we get for dispensing so much Ritalin to children who could not learn to sit still and pay attention. They apparently never learn to do so even when they become adults and become traders.

There still appears to me to be a fair amount of long crude/short gold spreading taking place. The thinking behind that play is that the worst of the economic carnage is over, commodity markets look to be perhaps bottoming, stocks are showing insufficient selling pressure to break into new lows and that therefore gold and other safe havens are no longer needed (hence the weakness in the bonds). You then buy crude oil on the expected economy recovery and get rid of gold.

Readers who have not yet purchased any physical gold but who have all their “insurance” money in the paper ETF or even only in the mining shares, take advantage of these bouts of price weakness to institute scale down buying programs. There is no substitute for owning the actual metal especially with so many well-founded doubts about that ETF. Remember – this is for buyers of the real metal – traders have to deal with what the market gives them and utilize sound and disciplined money management practices.

The Dollar moved higher early in the session but then faded as the equity markets stabilized. The one currency that did not recover off of its lows to any extent was the Japanese Yen. The Euro in particular came well off its overnight levels and actually moved into positive territory at one point. Gold now seems to be moving inversely to the Euro – more evidence of the idea that when risk is back in vogue, gold goes out of vogue. Remember when gold and the Euro were trading almost in lockstep? Not any more… How long that will last is unclear. The one point in all of this yo-yo trading is that we are nowhere near seeing a long term bottom in equities. There are way, way too many people looking to try to pick a bottom in the stock market. That sort of mentality is not synonymous with bear market bottoms. Bear market bottoms occur when NO ONE wants anything to do with stocks and that means NO ONE. The way these guys plow back into equities and unload gold at the faintest whiff of a bottom in equities tells me that we have much lower to go into the DOW and the other equity indices. Short term trading bottoms – those are one thing – long term solid bottoms heralding viable economic recoveries – no way. Still too much optimism out there… just listen to the constant drum beat coming from CNBC among so many of their anchors and guests… “Well John – are we ready to bottom yet” “So tell me Jake – what you buying?” “Okay Sandy – we’re looking good today – just how high can we take this thing?”  Does any of that sort of thing sound like capitulation or total despair? Are you kidding – there is too much hope for a bottom.

There really is not much more to say about today….the longs in gold simply have no conviction and are too easily pummeled. They will need to show some mettle soon or risk handing the bears the initiative. A move that can hold the lows of  that former congestion zone will show that they still have a bit of meddle in them.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

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Posted at 9:00 AM (CST) by & filed under Jim's Mailbox.

Jim,

"And judging by the state of preparations, the forthcoming Group of 20 summit is going to be a disaster. " writes Wolfgang Münchau.

It seems he doesn´t have much hope on the meeting of last resort.

Regards,
CIGA Christopher

An L of a recession – reform is the way out
By Wolfgang Münchau
Published: March 8 2009 18:15 | Last updated: March 8 2009 18:15

The US is dragging its feet over the financial sector. The European Union is doing the same, as well as failing to adopt policies that could shield it from an increasingly probable speculative attack. And judging by the state of preparations, the forthcoming Group of 20 summit is going to be a disaster.

So it looks like it is going to be an L – not a V or a U. I mean an L-shaped recession, one that starts with a steep decline, followed by very low growth for many years. In a V-type recession, the recovery is instant. In a U-type, it comes eventually. My guess is that we are currently somewhere in the middle of the vertical bit of the L, but it is the horizontal bit that is the scariest. History never repeats itself exactly, but we know from economic history that financial crises are surprisingly similar. This looks like Japan all over. Without financial restructuring, the economy is not going to recover. And Japan was lucky. It was surrounded by a booming global economy.

The best way to fight such a disaster is to restructure the banking system and provide short-term economic stimulus through monetary and fiscal policy. Speaking at a recent Aspen Italia conference in Rome, Martin Feldstein, a former economic adviser to Ronald Reagan and president of the National Bureau of Economic Research, estimated that US consumer spending would fall by $500bn (€395m, £355bn) annually, and construction spending by $250bn. Against this combined annual $750bn shortfall, the current stimulus package is woefully inadequate. In other words: we are looking at an L.

More…

 

Jim,

It looks like the folks across the pond like to do their bank takeovers on the weekend too. This leaves only two non government controlled banks in Great Britain. This is being billed as part of the "credit crisis" but it really should be called a part of a "solvency crisis."

Greg Hunter

Taxpayer ‘set to control Lloyds’

The government is to take a majority stake in the recently-created Lloyds Banking Group, the BBC has learned.

Under an agreement with the Treasury, the government’s stake will increase from 43% to between 60% and 65%.

Some £260bn of toxic loans will be insured, and Lloyds will be required to lend more to households and companies.

The deal was agreed on Friday night, but there are some legal formalities to be concluded. It is understood it will be formally announced on Saturday.

Reports said Lloyds had been unhappy to give the government a majority stake.

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Jim Sinclair’s Commentary

Here is Economic Law that cannot be violated and if attempted, hyperinflation becomes unavoidable as it is today.

Dear Mr. Sinclair,

The excerpt below was written by Kenneth Rogoff, the then Economic Counsellor and Director of Research at the IMF, to Joseph Stiglitz who was Chief Economist at the World Bank between 1997 and 2000.  Mr. Rogoff appears to believe based on historical fact that monetary inflation always leads to price inflation and that this very premise generally makes things worse.  Obviously we already know this, but I felt it was interesting to note this exchange between an IMF and World Bank economists.

Best Regards,
CIGA Marc

"Governments typically come to the IMF for financial assistance when they are having trouble finding buyers for their debt and when the value of their money is falling. The Stiglitzian prescription is to raise the profile of fiscal deficits, that is, to issue more debt and to print more money. You seem to believe that if a distressed government issues more currency, its citizens will suddenly think it more valuable. You seem to believe that when investors are no longer willing to hold a government’s debt, all that needs to be done is to increase the supply and it will sell like hot cakes. We at the IMF—no, make that we on the Planet Earth—have considerable experience suggesting otherwise. We earthlings have found that when a country in fiscal distress tries to escape by printing more money, inflation rises, often uncontrollably. Uncontrolled inflation strangles growth, hurting the entire populace but, especially the indigent. The laws of economics may be different in your part of the gamma quadrant, but around here we find that when an almost bankrupt government fails to credibly constrain the time profile of its fiscal deficits, things generally get worse instead of better."

Jim,

Wait until the Mideast gets wind of this.

Saying things are "Out of Control" is a gross understatement. "A Prelude to Total Chaos" is a more apt description.

Regards,
CIGA Wallace

Barack Obama ‘too tired’ to give proper welcome to Gordon Brown
Barack Obama’s offhand approach to Gordon Brown’s Washington visit last week came about because the president was facing exhaustion over America’s economic crisis and is unable to focus on foreign affairs, the Sunday Telegraph has been told.
By Tim Shipman in Washington
Last Updated: 10:03PM GMT 07 Mar 2009

Sources close to the White House say Mr Obama and his staff have been "overwhelmed" by the economic meltdown and have voiced concerns that the new president is not getting enough rest.British officials, meanwhile, admit that the White House and US State Department staff were utterly bemused by complaints that the Prime Minister should have been granted full-blown press conference and a formal dinner, as has been customary. They concede that Obama aides seemed unfamiliar with the expectations that surround a major visit by a British prime minister.

But Washington figures with access to Mr Obama’s inner circle explained the slight by saying that those high up in the administration have had little time to deal with international matters, let alone the diplomatic niceties of the special relationship.

Allies of Mr Obama say his weary appearance in the Oval Office with Mr Brown illustrates the strain he is now under, and the president’s surprise at the sheer volume of business that crosses his desk.

More…

Posted at 2:01 AM (CST) by & filed under General Editorial.

Dear CIGAs, At long last we are now offering Compendium Version 2 for sale. There will also be a very limited printing of Compendium Version 1 for sale as well. If you want a copy I suggest you order it while you have the chance. We release Compendiums every couple years to help cover the operating costs of running a site like JSMineset. Over the years we have gotten quite large and these costs have grown substantially. If you like what we do here please purchase a copy – you will be supporting a good cause and allow us to continue providing this service free of charge. **PLEASE NOTE YOU DO NOT NEED A PAYPAL ACCOUNT TO PURCHASE ANY OF THE COMPENDIUM SETS. COMPENDIUMS SHOULD ARRIVE WITHIN 2-4 WEEKS DEPENDING ON YOUR LOCATION** What you will receive with each set: Compendium Version 1 ($50 USD):

Compendium Version 1 includes all articles posted from the inception of JSMineset in 2002 to December 2005. It comes packaged as a searchable PDF database and includes several thousand articles on Gold and financial markets. As a bonus, a separate Technical Analysis video disc by Jim Sinclair is included in the package. This video is viewable on a computer only and is both PC and Mac compatible. Compendium Version 2 ($80 USD):

Compendium Version 2 includes all articles posted from December 2005 to the end of October 2008. All articles are categorized and presented in HTML format and are PC and Mac compatible. Several thousand articles are again included in this archive disc which makes up literally thousands of pages of market commentary from Jim himself. Compendium Version 2 also includes an hour long DVD video commentary on financial markets by Jim Sinclair. This disc is playable in any DVD player and any computer that supports DVD playback. Compendium Version 1 & 2 Package ($130 USD):

This package includes both compendium 1 & 2 which are shown above. As you have noticed by this point, JSMineset does not subsidize costs with garbage advertising nor do we ever promote products through our free eblast system. If you feel JSMineset has helped you over the years purchase Compendiums 1 and 2 and help keep us alive! For the price you pay the information you receive is unbeatable and you know it is going to a good cause. All prices are in US dollars and include shipping and handling. Thank you all for your continued support! Dan Duval JSMineset Editor

Posted at 12:33 AM (CST) by & filed under General Editorial.

Dear CIGAs,

Today I have simplified, but accurately outlined for you how paper currency works from Contract to Confetti and back again.

The following video fits in quite well with this market based educational initiative.

To this video, I would only add markets must be transparent, and the rules of level playing field must be adhered to. To stop white collar crime all one needs to do is make it a capital offense.

The way to make referees good regulators is to make deviations from duty a white collar crime.

White collar criminals are the most devoted cowards. I know this because I know them.

I have more respect for a ghetto kid that boosts a car, yet for the child in the ghetto there is no house arrest.

Posted at 11:24 PM (CST) by & filed under General Editorial.

Dear CIGAs,

money1&2_Page_2 money1&2_Page_1

Money always starts in some form of contract between the holder and the Treasury of the issuing country.

We will call this contract money.

During these times politicians have no control over issuing paper beyond the contract limitation. In the case of the $20 Gold certificate and $2 Silver certificate, the Treasury has agreed to give to the holder a $20 gold coin or 2 silver dollars in exchange for the certificate.

This controls the amount of liquidity in the system and acts to maintain the currency buying power without dilution in the form of increased money printing.

When things are going well in business and the paper assets of the issuing country are in market demand, government in modern times want politicians or people appointed by politicians to run the amount of money in the economy, not being restricted by a contract between a treasury and the holder of a currency.

money3&4_Page_1

20USD 

 

That is well and good for many years until increased amounts of speculation as a product of increased amounts of money in the system blows a bubble so big that the natural explosion of that bubble whips out the balance sheets of the players, banks and financial institutions.

Once it was a tulips bubble. Once it was the South Sea bubble, but this time it was different and more insidious.

Placing the horse in front of the cart, it was the creation of speculation money called OTC derivatives to a level that can only be described as COSMIC. The OTC derivative bubble exploded with a minor dip in the real estate market but then the OTC derivative collapsed on a modest recession in the real estate buying market. It was the collapsed OTC derivative that drove real estate and the credit markets into a total lock.

At this point non-contract money, which we will call CONFIDENCE-MONEY, begins to get shaky.

When general confidence is broken by a crash in the equity markets, or a market valuation of the currency in question, regardless of the depressed economy, hyperinflation occurs. Hyperinflation is a currency event described as a loss of confidence. It is not an economic event and does not occur in positive market environments or positive business conditions. This is a key point that the present students of markets haven’t a clue about.

Zimbabwe1 

This is called Confetti Money.

This has happened in America twice. The first was the collapse of the US Continental and the second was the collapse of the Confederate currency.

A close of the USDX below .72, which is certain to come, would be an event that would trigger a loss of confidence in the US dollar.

Loss of confidence in the US dollar could come in other ways such as the high expectations for the abilities of President Obama to be proven incorrect. The economic impact of the fall of Pakistan to the Taliban is another. There are many ways that confidence can be broken.

Every hyperinflation scenario has effectively stemmed from a result to some type of contract money.

You can see even Zimbabwe tried it where they tried to link their last printed money to agriculture by calling it an Agro but the name was nothing but hot air. The currency became totally worthless.

Rentenmark

The Rentenmark was Contract Money of a sort, much like what will come when the US dollar fails.

This is where the Federal Reserve Gold Certificate Ratio, modernized and revitalized, plus the policies that have a precedent of returning deficits towards surplus enters with Volcker at the helm.

The US Dollar then will be Contract Money, of a sort.

Pray to God Volcker lives long enough.

Posted at 6:29 PM (CST) by & filed under In The News.

Dear CIGAs,

$9.5 trillion of bailout money is enough to pay off every mortgage in the USA or write a check to every person on the planet for $1400.

Where did it go? The Fed keeps it secret. The Fed therefore has bigger secret accounts than Switzerland ever dreamed of.

One in 8 U.S. homeowners late paying or in foreclosure
Thu Mar 5, 2009 5:18pm EST
By Lynn Adler

NEW YORK (Reuters) – About one in eight U.S. homeowners with mortgages, a record share, ended 2008 behind on their loan payments or in the foreclosure process as job losses intensified a housing crisis spawned by lax lending practices, the Mortgage Bankers Association said on Thursday.

With unemployment at a 16-1/2-year high and expected to continue rising until mid- to late 2010, more borrowers will pay late or fall into foreclosure this year, said the group’s chief economist.

"While California, Florida, Nevada, Arizona and Michigan continue to dominate the delinquency numbers, some of the sharpest increases we saw last quarter in loans 90 days or more delinquent were in Louisiana, New York, Georgia, Texas and Mississippi, signs of the spreading impact of the recession," said Jay Brinkmann.

Duress is no longer isolated to borrowers with lower credit quality. As joblessness grew, so did late payments on prime fixed-rate loans that represent two-thirds of mortgages.

U.S. President Barack Obama’s $275 billion housing stimulus program will standardize modifications for distressed loans and pave the way for more refinancing.

More…

Jim Sinclair’s Commentary

Economic changes are processes, not singular events. The following is part of the hyperinflation process.

Because nothing done has targeted OTC derivatives as the villain in all this, there is nothing that can stop the ongoing process towards it final end. That end is not an event but a condition – hyperinflation.

American banking system insolvent, says US economist

6 Mar 2009, 2124 hrs IST, PTI

NEW DELHI: The American banking system has become insolvent following the global financial crisis which is likely to be deep and prolonged hitting the economies of the developing and developed world, said a US-based economist.

"In our assessment, the US banking system is insolvent… they are below the water level", said Nouriel Roubini, professor of the US-based Stern School of Business, while addressing a session on the global meltdown at the India Today Conclave 2009 here on Friday.

According to research, he said, the losses of the US banking system are a mammoth $ 3.6 trillion, with banks accounting for $ 1.8 trillion and pension funds, hedge funds and other shadow banking institutions, the remaining portion.

Pitching for nationalisation of crisis-ridden banks by the American government, the US-based economist said, "they (banks) could be handed over to the private sector after cleaning up".

Suggesting ways for tackling the global crisis, Roubini said it was time for the governments of developed and developing countries to act in concert to prevent further deepening of the global recession.

More…

Jim Sinclair’s Commentary

The Seven Story Mountain seeking the Real Story.

1. All of this, without exception, was an OTC derivative failure, even motors.
2. To a financial institution, every failure was an OTC derivative process.
3. There is not a sound bank in America.
4. There is no major financial institution that can be accurately described as sound.
5. For every loss there is a gain in transaction.
6. The gain can be in cash, position, fees or a mix of all three.
7. Now if everybody lost in the USA and on the planet, who won?

Corporate America’s Icons Crumbling Under Global Recession
By Steven Mufson
Washington Post Staff Writer
Friday, March 6, 2009; Page A01

The truisms have been familiar to generations of Americans: As General Motors goes, so goes the nation; Citigroup is too big to fail; General Electric, one of the 12 original companies in the Dow Jones industrial average in 1896, brings good things to life.

But the giants that only recently seemed like the unshakable foundations of the economy are faltering one after another. The girth that once seemed a source of strength now appears to be undermining them.

A share of Citigroup, worth $55.12 less than two years ago, yesterday cost about half of an ATM fee, finishing the day at $1.02 after briefly breaking below the buck-a-share level. The once-mighty financial conglomerate, valued at more than $300 billion in March 2007, was worth just $5.6 billion yesterday.

General Electric, whose mix of financial services, consumer products and industrial goods was once considered a sturdy pillar of the U.S. economy, closed yesterday at its lowest level since 1992, barely a 10th of its peak level. The price of a GE share, $6.66, was less than the cost of single compact fluorescent flood light bulb.

And battered GM shares slid yesterday yet another 15 percent to $1.86, not quite enough to buy a gallon of gasoline, after news that GM auditors warned the company might not remain a going concern without massive additional assistance from the U.S. government. While GM’s fate might indeed mirror the nation’s for now, the company could perish before an economic recovery arrives.

More…

Jim Sinclair’s Commentary

This type of talk, if it persists and gets heard in public, would begin the process of legislative weakening of the Federal Reserve.

AIG Update: Senators Doubt Fed Could Regulate Systemic Risk
By Emily Flitter, American BankerMarch 6, 2009

As the House Financial Services Committee met Thursday to discuss the creation of a systemic risk regulator, Senate Banking Committee members were questioning the mettle of the main candidate for the job, the Federal Reserve Board.

Senators openly doubted whether American International Group Inc., which has received four government bailouts so far, ever poised a systemic risk to the economy, and they asked if the central bank made a mistake in providing the company with assistance.

It seems as if the Fed led the government to make a "large blunder — the largest in modern history," according to Sen. Bob Corker, R-Tenn.

"I have a hard time understanding the systemic risk issue," Corker said at a hearing on the AIG bailouts.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., said regulators would have to do a better job explaining how and why they rescued AIG.

"Public confidence in what we’re doing is at stake," he said.

More…

Jim Sinclair’s Commentary

Mullah Omar makes for today’s Pakistan:

Mullah Omar Calls for a Taliban Surge

By ROBERT MACKEY
March 6, 2009, 8:26 AM

The Pakistani newspaper Dawn reports that on Thursday, “the mausoleum of renowned Pashto mystic poet Abdur Rehman Baba was bombed by unidentified miscreants,” outside Peshawar, in Pakistan’s North West Frontier Province. Dawn calls the bombing of the shrine to “a 17th century poet, revered for his message of love and peace” part of an “attack on Sufism.”

As the BBC notes, suspicion has turned to the Taliban, “who represent a more purist form of Islam and are opposed to Sufism, preventing people from visiting shrines of Sufi saints in areas they control.” The BBC also says that “No casualties are reported but the poet Rahman Baba’s grave has been destroyed and the shrine building badly damaged.”

According to Dawn:

The shrine’s watchman had received a threat from suspected militants on his cell phone three days ago. He told police that the attack took place to crack down on the tradition of women making pilgrimages to the site.

In spirit, the attack on the Pashtun poet’s shrine in Pakistan seems to echo one of the Afghan Taliban’s most infamous acts of cultural cleansing: the destruction of the Great Buddhas of Bamiyan in 2001. But, surprisingly, the Taliban leader who ordered the attack on the “idols” at Bamiyan, Mullah Muhammad Omar, might not approve of this bombing in Pakistan, or, for that matter, the attack on the Sri Lankan cricket team and its Pakistani police escort in Lahore.

More…

Jim Sinclair’s Commentary

"Eric the Gold" speaks about what might well be another difficult situation; a situation that many of your retirement plans are involved in.

As Safe As Gold
Sprott Asset Management
February 2009
Eric Sprott 
Sasha Solunac

What are phrases that connote safety? Two that come to mind are: “Like money in the bank” or “As safe as houses”. Given events of the past year, these two phrases no longer seem to hit the mark, do they? These days, the one word that signifies safety is “gold”, being far safer than both cash and houses. It therefore stands to reason that a more accurate phraseology would be “Like gold in the safe!” or “As safe as gold!” Yes, the barbarous relic is back… and with a vengeance.

As our readers may have already surmised, we like gold around here, and evidence suggests the world is beginning to like it more and more too. We therefore hope our readers can forgive us for harping on the same theme over and over. For the past seven articles including this one, the subject of gold has been a dominant theme, if not the prevailing theme in four of these articles; namely, “The Phony Express” (August 2008), “Cash or Gold” (October 2008), “Surviving the Depression” (December 2008), and now “As Safe as Gold”. Although we may seem obsessed, there is a method to our madness.

Not coincidentally, the past seven months have also coincided with the worst financial crisis the vast majority of us have ever seen in our lifetimes, as well as the worst global economic contraction the world has seen since the Great Depression. As we wrote in our previous article, “So You Think 2008 Was Bad? Welcome to 2009”, the world is currently in an environment where weakness only begets more weakness, and furthermore, the olden days of economic prosperity through endless credit creation are likely never coming back. That’s right; we believe there has been, and will continue to be, a paradigm shift in the way financial markets function going forward. We believe this last point is a very important distinction to make – one that fundamentally distinguishes the current environment from a run-of-the-mill recession. The implication is that current government policies, which are all focusing on bringing the olden days back (this time through endless government credit/debt creation) are in fact ruinous strategies that will have dire implications for financial stability and investment portfolios going forward.

If one believes the above (indeed, it seems increasingly difficult not to), then it should go without saying that, from an investment perspective, these are extremely challenging times. It has become very difficult to preserve wealth, let alone create it. Just like a rising tide lifts all ships, a receding tide tends to ground them one and all. You could have bought almost anything in 2003-2007 and made money (provided, of course, you got out by the beginning of 2008!) Likewise, right now you can buy almost anything and lose money. Those who have been “bargain hunting” on the way down have been taken to the cleaners. There was a time not that long ago when big bank stocks were considered conservative and ‘safe’ investments. Today this notion seems laughable. Bank stocks are now the biggest dogs on the planet – the common equity of which, in its current form, will be shown to be completely worthless in our opinion. Thus, buying bank stocks remains a sucker’s game – at any price. But there isn’t much solace to be found elsewhere. The direction for almost everything, in any industry, remains down. You show us an investment and we’ll tell you why it’ll lose money.

More…

Jim Sinclair’s Commentary

Some subjects seem to evade CNN.

BUDGET BACKLASH: Thousands Rally At City Hall
Taxpayers Furious With Budget Cuts Take Frustration To Streets Of NYC
Organizers Say 50,000 On Hand For ‘Rally For New York’

NEW YORK (CBS) ― A massive budget backlash came to lower Manhattan on Thursday. Tens of thousands of New Yorkers marched on City Hall, rallying to stop proposed funding cuts.

The rally cries of labor unions, community groups and families outside City Hall could be heard throughout lower Manhattan. Desperation for an economic lifeline brought out more than 50,000 people along several blocks of Broadway in a self-described "Rally For New York."

Their message for Gov. David Paterson came in the form of booming chants:

"No more cuts! No more cuts!"

Everyday New Yorkers had their own personal messages for the governor as well.

"Governor Paterson, I wish you could have an open heart that we are going to suffer if this budget cut goes through," said China Lankford of Jamaica.

More…