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Jim Sinclair’s Commentary
If you have put on your New Year’s resolution list to obtain Paper Certificates for your investments, either personal or IRA, you will be TOO LATE. You have until December 31st to make this request and even that can be declared too late.
How much of the road to protection have you taken?
If you held certain Reserve Fund Money Funds more than your weekend was ruined.
My perfect Christmas present from you would be to know that you have to the fullest degree possible fully protected you and yours.
Make me happy, please. Take your physical certificates while you still can.
Money market funds reel as yields near zero yields
By Deborah Brewster in New York
Published: December 21 2008 19:12 | Last updated: December 21 2008 19:23
Money market funds, an increasingly popular place to park cash, will need to raise fees or close to new money to remain profitable as yields hover at near-zero, according to industry managers.
The funds, which manage $3,800bn and have seen big cash inflows, are reeling from frozen credit markets, subprime exposure and a crisis of confidence triggered by one fund “breaking the buck”, or returning investors less than they paid in.
The US Federal Reserve last week cut its target interest rate to between zero and 0.25 per cent, from one per cent.
Jim McDonald, who runs taxable money market funds for T Rowe Price, said: “You can’t make money in this situation. If short-term interest rates stay where they are, it’s virtually impossible to run a government [bond] fund and make any money. You can close the fund, that’s one option.”
Vanguard last week closed two of its money market funds to institutional investors, while Credit Suisse said it would quit managing money market funds in the US and liquidate $8bn in assets across its three funds.
David Glocke, a portfolio manager at Vanguard, said: “It just doesn’t make any sense to take in money in this environment, it would dilute yields for existing investors.”
Jim Sinclair’s Commentary
Remember this?
Money market funds wait anxiously for rescue by Fed
By Deborah Brewster in New York
Published: November 12 2008 02:00 | Last updated: November 12 2008 02:00
Investors have pulled more than $400bn from money market prime funds in the past two months, leaving the funds waiting urgently for a Federal Reserve rescue plan to help them sell commercial paper to meet redemptions.
The Fed said on Monday that it would begin the rescue plan on November 24, a few weeks later than planned. Money market funds are low-risk, lowreturn fundsthat normally invest heavily in commercial paper, a type of debt used by businesses to meet short-term funding needs.
The funds currently manage a total of $3,600bn (£2,335bn, €2,900bn) and have been struck by high redemptions and illiquid markets, making it difficult for them to sell their paper to pay out investors.
The Fed plan, announced on October 21, will see it buy up to $600bn in certain companies’ short-term debt, as a way to provide liquidity in the credit markets and help money market funds find it easier to sell their commercial paper. Money market funds will be able to sell short-term debt issued by 50 financial institutions to the Fed programme, called the money market investor funding facility.
The Fed said the programme might over time be extended to buy debt from other investors besides money market funds.
A separate Fed programme to buy commercial paper in the markets has already begun operating.
Jim Sinclair’s Commentary
I am hearing this from too many good sources to dismiss the possibility that India will soon move against Pakistan.
Stratfor Geopolitical Diary: Countdown to a Crisis on the Subcontinent
The week began with a series of signals from New Delhi that India’s restraint in taking military action against Pakistan is no longer guaranteed. In fact, such action could very well be imminent.
In a press conference Monday, Foreign Minister Pranab Mukherjee said that while India “has so far acted with utmost restraint,†it will “explore all options†in pressuring Pakistan to deal with Islamist militancy. The same day, Indian media reported that Indian troops and the air force’s Quick Reaction Teams had deployed along the border with Pakistan, with commandos reinforced at airstrips in Jaisalmer and Uttarlai in Rajasthan and Bhuj in Gujarat. The Pakistani military, meanwhile, reportedly went on a heightened state of alert, with reports of air force jets scrambling in Islamabad, Rawalpindi, Lahore and Muzaffarabad, the capital of Pakistan-administered Kashmir.
Over the past few weeks, India has played a complex diplomatic game, issuing a series of statements that seemingly downplayed the likelihood of military action against Pakistan in response to the Nov. 26 Mumbai attacks, while making a point in the public sphere that New Delhi was focused on using diplomatic tools to pressure Islamabad. While New Delhi’s behavior led many to believe that the threat of war had subsided, Stratfor maintained that Indian military operations were being prepared, and that New Delhi’s plan was first to exhaust its diplomatic options before engaging in any kind of military action. India’s restraint, in large part, was attributed to its talks with the United States, which would much rather not see the nuclear-armed rivals come to blows when the Americans are fighting an uphill battle against al Qaeda and Taliban forces in the region.
But time is running out for Pakistan.
Reliable sources -— whose information on this issue cannot be verified at this time -— have told us that in the wake of the Mumbai attacks, New Delhi relayed a message to the Pakistanis via the United States, saying they would be given 30 days to crack down on Islamist militant proxies on Pakistani soil that continue to threaten India. While India used the time to prep its military forces, the United States came down hard on Pakistan behind the scenes, making clear that if Islamabad did not deliver, Washington would not be able to stand in New Delhi’s way if and when the time came for India to act. The Pakistanis carried out a few raids targeting militant leaders and Pakistani intelligence operatives, making a few arrests, but did nothing that substantially reduced the threat to India, from New Delhi’s point of view. And even if Pakistan’s government was prepared to accede to India’s demands in full, it could go only so far in placating New Delhi before its eff orts to avoid an international crisis created a domestic one.
Jim Sinclair’s Commentary
Today in Pakistan:
Pakistan asked to accept responsibility
* WP editorial says ‘Pakistan not acknowledging truth’, ‘excuses must come to an end’
By Khalid Hasan
WASHINGTON: The Washington Post on Monday urged Pakistani civilian leaders to face up to their country’s responsibility for the Mumbai attacks.
In a hard-hitting editorial, the newspaper pointed out that by now, “the evidence that the terrorist assault on Mumbai was planned and directed from Pakistan is overwhelming.” The lone surviving attacker, a Pakistani national, has signed a statement describing how he was recruited and trained by the Lashkar-e-Tayyaba group. Intelligence officials say cell phone intercepts show that the attackers were communicating with Lashkar commanders in Pakistan during the attacks. During a visit to Islamabad, British Prime Minister Gordon Brown spoke for the West when he openly blamed Lashkar-e-Tayyaba for the siege and added that “the time has come for action, and not words,” from Pakistan.
The Post said, “Stunningly, however, Pakistan’s civilian government is refusing to acknowledge the truth. In an interview with the BBC last week, President Asif Ali Zardari claimed that there is still no proof that the attackers came from his country.
Several days earlier, he told Lally Weymouth of Newsweek and The Post that ‘I don’t have any specific information’ showing that the terrorists were trained in Pakistan.
India Gives Pakistan Letter Said to Be Gunman’s
By SOMINI SENGUPTA
Published: December 22, 2008
NEW DELHI — India on Monday gave Pakistan what it called proof of Pakistani involvement in last month’s terrorist attacks in Mumbai. The move built public pressure on India’s neighbor, where the senior-ranking member of the American military arrived for talks for the second time since the attacks.
The Indian Foreign Ministry announced late Monday that it had given Pakistani officials here what it described as a letter from the lone surviving attacker. In the letter, the Indian ministry said, the gunman, Muhammad Ajmal Kasab, said he and his nine accomplices were “from Pakistan.” India did not make the specific contents of the letter public.
Pakistan’s Foreign Ministry acknowledged receipt of the letter, saying only that “the contents of the letter are being examined.” The government in Islamabad, Pakistan’s capital, has denied any links to the terrorist attacks and pressed India to offer proof. American officials have in turn pressed Pakistan to do more to crack down on terrorist groups operating within its territory.
India and the United States have attributed the three-day attack on India’s financial capital to Lashkar-e-Taiba, a banned group based in Pakistan that has fought Indian forces in Indian-controlled Kashmir for years.
