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Dear CIGAs,
You will love this.
I had an opportunity to take someone to the local ER. Between the outside door and the inside ER door there is a large sign. This sign outlines all the symptoms of the flu informing the reader that if you ANY of these symptoms "DO NOT ENTER THIS BUILDING."
The signature on the sign is not from the hospital, but rather the Center for Disease Control.
What are you supposed to do? I guess it means crawl home and die. This world seems to be devolving into the 10th hell of Dante at warp speed.
Yesterday CNN informed us that the military will be used to assist local authorities this flu season. After my visit to the hospital, I imagine they will be deployed to keep people out of the ER.
Will the presidential emergency order allow the military to use deadly force?
Jim Sinclair’s Commentary
Never ask a modern hedge fund manager what he is doing for his clients.
Look at his or her personal book to know what has been done with their money.
Gold lures inflation-wary hedge fund chiefs
Thu Jul 30, 2009 8:15am EDT
By Martina Fuchs
LONDON (Reuters) – U.S. hedge fund managers are increasingly likely to buy gold to protect their personal wealth against inflation, an investment management firm said on Thursday.
London-based Moonraker said a survey it carried out in the United States found that 20 out of 22 fund managers interviewed bought physical gold for personal investment on concerns the U.S.’ quantitative easing programme may lead to higher prices.
"Gold is the ultimate currency, performing best when economies are at extremes, whether that is inflationary or deflationary," Jeremy Charlesworth, chief investment officer at Moonraker, said in a statement.
"The managers I met in the U.S. know that if the politicians get the quantitative easing programme wrong, then the value of money relative to real assets will dwindle," he added.
Gold was seen as a safe haven asset during the financial crisis, as many investors considered it a less risky investment than stocks and shares.
Jim Sinclair’s Commentary
CIGA Green Hornet says "Give them billions more… What a great country! Not!"
Pakistan president Asif Zardari bans jokes ridiculing him
Posted by Desta Bishu | July 30th, 2009 at 6:12 am |
Pakistan’s president, Asif Zardari, has been accused of suffering from a sense of humour failure after banning jokes ridiculing him.
Pakistanis who send jokes about Asif Zardari by text message, email or blog risk being arrested and given a 14-year prison sentence.
The country’s interior minister, Rehman Malik, announced the Federal Investigation Agency (FIA) had been asked to trace electronically transmitted jokes that "slander the political leadership
Jim Sinclair’s Commentary
How about they got short by selling the products naked to willing buyer clients?
Mortgage Melt-Down Investigation: Goldman Sachs and Deutsche Bank Get Served
July 30, 2009
Goldman Sachs (GS) and Deutsche Bank (DB) got served by the US Senate which is investigating fraud in the mortgage meltdown last year. Several other financial institutions may also have received subpoenas from the sub-committee that is headed by Senator Carl Levin.
WSJ said the focus of the investigation is on whether internal communications show executives at the banks had private doubts on the soundness of the mortgage-related securities they were putting together. Anyone want to take a guess on what they will find?
I am sure there are plenty of emails and other electronic messages floating around to get someone in trouble. I never understand how people have not realized that email is forever. Regardless, they will clearly find something, but they should look at the trading in their accounts versus what was being sold to their clients, that is the real evidence.
We all know Goldman traded against sub-prime mortgages, I do not know about Deutsche Bank. Now, if Goldman traded $20 billion against these securities, but their institutional side sold these same products the firm was short, then I think there will be a problem. If the committee does their homework and actually investigates this thing then we might have our first “perp walk” for the carnage these lovely people brought upon us.
There could be nothing here, but if I were a betting man I would take the other side of that trade.
Jim Sinclair’s Commentary
These are the people that will appoint and look over management of nationalized companies in the US.
House Seems To Be Set on Pork-Padded Defense Bill
By R. Jeffrey Smith
Washington Post Staff Writer
Thursday, July 30, 2009
The Democratic-controlled House is poised to give the Pentagon dozens of new ships, planes, helicopters and armored vehicles that Defense Secretary Robert M. Gates says the military does not need to fund next year, acting in many cases in response to defense industry pressures and campaign contributions under an approach he has decried as "business as usual" and vowed to help end.
The unwanted equipment in a military spending bill expected to come to a vote on the House floor Thursday or Friday has a price tag of at least $6.9 billion.
The White House has said that some but not all of the extra expenditures could draw a presidential veto of the Defense Department’s entire $636 billion budget for 2010, and it sent a message to House lawmakers Tuesday urging them to cut expenditures for items that "duplicate existing programs, or that have outlived their usefulness."
While the administration won a big victory when the Senate voted July 21 to end the F-22 fighter-jet program, the House’s imminent action demonstrates its continued rebellion on many other Obama administration military spending priorities. Gates continues to struggle with lawmakers on both sides of the aisle who are loyal to existing military programs benefiting contractors that provide jobs and large campaign donations.
Jim Sinclair’s Commentary
If I recall correctly, I told you this more than 3 years ago.
GE Capital: Next CIT?
by Tyler Durden
GE Capital (GE), aka the next CIT, is practicing its recently acquired hypnosis skillset (perfected via daily lessons from CNBC anchors) which has culminated with a 63 page presentation replete with far too much empty verbiage and green shootery.
The take home message:
* H1 Net Income has plunged to $1.7 billion on $557 billion in total assets, and only thanks to firing pretty much everybody: $1.9 billion in SG&A savings
* This is down $24 billion from Q4 as GECC is "continuing to rapidly reduce balance sheet"
* Loss reserves are skyrocketing: currently at $6.6 billion, up one billion from Q1 (and much lower than reality)
* 2009 TY original outlook: $5 billion; Fed base case: $2.0-$2.5 billion, Fed adverse case: $0
* How many more people can GECC fire as its balance sheet implodes?
* Oh yeah, and if CRE really blows up, CIT, here we come
Jim Sinclair’s Commentary
Here is an uplifting story as soon as you got your brother to hide the Rotty.
Looks like a relative of my companion, Mr. Fred.
Missing dog Muffy found after nine years
Sophie Tedmanson in Sydney
July 30, 2009
![clip_image001[1]](http://jsmineset.com/wp-content/uploads/2009/07/clip_image0011.jpg "clip_image001[1]")
Just like Lassie the adventurous collie dog, a scruffy pet named Muffy will finally return home after a nine-year, 2000km (1250 mile) odyssey down the east coast of Australia.
The terrier-cross (or "bitsa" as her type of cross-breed is more affectionately known) was last seen by her owners on the Gold Coast in Queensland in 2000 ago when she took off from a friend’s house one day and never came back.
The Lampard family had given her up for dead and even replaced her with a Rottweiler named Jack, who died of cancer four months ago.
Incredibly, earlier this month, Muffy was discovered in Melbourne, Victoria, by the RSPCA, who had been tipped off by a good Samaritan concerned about a sickly looking, flea-ridden dog living in decrepit surroundings in a suburban backyard.
Jim Sinclair’s Commentary
Think about this. The FDIC sells the good parts, which of course do not equal the bad part because if they did there would not be insolvency.
The FDIC eats the crap which is another way of saying that we, our kids, and our kid’s kids eat the bad paper.
FDIC Poised to Split Banks to Lure Buyers
JULY 31, 2009
BY ROBIN SIDEL
The Federal Deposit Insurance Corp., grappling with the worst banking crisis since the 1990s, is poised to start breaking failed financial institutions into good and bad pieces in an effort to drum up more interest from prospective buyers.
The strategy, which is likely to begin soon, is aimed at selling the most distressed hunks of failed banks to private-equity firms and other types of investors who may be more willing than traditional banks to take a flier on bad assets. The traditional banks could then bid on the deposits, branches and other bits of the failed institution that are appealing.
Jim Sinclair’s Commentary
Ok, I am prejudiced, but more so, I am proud.
Tanzania to Reach 5% Growth Target, Central Bank Says
By Sarah McGregor
July 30 (Bloomberg) — Tanzania will probably achieve its economic growth target of 5 percent in 2009 as stimulus spending provides a boost to industries worst affected by the global financial crisis, Enos Bukuku, deputy governor of the Bank of Tanzania, said.
On June 10, Tanzania President Jakaya Kikwete unveiled a 1.7 trillion shilling plan to help local companies and agricultural cooperatives weather a decline in global growth.
“It’s working and we are in a good position,” Bukuku said today in an interview following a presentation in the Kenyan capital, Nairobi. “No other country in the region has a similar rescue plan.”
The stimulus package will directly compensate exporters for losses, guarantee debt rescheduling and boost loans to farmers especially for seeds, fertilizer and tractors. It will be funded by the current budget for the fiscal year ending June 30, 2010, of which about a third is being funded by outside donors. In May, the International Monetary Fund approved a $330 million loan for the country.
The east African nation’s foreign exchange reserves stood at $2.9 billion at the end of June, which gives “adequate comfort” from potential external shocks, Bukuku said.
Jim Sinclair’s Commentary
There is no end to this. The dollar is doomed. There are only 100 days to go.
Fannie, Freddie Regulator Sees More Capital Injections by Treasury
Thursday, July 30, 2009
The director of the Federal Housing Finance Agency predicted the Treasury Department will have to make billions of dollars in additional capital injections into Fannie Mae (FNM: 0.5725, -0.0075, -1.29%) and Freddie Mac (FRE: 0.6, -0.0189, -3.05%) in the next 12 months — and that taxpayers will lose some of their investment in the companies.
“There will certainly be significantly more [Treasury investment] in the future” because of continuing problems in the housing market, James Lockhart said in an interview with FOX Business.
Jim Sinclair’s Commentary
The only thing that will result in Bernanke being sent back to Princeton to teach is a failure to take QE to infinity.
Then Summers will.
Reappoint Ben Bernanke? No Way
Richard Bernstein|Jul. 30, 2009, 9:34 AM
Should we have re-elected Jimmy Carter in 1980 for his stewardship of the US economy? Of course not. Should Ben Bernanke be reappointed as Chairman of the Federal Reserve for his stewardship of the banking and credit systems? Of course not.
Certainly, the Fed under Mr. Bernanke is not solely responsible for the environment that produced the biggest credit bubble and credit deflation of our lifetimes, but Jimmy Carter wasn’t solely responsible for the late-1980s inflationary spiral. Mr. Carter was not re-elected, and similarly Mr. Bernanke should not be reappointed. Simply put, how can Washington even consider keeping Mr. Bernanke as Fed Chairman when the US banking system effectively failed on his watch?
I have the highest respect for Mr. Bernanke as an academic and economic historian. Nonetheless, there are several reasons, in my opinion, why someone else needs to be the Fed Chairman.
Need for Volker-like Leadership
If one thing positive can be said about Carter’s economic policies, it is that he appointed Paul Volker as Chairman of the Federal Reserve in 1979. The US economy was in the midst of a vicious inflation spiral, but Mr. Volker initiated dramatic changes to monetary policy. Those policies were extremely painful in the short-term, but they stymied inflation and significantly strengthened the US economy’s long-term growth path.
Jim Sinclair’s Commentary
What is good for financial institutions is a disaster for the average guy.
Unemployment spreads distress in U.S. home loans
Thu Jul 30, 2009 1:23am EDT
By Lynn Adler
NEW YORK (Reuters) – Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday.
Metro areas with populations of at least 200,000 in those four states accounted for 35 of the 50 highest foreclosure rates.
Mortgages have failed the fastest in the areas with the greatest overbuilding, purchases by speculators and reliance on riskier loan products to improve affordability.
But the source of the mortgage trouble has swung from lax lending standards to unemployment.
Some of the areas with the most severe foreclosure activity have started to show improvement as price cuts and first-time buyer tax credits lure purchasers.
Jim Sinclair’s Commentary
One out of ten are out of work. The average person is not sleeping nights concerned about mortgage foreclosures. School systems are going broke. RI is putting over 1000 businesses out for taxes due.
These guys got bonuses of more than they earned on our backs. Where is the outrage?
NY AG Andrew Cuomo details how much TARP recipients like Citigroup, Merrill Lynch paid in bonuses
BYDOUGLAS FEIDENAND GREG B. SMITH
DAILY NEWS STAFF WRITERS
Thursday, July 30th 2009, 11:45 AM
The top banks that got billions in taxpayer bailout money doled out bonuses that exceeded their net profits or while losing money, a new report says.
After last year’s brutal economic downturn, more than 4,700 employees at nine top banks received bonuses of more than $1 million each while accepting billions of public aid through the Troubled Asset Relief Program (TARP).
Of that, 836 received bonuses in excess of $3 million each, a new report released Thursday by New York Attorney General Andrew Cuomo found.
The payouts came as profits fell and, in some cases, losses mounted. This was especially true at two of New York’s biggest TARP beneficiaries, Citigroup and Merrill Lynch.
Citi lost $27 billion in 2008, but handed out bonuses of more than $1 million each to 738 executives, including 44 who pocketed payouts of $5 million or more.
The taxpayer helped pay for all of this: Citi received a $45 billion TARP bonanza.
"There is no clear rhyme or reason to the way banks compensate and reward their employees," Cuomo said. "When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well."
Cuomo noted three top TARP recipients -Goldman Sachs, Morgan Stanley and J.P. Morgan Chase – all handed out bonuses that exceeded their net profits. They were able to do this, in part, because they received billions from the taxpayers.
Jim Sinclair’s Commentary
Maybe investors have taken to reading the prospectus?
Gold tunes out weak ETF buying as speculation soars
Wed Jul 29, 2009 9:42am EDT
By Jan Harvey – Analysis
LONDON (Reuters) – Gold prices are ignoring dwindling inflows into bullion-backed exchange-traded funds, with prices supported as investors switch their interest to the U.S. futures market and outright purchases of physical metal.
Investors are increasingly embracing riskier assets like stocks, leaving less of an impulse to hoard gold as a hedge against the unknown, lending support to its appeal as a buffer to dollar weakness and future inflation.
Consequently, while interest in gold-backed ETFs has tailed off after unprecedented buying in the first quarter, other forms of investment, such as positioning on the New York Comex futures exchange, have increased and underpinned a firm price.
Spot gold has held firm above the $900 marker since early May, with the psychologically key $1,000 level in reach.
"The slack created by slower ETF demand hasn’t gone away completely, it’s just been replaced by more speculative interest," said Barclays Capital analyst Suki Cooper.
"The position on Comex has picked up quite sharply."
Jim Sinclair’s Commentary
Wall Street’s control of Washington has resulted in the Administration’s total conviction that what is good for financial institutions is good for America.
Sadly, it isn’t, and therein is the extreme risk of secondary OTC derivative failure and 1933 to 1940 experience in business times 10.
1 In 59 Chicago Area Homes In Foreclosure
First Posted: 07-30-09 10:01 AM | Updated: 07-30-09 10:07 AM
CHICAGO (AP) — The Chicago-Naperville-Joliet metropolitan area had the highest home foreclosure rate in Illinois for the first half of the year.
A report released Thursday by Irvine, Calif.-based RealtyTrac show more than 63,500 foreclosures filings from January through June. That’s one in every 59 houses, and 30 percent higher than the same period last year.
Foreclosure activity was up 15 percent in the Rockford area and 40 percent in the metro area that includes Rock Island and Moline and Davenport, Iowa.
Increases are blamed on growing unemployment rather than risky mortgages.
On the bright side, foreclosure activity fell 22 percent in the Peoria area, 29 percent around Springfield and 11 percent in the Champaign-Urbana area from last year.
Jim Sinclair’s Commentary
With Wall Street in charge of Washington, what did you expect?
Naked credit default swaps are weapons of mass financial destruction on a global scale.
Who needs Terrorism when we have this type of at home thinking running finance?
Derivatives Plan Leaves Open ‘Naked’ Swaps Issue
By Dawn Kopecki and Robert Schmidt
July 30 (Bloomberg) — A new U.S. regulatory regime being pushed by Representatives Barney Frank and Collin Peterson for the $592 trillion over-the-counter derivatives market leaves open for debate whether to ban so-called naked trading.
The legislative proposal, which would push most derivatives onto an exchange or clearinghouse, fails to resolve the issue of outlawing credit-default swaps where the buyer doesn’t own the underlying asset. A three-page summary of the plan also shows lawmakers haven’t agreed on disclosure rules and trading limits, or how to divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
“None of the remaining areas are deal breakers,” Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said at a news conference in Washington today touting the plan. He said “we are very close,” and a bill may pass Congress by the end of the year.
At a minimum, hedge funds and other companies using credit- default swaps would have to report to regulators any short positions related to those contracts, according to the proposal. The bill, which may change as it works its way through committees and the House floor, includes most of what the Obama administration has been pitching to rein in the derivatives market, including clearinghouses and margin requirements.
“We clearly want to err on the side of too much regulation rather than too little, given what we’ve been through,” Peterson, a Minnesota Democrat and chairman of the House Agriculture Committee, said at the news conference.
Jim Sinclair’s Commentary
China bashers insist that China is financially imprisoned and therefore compromised because they hold $800 billion in US dollars out of reserves of $2 trillion.
The US just flushed $12 trillion into the collapsed OTC derivative positions of financial institutions which most certainly involve large losses and non recoveries.
Do you really believe that China cannot afford to write off $400 billion if they decided to prevent future losses and take over the world economic leadership after the event horizon of that action?
Jim Sinclair’s Commentary
I do hope that the USA knows since China has now won the economic game partly due to low cost labor, China will take it all the way as the "go to country" for lower priced and fabulous high tech.
China is already outcompeting both RSA and Australia in new mining techniques and equipment.
U.S. may OK hi-tech exports to China
BEIJING, July 30 — The U.S. has agreed to loosen restrictions on the export of hi-tech goods to China and speed up its recognition of the nation’s market economy, Vice-Premier Wang Qishan said on Tuesday after the China-U.S. Strategic and Economic Dialogue (SAED).
"The U.S. pledged to facilitate exports of high-technology products from the U.S. to China," he said, while calling the SAED a "full success".
Sino-U.S. trade has grown massively since China "opened up" 30 years ago. Last year – in spite of a seven-year low in China’s rate of growth because of the global financial crisis – the volume of trade between the countries amounted to 333.7 billion U.S. dollars. The number was 2.5 billion U.S. dollars 30 years ago.
However, despite the massive volume of trade, the U.S. suffers from a significant trade deficit with China and has blamed China’s "undervalued" yuan for the fact that more goods flow from China into the U.S. than in the other direction.
Analysts have said the reluctance of the U.S. to export hi-tech products is partly to blame and noted that unrestricted sales of hi-tech goods would help balance bilateral trade.
Jim Sinclair’s Commentary
After 2 bomb out auctions of course it is.
How much QE was part of this?
The future of the Fed hangs on the success of the bond offerings.
Playing games with the Euro yesterday would not make today’s auction a success.
Only the action of those international investment banks making so much money from Fed guarantees on their borrowings could.
Treasury’s Auction of 7-Year Notes Is Better Than Expected
Thursday, 30 Jul 2009 | 1:15 PM ET
By: Jeff Cox
The bond market got a bit of relief Thursday, as a $28 billion auction of seven-year notes went somewhat better than expected.
The auction saw a yield of 3.369 percent on a bid-to-cover ratio of 2.63 as the price tag continues to increase for the government’s massive debtload.
The bond market this week already has weathered two tepid auctions, for two- and five-year notes. With today’s auction of $28 billion in seven-year notes sending investors even further out on the yield curve, there was little optimism that things would change.
"As an investor you’ve always got to look at how much debt is too much debt," says Bill Walsh, president of the Walsh & Hennion trading firm in Parsippany, N.J. "It’s a lot of supply for the market to absorb. The actual buyers, the investors, are questioning at what rate should we be buying this stuff."
Jim Sinclair’s Commentary
This is the FUBAR agency lacking capital that guarantees the nation’s retirement programs.
Sure, all is well.
Pension Agency Would Be Revamped Under Measure in U.S. Congress
By Holly Rosenkrantz
July 30 (Bloomberg) — The government agency that guarantees the pensions of more than 44 million Americans would be restructured under legislation introduced in the U.S. Senate.
The Pension Benefit Guaranty Corp.’s finances and structure need revamping as “several of the country’s largest automobile and manufacturing companies are teetering on the edge of bankruptcy,” Senator Herb Kohl, a Wisconsin Democrat and a sponsor of the measure, said in a statement.
The agency, created by Congress in 1974 to protect the pension programs of bankrupt companies, reported in May a deficit of $33.5 billion, triple that of six months earlier. Last week it took over the pension plan of Delphi Corp. the auto-parts maker in bankruptcy since 2005.
The agency is also facing increased scrutiny after a report by its inspector general in May found its former director, Charles E.F. Millard, had inappropriate communication with eight of 16 Wall Street firms that bid last year to manage $2.5 billion of the agency’s $48 billion.
Millard, a Bush administration appointee, may have violated “blackout” rules that prohibited him from contacting bidders on three contracts for “strategic partnerships” that were to involve investments in stocks, real estate and private-equity assets. The House Education and Labor Committee is investigating whether any laws were broken.
Jim Sinclair’s Commentary
This is bureaucratic genius.
Shut down the businesses rather than look for funds due for settlements or structure payout plans.
Put people out of work and let the unemployment lines get longer. Then the state runs into increased cash drains. The state then has to pay its obligations in IOUs.
This type of thinking and pedigree is what is going to run the nationalized US industries.
1,200 R.I. businesses face closure over sales tax
01:00 AM EDT on Thursday, July 30, 2009
By Cynthia Needham and KATHERINE GREGG
PROVIDENCE — State tax officials have put more than 1,200 businesses across the state on notice this week that they are out of business unless they pay their overdue sales taxes immediately.
For most, that action came in the form of a personal visit from the state Division of Taxation, ordering business owners to lock their doors at once.
By Wednesday, a line of people had queued up inside the Department of Administration building on Smith Hill, waiting their turn to plead their case to a state revenue agent. Some were angry. Others frustrated.
“I understand the state needs money, but to put pressure on the small guy or the moderate guy that’s struggling, it’s not going to do any good,” said Mike Suriani, who owns an electrical supply company in South Providence.
In Suriani’s case, it may have been a bookkeeping error that landed him in the three-hour line. Suriani says he paid his taxes in full — albeit a little late –– and had copies of the cancelled checks from the state showing he had indeed turned over the sales taxes he collected.
Tanzania Choosing Investors For Coal Project, 400 MW Pwr Plant
DOW JONES NEWSWIRES
The Tanzanian government is in the process of selecting investors to develop its Mchuchuma coal project and build a 400 megawatt power plant, the state-run National Development Corp. said Thursday.
In a statement, NDC said a 200-kilometer high voltage power lines would also be constructed linking Mchuchuma, in the south western region, with the national grid.
Tanzania is in the process of connecting its vast gold mines located around Lake Victoria to the national grid.
Up to 48 foreign and local companies have expressed interest to develop the Mchuchuma project, which has up to 125.3 million metric tons of coal deposits, and the winner will be announced before the end of the third quarter.
According to the Ministry of Energy and Minerals Development the companies that have expressed an interest include Singapore-based Nava Bharat, which won a bid to acquire Zambia’s largest coal mine Maamba Collieries early this year. Others include diversified miners BHP Billiton PLC (BHP.LN) and Rio Tinto PLC ( RTP), Australia-based Western Metals Corp. (WTLC), India’s Tata Steel Co. ( 500470.BY) and China’s CAMC Engineering.
Development of the Mchuchuma coal project is expected to cost up to $660 million and a power plant would be completed three to four years after the start of construction work.
Analysts say Tanzania needs more power plants to meet rising demand occasioned by massive investment in the gold mining sector since the start of the decade. Most gold mines still rely on fuel-fired plants to run operations because they aren’t connected to the national grid.
Tanzania is Africa’s third largest gold producer.
