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My Dear Friends,
Whatever hope you have for a new personality to make a difference in government, remember the teaching given to us all by our Past Masters:
“There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”
–Daniel Webster
Jim Sinclair’s Commentary
I have no argument with the following thesis. I would however push the serious social unrest out into very late 2009 at the earliest.
In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt.
Jim Sinclair’s Commentary
As the "Too Big to Fail" banks get bailed out and the "Too small to be concerned about," roll over, we are building but a few mega corporations to be the engines of tomorrow’s Robber Barons.
I am convinced that when Lehman was dumped to accelerate the decomposition of the international economic corpse, our planners did not foresee the degree of the implosion now without any practical solution whatsoever.
This is why it has all hit the Fan.
What do you do when you have stolen all the dollars? You then rule over but a Paper Empire, the gene pool of serfs having been economically cleansed. Now here is a good argument for the Federal Reserve Gold Certificate Ratio modernized and revitalized.
HuffPost Contest: Name That Bank Seizure
February 16, 2009
Republican Sen. Lindsey Graham of South Carolina stunned political observers on Sunday when he said that "the idea of nationalizing banks" must be kept on the table, even if it makes him "not comfortable."
Moments earlier, Rep. Maxine Waters (D-Calif.), who agrees with Graham, lamented that "the word ‘nationalization’ scares the hell out of people."
Indeed, many who support a policy of ‘nationalization’ say the term is neither an accurate description of the policy nor politically helpful. (For more, read Arianna’s recent column, "Why is Obama Reluctant to Kill the Zombie Banks Threatening Our Economy?")
So what should ‘nationalization’ be called instead?
To enter our name-that-bank-seizure contest, drop your suggested replacement term in the comments section. We’ll highlight the best suggestions in a post later this week and, and use the winner when referring to nationalization. As more economists argue that nationalization is increasingly a matter of when rather than if, it’s a reference that will be popping up with rising frequency.
Jim Sinclair’s Commentary
This is dramatically true if the IMF was to be a seller of any gold. What a great opportunity for central banks around the world to get rid of what has been and will again be their Toxic Paper, the US dollar.
CBRC Official Says U.S. Bonds Not Only Option, China News Says
"U.S. debt is one option in addition to gold and other government debt,"
By Judy Chen
Feb. 13 (Bloomberg) — China Banking Regulatory Commission official Luo Ping said holding U.S. government bonds is not the only option for investing reserves, clarifying comments made a day earlier, the China News Service reported.
U.S. debt is one option in addition to gold and other government debt, Luo, head of the training center at the banking regulator, was quoted as saying in an interview with the news agency late yesterday. If the U.S. government issues too much debt in its efforts to revive the economy, all Treasury holders will suffer losses, he added, the Chinese-language report said.
Dow Jones on Feb. 11 cited Luo as saying that there are few real alternatives to holding U.S. Treasury securities. CBRC said late yesterday in a statement that Luo’s comments don’t represent the view of the regulator.
Gold Scams Galore:
Here is an example of pay for it in the USA and get it in a tax shelter country. Guess what, you are screwed, you got nothing.
This was not gold but the form of the gold scam follows the form of this scam.
Remember this when you sign up for the gold deal that helps you, wink, wink, get out from under Uncle.
These deals search for the terminal gullibility, preaching fear to get you to act.
They tell you what you want to hear in order to pick your pocket.
"Gold Caveat Emptor."
U.S. Accuses Texas Financial Firm of $8 Billion Fraud
By CLIFFORD KRAUSS, PHILLIP L. ZWEIG and JULIE CRESWELL
Published: February 17, 2009
HOUSTON — Stopping what it called a “massive ongoing fraud,” the Securities and Exchange Commission on Tuesday accused Robert Allen Stanford, the chief of the Stanford Financial Group, of fraud in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.
In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured CDs.
The C.D.’s were sold by Stanford International Bank through the firm’s registered broker-dealer and investment adviser, which are in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the S.E.C. suit. Stanford Financial asserts that it advises about $50 billion in assets.
Shortly after 10 a.m. Central time, about 40 police officers and other law enforcement officials simultaneously entered Stanford Group’s two office buildings in Houston. Many of the law enforcement personnel carried large black briefcases. Stanford group’s headquarters are in two offices in Houston, one within a tower of the Houston Galleria shopping mall, and the other across the street.
Jim Sinclair’s Commentary
Your retirement has gone Missing.
Those now comfortably retired for life with your retirement don’t give a damn.
Slowly the most egregious of what has been stolen emerges – your plans for your future.
Your pensions, all of them, having been savaged by the OTC derivative manufacturers and distributors are all now going to be inflated away as there is no other way.
Keep in mind an axiom: There is no loss without a profit offsetting.
Retirement now is out of the question. You work until you are used up, and then get whatever kind of a job you can. Your best hope is to depart in your sleep. There is no other way.
Pension insurer’s deficit deepening
Tuesday, February 17, 2009 3:01 AM
BY DEB RIECHMANN
ASSOCIATED PRESS
WASHINGTON — The worsening recession spells trouble for a little-known government corporation that insures the pensions of 44 million workers and retirees.
The Pension Benefit Guaranty Corp. has an $11 billion deficit that seems sure to grow as corporate America suffers through the worst economic crisis since the Great Depression.
With companies reporting shortfalls in their pension funds, it’s all but certain that the pension agency will be forced to take over the plans of a rising number of bankrupt businesses. That means more red ink at the corporation before things possibly can improve.
The future financial health of the agency is hard to forecast. It hinges on interest rates, the length of the recession and the pension agency’s own luck in playing the market, where it has billions invested.
The agency has $63 billion in assets. But it is obligated to spend $74 billion on pension benefits in the coming years. The agency might have time to rebound, but over the long term, it might become insolvent and require a bailout.
"Someday — probably more than 20 years from now — there’s a significant chance that somebody is going to have to pay the piper," said former agency Director Charles E.F. Millard, a Bush administration appointee who stepped down Jan. 20 when Barack Obama became president. "In the near to medium term, there will be no need for a bailout of" the agency.
Jim Sinclair’s Commentary
Alf’s target on gold will be reached when the markets are stunned to find out that there is no safe haven in the US dollar.
Prior to that, gold in under the magnet may reach $1224 on the simple panic now building in markets as participants recognize there is NO practical solution to the enormous disruption that OTC derivatives manufacturers, distributors and Hedgies have caused.
The BIS (Bank for International Settlement) publicly altered the manner by which they determine the total nominal value of derivatives outstanding. This has actually backfired badly now that it is assumed every entity is lying. The BIS was all that was left for somewhat legitimate economic statistics.
You probably noticed the amount of outstanding OTC derivative nominal value dropped 80% from the BIS figure of one quadrillion one thousand and one hundred forty four trillion dollars as the BIS moved to the computer modeling of value to maturity, another foolishly glib cartoon.
Euro Falls to 10-Week Low on Concern Europe’s Turmoil to Worsen
By Yasuhiko Seki and Ron Harui
Feb. 17 (Bloomberg) — The euro fell for a second day against the dollar and the yen on speculation financial turmoil in Europe will worsen and after its recent losses triggered automatic orders to sell the currency.
The pound declined versus the yen on concern a U.K. report today will show inflation slowed due to the economic slump, giving the Bank of England more room to cut interest rates. The dollar may weaken for a second day against the yen before U.S. housing and manufacturing reports that economists say will show the recession is deepening.
“The financial turbulence in central and Eastern Europe is likely to persist,” said Masafumi Yamamoto, head of foreign- exchange strategy for Japan at Royal Bank of Scotland in Tokyo and a former Bank of Japan currency trader. “The markets may perceive this as a factor to sell the euro.”
Jim Sinclair’s Commentary
The problems of bankrupt states and municipalities is only starting.
States in a financial pinch looking at drastic cost-cutting measures
(CNN) — California Gov. Arnold Schwarzenegger issued 10,000 layoff notices Tuesday, affecting a wide spectrum of state employees and aimed at dealing with the state’s budget crisis, a spokesman said.
California lawmakers resumed negotiations late Tuesday after the longest legislative session in state history over the weekend resulted in a budget impasse.
"Every state employee who receives a salary under the general fund is affected, and the governor began issuing layoff notices for the least-senior employees in various agencies," said Aaron McLear, the governor’s press secretary.
The layoffs would begin on July 1, which marks the fiscal year, and includes jobs in the Departments of Health and Human Services and Corrections, among others, McLear said. Another 10,000 layoff notices could be issued on Wednesday in other departments, he said.
The governor, facing a $42 billion deficit, was prompted to move on the layoff notices after lawmakers missed a Monday night deadline to reach a budget deal, McLear told CNN late Monday.
Jim Sinclair’s Commentary
Here is one of the little nasty players ousted.
Let see who he outs.
SEC Charges George Georgiou, a Canadian Citizen, for Market Manipulation Schemes
Thu. February 12, 2009; Posted: 03:53 PM
Feb 12, 2009 (SECURITIES AND EXCHANGE COMMISSION RELEASE/Content Works via COMTEX) — The Commission announced that on February 12, it charged George Georgiou, of Toronto, Ontario, with manipulating the market in four separate microcap stocks — Avicena Group, Inc., Neutron Enterprises, Inc., Hydrogen Hybrid Technologies, Inc., and Northern Ethanol, Inc. The Commission’s action, filed in federal district court in Philadelphia, alleges that, from 2004 through September 2008, Georgiou, who controlled the publicly-traded stock of each company, manipulated the market for the purpose of artificially inflating each company’s stock price or to create the false appearance of an active and liquid market. In order to do so, Georgiou used many nominee accounts that he either directly or indirectly controlled at offshore broker-dealers and banks, and used a variety of manipulative techniques, including matched orders and wash sales. Ultimately, Georgiou realized at least $20.9 million in ill-gotten gains from his manipulation schemes.
In addition to the enforcement action, the Commission today entered an order suspending trading in the securities of the four manipulated stocks for a ten day period commencing 9:30 a.m. Feb. 12, 2009. The U. S. Attorney for the Eastern District of Pennsylvania today separately announced criminal charges against Georgiou involving the same conduct.
The Commission’s complaint alleges that Avicena Group is headquartered in Palo Alto, California, and that the other three companies are headquartered in Canada. Each of the manipulation schemes followed a similar pattern. Georgiou controlled all or a large percentage of the unrestricted, publicly-traded stock of each company. He had influence with management, access to confidential shareholder lists, and was able to coordinate the release of company news with his illegal trading. In recorded conversations and through his own e-mails, Georgiou admitted his intent to manipulate each of the stocks, and gave directions to his nominees.
The complaint further alleges that Georgiou used many nominee accounts at offshore broker-dealers in Canada, the Bahamas, Turks and Caicos, and other locations. Georgiou asserted direct control over some accounts by issuing trading and wiring instructions directly to broker-dealers, and indirect control over others by communicating trading instructions to nominees who, in turn, executed Georgiou’s trading instructions. Through these accounts, Georgiou used a variety of manipulative techniques in each scheme, including controlling the trading volume through promises of profits to nominees, executing or directing matched orders, wash sales, or other prearranged trades, marking-the-close, and paying illegal kickbacks in exchange for purchases.
Jim Sinclair’s Commentary
How is your sense of humor?
Greenspan Concedes to `Flaw’ in His Market Ideology (Update2)
By Scott Lanman and Steve Matthews
Feb. 17 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the U.S. may be doing too little to repair its financial system and promote an economic recovery.
President Barack Obama today signed into law a $787 billion economic stimulus package of tax cuts and increased spending. He has also pledged to use the bulk of the roughly $315 billion left in the bank bailout fund approved by Congress last October to revive the battered financial industry.
“The amount of money in both these pots may not be enough to solve the problem,” Greenspan said in an interview before a speech prepared for today to the Economic Club of New York.
The comments highlight the difficulties Obama faces in fighting the steepest recession in a generation. The economy contracted at an annual pace of 3.8 percent in the fourth quarter of last year, the most since 1982.
Greenspan, who now heads his own Washington-based consulting company, warned in his speech that the positive impact of the stimulus package on the economy will peter out if the U.S. fails to fix its financial system.
Jim Sinclair’s Commentary
Change is an elusive asset.
Obama Sends 17,000 Additional Soldiers to Afghanistan (Update3)
By Edwin Chen and Roger Runningen
Feb. 17 (Bloomberg) — President Barack Obama said the war in Afghanistan is “still winnable” as he signed an order increasing U.S. troops there by 17,000 combat and support personnel.
Military force alone cannot adequately deal with the threat posed by a “resurgent” Taliban, Obama said in an interview with Canadian Broadcasting Corp. The war is “still winnable — in the sense of our ability to ensure that it is not a launching pad for attacks against North America.”
Only a “comprehensive strategy” that also relies on diplomacy and development can halt the Taliban and the spread of extremism, the president said.
The announcement of the deployment marks Obama’s first significant decision on defense as he seeks to fulfill his campaign promise to shift the focus away from Iraq to Afghanistan as the central front on the battle against terrorists.
Jim Sinclair’s Commentary
The problems are legion. The solution simply does not and will not exist. Hyperinflation is the only way out.
Kan. suspends income tax refunds, may miss payroll
TOPEKA, Kan. (AP) — Kansas has suspended income tax refunds and may not be able to pay employees on time, state officials said Monday.
The state doesn’t have enough money in its main budget account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest borrowing $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and Republican leaders refused Monday.
Budget Director Duane Goossen said that without the money, he’s not sure the state can meet its payroll. About 42,000 state employees are scheduled to be paid again Friday.
He added that the state might also have to delay payments to public schools and to doctors who provide care to needy Kansas residents under the Medicaid program.
Goossen said the state stopped processing income tax refunds last week. Sebelius accused Republicans, who hold majorities in both chambers of the state legislature, of blocking the accounting maneuver to "play political games."
Jim Sinclair’s Commentary
If the OTC Derivative guys come for your house remember this article. It is very much for real. I hear the degree of record keeping has never met the volume of SIVs sold, which forms a secondary problem of severe potential ramifications. Basically, the paperwork is a total disaster. It was the subject of a special meeting called by the New York Fed which was presented for the purpose of handling back office problems.
Homeowners’ rallying cry: Produce the note
By MITCH STACY – 2 hours ago
ZEPHYRHILLS, Fla. (AP) — Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.
And just like that, the foreclosure proceedings came to a standstill.
Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
"I’m going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I’ll try everything I can because it’s all I have left."
Jim Sinclair’s Commentary
The slope we are on is the slipperiest in history. I am glad that I turn 68 next month.
Greenspan backs bank nationalisation
By Krishna Guha and Edward Luce in Washington
Published: February 18 2009 00:06 | Last updated: February 18 2009 00:06
The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman has told the Financial Times.
In an interview with the FT Mr Greenspan, who for decades was regarded as the high priest of laissez-faire capitalism, said nationalisation could be the least bad option left for policymakers.
Jim Sinclair’s Commentary
How smart they are!
China Feasts on Miners as ‘Bank of Last Resort,’ as Metal Falls
By Helen Yuan and Rebecca Keenan
Feb. 18 (Bloomberg) — Wuhan Iron & Steel Group and Jiangsu Shagang Group Co., China’s third- and fifth-largest steelmakers, are shopping for iron ore mining stakes in Australia and Brazil, executives said in interviews.
“We are evaluating and selecting” candidates in Australia and Brazil, said Shen Wenrong, Jiangsu-based Shagang’s chairman. “Going overseas is the government policy, so I believe we will get financing from Chinese banks.” Wuhan spokesman Bai Fang said his company is “looking for opportunities” amid lower acquisition costs for iron ore assets in Australia and “won’t rule out other countries.”
The world’s top metal user, China already has acquired $22 billion worth of commodity assets this year after a 70 percent drop in metal and oil since July ended a six-year boom in raw materials. With U.S. and Australian banks still hesitant to lend, Rio Tinto Group and OZ Minerals Ltd., laboring under combined debt of $40 billion, agreed this month to sell stakes to Aluminum Corp. of China and China Minmetals Corp., respectively.
