Posted at 3:36 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

As expected, the return of a larger number of traders to New York this morning saw the return of the usual selling gang which had been missing in action on Friday of last week. Gold had risen sharply in overnight trading before they took it down $17 off its best overnight levels pretty much erasing all of those gains. Action was centered around the technically significant $880 level which is once again proving to be very formidable resistance (bullion banks). Gold did manage to hold onto all of its gains from its low volume session of Friday however which is quite impressive. As a result, the breakout from the former consolidation range of $830 – $850 must be respected as the bullish flag or pennant formation was confirmed by today’s ability to retain price strength. Still – the ability of the bullion banks to knock prices back so easily is not particularly enchanting.

To give you an idea just how low the volume was last Friday and why I was cautious about reading too much into the price action, the total number of contracts changing hands was 25,513. That is for all of the contracts combined. Prior to the onset of the holiday trade, volume for the month of November was averaging over 150,000 per day! That is why one wants to see confirmation of low volume breakouts. All too often they turn out to be traps.

Gold is however trading solidly above its 100 day moving average on the continuous daily price chart and has once again recaptured the 200 day moving average – that is no mean achievement. When a market is trading solidly above both the 100 day and the 20 day moving averages, all the bears have going for them at that point is to hope for “overbought” readings since the technical price charts are decidedly against them.

Technically support should show up near the $860 level and then again near $852 on any downside moves. Today’s failure to maintain most of the overnight gains will be viewed by sellers as a green light to move back in and by some short term bulls as a signal to book profits and exit. Resistance is first at today’s session high near $890 and then at the even number of $900. A larger battle will be fought at $920 since it is the point of focus on the downsloping trendline resistance from the weekly gold chart which just so happens to also correspond with horizontal resistance drawn on that same weekly chart.

There were 52 deliveries assigned today in the December gold contract bringing the total for the month to 1.3615 million ounces – a very respectable number considering the registered category is still showing a  bit over 2.8 million ounces. That is not all that far from being half of the gold available for delivery against the Comex futures contracts. There are 84 contracts left open in the December so unless we get some last minute new buyers who want to take delivery, total gold taken will come in a bit less than 1.38 million ounces. Gold traders should not be under any illusions however – unless they are willing to take possession of Comex gold through the delivery process further pulling down the stocks, the paper gold market is still the arena of the bullion banks. The have nothing to fear from paper longs who lack the teeth to take the metal from them.

By the way, gold priced in terms of British Pounds made another brand new all time high at today’s London PM Fix coming in at 601.798. That puts it very close to Euro-priced gold which came in at 616.551. The Pound and the Euro are trading very close to the same level against the US Dollar on the Foreign Exchange markets meaning that gold priced in both currency units is going to be fairly close until we see these currencies separate themselves somewhat.

Just as the bullish pennant formation in the gold chart was confirmed to the upside today, so too the bearish pennant formation in the USDX chart was also confirmed to the downside. It is now trading below its 100 day moving average with all of the other major moving averages, the 10, 20, 40 and 50 days all moving down. The recent low in the continuous chart near the 78.80 level becomes quite critical for the prospects of the Dollar as we move into the New Year.

As we move into the end of the year, some traders with profits are going to be tempted to take them either to improve their year-end trading performance or as is the case of a larger majority, to attempt to reduce somewhat the horrific losses that they have incurred in the commodity markets this year. After all, if you are down 20% on the year and you have made some very good gains in the last few weeks, why not take the money off the table, cut your final year end losses a bit and come into the new year down only 10% or so as you make ready for a fresh start in 2009. In other words, get ready for some further volatility to close out the trading year.

Crude oil got a bit of a bounce today as it perilously clings to support just above the $35 level. Shorts are probably booking some profits in there as well.

Bonds moved higher once again as they simply refuse to break down even given the parabolic type of blow off run we have been witnessing in that pit. The bubble still lives. Bond bulls are taking profits but guys who missed out on the leg up are using any price weakness to get in which is why this market simply will not go down and stay down. Something will have to occur which changes the mind set in the bonds before the longs throw in the towel.

The HUI has run into selling near the 300 level with the XAU encountering the same near the 120 level. Both are showing signs of potential short term tops in those regions. For the uptrend in the HUI to remain in force, it will need to hold above the 260 level on any price retreat while the XAU will need to maintain its footing above the 108- 110 level. Such price action would indicate a consolidation trade is occurring with an attempt to build another base of support. Failure to hold the previously mentioned levels would allow to bears to growl that the recent upleg was nothing but a corrective rebound in a larger downtrend. The weekly chart in both the HUI and the XAU looks much improved but prices will need to quickly clear 300 in the HUI and 120 in the XAU to keep the charts friendly.

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

December2908Gold1230pmCDT.jpg

Posted at 4:15 PM (CST) by & filed under General Editorial.

Dear Friends,

Here is my New Years gift to you, my extended family.

There is no way that the CONSEQUENCES of the largest creation of paper money since it was invented can be avoided or even modified. Odds now favor Alf Field’s price objective.

January 14th 2011 to June 21st, 2012:

The best part of this gift is not the one you already know, which is January 14th 2011, but rather the date that a new currency form will replace the form of the US dollar as you know it today which is the third week of June 2012.

Don’t laugh! Write this down and do not forget about it!

Happy (sort of) New Year,
Jim

Posted at 3:15 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Do not for a moment think the Pakistan/India problem will just morph away. It will not.

Do not believe that mistakes will not occur in the Israeli strategy backed by the US lead by President Elect Obama.

It is possible that before retaliating you need to decide if you are prepared to really go all the way and what such a decision means. Tit for tat is a waste of time.

Turkey plays the role of victim in this unwinding scenario.

As the following article points out:

“He retired from the C.I.A. in 2006 after 29 years, and no longer has access to the nation’s most sensitive information. But his career as an analyst is far from over. As an influential terrorism adviser on President-elect Barack Obama’s transition team, he dispenses counsel to the administration-in-waiting on some of the thorniest problems it will face: as varied as the hunt for Al Qaeda’s senior leaders like Mr. Zawahri, the likelihood of another attack on American soil, and how to stave off nuclear Armageddon between India and Pakistan.”

Behind Analyst’s Cool Demeanor, Deep Anxiety Over American Policy

By MARK MAZZETTI

Published: December 26, 2008

WASHINGTON – BRUCE RIEDEL was a 28-year-old Middle East analyst at the Central Intelligence Agency on Oct. 6, 1981, the day a band of gunmen assassinated President Anwar el-Sadat of Egypt during a military parade in Cairo.

Within hours of the attack, Mr. Riedel was summoned to the agency’s seventh floor to brief William J. Casey, the irascible C.I.A. director. Over the next several months, he began compiling a dossier about the attack — what he calls the “birth of the global jihad” — and about the emergence of a cerebral Egyptian physician named Ayman al-Zawahri.

He retired from the C.I.A. in 2006 after 29 years, and no longer has access to the nation’s most sensitive information. But his career as an analyst is far from over. As an influential terrorism adviser on President-elect Barack Obama’s transition team, he dispenses counsel to the administration-in-waiting on some of the thorniest problems it will face: as varied as the hunt for Al Qaeda’s senior leaders like Mr. Zawahri, the likelihood of another attack on American soil, and how to stave off nuclear Armageddon between India and Pakistan.

Mr. Riedel is one of a chorus of terrorism experts who see the terrorist network’s base in the mountains of Pakistan as America’s greatest threat, and perhaps the biggest problem facing Mr. Obama’s new team.

He speaks angrily about what he calls a savvy campaign by Pakistan’s government under President Pervez Musharraf to fleece Washington for billions of dollars even as it allowed Al Qaeda to regroup in Pakistan’s tribal lands.

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Jim Sinclair’s Commentary

I am sure that the present Administration has no teeth in this situation.

Bush, Saudi King talk amid Israel-Gaza bloodshed

CRAWFORD, Texas (AFP) — Saudi King Abdullah told US President George W. Bush by telephone on Saturday that major countries must take action to halt Israel’s attacks on Gaza, the Saudi state news agency SPA reported.

White House spokesman Gordon Johndroe had said earlier that the king had called Bush, who was preparing to usher in 2009 on his Texas ranch, to discuss "the Middle East" and had declined to offer further details.

But SPA reported that King Abdullah had discussed "the Israeli aggression against Gaza" and the "implications of continuing Israel’s policies of blockade, occupation and torture against the Palestinian people all over the Occupied Territories."

The king also called for "the major countries to shoulder their responsibilities to stop this Israeli attack and save the lives of the innocent and remaining infrastructure in the Palestinian territories."

Abdullah made the call after a meeting in Riyadh with Palestinian President Mahmud Abbas.

More…

Posted at 2:46 PM (CST) by & filed under In The News.

Dear Friends,

I suggest this article below be put on your bulletin board where you track the most serious trends in geopolitical events. Between now and 2012 Pakistan packs the punch. Israel makes an error in judgement and Turkey is victimized.

Newfound Riches Come With Spiritual Costs for Turkey’s Religious Merchants
By SABRINA TAVERNISE
Published: December 25, 2008

NYT2008122516465848C

Ferhan Kadiroglu played with her 3-year-old daughter, Ayse, in their Istanbul home. Their family is part of Turkey’s powerful new class of wealthy Muslims.

ISTANBUL — Turkey’s religious businessmen spent years building empires on curtains, candy bars and couches. But as observant Muslims in one of the world’s most self-consciously secular states, they were never accepted by elite society.

Now that group has become its own elite, and Turkey, a more openly religious country. It has lifted an Islamic-inspired political party to power and helped make Turkey the seventh largest economy in Europe.

And while other Muslim societies are wrestling with radicals, Turkey’s religious merchant class is struggling instead with riches.

“Muslims here used to be tested by poverty,” said Sehminur Aydin, an observant Muslim businesswoman and the daughter of a manufacturing magnate. “Now they’re being tested by wealth.”

Some say religious Turks are failing that test, and they see the recent economic crisis as a lesson for those who indulged in the worst excesses of consumption, summed up in the work of one Turkish interior designer: a bathroom with faucets encrusted with Swarovski crystal, a swimming pool in the bedroom, a couch rigged to rise up to the ceiling by remote control during prayer. “I know people who broke their credit cards,” Ms. Aydin said.

But beyond the downturn, no matter how severe, is the reality: the religious wealthy class is powerful now in Turkey, a new phenomenon that poses fresh challenges not only to the old secular elite but to what good Muslims think about themselves.

More…

Posted at 2:41 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Thinking of your commentary on "Hedge funds gain access to $200bn Fed aid" and talking of extreme outrage:

Probably the most extensive collateral damage caused by unregulated credit and the fraud of fiat money has been the gratuitous ruin of many valuable companies and interdependent communities. These companies and communities have, contrary to self-seeking argument, mutually and efficiently evolved to best succeed in ”real world” markets. As far as possible they have avoided debt but have now bankrupted or been taken over and in an illusion of success, displayed as trophies on the walls of vacuous financial organizations as collateral to fund ever expanding market share and valueless monetary turnover that is re-circulated to create the illusion of profit and accelerating personal wealth.

This is a ponzi scheme with many layers and illusions that is becoming progressively more visible in its terminal phase at the point of exponential growth. It is not only destructive to the real economy but also of the ability to produce goods, services and vital social capital that in the end undermines a nation’s well being and stability.

CIGA Peter

Dear Peter,

Adam Smith knew as much about economics as he did about life, but for public consumption the "Unseen Hand" sold better to those that thrived for profit.

It doesn’t matter if Adam Smith knew why he played this roll of speaking truth to those who had ears to hear even if they did not know what the true attraction really was.

Peter, be assured that underneath all of this there is a public justice of another variety that will not be denied. It is an "Unseen Hand" that sets things unfailingly into balance.

Hedge Fund managers that have sewn havoc and destruction may feel invulnerable, too connected to be held accountable and too rich to be touched by mere mortals. These elitists would be well advised to study the writings of Adam Smith and to look over their shoulders often because they are the only ones who do not know their days of glory are behind them, their contacts are spent and the unseen hand is now firmly around their neck.

Strength lies in knowledge. Weakness pretends in being connected, unwisely.

"Hurricane Carter" knew the truth. He knew those who were the culprits.

So do I.

All the best,
Jim

Posted at 3:55 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Volume in today’s gold trading session was again extremely light which as I have been warning can lead to exaggerated moves to both the upside and the downside. Today’s move was to the upside with the low liquidity allowing floor traders to go gunning for upside buy stops. It certainly did not do the bears’ cause much help that the Dollar was weaker and crude oil was higher today as the shorts had nothing whatsoever in the way of fundamentals to buttress their case.

While moves occurring in markets in holiday mode are always suspect and therefore subject to mild corrections as traders take back some of the extremes, today’s move was nonetheless quite impressive technically because of the price levels through which gold knifed so easily. It was as if selling resistance simply disappeared. Maybe the spiked egg nog that the bulls gave the shorts on Wednesday was a lot stronger than we suspected and most of them were still hung over or trying to sleep it off.

I am sending several chart images today to give you a bit bigger picture of what gold has done technically. The first is the usual 12 hour chart which shows the previous trading range between $830 and $850 which was broken to the upside this morning. The breach, if it can maintain this level Monday when a few more folks will be around in the pits, sets up another run at $880 once again. If that breaks, $900 will be reached rather quickly as the momentum geeks will want in. You can see the various downside support levels marked in red on the chart.

The Daily chart is rather interesting as well. As you can see, all of the major moving averages shown on this chart are now moving higher. Even the 100 day has stopped moving lower, has flattened out and is making an upside turn. Technically the only thing remaining negative on this chart is that the downsloping trendline resistance lines drawn off the peaks have not yet been broken convincingly to the upside. If you look at the shorter-dated line on the chart, you can see that it comes in fairly close to the $880 level making that region something that chart watchers will be focusing on to see whether or not the bullion banks will be able to hold the line there or not.

The last chart is the same daily chart but notes the presence of a bullish flag formation which was confirmed in today’s session. The only thing which gives me pause about this move however is the fact that it came on such low volume. That is why I would like to see further confirmation in Monday’s session. Should the flag be confirmed indeed, the price projection from this formation, for what that is worth, comes in near the $980 – $990 level –

It should be noted that both the HUI and the XAU are illustrating the same bullish flag formation on their respective charts as is the Comex gold chart. Both are also trading solidly above their 100 day moving averages – more bullish technical signals.

Incidentally, all of the grains continue solidly higher today confirming that the bottoms are in those markets. That is further fodder for gold bulls.

There were another 110 deliveries assigned today at the Comex bringing the total for December gold to 13,563 or 1.356 million ounces.

The Dollar daily chart is exhibiting a bearish flag formation – a near perfect inverse of the gold chart. Its initial target is near the 73 level – not far from major, major dollar support. One thing is for certain – the dollar looks headed for much more weakness in the upcoming new year if all we have to look at is its technical chart pattern.

Bonds were back to their usual straight up move today. No support from the dollar coming from that front.

Enjoy your weekend.

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

December2608Gold1230pmCDT-1December2608Gold1230pmCDT-2December2608Gold1230pmCDT-3

Posted at 6:16 PM (CST) by & filed under General Editorial.

Dear CIGAs,

We would like to thank you all for another great year at JSMineset.com, and quite the year at that! We look forward to you all being by our side on this unprecedented economic ride and wish you and all yours the best over the holiday season!

Regards,
Jim, Trader Dan, Editor Dan, Monty Guild and David

Happy-Holidays-webcopy

Posted at 6:10 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Closer and closer we come. There is a political demand for the Indian government to act in order to satisfy the constituency lest an old adversarial party rises once again. The odds favor something dangerous soon.

India, Pakistan: Signs of a Coming War
December 24, 2008 | 2002 GMT

Several major signs of a coming Indian-Pakistani war surfaced Dec. 24.

Indian troops reportedly have deployed to the Barmer district of southwest Rajasthan state along the Indian-Pakistani border. Furthermore, the state government of Rajasthan has ordered residents of its border villages to be prepared for relocation. The decision reportedly came after a meeting among the state’s director-general of police, home secretary and an official from the central government. Stratfor confirmed the report with an Indian army officer.

According to India’s ZeeNews, the Pakistani army replaced the Pakistan Rangers that regularly patrol the border with India. The Pakistani troop movements were later confirmed by U.K. Bansal, the additional director-general of India’s Border Security Force (BSF) in Barmer, Rajasthan.

As Stratfor reported Dec. 22, there is a high probability of India using military force against Pakistan after Dec. 26, when a deadline expires for Pakistan to deliver on Indian demands to crack down on Islamist militant proxies that threaten India. With low expectations that Pakistan has the will or capability to deliver on these demands, India has spent the past month preparing for military action against Pakistan. Pressure is now ratcheting up on both sides of the border, with Indian Air Marshal P.K. Barbora, air officer commanding-in-chief of the Western Air Command, telling reporters Dec. 24 that as many as 5,000 targets in Pakistan have thus far been identified, while saying that many of the militants hiding out in camps in Pakistan-occupied Kashmir have already fled.

More…

 

Jim Sinclair’s Commentary

Words of war can easily result in a war between two nuclear powers. The problem lies in if the action bogs down, or one party starts to lose.

We’ll defend Pakistan till the last drop of our blood: Zardari
Nirupama Subramanian

ISLAMABAD: A charged debate on national security in the Pakistan parliament’s upper House saw members across party lines express support for the government and the country’s armed forces against “any kind of aggression” by India.

With a well-known international think-tank adding fuel to the fire with information — by its own admission, it was unverified — that India had set a deadline of December 26 for Pakistan to act against militant groups operating in its territory, President Asif Ali Zardari added to the war talk with the pledge that the Pakistani nation would defend itself “till the last drop of our blood.”

Statements by Prime Minister Yusuf Raza Gilani and Interior Ministry head Rehman Malik about the low possibility of war were lost on a day of high rhetoric both in the Senate and in the National Assembly.

Mr. Gilani, speaking in Lahore, said it was his assessment there would be no war between the two countries, even though he said the nation was fully prepared to meet any threat head-on.

Mr. Malik, speaking at a memorial function for Benazir Bhutto in Islamabad, described the leadership of the two countries as “sensible” enough to prevent a war.

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Jim Sinclair’s Commentary

If you are in India you might consider leaving for anywhere, now.

The only safe place in India is Prasanthi Niliyam. I feel quite good here in Africa.

If this push does come to shove, do not be complacent in major capitals or commercial centers anywhere.

Surgical strikes’ mean war, senators warn India

ISLAMABAD: The Senate on Wednesday ruled out the possibility of allowing India ‘surgical strikes’ in saying such attacks would be taken as aggression. “Any violation of Pakistani territory would be considered as war and would be repulsed with full force,” Leader of the House Raza Rabbani said while winding up a debate on national security in the Upper House. He rejected reports that US Chiefs of Staff Chairman Michael Mullen had asked Pakistan not to retaliate in case of an Indian strike. “We were neither conveyed such a message by Mullen nor are we ready to accept such advice,” Rabbani said. He dismissed reports of differences between the military and civilian leadership. Rabbani offered India co-operation in the Mumbai probe but said Pakistani citizens would not be handed over to India. zulfiqar ghuman

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Jim Sinclair’s Commentary

Anyone seen four horsemen go by? Is there anyone who does not yet understand how pivotal Pakistan is for the world?

Suicide bombers ready to defend Pakistan: TTP
Daily Times, Pakistan – 15 hours ago

Tehreek-e-Taliban Pakistan backed and financed by u.s.a (TTP) chief Baitullah Mehsud said on Wednesday that ‘hundreds of thousands of suicide bombers’ are ready to defend Pakistan in case of war with India. According to a statement, he said, “Despite our differences with the government, the protection of Pakistan and its people is as much our duty as it is of the armed forces.” “The armed forces and the nation do not need to worry about the western borders in case of an Indian attack,” he added.

More…

Pak military, Taliban unite against India
25 Dec 2008, 1044 hrs IST, Indrani Bagchi, TNN

NEW DELHI: “We are all Taliban now’’ is what Pakistanis may soon be saying. With Baitullah Mehsud of the Tehrik-e-Taliban (TTP) openly ranging himself and his suicide fighters on the side of the Pakistan army, the distinction between the army and the jihadi militia has significantly blurred. The danger of ‘Talibanisation’ becoming mainstream in Pakistan is now a proximate reality.

On Tuesday, Mehsud, whose TTP is one of the biggest Taliban terror groups in the Federally Administered Tribal Areas (FATA), offered his bombers to the Pakistan army to fight India. In the immediate aftermath of the Mumbai attacks, Mehsud and Maulana Fazlullah (Tehreek-e-Nafaz-e-Shariat-e-Mohammad) in Swat had both offered their terror groups to “help’’ the Pakistan army.

The aggressive noises against India were designed to signal that they meant business and to extend their appeal beyond the sections which have already embraced them.

In the process, however, the lid may have been blown off the tacit alliance that the Pakistan army was always suspected to have with the Taliban even when the two were fighting in FATA and the North West Frontier Province.

More…

‘Surgical strike’ speculation quashed
By Iftikhar A. Khan

ISLAMABAD, Dec 24: The government ruled out on Wednesday the possibility of allowing India to conduct a ‘surgical strike’ inside Pakistan.

Winding up a discussion on national security in the Senate, Leader of the House, Mian Raza Rabbani, rejected as baseless rumours that US Chief of Staff Michael Mullen had advised Pakistan not to retaliate in case of a strategic strike inside its territory and that Pakistan had agreed to allow a single strike. “We were neither conveyed such a message by Mullen nor are we ready to accept such an advice.”

Senator Rabbani said Pakistan would neither allow a surgical strike nor violation of its airspace or other territorial limits.

He asserted that a surgical strike would be treated as war and repulsed with full force.

He said any attempt to alter the boundaries of the country would be thwarted with the support of the masses. He said the civilian and military leadership, as well as the entire nation, were reading from the same page, singing in the same tune and speaking the same language.

More…

Kayani, the real power wielder in Pakistan
25 Dec 2008, 0000 hrs IST, Indrani Bagchi, TNN

NEW Delhi – Mumbai attacks lifted the veil on what was, until then, a stealthy transformation within Pakistan — the outing of new army chief

Ashfaq Parvez Kayani as the real power in the country, as opposed to the fragile democratic government led by Asif Ali Zardari and Yousuf Raza Gilani.

The first sign came when Pakistani foreign minister Shah Mehmood Qureshi was literally airlifted out of Delhi in the middle of the night, by what Indian officials say was a Pakistan army airplane.

Diplomatic sources said it was Kayani who personally torpedoed the proposal by Gilani to send the DG-ISI to India. He reportedly told a friendly diplomat, "The Indians will be asking for me the next time." It was also Kayani who went on record to state that Pakistan would respond "within minutes" to India. All indications are that the Pakistan army is spoiling for a fight.

When Kayani was made army chief by former president Pervez Musharraf in late 2007, all that was known about him was his reclusive nature, his apolitical bent and that he was a professional soldier and a keen golfer with an 18 handicap.

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Jim Sinclair’s Commentary

Christmas spirit in downtown Karachi:

Pakistan Scrambles Fighter Jets After India Says ‘All Options Open’
Washington Post   |  Rama Lakshmi   |   December 23, 2008 05:23 PM

NEW DELHI, Dec. 22 — In signs of growing regional tension since the Mumbai attacks last month, Pakistan scrambled fighter jets over several of its larger cities Monday, and India’s foreign minister told a gathering of Indian diplomats in New Delhi that the country is keeping all its options open to bring the perpetrators of the attacks to justice.

"We have so far acted with utmost restraint," Pranab Mukherjee told the more than 120 envoys from posts around the world. But he added, "We will take all measures necessary as we deem fit to deal with the situation."

A senior government official, who spoke on the condition of anonymity, later called Mukherjee’s tough talk "an expression of political will that India will not take this lying down." He added that the option of "precision airstrikes" on terrorist training camps in Pakistan would remain on the table if Islamabad did not act effectively against groups fomenting terrorism against India.

Pakistan has denied involvement in the Mumbai attacks, which killed more than 170 people and wounded more than 230.

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Jim Sinclair’s Commentary

What the banks refuse to tell is a story that will certainly send them all to hell.

Crackdown on bailed out banks
Dec 24, 2008

WASHINGTON – LAWMAKERS are turning up the heat on banks that have received money from the Treasury Department’s $700 billion (S$1 trillion) rescue fund after the Associated Press reported that they wouldn’t say how they are using the money.

Sens Dianne Feinstein and Olympia Snowe said on Tuesday that they will propose legislation next month to force companies that receive money from the fund to report how they have spent it.

The legislation would also prohibit them from spending the taxpayer dollars on lobbying or political contributions. It would also apply to some recipients of the Federal Reserve’s emergency lending programs.

The legislation was introduced earlier this year, but the Senate did not take it up. The sponsors have long said they plan to pursue it when the 111th Congress convenes Jan 6.

‘At present, we don’t know whether these companies are using these funds to fly on private jets, attend lavish conferences or lobby Congress,’ Ms Feinstein, a Democrat, said in a statement.

More…