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The IMF versus the Asian central banks is like a go-kart playing chicken with the world’s most powerful bullet train. Good luck with that one.
–CIGA Rusty Bayonet
Final Thoughts For The Day:
1. The general thinking is that today was massive short covering. Some point at the silly short of gold OTC derivative hedgers. My feeling is that when COT takes on governments, COT loses. India front ran China. The IMF will not have the "Gold For Sale" sign up much longer.
2. Tomorrow the Fed will leave rates unchanged again.
3. Therefore the hair splitters will be reading the Fed statement for some key to the future.
4. My feeling is that if the Fed pays homage to the Hawks in wording the Administration will go wild.
5. Gold is set up for $1224 and $1650 without any regard to the if or not there are the same two words in a Fed statement.
6. All the way to Alf’s numbers there will be challenges so to the fellows – man up, the ladies are perfect anyway.
7. Ignore the challenges from here to $1650 as from $248 to here. This entire process is gold ascending and the dollar descending, technical BS aside.
8. Before I listen to Professor Pundit on the dollar carry trade, I would have to see Libor green for a change.
9. There isn’t a chance in hell that the Fed will do anything different tomorrow from today in practice.
Jim Sinclair’s Commentary
Do you really think the Fed can change course without major political ramifications? The economic problems are quite far from solved and in some areas are worse.
Even changing two words in the Fed statement is fraught with political risk.
Bernanke tonight will make a choice upon which the future of the Fed hangs. What was created in 1913 can be dissolved, in practice, in 2009.
Republican Wins Race for Virginia Governor
Tue, November 03, 2009 — 8:07 PM ET
By IAN URBINA
RICHMOND, Va. — Robert F. McDonnell, a Republican and a former state attorney general, won a decisive victory in Virginia’s governor’s race Tuesday, a stark reversal of fortune for Democrats who have held control in Richmond for the past eight years.
Mr. McDonnell defeated the Democratic candidate, R. Creigh Deeds, an 18-year state senator from rural Bath County in western Virginia. With 99 percent of the precincts reporting, Mr. McDonnell had 59 percent of the vote, and Mr. Deeds 41 percent.
Republicans cited the victory as a repudiation of the Obama administration and the national Democratic Party’s agenda, especially that of departing Gov. Tim Kaine, the chairman of the Democratic National Committee.
Nonetheless, exit polls conducted by Edison Research on Tuesday showed that support for Mr. Obama had diminished only slightly in the state since his victory here in 2008. The polls suggested that many of Mr. Obama’s voters stayed home on Tuesday, allowing Mr. McDonnell to win on strong support among white men and independents and among voters who say they are very worried about the direction of the nation’s economy.
Jim Sinclair’s Commentary
Turkey makes their position clear.
Covered with olive leaves, the PM says it the way Turkey is now.
Turkey PM: If you don’t want Iran to have nukes, give yours up
Last update – 20:10 31/10/2009
Turkish Prime Minister Tayyip Erdogan said on Saturday that countries opposed to Iran’s atomic program should give up their own nuclear weapons, and attacked as "arrogant" the sanctions imposed on Ankara’s neighbor.
He also said he wanted the Middle East, and then the whole world, to rid itself of nuclear weapons.
During a trip to Iran this week, Erdogan said he backed Tehran’s "right to peaceful nuclear energy" and called its approach in nuclear talks with Western powers "positive."
The trip added to Western concern that NATO’s only Muslim member may be shifting its foreign-policy focus towards the Islamic world and turning its back on Western allies.
Iran says the sole aim of its nuclear program is to generate electricity, but Western powers suspect it of secretly planning to produce nuclear weapons and are trying to persuade it to stop enriching uranium.
Jim Sinclair’s Commentary
Turkey follows the money with the Russian/Iranian energy complex.
Russia and Turkey to build oil refinery in Mediterranean
Monday, 02 Nov 2009
Todays Zaman Cited Mr Sergei Shmatko energy minister of Russia as saying that Russia and Turkey will build an oil refinery in the Mediterranean to maximize profits from a joint pipeline project.
Mr Shmatko said that “We want to build a major refinery and jointly sell oil products from the Mediterranean coast.”
The comment follows a deal between Italy, Russia and Turkey last week under which Russia agreed to participate in building a pipeline from the Turkish Black Sea port of Samsun to Ceyhan in the Mediterranean.
Russia and Kazakhstan said that they would supply crude for the new link which is designed to reduce tanker traffic through Turkey’s narrow and busy Black Sea straights.
Italy’s Eni and Turkey’s Çalık hold 50% each in the 550 kilometers pipeline which will have a maximum capacity of 1.5 million barrels per day.
Jim Sinclair’s Commentary
Trader Dan has been recognized by the Wall Street Journal.
We are proud to call your attention to the Hog Man. Trader Dan’s opinion, long sought by all CIGA’s with myself first in line, is now carried on the Wall Street Journal Commodities page.
We are keeping this quiet here in memory of my 720 pound porker, Bertha. She was leash trained, but after she got to 450 pounds, it was hard to tell who was taking whom on a walk.
Today’s Comments On Gold:
1. Is there any question left out there about gold going to $1650?
2. Do you really believe the shorts can sit on the gold shares as financing windows open up and gold starts its march past my estimates and on to Alf’s numbers?
3. Closing your derivative book now is not good news. It is a public admission that you are an ass.
4. On the countdown – not too shabby so far.
5. To the hoard of whiners from $248 up, next time I reserve the right to yell at you.
Jim Sinclair’s Commentary
What a bunch of cheapskates.
The US sends them billions and all they offer is $5 million. Is that $267,153 each?
Pakistan offers $5 mn for information on Taliban leaders
By IANS
November 2nd, 2009
ISLAMABAD – The Pakistan government Monday offered a reward of $5 million for information on the country’s Taliban chief Hakimullah Mehsud and 18 of his associates.
The reward is for information on Tehreek-e-Taliban leader Hakimullah Mehsud and his associates who have vowed deadly attacks across the country in retaliation over US drone strikes.
The rewards were offered in a government advertisement on the front page of The News daily and flashed on Pakistani television channels overnight.
“Anyone who captures these people dead or alive or provides concrete information, the government will award them a cash reward,” The Nation quoted the advertisement as saying.
“The banned Tehreek-e-Taliban (TTP) terrorists are daily involved in deadly activities and because of their activities innocent Muslims are going to the valley of death,” it added.
Jim Sinclair’s Commentary
A little harsh, don’t you think?
Jim Sinclair’s Commentary
Egon von Greyerz gets the award today for the most intriguing headline.
India buys gold while Great Britain buys banks. Now that is consistency in stupidity
INDIA BUYS GOLD – UK BUYS BANKS
November 3rd, 2009 by Egon von Greyerz, GoldSwitzerland
India, like China, understands the virtues of gold. This is why they have snapped up 200 tons of gold from the IMF at around $1,045 per ounce or $6.7 billion. The UK does not understand gold, that is why Gordon Brown sold most of the nation’s gold in 1999 at virtually the low of $250.
Instead the UK has today spent $51 billion on propping up bankrupt banks. Royal Bank of Scotland received another $41 billion today making it the costliest bailout worldwide with a total of $75 billion. Lloyds Bank received another $10 billion. The US is of course also spending printed money on rescuing bank creditors with 115 bank failures so far in 2009.
So who is likely to make the best return on their investment, India with their gold or the UK or US with their bankrupt banks. We certainly know who we will put our money on.
On 22 October we forecast in our report “Final Warning” that starting in November we are likely to see major changes in markets and in the economy. We have barely entered November and gold is already making a new all time high at $1,081. It is interesting that it is happening right after IMF has disposed of half of the planned gold sales. The same event in the 1970’s was the catalyst for the acceleration of the gold price.
But this is just the beginning as we have been discussing in our reports. We would suggest that investors don’t follow the example of the UK and US and throw good money after bad but instead do like India and protect themselves by buying gold.
Jim Sinclair’s Commentary
The shakeup should be the British people as RBS gets another huge hunk of cash.
Lloyds is next. Maybe the Queen as well. Certainly Prince Charles.
You know this is total madness, too big to fail. The new normal is a form of social fascism.
Gold is your only refuge. Go there!
RBS and Lloyds in major shake-up
Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off branches in another major shake-up of the UK banking industry.
The sales have been demanded by the European Commission to safeguard competition concerns after the two were bailed out by the UK government.
RBS will sell 318 branches, while Lloyds will dispose of more than 600 branches over the next four years.
Lloyds also confirmed it would stay out of a government-run insurance scheme.
Lloyds, which is 43.5%-owned by the government, will instead raise £21bn, including a £13.5bn rights issue and a £7.5bn debt swap.
Jim Sinclair’s Commentary
Sounds fair in the "New Abnormal."
CIT Bankruptcy: Taxpayers Stiffed on Company’s Bailout Billions While Execs Reap Bonuses
By Ward Harkavy
If people were pissed off about AIG’s temporary decline and permanent bonuses, CIT’s bankruptcy ought to enrage them.
The giant lender to businesses is heading for a quick in-and-out in bankruptcy court, and when it emerges, taxpayers will be the ones who have gotten the ol’ in-out: CIT won’t have to repay its $2.33 billion TARP bailout.
CIT’s been in deep trouble for way more than a year. Meanwhile, some of its execs have reaped special bonuses. Its H.R. director, Jim Duffy, has received a $450,000 cash bonus for what the company called his "exceptional performance." What did he do? "Mr. Duffy’s achievements in 2008 include the design and implementation of a process to reduce our total headcount by 22% … along with the successful deployment of talent and development programs targeted at retaining CIT’s key talent," according to CIT’s proxy filing last April. That message to taxpayers was approved by CEO Jeff Peek.
That was the same month that Peek’s wife, Liz Peek (a former journalist), wrote an anonymous, weepy tell-all for Portfolio about the sad plight of TARP wives. And that was the same month that Portfolio itself went out of business.
Liz Peek acknowledged in her sob story that even her husband had to take some of the blame for last year’s Wall Street tsunami, though she continued the canard that the Street’s execs didn’t see the tusanimi coming — as if it were a natural disaster instead of a manmade one.
Jim Sinclair’s Commentary
Fire those white collars and get rid of the overhead. Unique idea!
J&J to Slash More Than 7,000 Jobs in Restructuring
By Shannon Pettypiece
Nov. 3 (Bloomberg) — Johnson & Johnson, the world’s biggest health-products company, will fire more than 7,000 workers as it tries to eliminate layers of management and invest in more profitable areas of its business.
The cuts will shrink J&J’s workforce by 6 percent to 7 percent and save as much as $1.7 billion by 2011, the New Brunswick, New Jersey-based business said today in a statement.
J&J has been trying to diversify its business into biotechnology medicines, consumer products and medical devices as it faces generic competition to its antipsychotic Risperdal and migraine drug Topamax. The company reported third-quarter revenue that was lower than analysts had expected, citing generic competition and slowing demand for consumer products.
“Today, we are announcing a series of actions and plans designed to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the health care industry,” Johnson & Johnson Chief Executive Officer William C. Weldon said in the statement.
J&J fell 7 cents, or less than a percent, to $59.42 at 9:42 a.m. in New York Stock Exchange composite trading. It has lost 2.7 percent of its value in the past 12 months before today.
Jim Sinclair’s Commentary
Welcome to the New Abnormal.
Let’s call it the ZOMBIE JAMBOREE
Eric Sprott: "Dead Government Walking"
Joe Weisenthal | Nov. 3, 2009, 12:48 PM
If you’re looking for something to cheer you up, don’t read the latest letter from ultra-bear Eric Sprott (via Market Folly). Basically he argues, a US default is coming sooner, rather than later, and that there’s just no hope of averting this.
The projected US deficit from 2009 to 2019 is now slated to be almost $9 trillion dollars.3 How on earth does anyone expect them to raise this capital? As we stated in a previous article, in order to satisfy US capital requirements, all existing investors would have had to increase their US bond purchases by 200% in fiscal 2009. Foreigners, however, only increased their purchases by a mere 28% from September 2008 to July 2009 – far short of what the US government required.4 The US taxpayer can’t cover the difference either. According to recent estimates, tax revenue from all sources would have to increase by 61% in order to balance the 2010 fiscal budget. Given that State government income tax revenues were down 27.5% in the second quarter, the US government will be lucky just to maintain its currentlevel of tax revenue, let alone increase it.
Jim Sinclair’s Commentary
Let’s hear a rousing round of applause for Darth Vader, the Dark Side, the Evil Empire, and all their little OTC derivative devils who did this.
Cleary they do not give a flying f***.
Bankruptcy Filings to Match Divorce Filings in 2009: 1.5 Million. 35.8 Million Americans on Food Stamps – 11 Percent of the Population. The 5 Indicators of the Misery Index.
It is a sobering fact that in 2009, there will be as many people filing for bankruptcy as those filing for a divorce. We are on track to seeing an average of nearly 5,900 bankruptcy filings a day for 2009. While some people use the stock market as their barometer of economic recovery, there are a few other “misery” indicators that show things are still bad for millions of Americans and counter the recovery talks. If you want to track a broader recovery, I would recommend people examine the five indicators of the misery index. Food stamps, bankruptcies, long-term unemployed, foreclosures, and credit card defaults are probably your best gauges to the real economic recovery.
The problem we currently face is even after the global economy was brought to its knees by the current Wall Street banking structure, things still haven’t changed at the core of their mission. The same banks are back taking inordinate amounts of risk with the now explicit backing of the U.S. Taxpayer. It is no surprise then that our U.S. dollar has been pummeled by the policies of the Federal Reserve and U.S. Treasury.
Let us examine each component of the misery index.
Jim Sinclair’s Commentary
Remember the terrorist that hid the bomb in a body cavity that exploded all over the Prince’s robes?
The Prince suffered no injuries but got one hell of a dry cleaning bill.
Well this scanner will never find that bomb in its hiding place.
Child porn fears scupper airport ‘nude X-ray’ scans
By Jason Lewis
Last updated at 1:22 PM on 18th October 2009
Airport security chiefs have been banned from subjecting children to a controversial new X-ray scanner that produces ‘naked’ pictures of passengers because of legal warnings the images may break child pornography laws.
The full-body scanner, which can spot weapons and explosives hidden under clothing, was launched with great fanfare at Manchester Airport last week.
But now – with the system due to begin operating at full capacity at Manchester’s Terminal 2 next week – security chiefs have been told no one under 18 can be subjected to the new checks.
Child protection experts have warned that the image produced by the Rapiscan machines may break the law which prevents the creation of an indecent image or pseudo-image of a child.
The legislation, the Protection of Children Act 1978, could potentially have led to security officers facing criminal charges for doing their job by examining the images.
