![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Dear CIGAs,
Here is an unusual problem at a South African mine. No it is not a circus elephant, this is the real thing.
Dear CIGAs,
Ayn Rand wrote the following about those who are best described as Profiteers of Destruction:
"Your laws don’t protect you against them, but protect them against you — when you see corruption being rewarded and honesty becoming a self-sacrifice — you may know that your society is doomed."
Laws are as much the written word as they are the application of that written word via your regulators. Let us hope that regulators, having suffered significant embarrassment, might on this issue protect the public rather that the Profiteers of Destruction.
Email Address: chairmanoffice@sec.gov
SEC Announces Panelists for Securities Lending and Short Sale Roundtable
FOR IMMEDIATE RELEASE
2009-207
Washington, D.C., Sept. 25, 2009 — The Securities and Exchange Commission today announced the panelists for its September 29 and September 30 roundtable in Washington D.C. to discuss securities lending and short sale issues.
Additional Materials
- Spotlight on Short Sales
- Notice of Roundtable Discussion; Request for Comment
- Panelist Biographies
- View comments
- Submit comments
The roundtable will begin at 9:30 a.m. on both days with opening remarks from SEC Chairman Mary L. Schapiro.
"Securities lending was once thought to be a way to earn a few extra points of return, with little or no risk," said Chairman Schapiro. "Events of last year reveal the risk was present. As a result, we need to consider ways to enhance investor-oriented oversight of this multi-trillion dollar market."
Chairman Schapiro added, "We also must focus on a flip-side of securities lending — short selling. That’s why the roundtable will also examine potential short sale pre-borrow and hard locate requirements and short sale disclosures."
Panel topics will include discussions of securities lending practices, possible short sale pre-borrowing requirements and additional short sale disclosures.
Roundtable participants will include representatives of corporate issuers, financial services firms, beneficial owner lenders, lending agents, borrowers of securities, self-regulatory organizations, international regulators and the academic community.
The roundtable will be held at the SEC’s headquarters at 100 F Street NE in Washington, D.C., and will be open to the public with seating on a first-come, first-served basis. The roundtable also will be webcast on the SEC’s Web site.
For additional information about the roundtable, contact the SEC’s Division of Trading and Markets at (202) 551-5720.
Agenda and Panelists
September 29, 2009
9:30-9:40 a.m.
Opening Remarks from SEC Chairman Mary L. Schapiro
9:40-10:50 a.m. – Panel 1
Overview of Securities Lending: Participants; Process; Benefits and Pitfalls
- Jerry Davis, New Orleans Municipal Employees’ Retirement System
- David Downey, OneChicago
- Irving Klubeck, Pershing LLC
- William Pridmore, William F. Pridmore, Ltd.
- Professor Adam Reed, University of North Carolina
10:50-11 a.m. – Break
11 a.m.-12:30 p.m. – Panel 2
Securities Lending and Investor Protection Concerns: Cash Collateral Reinvestment; Default; Lending Agent Compensation and Fee Splits; Proxy Voting
- Patrick Avitabile, Citigroup
- Ed Blount, Center for the Study of Financial Market Evolution
- Karen Dunn Kelley, Invesco
- Bruce Leto, Stradley Ronon Stevens and Young, LLP
- Kathy Rulong, Bank of New York Mellon Corporation
- Julia Short, RidgeWorth Investments
- Christianna Wood, Internat’l Corporate Governance Network
12:30-1:30 p.m. – Lunch Break
1:30-2:40 p.m. – Panel 3
Improving Securities Lending for the Benefit of Investors: Transparency; Electronic Platforms; Central Counterparties; Accountability
- Gregory DePetris, Quadriserv, Inc.
- Christine Donovan, Brown Brothers Harriman
- Aaron Gerdeman, Sungard
- Chris Jaynes, eSecLending
- Mike McAuley, State Street Corporation
- Jeff Petro, Federated
- Shawn Sullivan, Credit Suisse
2:40-2:50 p.m. – Break
2:50-3:55 p.m. – Panel 4
The Future of Securities Lending and Potential Regulatory Solutions: Market Evolution; SEC’s Role; Assessing any Regulatory Gaps
- Mark Faulkner, Data Explorers
- Richard Ketchum, FINRA
- John Nagel, Citadel Investment Group, L.L.C.
- Leslie Nelson, Goldman Sachs
3:55-4 p.m.
Closing Remarks from SEC Chairman Mary L. Schapiro
September 30, 2009
9:30-9:40 a.m.
Opening Remarks from SEC Chairman Mary L. Schapiro
9:40-11 a.m. – Panel 1
Controls on "Naked" Short Selling: Examination of Pre-Borrow and Hard Locate Requirements
- William Conley, Goldman Sachs
- Peter Driscoll, Security Traders Association
- Dr. Frank Hatheway, NASDAQ OMX Group
- William Hodash, The Depository Trust & Clearing Corporation
- Paul Lynch, State Street Corporation
- Michael Mendelson, AQR Capital Management
- Dennis Nixon, International Bancshares Corporation
- William O’Brien, Direct Edge
- Thomas Perna, Quadriserv, Inc.
11-11:10 a.m. – Break
11:10-12:25 p.m. – Panel 2
Making Short Sale Disclosure More Meaningful: Public versus Non-Public Reporting; Consolidated Tape Disclosure; Timeliness of Information
- Professor James Angel, Georgetown University
- David Carruthers, Data Explorers
- Richard Gates, TFS Capital LLC
- Michael Gitlin, T. Rowe Price
- Jesse Greene, IBM
- Joseph Mecane, NYSE Euronext
- Michael Treip, UK Financial Services Authority
12:25-12:30 p.m.
Closing Remarks from SEC Chairman Mary L. Schapiro
Jim Sinclair’s Commentary
The Chinese in two days have:
1. Invested US2.5 billion dollars in an energy project.
2. Invested US4.0 billion dollars in high speed railroad equipment
3. Invested US2.0 billion dollars in US high risk funds.
You really think that China is dollar bound? If you do you are mad.
Jim Sinclair’s Commentary
I am sure before the Fed is finished threatening the public with all the dire results of an audit that auditing the Fed will cause infertility and the bends.
Fed’s Alvarez Says Audits Could Lead to Higher Rates (Update1)
By Craig Torres and Scott Lanman
Sept. 25 (Bloomberg) — Federal Reserve General Counsel Scott Alvarez said audits of monetary policy by the U.S. Congress could lead to higher interest rates and reduced confidence in central bank policy.
Congressional audits of monetary policy could “cause the markets and the public to lose confidence in the independence of the judgments of the Federal Reserve,” Alvarez told the House Financial Services Committee today in response to a question from Representative Dennis Moore, a Kansas Democrat. Alvarez said in his prepared remarks the audits would probably “chill” the central bank’s discussions on interest rates.
Fed Chairman Ben S. Bernanke and his colleagues are trying to persuade lawmakers not to pass legislation sponsored by Representative Ron Paul of Texas that would repeal the central bank’s immunity to audits of monetary policy. Fed officials used emergency powers to protect creditors of Bear Stearns Cos. and American International Group Inc. during the financial crisis, prompting congressional scrutiny.
“We don’t want to give the rest of the world or, more important, domestic investors the impression that we are somehow in a formal way injecting Congress into the setting of monetary policy,” said Representative Barney Frank, a Massachusetts Democrat and chairman of the committee. “That could have a very destabilizing effect.”
Frank added that “a lot needs to be done” on Fed transparency and said that Congress can accomplish that without interfering with the independence of monetary policy decisions.
Jim Sinclair’s Commentary
40 days to go!
US dollar set to be eclipsed, World Bank president predicts
United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency, says Zoellick
The United States must brace itself for the dollar to be usurped as the world’s reserve currency as American dominance wanes in the wake of the financial crisis, the World Bank president, Robert Zoellick, warned yesterday.
Speaking ahead of the World Bank/IMF annual meetings in Istanbul, he said it was time for a "responsible globalisation", in which decision-making was shared between the old powers and developing countries such as China and India.
Ever since the post-second world war Bretton Woods agreement, which cemented the dollar’s ascendancy over sterling, Americans have been able to rely on borrowing cheaply from the rest of the world as governments banked on the dollar as a safe bet. But Zoellick said the greenback’s status could be under threat from the growing strength of the Chinese yuan and the euro.
"The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency. Looking forward, there will increasingly be other options to the dollar," Zoellick told an audience at Johns Hopkins University in Washington. From now on, he said, confidence in the US currency – and its economy – would have to be earned. "The future for the United States will depend on whether and how it will address large deficits, recover without inflation that could undermine its credit and currency, and overhaul its financial system."
Jim Sinclair’s Commentary
How about all member banks sell lemonade on the sidewalk on Saturdays? This idea is embarrassing.
FDIC Proposes Banks Prepay Deposit Fees Through 2012 (Update1)
By Alison Vekshin
Sept. 29 (Bloomberg) — The Federal Deposit Insurance Corp. is asking lenders to prepay three years of premiums, raising $45 billion, to replenish reserves drained by the fastest pace of bank failures in 17 years.
The insurance fund will have a negative balance as of tomorrow after 120 banks were shut in the past two years, and will be positive by 2012, the staff said. Banks failures may cost $100 billion through 2013 with half the cost already incurred, the FDIC said. The agency today rejected options for a second special fee or borrowing from the Treasury Department.
“What we are proposing to do is to tap the ample liquidity of the banking industry to improve our own liquidity position without borrowing from the Treasury,” FDIC Chairman Sheila Bair said at a Washington board meeting.
The agency is required by law to rebuild the insurance fund when the reserve measured against insured deposits falls below a certain level. The fund, drained by 95 bank failures this year, had $10.4 billion as of June 30 and will return to a positive balance in 2012.
The proposal adopted unanimously by the board requires banks to pay premiums for the fourth quarter and next three years on Dec. 30.
Jim Sinclair’s Commentary
The first of the rescuers that has to be rescued. That is if the housing agencies are considered businesses.
That cost is about double their original capitalization, and has no chance of being promptly earned back by charging fees to the banks.
Now let’s see how many writers and talking heads say that they told you so.
FDIC says bank failures to cost around $100B
Deposit insurance fund seen running a deficit as soon as this month
WASHINGTON – Federal regulators said Tuesday they expect bank failures to cost the deposit insurance fund about $100 billion in the next four years and the fund to begin running at a deficit this month.
That is higher than an earlier estimate of $70 billion in failure costs through 2013.
The Federal Deposit Insurance Corp. made the projections as its board voted to propose requiring banks to prepay an estimated $45 billion in regular insurance premiums for 2010-2012. The proposal could take effect after a 30-day public comment period.
"I do think this is a good balance," FDIC Chairman Sheila Bair said. The plan requires the banking industry "to step up" while spreading the financial hit to banks over a number of years, she said.
The insurance fund has been sapped by billions from a rash of bank failures that began in mid-2008. The banking industry prefers that option over a special emergency fee — which would be the second this year.
It was the first time the FDIC has required prepaid insurance fees.
Bair didn’t rule out the possibility of the agency tapping its $500 billion credit line with the Treasury Department, if the economy doesn’t stage a full recovery. However, there is a recognition in the banking industry that "everybody’s got bailout fatigue," she said
Ninety-five banks have failed so far this year as losses have mounted on commercial real estate and other soured loans amid the most severe financial climate in decades. The insurance fund fell 20 percent to $10.4 billion at the end of June, its lowest point since 1992, at the height of the savings-and-loan crisis. The fund has now slipped to 0.22 percent of insured deposits, below a congressionally mandated minimum of 1.15 percent.
Jim Sinclair’s Commentary
One scenario that will not take place is a civil suit that goes through to judgement for and against. These instruments could not survive such transparency.
The fallout of as lawsuit taken to completion is the destruction of almost all these instruments of mass financial destruction.
SCENARIOS: What will come of the China derivatives tussle?
Tue Sep 29, 2009 3:50am EDT
BEIJING (Reuters) – A group of Chinese state firms, with the backing from the state assets watchdog, have launched a contract war against their foreign banks, threatening not to pay out loss-making derivatives deals they claim were unfair.
Arguing that they were mis-sold risky and unnecessary oil options, China State-owned Assets Supervision and Administration (SASAC) this month took the unprecedented step of warning banks that state corporations could default or sue, appearing to give Beijing’s seal of approval to tearing up derivative deals worth an estimated several billion dollars to the banks.
Based on past disputes over derivative deals, there are a handful of potential outcomes from the stand-off.
THEY SETTLE PRIVATELY, EACH SIDE SHOULDERS SOME LOSSES
This is the most likely outcome, lawyers say.
Both sides know that the stakes are high: Beijing needs to preserve its reputation as a contract-abiding member of the global financial community; the banks will not want to risk destroying their relationship with the Chinese government and state firms, which are among their biggest clients now.
Jim Sinclair’s Commentary
History will designate this period as "The Recovery That Wasn’t."
GE’s Immelt warns US recovery slowest in decades
By ALEX KENNEDY (AP)
SINGAPORE — General Electric Co. chief executive Jeffrey Immelt warned Tuesday that high unemployment and slower lending will drag on U.S. economic growth, likely resulting in the weakest recovery in decades.
"There are reasons to believe that this recovery could look different from ones in the past," Immelt said in a speech in Singapore. "There’s not a lot of confidence that it’s going to be great."
Immelt suggested the world’s largest economy could be facing its slowest recovery from a recession since before the 1970s as increased government regulation and bank consolidation pinch off available credit.
Joblessness, which reached a 26-year high of 9.7 percent in August, will also weigh on growth by undermining consumer spending, he said.
"Easing up money has always been the elixir to keep the economy in recovery mode," Immelt said. "But once you get interest rates to zero percent, you can’t go much below that, which is kind of where we are right now."
Jim Sinclair’s Commentary
The recovery that isn’t.
U.S. Consumer Confidence Unexpectedly Fell This Month (Update1)
By Shobhana Chandra
Sept. 29 (Bloomberg) — Confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households.
The Conference Board’s confidence index dropped to 53.1, from a revised 54.5 in August, a report from the New York-based group showed today. Measures of present conditions and expectations for six months from now both declined. The index has climbed from a record low of 25.3 reached in February.
Unemployment is forecast to rise to 10 percent this year, even as the monthly pace of job losses slows. Today’s report corroborates the Federal Reserve’s assessment last week that sluggish income growth and tight credit are curbing household spending and slowing the pace of the economic recovery.
“It’s a little hard for households to look at their paychecks, or the lack thereof, and feel more confident,” Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in a Bloomberg Television interview. Even so, “we should continue to see consumer confidence turn around,” because the recession is over and hiring eventually will rebound, she said.
Consumer confidence was projected to increase to 57 this month, from an originally reported reading of 54.1 in August, according to the median estimate in a Bloomberg News survey of 78 economists. Forecasts ranged from 54 to 70. The index averaged 58 last year.
Jim Sinclair’s Commentary
No, the USA is not going broke. It already is.
Early retirements strain Social Security: Is U.S going broke?
In the latest sign the Social Security ticking time bomb is almost ready to explode, an unexpected spike in the number of early retirement claims will cause the entitlement program to run a deficit as early as 2010, nearly a decade ahead of earlier projections.
September 28, 11:49 PM
William Busse
In the latest sign the Social Security ticking time bomb is almost ready to explode, an unexpected spike in the number of early retirement claims will cause the entitlement program to run a deficit as early as 2010, nearly a decade ahead of earlier projections.
The system has suffered not only a 23% increase in early retirement applications, but the severe recession has resulted in the loss of 6.9 million jobs. In this negative feedback loop, older employees lose their jobs and thus stop paying into the system while applying for early retirement benefits when they are unable to secure a new job.
The federal government maintains that there is no cause for alarm even though the Congressional Budget Office says that the system will begin running permanent deficits by 2016, and will be totally depleted by 2036. The government reminds us that the Social Security Trust Fund has a surplus of 2.5 trillion, even though this “surplus” consists of IOU’s from the federal government. The actual surplus has already been confiscated and spent on a wide variety of social engineering projects, countless layers of inefficient and valueless bureaucracies, entitlements and pork barrel projects.
The severity of the Social Security crisis and other growing deficits begs a larger question: Is the US government going broke?
In a 2006 Federal Reserve Bank of St. Louis Review article, Boston University Professor of Economics Lawrence Kotlikoff examined the country’s probable “fiscal gap”. This is explained as the value difference between all future government expenditures, including servicing official debt, subtracted from all probable future receipts.
Jim Sinclair’s Commentary
The view from ground zero – Israel.
It’s Time To Stop Iran Before It’s Too Late; Report: Saudi Air-Space Open To IAF
September 29, 2009
In Jerusalem, last week’s announcement of yet another Iranian nuclear facility was received with feeling of validity, with statements from the United States and some European leaders more in line with Israel’s rapidly mounting concerns, with Israeli leaders continuing to warn the window of opportunity to prevent a nuclear capable Iran is closing, and we mustn’t permit Iran to reach its objective.
Prime Minister Binyamin Netanyahu this week told associates that the time has come for the world to take the necessary steps to halt Iran. The prime minister is pleased with the statements released by leaders of the United States, Germany, Russia and China, all signaling they represent a united front against Iranian President Mahmoud Ahmadinejad’s objective, to enrich enough low grade uranium to build a nuclear bomb. In Jerusalem, there is a ray of hope that the western alliance is about fed up with diplomatic efforts, and the discussion may soon come to an end and lead to more forceful measures, most likely beginning to stepped-up economic sanctions.
According to a Wall Street Journal report, despite last week’s report of the discovery of the nuclear facility in Qom, America and Israel have been aware of its existence for the a number of years.
In a related matter, the British Sunday Express reported over the weekend that Saudi Arabia will permit Israeli fighter planes to fly through its airspace en route to Iran if an offensive assault is decided upon. The report quotes Britain’s chief of intelligence, Sir John Scarlett, who apparently met with Mossad Intelligence Agency Director Meir Dagan. It appears the news of the Qom facility was enough to finally persuade the Saudis.
Jim Sinclair’s Commentary
Here is a simple question of logic. If you merge a mess with a bankrupt what do you get?
I think a messy bankrupt.
CIT Group shares soar on possible merger report
Shares of CIT Group jump on report of merger talks between hedge fund, IndyMac Bank
On Tuesday September 29, 2009, 12:39 pm EDT
CHARLOTTE, N.C. (AP) — CIT Group Inc.’s shares soared Tuesday on a report that hedge fund manager John Paulson is considering merging the troubled finance company with failed mortgage lender IndyMac Federal Bank.
Shares of New York-based CIT Group, one of the nation’s largest lenders to small and midsize businesses, rose 24 cents, or 14 percent, to $1.91 in early afternoon trading. They have traded between 31 cents and $8.25 during the past year.
A story in the New York Post, citing people familiar with the matter, said the plan has been discussed among a number of CIT creditors, including Paulson, but is not part of any formal discussions between CIT and IndyMac. The plan, however, was one of several being considered ahead of a meeting Thursday of CIT’s bondholders to discuss restructuring plans, the newspaper said.
A spokesman for CIT Group declined to comment on the Post report.
Paulson, and his hedge-fund firm Paulson & Co., was part of the consortium that bought IndyMac from the Federal Deposit Insurance Corp. earlier this year, after the big California lender failed in July 2008.
Jim Sinclair’s Commentary
Another risk-less activity fraught with RISK.
Schapiro: Securities lending rules ‘may need to be improved’
Agency hosts roundtable to look at post-credit crisis securities lending issues
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Securities and Exchange Commission head Mary Schaprio said Tuesday that the major financial crisis has raised questions about the multi-trillion dollar practice of securities lending, where investors such as hedge fund managers borrow shares from institutional investors for a price.
"For a long time, securities lending was regarded and described as a relatively low-risk venture, but the recent credit crisis revealed that it can be anything but low risk," SEC Chairwoman Schapiro told participants at a roundtable hosted to examine the practice of securities lending.
"Many questions have arisen with respect to the securities lending market and whether it may be improved for the benefit of market participants and investors. Some institutions that lent their securities, and the beneficiaries relying on those institutions, were significantly harmed," Schapiro said.
Encouraged by the expanded practice of securities lending, pension funds and other institutional investors temporarily lend out stocks to other investors who use them for a wide variety of purposes such as short selling or to vote the shares in proxy contests that pit shareholders against executives over the future of corporations.
With the practice of short selling, investors bet that a share price will go down by borrowing and selling shares of a company in hopes of buying back the shares at a lower price. The original owner then gets the shares back, and the short-seller pockets the difference in the price as profit.
Jim Sinclair’s Commentary
The guarantee is no better than the guarantor.
You think owning gold might become popular?
FDIC Discloses Deposit Insurance Fund Is Now Negative
Submitted by Tyler Durden on 09/29/2009 09:54 -0500
In an unprecedented disclosure, the FDIC has highlighted that it expects the DIF reserve ratio to be negative as of September 30. As there are a whopping 48 hours before that deadline, one can safely assume that the DIF is now well into negative territory: as of today depositors have no insurance courtesy of a banking system that has leeched out all the capital of the Federal Deposit Insurance Corporation. Let’s pray there is no run on the bank soon.
Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative. This reflects, in part, an increase in provisioning for anticipated failures. In contrast, cash and marketable securities available to resolve failed institutions remain positive.
Additionally, the FDIC has now raised its expectation for bank failure costs from $70 billion $100 billion. Feel free to expect this number to continue growing.
Staff has also projected the Fund balance and reserve ratio for each quarter over the next several years using the most recently available information on expected failures and loss rates and statistical analyses of trends in CAMELS downgrades, failure rates and loss rates. Staff projects that, over the period 2009 through 2013, the Fund could incur approximately $100 billion in failure costs. Staff projects that most of these costs will occur in 2009 and 2010. Approximately $25 billion of the $100 billion amount has already been incurred in failure costs so far in 2009. Staff projects that most of these costs will occur in 2009 and 2010.
Jim Sinclair’s Commentary
Iran warns West against "past mistakes"
By Parisa Hafezi and Fredrik Dahl
TEHRAN (Reuters) – Iran said on Tuesday it would refuse to discuss a newly declared nuclear plant at forthcoming international talks and cautioned Western powers it could curb cooperation further if they repeated "past mistakes."
An Iranian MP suggested parliament might seek withdrawal from the nuclear Non-Proliferation Treaty (NPT) if Thursday’s Geneva talks with major powers fail and "if the Zionists and America continue their pressure on Iran" — a reference to policies including economic sanctions.
Washington has suggested possible new sanctions on banking and the oil and gas industry if Tehran fails to assuage Western fears it seeks nuclear weapons. U.S. officials believe sanctions could now have more effect, playing on leadership divisions evident since a disputed presidential poll.
Comments by Western and Iranian officials suggested little optimism ahead of the Thursday’s rare meeting of the P5+1 — permanent U.N. Security Council members China, Britain, France, the United Sates and Russia, as well as Germany — with Iran.
Riyadh ‘offers airspace’ for Israel attack on Iran
Mon, 28 Sep 2009 11:13:52 GMT
Israeli fighter jets have been allowed to use Saudi airspace to launch go-it-alone air strikes on Iranian nuclear installations, says a recent report.
The issue has been discussed in a closed-door meeting in London, where British Intelligence Chief Sir John Scarlett, his Israeli counterpart, Meir Dagan, and Saudi official have been present, Daily Express reported.
According to the report, Scarlett has been told that Saudi airspace would be at Israel’s disposal should Tel Aviv decide to move forward with his military plans against Iran.
The British daily added the likelihood of an Israeli attack against Iran has increased significantly after the country announced plans to launch its second enrichment facility in the central city of Qom.
Press TV contacted the Saudi Embassy in Tehran for information on the report. The embassy, however, was reluctant to elaborate.
Jim Sinclair’s Commentary
The most dangerous situation on the planet, even more so that Iran vs. Israel
Outside View: A nuclear-armed Taliban?
Published: Sept. 29, 2009 at 11:40 AM
By LAWRENCE SELLIN, UPI Outside View Commentator
WASHINGTON, Sept. 29 (UPI) — A nuclear-armed Taliban? It may not be as far-fetched as it might first appear.
The Taliban already control or have a significant presence in northwest Pakistan along a critical stretch of the Afghan border. Taliban units operate with relative impunity in the region surrounding Peshawar, Pakistan’s major population, commercial and transportation center less than 100 miles from Pakistan’s capital, Islamabad.
Dominance of Taliban and al-Qaida forces in the pivotal northwest region of Pakistan provides not only a sanctuary and training centers for attacks on Afghanistan, but it has become a base of operations to weaken any pro-Western sentiments among the Pakistani people and the government in Islamabad.
Not the least of which are the attacks the Taliban and al-Qaida have mounted against Pakistani nuclear sites in the neighboring province of Punjab. According to an article published in the Long War Journal by Bill Roggio, attacks on the Kamra and Sargodha air bases may have been designed to intimidate officers either on the fence or who do not support the Islamists and erode the military’s capacity to defend nuclear installations. The Taliban’s control of northwest Pakistan and its strong presence, along with al-Qaida, in Quetta and Baluchistan province in general is a threat to the status quo in both Afghanistan and Pakistan.
If unchecked, an unambiguous Taliban victory in Afghanistan will not only produce mass executions on a scale not seen since the killing fields of Pol Pot’s Cambodia and a refugee crisis like Darfur, but it will produce massive political aftershocks and enormously strengthen the hand of radical elements throughout the region. We are only fooling ourselves if we believe that a Taliban-controlled Afghanistan will not become a center for the export of radical Islamic ideology and terrorism.
Jim Sinclair’s Commentary
Here is one more take on the Kansas Mortgage Case.
This is awful news for value to maturity valuation method of mortgage backed securitized investment vehicles.
Waking up to discover the mortgage market was a giant criminal enterprise
September 24th, 2009 — 6:55 pm
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
via Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks.
This is a potentially gigantic story. It seems that a court has ruled that about half of the mortgage market has been run as a criminal enterprise for years, which would invalidate any potential forelosure proceedings for about, oh, 60 million mortgages. The court ruled that the electronic transfer system used by the private company MERS — a clearing system for mortgages, similar to a depository, that is used for about half the mortgage market — is fundamentally unreliable, and any mortgage sold and/or transferred through MERS can’t be foreclosed upon, at least not in Kansas.
Coincidentally I’d been working on something related to this all day yesterday. All over the country, lawyers are contesting foreclosures because of similar chain-of-custody issues. I have some material about this coming out in my next Rolling Stone story, so I can’t get into this too much, but suffice to say the lenders and the banks were extremely sloppy about their paperwork (at best — there is a fraud angle as well) and jammed up the system with missing and/or mismarked mortgage notes. Since a sale isn’t legal unless there’s full transfer of the physical note, a lot of the sales of mortgage-backed securities were not entirely legal, since the actual notes were often not transferred.
Jim Sinclair’s Commentary
The poor lowly swine has nothing to do with it.
One of my favorite pets was Bertha, my 720 pound swine. Quite unfortunately she ate a meal that Gramma made and died forthwith.
We all knew better, but then Bertha was a pig.
Swine-Flu Slaughter Leaves Cairo Without Pigs to Devour Trash
By Daniel Williams
Sept. 29 (Bloomberg) — Egypt’s pigs are getting their revenge.
Five months after anxiety about swine flu prompted Egyptian President Hosni Mubarak’s government to order the slaughter of all the country’s 300,000 hogs, the organic waste they once devoured is piling up on Cairo’s streets, contributing to a garbage crisis.
The government’s action destroyed the livelihood of about 70,000 families known as zabaleen, who were freelance trash collectors and urban pig farmers. It forced all pork processors and retail outlets to close and created a potential health hazard as neighborhoods reek of decaying garbage. Some residents, concerned that yesterday’s discarded kebab might become tomorrow’s cholera outbreak, are burning refuse in bonfires
