Posted at 9:28 PM (CST) by & filed under Jim's Mailbox.

Jim,

In the same day of the announcement to buy one trillion OTC derivatives from the banks, they are already asking for more than one trillion.

CIGA BJS

Dear CIGA BJS

See the Krugman comments earlier. The problem globally is over one quadrillion. Sure they need more money.

Regards,

Jim

Toxic asset mountain looms over Treasury plan
PPIP may need to at least double in size to tackle troubled loans, securities
By Alistair Barr, MarketWatch
Last update: 5:29 p.m. EDT March 23, 2009

SAN FRANCISCO (MarketWatch) — The Treasury Department’s latest plan to stabilize the financial system targets a formidable mountain of troubled loans and mortgage securities from the real estate boom earlier this decade. Some experts said Monday that more money may be needed to complete the arduous climb.

Between $75 billion and $100 billion of Treasury money will be funneled into the so-called Public-Private Investment Program, or PPIP. Private investors will buy troubled assets alongside the Treasury and will get access to government loans and guarantees, generating $500 billion to purchase toxic assets. It could be expanded to $1 trillion later, Treasury said Monday. See full story.

"Purchasing $1 trillion in toxic assets won’t be enough to solve the banking system’s problems; the program probably needs to be at least twice as large," said Mark Zandi, chief economist at Moody’s Economy.com.

The first half of the plan focuses on loans sitting on bank balance sheets. U.S. banks may be holding as much as $2.5 trillion of toxic assets that haven’t been written down yet, Zandi estimated.

"To cover losses on these assets, the government will ultimately need an additional $300 billion to $400 billion," he added. "The up to $100 billion that officials plan to commit now is a good start, but they will eventually have to ask Congress for more."

The other part of Treasury’s plan targets mainly non-agency residential mortgage-backed securities (those issued by private firms rather than government agencies like Fannie Mae and Freddie Mac) and commercial mortgage-backed securities.

The Legacy Securities Program, as it is known, will incorporate the Federal Reserve’s Term Asset-Backed Securities Loan Facility, or TALF. Investors will get TALF loans to help them buy non-agency residential MBS that were originally rated AAA. Commercial MBS and other asset-backed securities still rated AAA will also be eligible, Treasury said.

More...

Posted at 7:13 PM (CST) by & filed under General Editorial.

Dear Friends,

Referring back to my recent Bloomberg radio interview, the rally at this time is no surprise.

In order to have legs in this rally there must be immediate and significant action on two items – the uptick rule on short sales and the practice of naked short selling.

Without immediate and real action of the two key market points and this attempt at a 1930s type equity rally will certainly fizzle.

Regards,
Jim

Posted at 5:43 PM (CST) by & filed under In The News.

Dear CIGAs,

A comment on today’s Treasury plans for financing private investments in defunct OTC derivatives:

"Giving money and power to government is like giving whiskey and car keys to teenage boys."
— P.J. O’Rourke, Civil Libertarian

Jim Sinclair’s Commentary

Sorry Paul, There is no practical solution

Having paid out OTC derivative winners to the tune of $9.5 trillion, it is too late to erase the mess. That could only have been done prior to Lehman being flushed on purpose. After Lehman went, ALL the dominoes fell.

Sorry, Paul Krugman, you are right on almost everything with one exception: There is no practical solution as it all has gone too far. The winners are too lopsided now versus the losers on the OTC derivative and are protected by contract law.

Keep in mind that an OTC derivative is an unfunded special performance contract.

Under the law the ONLY way to cancel contracts is the US government declaring by Presidential Order an Economic Emergency, an act he will not do. An Economic Emergency Declaration is when there is no solution, and is considered a Draconian surrender to circumstances.

G-20 Must Freeze The $1.5 Quadrillion Derivatives Bubble As The First Step To World Economic Recovery
By Webster Tarpley
3-22-9

(Highlights from the article)

"That cause is unquestionably the $1.5 quadrillion derivatives bubble. Derivatives have provoked the downfall of Bear Stearns, Countrywide, Northern Rock, Lehman Brothers, AIG, Merrill Lynch, and Wachovia, and most other institutions which have succumbed. Derivatives have made J.P. Morgan Chase, Bank of America, Citibank, Wells Fargo, Bank of New York Mellon, Deutsche Bank, Société Générale, Barclays, RBS, and money center banks of the world into Zombie Banks."

"Krugman is right: "zombie ideas" rule Obama’s Washington. The Fed’s TALF amounts to subsidies for securitization, meaning more derivatives. The derivatives bailout was pioneered by Gordon Brown, Alistair Darling, and Mervyn King in the case of Northern Rock. These efforts are doomed to costly futility. The $1.5 quadrillion derivatives bubble is comparable to the black holes of astrophysics, those artifacts of gravity collapse which will irresistably suck in all matter that comes near them. It compares to a world GDP of a mere $55 trillion, itself a figure inflated by financial speculation."

"The derivatives are the black holes of financial engineering, and can easily consume all the physical wealth and all the money in the world, and still be bankrupt. Gordon Brown’s demand of $500 billion for the IMF is enough to bankrupt several nations, but pitifully inadequate to deal with the derivatives. They can only be dealt with by re-regulation — a quick freeze, leading to extinction and permanent illegality. We reject Brown’s IMF world derivatives dictatorship."

"Derivatives pose the question of fictitious capital — financial instruments created outside of the realm of production, and which destroy production. In 1931-2, fictitious capital appeared as tens of billions of dollars of reparations imposed on Germany, plus the war debts owed byBritain and France to the United States. These debts strangled world production and world trade. Bankers and statesmen tried desperately to maintain these debt structures. But US President Herbert Hoover proposed the Hoover Moratorium of 1931-1932, a temporary freeze on all these payments. The Lausanne Conference of June 1932 was the last chance to wipe out the debt permanently. But the Lausanne Conference failed to act decisively, and passed the buck. By the end of 1932, there was near-universal default on reparations and war debts anyway. And by January 1933, Hitler had seized power. We urge the London G-20 to defend world civilization against derivatives. It is time to lift the crushing weight of derivatives from the backs of humanity before the world economy and the major nations collapse into irreversible chaos and war, as seen during the 1930s."

More…

Despair over financial policy
March 21, 2009, 7:12 am

The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding.

But it’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.

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Jim Sinclair’s Commentary

OTC derivatives bury two credit unions.

Oh excuse me, toxic assets did it.

Recall my suggestions to those in credit unions? Nothing has changed.

US Seizes Two Major Credit Unions
By MARCY GORDON

The National Credit Union Administration said it has taken over and put into conservatorship the two corporate credit unions, U.S. Central Federal Credit Union, based in Lenexa, Kan., and Western Corporate Federal Credit Union, in San Dimas, Calif. U.S. Central has about $34 billion in assets while Western Corporate, known as WesCorp, has an estimated $23 billion in assets.

A conservatorship enables the government to operate a financial institution. Corporate credit unions provide financing and investment services to the much larger population of retail credit unions. Some of the 28 corporate credit unions in the U.S. have sustained steep losses on paper from the depressed value of the mortgage-linked securities they hold.

The NCUA, which oversees some 7,800 federally insured credit unions, said it "will continue to take any and all steps necessary to preserve a well-functioning system of corporate credit unions and to protect the assets of (retail credit unions) and their members during the … financial market dislocation."

The financial services provided by the two corporate credit unions "will continue uninterrupted" and there will be no direct impact on the 90 million members of retail credit unions nationwide, the NCUA said in a news release.

More…

Jim Sinclair’s Commentary

The Treasury will fix nothing by planning to make soft loans to finance one trillion dollars worth of OTC derivative purchases.

The dirt will certainly be in the details of the financing that you will never see.

This is creative (as in creative accounting) if nothing else and it is nothing else.

Geithner Relies on Investors for $1 Trillion Plan
By Rebecca Christie and Robert Schmidt

March 23 (Bloomberg) — The Obama administration unveiled its plan to remove toxic assets from the books of the nation’s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization.

The plan is aimed at financing as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp. debt guarantees, the Treasury said in a statement in Washington.

Barely two months after President Barack Obama took office, he and Treasury Secretary Timothy Geithner are staking much of the new administration’s economic credibility on the theory that removing the devalued loans and securities from banks’ balance sheets will help them start lending again and resuscitate the economy.

The Standard & Poor’s 500 Stock Index rose 4.4 percent to 802.43 at 12:42 p.m. in New York, and the S&P 500 Financials Index jumped 9.3 percent. Yields on benchmark 10-year Treasury notes were little changed at 2.65 percent.

Because the program depends on private investors stepping up, it may be weeks or months before it’s clear whether the approach will work. “You will start to see this buying up the assets” shortly after private asset managers are chosen by May, Austan Goolsbee, a member of the White House Council of Economic Advisers, said in an interview with Bloomberg Television.

More…

Jim Sinclair’s Commentary

The French get it!

French unions delay decision and vow more action
Friday, March 20, 2009
By Tamora Vidaillet

French unions said on Friday they would keep up pressure on President Nicolas Sarkozy after up to 3 million people joined protests over the economic crisis.

But the unions held off deciding on a possible new round of strikes until a meeting planned for March 30.

The turnout at a day of rallies and demonstrations in cities across France on Thursday was the largest at any protest since Sarkozy’s election in May 2007. The demonstrators challenged the government’s response to the crisis.

Representatives from eight unions told a news conference that while they had yet to decide on how they would proceed, they were united in their will to make their voices heard.

"What counts in today’s message is the affirmation by all unions that there will be a united follow-up to yesterday’s movement," said Maryse Dumas, second-in-charge at the powerful CGT trade union.

More…

Jim Sinclair’s Commentary

Oh yeah, here are some more OTC derivatives to bail out.

You think they did not securitize commercial real estate?

Defaulting Commercial Properties Hit Banks on Vacancy-Rate Rise
By Ari Levy and Daniel Taub

March 23 (Bloomberg) — U.S. banks, battered by record losses from the worst housing slump since the Great Depression, now must weather increasing loan delinquencies from owners of skyscrapers and shopping malls.

The country’s 10 biggest banks have $327.6 billion in commercial mortgages, which face a wave of defaults as office vacancies grow and retailers and casinos go bankrupt. A projected tripling in the default rate would result in losses of about 7 percent of total unpaid balances, according to estimates from analysts at research firm Reis Inc.

Commercial property prices are down almost 20 percent in the past year, and with the global recession worsening, there’s “significant stress” in the market, said William Schwartz, a credit analyst at DBRS Inc. in New York. Moody’s Investors Service is reviewing the financial strength ratings of 23 regional lenders, as “these losses are likely to meaningfully weaken the capital position of many banks in 2009,” said Managing Director Robert Young in New York.

More…

Jim Sinclair’s Commentary

There is no line in the sand of where a state goes from being capable to failed. It is a process all media has to spin, or so it appears.

Where Pakistan is concerned the process has gone beyond repair.

Pakistan is a FUBAR Taliban state.

Pakistan ‘perilously close’ to being failed state

NEW DELHI (AFP) — Pakistan is "perilously close" to becoming a failed state and is already "pretty dysfunctional," a senior Indian government official has said.

Home Minister P. Chidambaram also voiced fears that the rise of the Taliban in neighbouring Pakistan could have a spillover effect on India.

"I do not think it (Pakistan) is a failed state but if it does not arrest the decline, it is perilously close to becoming one," he said in an interview on India’s CNN-IBN network to be aired late Monday.

"It is pretty dysfunctional today," Chidambaram said.

Asked if India has a stake in ensuring stable civilian rule in Pakistan, he replied: "Of course a stable civilian democratic government means that we know who we are dealing with and there are checks and balances."

He added that the rise of the Taliban in Pakistan "will encourage fundamentalists in India to imitate them, and number two the Taliban could become a sponsor of terror in India."

More…

 

Jim Sinclair’s Commentary

The entire Federal Reserve and Treasury program in terms of the predictable result is described below:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
–Thomas Jefferson

Some might say that financiers work, but today’s crowd is better described as scheming. That cannot be considered work in terms of Jeffersonian Democracy.

Nothing has taken place by chance since Lehman’s flushing.

Gold is very much a part of the plan.

The results of the flushing of Lehman could have been accurately predicted by my dog Mia.

Jim Sinclair’s Commentary

This is so true that it is not in the least bit funny. It is so sad that we accept that all our elected officials and CEOs of major companies are devout criminals without any redeeming human value.

What else is there to say?

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Jim Sinclair’s Commentary

Not that it will make any difference, but deluging the gatekeepers with our disdain for their lack of consideration of the level playing field seems appropriate. Lack of the uptick rule favors the few at the cost to the many due to a strong and over financed lobby. It is another wrong so lightly taken.

Dear Mr. Rivera,

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

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

Sincerely,
Adam P. Knapp

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

 

Jim Sinclair’s Commentary

Auto companies that refuse to discount their inventory to cost or below, but choose rather to store (all of them) in hard times and wait for an economic pickup that will not come in later 2009 are not worthy of being called business people.

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Jim Sinclair’s Commentary

The innocence of the banksters?

This is just too wrong.

Toxic assets are OTC derivatives on real estate mortgages, credit cards, auto loans, or basically anything securitized.

Whomever they quote here is either a pawn, dope, or bankster.

Note how careful the interviewee is when he called a real estate loan "the makings of" and stops there. The media is feeding the public with a con-job that would make AIG and Madoff proud.

What this article would infer is that the banksters are not responsible, while in fact, this is ALL the doing of the OTC derivative manufacturers and distributor banksters. The modern name for these parasitic scoundrels is BANKSTERS.

So What’s A Toxic Asset?
A Closer Look At The Financial Black Holes That Are Clogging Up The Nation’s Credit Flow
March 23, 2009

(CBS)  The Obama administration rolled out a plan Monday that could facilitate the purchase of up to $1 trillion worth of toxic assets from struggling banks in an effort to clean up their balance sheets and get them to start lending again.

So what exactly are these toxic assets, which have caused such huge problems in our financial system?

Every time you see foreclosure signs littering neighborhoods, you’re probably looking at the makings of a toxic asset, reports CBS News correspondent Bianca Solorzano.

"Toxic assets are the ones that nobody wants to touch because they’re just considered too dangerous," Doug Rediker, of New America Foundation, told CBS News.

More…

Jim Sinclair’s Commentary

Please note the Formula takes you through to this point when there is no further international lenders and the US must (as is the case now) turn inwards on itself to raise capital. The beard right now is the Fed buying Treasury debt.

Soon there may be nobody left to lend to America
Irwin Stelzer
From The Sunday Times
March 22, 2009

Anyone who thought Ben Bernanke and his Federal Reserve Board colleagues were out of ammunition received a rude, or pleasant, shock last week. Rude, if you worry that a few extra trillions sloshing around the economy might one day trigger a wave of inflation; pleasant, if you worry that the economy is sinking fast, and the Obama administration and Congress haven’t a clue what to do about it.

The Fed plans to buy $300 billion of Treasury IOUs in the next six months (more to come if needed), pour $1.45 trillion into the mortgage market, and keep interest rates close to zero for “an extended period”. There’s more in the Fed’s “do whatever it takes” arsenal if these steps don’t bring interest rates down so people can borrow more cheaply to buy houses, cars and other durable goods. But so far, so good: interest rates on 30-year mortgages fell below 5%. Whether that will encourage enough creditworthy borrowers to sop up the huge inventory of unsold homes, much less trigger new construction, is difficult t

More…

Jim Sinclair’s Commentary

There is ONE simple cause of this crisis and that is OTC derivatives. This presentation is yet another in the long line of STRATEGIC DENIAL.

By refusal to face the real problem there will be no solution at all. The result of this denial is hyper-inflation.

The result of hyper inflation is that Alf Fields will be more correct on gold than I will be at my $1650 projection prior to January 14th 2011. My target will probably come a lot prior to that date.

My Plan for Bad Bank Assets
The private sector will set prices. Taxpayers will share in any upside.
By TIMOTHY GEITHNER

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.

No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.

The depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.

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Jim Sinclair’s Commentary

The newest acronym you need to add to your vocabulary is TBTF – Too Big To FAIL.

Everything TBTF so far has been bailed out directly or indirectly.

Everything TBTF will be bailed out directly or indirectly.

The final solution will be the dissolution of the US dollar. There is no other possibility.

Half of auto suppliers facing bankruptcy
By ED BRAYTON 3/23/09 6:36 AM

Automotive News reports on a new study that concludes that half of all U.S. auto supply companies potentially face bankruptcy in 2009, with devastating results for the American economy:

More than half of the top U.S. auto parts suppliers could file for bankruptcy protection in 2009 with at least one million job losses, according to a study by global consultants A.T. Kearney.

Those suppliers, which ship parts directly to automakers, are pressured from above by production cuts by the automakers and from below by increasingly fragile companies that supply them with components, the study found.

Four major suppliers declared bankruptcy in 2008. The Treasury Department established a $5 billion fund to help auto suppliers last week, but that was far short of the $18.5 billion the industry was seeking.

More…

Jim Sinclair’s Commentary

Inheriting a Narco State south of the border is overshadowed by all the other shadows created in the last 8 years.

There is no question that oil production has peaked even if there is no peak yet in oil production from avowed enemies of the West. That is to say that the enemies with oil production seem too continually grow.

Mexican Drug Cartel Violence Spills Over, Alarming U.S.

TUCSON — Sgt. David Azuelo stepped gingerly over the specks of blood on the floor, took note of the bullet hole through the bedroom skylight, raised an eyebrow at the lack of furniture in the ranch-style house and turned to his squad of detectives investigating one of the latest home invasions in this southern Arizona city.

A 21-year-old man had been pistol-whipped throughout the house, the gun discharging at one point, as the attackers demanded money, the victim reported. His wife had been bathing their 3-month-old son when the intruders arrived.

“At least they didn’t put the gun in the baby’s mouth like we’ve seen before,” Sergeant Azuelo said. That same afternoon this month, his squad was called to the scene of another home invasion, one involving the abduction of a 14-year-old boy.

This city, an hour’s drive north of the Mexican border, is coping with a wave of drug crime the police suspect is tied to the bloody battles between Mexico’s drug cartels and the efforts to stamp them out.

More…

Posted at 5:00 PM (CST) by & filed under In The News.

Dear Friends:

The Federal Reserve moves to self financing by buying tons of US Treasury instruments in a clear message that:

  • Inflation = Good
  • Deflation = Bad

Therefore:

  • Higher price of Gold = Good
  • Lower price of Gold = Bad

Which also infers that:

  • Higher dollar = Bad
  • Lower dollar = Good.

This simple formula seems to be too complex for the talking heads who seem to have a difficult time making simple adjustments to their broadcasts, such as no smiling when reporting the Dow is down 500 points or now looking incredulous when reporting gold isup $1.

Fed quantitative easing via financing themselves put a floor under gold. When you have a floor under a market it will seek the ceiling.

The first floor temporary ceiling is at $1224. After that look to $1650 followed b y Alf’s numbers.

Bank crisis spawns new kind of gold rush
2009 recession and banking crisis has set off a rush to invest in gold and other precious metals at unprecedented levels
DAVID PARKINSON
From Friday’s Globe and Mail
March 20, 2009 at 1:00 AM EDT

In 1897, at the height of a major U.S. recession and banking crisis, a gold discovery on the Klondike River in Yukon Territory triggered one of the biggest gold rushes ever seen. Now, more than a century later, history is – sort of – repeating itself.

No, the world’s downtrodden aren’t beating a frenzied path to a harsh, remote swath of the Canadian north this time around. But the 2009 recession and banking crisis has set off a rush to invest in gold and other precious metals at unprecedented levels – a move that has tightened the global supply/demand picture and helped push prices to record highs. And increasingly, they are opting for the tangible comfort of physical gold – actual gold bars and coins that they can cling to in troubled times.

“When the banking crisis hit [last fall], we saw an avalanche of demand,” said James DiGeorgia, a Florida-based coin and precious metals dealer and editor of the Gold & Energy Advisor newsletter. “People are scared to death that all this debt [being taken on by governments] is going to debase the [U.S.] dollar and other currencies around the world.”

Data from the World Gold Council show that while demand for gold for industrial, dental and jewellery purposes fell 10 per cent in 2008, net purchases of physical gold for investment purposes jumped 64 per cent to 1,091 tonnes. In the fourth quarter – as the U.S. banking crisis reached new depths – net gold investment volumes surged 182 per cent from a year earlier. As a result of the boom in investment demand, overall gold demand rose 4 per cent last year, further widening the annual supply shortfall in the gold market.

“These dramatic retail investment inflows reflect the extreme uncertainty that surrounds the global economy and financial system,” the World Gold Council said. “In an environment where investors are more concerned about the loss of capital than they are about the return on capital, the absence of default risk or counterparty risk has been a key attraction for gold.”

More…

Jim Sinclair’s Commentary

The felonious game is over.

The handwriting is no longer on the wall, it is now in neon lights 100 feet high.

The pressure against naked shorting is picking up speed. You never would have seen this in the last 8 years. Look for criminal charges of fraud soon against the practitioner. Only the most dense hedge fund manager can fail to see the jig is up on this convenient and previously profitable crime.

Now old fails to delivers are an invitation akin to a sign on the hedge fund door saying "Arrest me please!"

Check your own investments to see the "Fails to Deliver."
http://failurestodeliver.com

In a year or so you will be able to check the location of the dense hedge fund manager:
http://www.felonspy.com/search.html

Naked Short Sales Hint Fraud in Bringing Down Lehman
By Gary Matsumoto

March 19 (Bloomberg) — The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.

As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.

The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.

“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”

While the commission’s Enforcement Complaint Center received about 5,000 complaints about naked short-selling from January 2007 to June 2008, none led to enforcement actions, according to a report filed yesterday by David Kotz, the agency’s inspector general.

The way the SEC processes complaints hinders its ability to respond, the report said.

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Jim Sinclair’s Commentary

Your first reaction to Fed and Treasury intentions might be "Are these guys nuts?"

The better question is what do they know that the general populous does not?

The answer to that is the entire mountain of OTC derivatives is falling down.

The premise concerning external floating dollars is reasonable.

Fed Planning 15-Fold Increase In US Monetary Base
by Eric deCarbonnel

The fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion. Whether expressing approval or concern over the fed’s intentions, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base because they don’t take into account the amount of dollars circulating abroad.

At least 70 percent of all US currency is held outside the country, and this means the US monetary base is considerably smaller than the fed’s overall balance sheet. Take, for example, the true US domestic money supply at the beginning of September 2008, before the fed started its quantitative easing. From the Federal Reserve’s website, we know that currency in circulation was 833 Billion. This translates as 583 Billion dollars circulating abroad (70 percent), and 250 Billion dollars circulating domestically (30 percent). Since the bank reserve balances held with Federal Reserve Banks were 12 billion, that gives us a 262 Billion domestic monetary base as of September 2008. Now compare that to the projected US domestic monetary base for September 2009 which is 3,818 billion (4,500 billion – 583 billion (dollars circulating abroad) – 99 billion (other fed liabilities not part of the money supply)). The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply.

262 Billion = US monetary base as of September 2008 (minus dollars held abroad)
3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)

3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base

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Jim Sinclair’s Commentary

A Plan finally, but not much of a Final Plan.

An economy wrecked by over leveraging (borrowing) on fraudulent paper will now be saved by providing low cost leverage (borrowing) to buy fraudulent paper. Are these people intelligent or what?

Treasury’s toxic asset plan could cost $1 trillion
Geithner releases initial outlines of proposal to be unveiled on Monday

WASHINGTON – The Obama administration’s latest attempt to tackle the banking crisis and get loans flowing to families and businesses rely on a new government entity, the Public Investment Corp. to help purchase as much as $1 trillion in toxic assets on banks’ books.

The plan that Treasury Secretary Timothy Geithner intends to announce Monday aims to use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases and also sharing risks if the assets fall further in value.

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Jim Sinclair’s Commentary

This will not take 10 years nor will it take 10 months. It is here and now!

Gregg: ‘This country will go bankrupt’

Posted: 10:53 AM ET
March 22, 2009

WASHINGTON (CNN) – Even though he was almost a member of the new Obama administration, New Hampshire Republican Judd Gregg Sunday slammed President Obama’s approach to handling the country’s fiscal outlook.

“The practical implications of this is bankruptcy for the United States,” Gregg said of the Obama’s administration’s recently released budget blueprint. “There’s no other way around it. If we maintain the proposals that are in this budget over the ten-year period that this budget covers, this country will go bankrupt. People will not buy our debt, our dollar will become devalued. It is a very severe situation.”

Gregg, known as one of the keenest fiscal minds on Capitol Hill, also told CNN Chief National Correspondent John King that he thought it was “almost unconscionable” for the White House to continue with its planned course on fiscal matters with unprecedented actual and projected budget deficits in the coming years.

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Jim Sinclair’s Commentary

I love the name of the new bill, "Federal Reserve Thingy."

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Jim Sinclair’s Commentary

Toxic assets are OTC derivatives, nothing else.

Toxic Asset Plan Foresees Big Subsidies for Investors  NYT
By EDMUND L. ANDREWS, ERIC DASH and GRAHAM BOWLEY
The goal of the plan, to be announced next week, is to leverage the dwindling resources of the bailout program with money from private investors

Jim Sinclair’s Commentary

Deficits for years is Death for the dollar

New Deficit Forecast Casts Shadow on Obama Agenda  NYT
By JACKIE CALMES
New projections for the fiscal years 2010 through 2019 show deficits totaling $2.3 trillion, more than the White House’s predictions

Posted at 4:57 PM (CST) by & filed under Jim's Mailbox.

Jim,

This reverse head and shoulders continuation pattern yields a target of 1300 based on the upside down head at 700 and the neck line at 1000. That difference of 300 added to the neckline yields a pattern based target of 1300 minimum. Thanks to philbond007 for the chart.

CIGA Ken

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Dear Ken,

$1224 then $1650.

Regards,
Jim

Posted at 11:20 PM (CST) by & filed under Jim's Mailbox.

Dear CIGAs,

I would like to send a special thank you out to the following:

  • CIGA Green hornet
  • CIGA Arlen
  • CIGA Jeff
  • CIGA Dr. Bob
  • CIGA Rusty Bayonet
  • CIGA Omid
  • CIGA Eric
  • CIGA Annette
  • CIGA Salim

Your help is deeply appreciated.

Sincerely,
Jim

 

Jim Sinclair’s Commentary

Dean Harry speaks to us. His great wisdom is not limited to finance.

We are all privileged to know him.

TWO WOLVES
This is as good as I have ever heard it explained!

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One evening an old Cherokee told  his grandson about a battle that goes on inside all people.

He said, ‘My son, the battle is between two ‘wolves’ inside us all.

One is Evil. It is anger, envy, jealousy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.

The other is Good. It is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion and faith.’

The grandson thought about it for a minute and then asked his grandfather: ‘Which wolf wins?

The old Cherokee simply replied,  ‘The  one you feed.’

 

Jim,

You mentioned how the legal issues are likely to dog the financial companies for years to come.

CIGA Charlie

New Jersey sues Lehman over pension fund loss
By Isabelle Clary
Posted: March 18, 2009, 10:29 AM ET

New Jersey Attorney General Anne Milgram filed a lawsuit Tuesday on behalf of the $59 billion New Jersey Division of Investment, Trenton, against executives of Lehman Brothers Holdings, claiming the state’s pension fund lost more than $100 million on investments in Lehman, said Robert Corrales, spokesman for Gov. Jon Corzine.

The suit alleges fraud and misrepresentation on the part of Lehman executives “in violations of New Jersey and federal securities laws, negligent misrepresentation, breach of fiduciary duty, fraud, and aiding and abetting. It seeks to recover compensatory and punitive damages,” Mr. Corzine’s office said in a statement.

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Posted at 11:13 PM (CST) by & filed under In The News.

Dear CIGAs,

The Death of the Dollar is set in cement.

$1 trillion deficits seen for next 10 years
By ANDREW TAYLOR

WASHINGTON (AP) — President Barack Obama’s budget would generate deficits averaging almost $1 trillion a year over the next decade, according to the latest congressional estimates, significantly worse than predicted by the White House just last month.

The Congressional Budget Office figures, obtained by The Associated Press Friday, predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the White House predicted in its budget.

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

The latest figures, even worse than expected by top Democrats, throw a major monkey wrench into efforts to enact Obama’s budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his allies controlling Congress would have to consider raising taxes after the recession ends or paring back his agenda.

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Jim Sinclair’s Commentary

The American motor industry is finished. As goes Motors, so goes the USA. What a disaster has been brought on us by the OTC derivative manufacturers and distributors.

GM, Chrysler May Need Additional Aid, Rattner Says
By John Hughes

March 20 (Bloomberg) — General Motors Corp. and Chrysler LLC, which have requested as much as $21.6 billion in additional government aid, may need “considerably” more than that, said Steven Rattner, the Treasury’s chief auto adviser.

“It could be considerably higher, I won’t deny that,” Rattner said, when asked whether U.S. aid sought could rise. Rattner spoke in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” scheduled to air today.

Rattner and President Barack Obama’s auto task force are assessing proposals from GM and Chrysler and deciding whether to recommend additional aid or tip the car companies into bankruptcy. Rattner said the task force will give its “sense of direction” before March 31. Chrysler and GM have received $17.4 billion since December and requested more last month.

“What they’ve asked for depends on them achieving plans that are somewhat ambitious,” Rattner said. “Like all management teams they tend to take a reasonably, slightly perhaps, optimistic, view of their business. So it could be more, I can’t rule that out.”

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Jim Sinclair’s Commentary

Remember Jim’s Formula? Forget the dollar!

U.S. Federal Deficit Soars Past Previous Estimates
1:55 p.m. ET Friday, March 20, 2009

Deteriorating economic conditions will cause the federal deficit to soar past $1.8 trillion this year and leave the nation wallowing in a sea of red ink far deeper than the White House had previously estimated.

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Jim Sinclair’s Commentary

No, but it is the death of the US dollar.

Terence Corcoran: Is this the end of America?
Posted: March 19, 2009, 7:38 PM by NP Editor
By Terence Corcoran

U.S. law-making is riddled with slapdash, incompetence and gamesmanship

Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers.
As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America?

Probably not, if only because there are good reasons for optimism. The U.S. economy has pulled out of self-destructive political spirals in the past, spurred on by its business class and corporate leaders, the profit-making and market-creating people who rose above the political turmoil to once again lift the world out of financial crisis. It’s happened many times before, except for once, when it took 20 years to rise out of the Great Depression.

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Jim Sinclair’s Commentary

The next problem. Take a number.

Commercial Real Estate: The Banks’ Next Big Problem
By 24/7 WALL ST. Friday, Mar. 20, 2009

In most large American cities there are office buildings which sit half finished in their financial districts. There are still huge cranes next to some of them. If the construction on a site ended months ago, there is nothing left beyond the skyscraper skeleton and a security fence to keep vandals out.

As businesses such as law firms, investment banks, car companies and retailers cut jobs and move to less expensive offices, the commercial real estate industry is collapsing with astonishing speed. None of the unfinished buildings were erected with cash from the developers. Banks put the money up for the physical location and structure, and perhaps even the rent from tenants, as security deposits in most cases. The land is no longer worth much. The buildings are half empty or unfinished and tenants are leaving, and, in many cases, defaulting on their leases. Lawsuits to get payment of those obligations are long and expensive. As often as not, the former tenant could not afford to pay a judgment anyway. (Read "Four Steps to Ending the Foreclosure Crisis.")

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Jim Sinclair’s Commentary

Are these guys trying to start a civil war?

They may not have brains, but you must say "En Grande Bol."

Citigroup Plans Big Bonuses Despite Rules Against Them
By STEPHEN GANDEL Friday, Mar. 20, 2009

AIG isn’t the only bailed-out financial firm paying big bucks to managers who helped steer their company to near collapse. Citigroup has pledged millions of dollars in bonuses to senior executives for the next few years, despite lawmakers efforts to eliminate such payments.

It’s not clear whether the bonuses, which Citigroup says are for 2008 but won’t start paying out until 2010, will be allowed. Under compensation rules passed by Congress in mid-February, cash bonuses are barred for top executives at bailed-out banks.

But Citi finalized its bonus program shortly before the new rules were introduced. That might make the payments permissible, though they could be made almost worthless by new tax rules just passed by the House of Representatives and headed for consideration in the Senate. Even so, Citigroup’s move in January to set in place bonus payments for years to come raises questions about whether it was trying to evade compensation rules it knew were coming.

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Jim Sinclair’s Commentary

Please watch this video as it will explain to you the Gordian Knot that ties Pakistan to Afghanistan not recognized by the US planners. The USA still thinks buying the leadership of Pakistan is some means of overcoming this growing threat to the world. Buying the Pakistan leadership by aid only worsens the problem.

Pakistan is another problem lacking practical solution and a problem soon to take center stage of world geopolitical events. Markets will be thrown into long-term turmoil by what this means to energy supply, and the future of the US dollar.

Please view this well done and educational documentary.

 

Jim Sinclair’s Commentary

Even though bonuses are a beard for the real problem, this cartoon certainly portrays the accurate character of the players. I wear blue shirts with white collars and French cuffs, but let that be the only comparison.

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Rather Than Wall Street, Why Not Bail Out A Generation?
by Jesse Jackson

AIG, the world’s largest insurance company, of which we — U.S. taxpayers — now own 80 percent, has consumed nearly 170 billion of our dollars to bail out bad bets it made selling credit insurance to banks and investment houses. This weekend, we learned where the money went — largely to other Wall Street banks: $12.9 billion to Goldman and Sachs; $2.3 to Citibank; and, remarkably, nearly $12 billion to Deutsche Bank of Germany; the same to Societe Generale of France; $8.5 billion to Barclays Bank of England; $5 billion to UBS of Switzerland, which is now under investigation for running a tax avoidance scheme for the very wealthy.

To add insult to this injury, the very bankers who caused the catastrophe are paying themselves "retention bonuses" totaling over $165 million in order to avoid "losing talent." Apparently, it takes a lot of talent to lose hundreds of billions.

This raises a simple question. Instead of using our money to bail out the folks who got us into this mess, why don’t we help the generation that we’ll rely on to dig our way out of the hole? Instead of shipping billions to bankers in Germany and France, why not relieve the debt that burdens more and more of our own children as they struggle to pay for college.

The burdens are clear. College tuitions have been rising faster than inflation — they’re up about 58 percent since 2000. Grants haven’t kept up. As a result, students are taking on more and more debt. These days, two of every three students graduate with debt, which averages more than $21,000. But the average is misleading

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How to create a 1930s type equity rally in a fledgling depression caused by a credit lock up.
By Mr. J.P. Morgan (aka Jim Sinclair)

JPM had to stop the short pool raids that were being conducted by Jesse Livermore. Morgan invited Livermore to visit him. They came to some unpublished arrangement, and Livermore ceased his short selling pool operations.

Today it will require more than lip service so far offered to a future US reinstating of the “Up Tick” rule. It must happen in its full form.

Saying shame-shame to the naked short sellers is a waste of time.

Canada will have to own up to the fact that they are the planetary naked short sale central requiring that brokers ask but one time if the client intends to deliver. The client of course says yes. The Canadian broker then has performed their complete regulatory duty. The client fails to deliver for months or years.

Since a naked short sale results in a credit of the account there are no problems with margin or back office wink-wink.

What is required is the old fashioned uptick rule to come back and be strictly enforced in the USA. T3 (trade date plus three days to deliver) for a fund or institution and T21 (trade date plus twenty one days to make delivery) for an exchange floor or NASDAQ based market maker.

Brokers representing naked short sellers who call themselves specialist/market makers in the shares are kidding no one. They are not market makers that stand ready at all times to make bids and offers in the company being naked shorted via them.

What the naked short has done compared to a legal short is expand the capitalization of the company under attack fraudulently. The legal short seller by borrowing the share to make delivery delivers registered shares and does not expand the capitalization of the company.

In order for a 1930s type rally to have legs, talking about controlling the hammer and sledge no uptick and naked illegal short who fraudulently expanding a company’s capitalization must be controlled and known to be under control. A public roast of a few of those that do not get the message and back off will be necessary.

Short selling is a necessary part of market, but like all games there must be rules and those rules must be adhered to.

J.P. Morgan then turned his attention to the banking system, which was locked up credit wise.

J.P. Morgan’s loaning of funds to each bank came with the specific binding orders that the funds were to be used to make loans and not for any other purpose.

The problem now is that every penny that enters the front door of an AIG, Citi or any other busted beggar goes out the back door to pay off the winners of OTC derivatives.

As long as funds in equals the amount going out the back door, no 1930s type rally can have legs. Thus there will be no "timeout" in the downward spiral during which practical solutions might be sought.

TARP, LARP, FLARP and whatever is to come cannot be for the purpose of making some shadow figures in the dark trillionaires.

Bailouts must be for making loans within and outside the system. Failing to make all the above happen means all hope is lost.

The Fed can buy every instrument the Treasury prints for the rest of your life. Without JP Morgan’s measures as above, it will only result in the US dollar at a negative value.

I know exactly how to turn this thing around, buying time for a solution yet hold no hope that it will occur.

Those that would lose by doing the right thing have the most powerful lobby opposing such actions backed by untold amounts of money and are buying every politician that ever ran for or was appointed to office.

The West has never had more sinister enemies than their own financiers seeking to have more money than any being ever could spend.

Jim Sinclair’s Commentary

These are real people with real problems and deep suffering delivered to them by the degraded, amoral, filthy rich of OTC derivative finance. The USA needs no external enemies when this type of cancer is rotting it from within.

Sacramento’s tent city homeless camp is coming down, sources say
By Cynthia Hubert and Ryan Lillis
Published: Thursday, Mar. 19, 2009 – 12:02 pm

Sacramento’s burgeoning tent city homeless camp north of downtown is about to become history, sources told The Bee today.

Mayor Kevin Johnson, working with a coalition of property owners, homeless advocates and others, has come up with a plan to move 100 to 200 men and women off of the land near the Blue Diamond almond plant and into apartments, shelters and other structures, according to participants in the discussions.

SMUD, which owns the bulk of the land, hopes to fence off the property some time within the next four weeks to pursue an upgrade of its substation there, said spokeswoman Elisabeth Brinton.

"We have been patient, working with city leaders and advocates and taking their lead," Brinton said. "We are committed to doing the right thing for the community."

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Jim Sinclair’s Commentary

On balance the Russians are correct as compared to the US Fed or Treasury in Russia’s resistance to printing paper.

On the downside, the SDR doesn’t have a snowball’s chance in hell of becoming a reserve currency of merit.

The Russians need not be considered the opposition as the West has home grown real enemies from within.

China backs talks on dollar as reserve -Russian source
Thu Mar 19, 2009 11:24am EDT
By Gleb Bryanski

MOSCOW, March 19 (Reuters) – China and other emerging nations back Russia’s call for a discussion on how to replace the dollar as the world’s primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar’s status as world’s sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.

Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decisionmaking globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.

"They (China) did not formally put forward their position for the G20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency)," the source told Reuters, speaking on condition of anonymity.

The source said the Chinese paper envisaged the International Monetary Fund’s Special Drawing Rights (SDRs) being first assigned a role of a clearing currency on some transactions and then gradually becoming the main global reserve currency. "They said that the role of reserve currency should be given to SDR," the source said.

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Jim Sinclair’s Commentary

This is a unwise precedent. It makes international capital wary of US domicile.

It is a diversion from the real problem and economically unsound. There are other means of accomplishing the same thing.

House Approves 90% Tax on Bonuses After Bailouts
By CARL HULSE and DAVID M. HERSZENHORN
Published: March 19, 2009

WASHINGTON — The House overwhelmingly approved on Thursday a near total tax on bonuses paid this year to employees of the American International Group and other firms that have accepted large amounts of federal bailout funds, rattling Wall Street as lawmakers rushed to respond to populist anger.

Despite questions about the legality of the retroactive 90 percent levy, Democrats and some Republicans said the tax on bonuses for traders, executives and bankers earning more than $250,000 was the quickest way to show angry Americans that Congress intended to recoup the extra dollars. Even backers of the measure noted it was an extraordinary step.

The House vote sent some employees into a panic about the prospect of, in effect, having to give up money they might already have spent. And it had regulators fearing it could undermine the Treasury’s efforts to stabilize the financial system if banks tried to flee the bailout program or if other firms refused to participate in coming rescue operations to protect their bonuses, some executives said.

Vikram S. Pandit, chief executive of Citigroup, lobbied against the legislation in a meeting Thursday with the Senate majority leader, Senator Harry Reid, according to an industry official.

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Jim Sinclair’s Commentary

Amoral behavior and financial crimes are not victimless.

An employer has obligations to those employed that transcend the employer’s private pocketbook.

The financial rule violator starts a chain of events for which he/she carries eternal responsibility that will not be denied, its outcome here, now and forever.

Desperate Japanese head to ‘suicide forest’
updated 10:19 a.m. EDT, Fri March 20, 2009
By Kyung Lah
AOKIGAHARA FOREST, Japan (CNN) — Aokigahara Forest is known for two things in Japan: breathtaking views of Mount Fuji and suicides. Also called the Sea of Trees, this destination for the desperate is a place where the suicidal disappear, often never to be found in the dense forest.

Taro, a 46-year-old man fired from his job at an iron manufacturing company, hoped to fade into the blackness. "My will to live disappeared," said Taro. "I’d lost my identity, so I didn’t want to live on this earth. That’s why I went there."

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Jim Sinclair’s Commentary

The French get it.

Sarkozy under pressure as ‘millions’ take to streets
By James Mackenzie, Reuters
Thursday, 19 March 2009

As many as three million people took to the streets across France today to protest against President Nicolas Sarkozy’s handling of the economic crisis and demand more help for struggling workers.

The protests, which polls show are backed by three quarters of the French public, reflect growing disillusion with Sarkozy’s pledges of reform as the crisis has thrown tens of thousands out of work and left millions more worried about their jobs.

Bright spring sunshine helped the turnout and the total reported by union organisers surpassed the 2.5 million seen on an earlier day of protest on Jan. 29.

Streets in central Paris were packed with protesters waving anti-Sarkozy placards and chanting slogans, with badges reading "Get lost you little jerk!", the now infamous comment made by Sarkozy to a protestor at an agriculture show, much in evidence.

"There are more and more workers who feel they are not responsible for this crisis but that they are the main victims of it," said Bernard Thibault, head of the CGT, one of the eight trade unions organising the strikes.

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Sodom and Gomorrah

Is described in the old testament as a place where no honest person could be found. Forget Sodom and Gomorrah, this is the final act of deceit that the media will present as a solution to the problem.

Establishing "false fabricating" as an accounting foundation is simply wrong. This act proves beyond any doubt that there is no practical solution to the planetary meltdown of the fraudulent instruments of OTC derivatives.

Financial inhumanity does not deserve to be bailed out of this disaster.

Some change the new faces brought to the filth of the financial community.

"Facts (bankruptcy of spirit and finance) do not cease to exist because they are ignored."
–Aldous Huxley

Shame on the FASB! They have failed to perform their purpose!

 

Click here to view Monty’s recent commentary on FASB 157…

 

Accounting Brothel Opens Doors for Banker Fiesta: Jonathan Weil
Commentary by Jonathan Weil

March 19 (Bloomberg) — The banks demanded that the accountants give them leeway in how they report losses to investors. The accountants responded by giving away their souls.

This week, the Financial Accounting Standards Board unveiled what may be the dumbest, most bankrupt proposal in its 36-year history. If it stands, the FASB ought to change its name to the Fraudulent Accounting Standards Board. It’s that bad.

Here’s what the board is floating. Starting this quarter, U.S. companies would be allowed to report net-income figures that ignore severe, long-term price declines in securities they own. Not just debt securities, mind you, but even common stocks and other equities, too.

All a company would need to do is say it doesn’t intend to sell them and that it probably won’t have to. In most cases, it wouldn’t matter how much the value was down, or for how long. In effect, a company would have to admit being on its deathbed before the rules would force it to take hits to earnings.

So, if these rules had been in place last year, a company that still owned shares of American International Group Inc. or Fannie Mae, for instance, could exclude those stocks’ price declines from net income entirely. It would make no difference that the companies were seized by the government last year, or that both are penny stocks. The loss would get buried away from the income statement, in a balance-sheet line called “accumulated other comprehensive income.”

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Jim Sinclair’s Commentary

Please note the words "Naked Short" and "Fraud" linked together by an unquestionable expert witness.

Naked Short Sales Hint Fraud in Bringing Down Lehman (Update1)
By Gary Matsumoto

March 19 (Bloomberg) — The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.

As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.

The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.

“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”

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Posted at 3:59 PM (CST) by & filed under General Editorial.

Dear CIGAs,

For those of you who have purchased Compendiums in support of JSMineset, we will be emailing you a link to Jim’s 3 hour CIGA meeting in Toronto. This is available for download at this time only to those who have purchased a Compendium and are helping to support JSMineset.com.

If you would like to purchase a Compendium please click any of the package links below. I will be emailing the links out tomorrow to email addresses that are associated with your payment.

Regards,

Dan Duval
JSMineset.com Editor

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!