Jim Sinclair’s Commentary

I am sure that the public is clueless on how important CIT has been to the bread and butter business that I call Middle America.

People will find out soon.

CIT failure to leave small businesses floundering
Sun Nov 1, 2009 4:36pm EST
By Elinor Comlay

NEW YORK, Nov 1 (Reuters) – CIT Group Inc’s (CIT.N) bankruptcy filing, while long expected, could still trigger a financing crunch for many of the hundreds of thousands of small businesses it finances.

CIT filed for bankruptcy protection on Sunday, and said its creditors have already approved the century-old commercial lender’s reorganization plan.[ID:nN01408863]

The bankruptcy followed a failed struggle to refinance its debt amid the credit crunch and recession, and paves the way for it to restructure.

Under the plan announced on Sunday, the lender expects to reduce total debt by about $10 billion.

But the company’s long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, lawyers said.

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Jim Sinclair’s Commentary

Not to worry. It isn’t going to happen.

Saudi Central Bank Warns Against Quick Withdrawal of Stimulus
By Alaa Shahine and Fiona MacDonald

Nov. 1 (Bloomberg) — The central bank governor of Saudi Arabia, the world’s biggest oil producer, joined a top Chinese official in warning against an early withdrawal of economic stimulus measures.

“The world economy is still in a recession with high unemployment rates and scarcity of credit despite the huge fiscal and monetary stimuli,” Muhammad al-Jasser said in a speech at an economic forum in Kuwait today. “The activation of stimulus exit strategies is still too early as it needs good timing and gradualism during the next few months.”

Central banks have started to pare emergency measures taken at the height of the financial crisis. Japan’s central bank said on Oct. 30 that it will stop buying corporate debt at the end of the year. Australia last month became the first Group of 20 nation to raise its benchmark interest rates since the height of the crisis and Norway followed.

Chinese Commerce Minister Chen Deming warned yesterday against an early withdrawal of stimulus measures, citing the risk of another world slump.

“There are increasing signs that the global economy is heading in a positive direction, but there are still many uncertainties,” Chen said in Shanghai. If countries “withdraw the stimulus measures now, the global economy will plunge.”

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Jim Sinclair’s Commentary

China has an economic strategy while the West has Wall Street and the city.

China to map out Africa strategy at forum in Egypt
By CHRISTOPHER BODEEN (AP) – 51 minutes ago

BEIJING — China will set the future direction of its burgeoning ties with Africa at a multinational forum in Egypt this month, Foreign Minister Yang Jiechi was quoted as saying on Sunday.

Premier Wen Jiabao plans to attend the Nov. 8-9 Forum on China-Africa Cooperation in the resort of Sharm el-Sheikh, Yang said in an interview with the official Xinhua News Agency.

No details were given, but at the last forum in 2006, China pledged to double assistance to Africa by 2009, provide $5 billion in preferential loans and credits, cancel debts and establish a $5 billion fund to encourage Chinese investment.

Yang said those goals had all been met, while the upcoming meeting marks "another important occasion to boost China-Africa friendship and cooperation."

China’s trade with Africa has soared by a factor of 10 since 2001, passing the $100 billion mark last year. Estimates of Chinese investment in Africa range upward from $6 billion as China tries to lock up oil, gas and other key resources for its resource-hungry economy. Estimates for total loans, investment and aid donations — often difficult to distinguish from each other — run closer to $50 billion.

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Jim Sinclair’s Commentary

Turkey has been fighting with a self definition problem, from Islamic European to full fledge Middle Eastern entity.

It seems they have made up their mind, and it is not in the best interest of the West.

Turkey, Israel and Pakistan represent the areas most likely to cause the next and most serious geopolitical upset.

Turkey flirts with Tehran

NATO’s only Muslim member is undermining Western efforts to keep nuclear weapons from Iran by expanding its trade ties.

Even as Congress pushes legislation aimed at punishing foreign companies that sell petroleum to Iran, and the United Nations prepares to consider sanctions against that country if an ongoing round of nuclear talks fails, Iranian leaders this week were elated over plans to treble trade ties with a key Middle Eastern power.

So which rogue nation is undermining Western efforts to prevent Tehran from obtaining nuclear weapons? Syria, perhaps, or the unpredictable Saudis? Actually, it’s Turkey, a member of NATO, prospective member of the European Union and the United States’ most strategically important Muslim ally.

Turkish Prime Minister Recep Tayyip Erdogan announced plans Wednesday in Tehran to increase trade between the two countries from its current level of about $7 billion to $20 billion by 2011. Turkey and Iran have reportedly reached agreements on power plants, banks and natural gas development that would help make up for any economic pain the United Nations could inflict via tougher sanctions. The deals are fueling worries that Turkey, a model democratic Muslim state and a vital bridge between Europe and the Arab world, is turning its back on the West to embrace Islamist regimes to the east.

Some of those fears are probably overblown. Much has been made, for example, of Turkey’s worsening relations with Israel, which went from lukewarm to frosty after the 2008 Gaza incursion. But that’s just Middle Eastern politics; Erdogan is reflecting popular anger over Gaza and boosting his status at home by bashing Israel. There’s little chance Turkey would jeopardize its ties to the United States and Europe by breaking off relations with Israel.

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Jim Sinclair’s Commentary

Pakistan today: