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Dear CIGAs,
Martin Armstrong has written a new article titled "Is America On The Verge Of Another Bank War? Should We End The Fed Or Goldman Sachs?"
The subject is something we have spoken about here. The Fed is under political pressure not to SAY or DO anything that would be perceived by the Administration or Wall Street as a derailment of the procedures seen as necessary to economic recovery.
The needs of politics and Wall Street are always in present time and not forward looking.
Armstrong points out the history of such events, but in my opinion there has never been a challenge to a central bank as serious as what is now in place.
Armstrong’s article can be accessed here…
Jim Sinclair’s Commentary
And on it goes. Once you open Pandora’s box of ‘Too Big To Fail," and government underwriting of private losses, how do you stop?
You can’t without the fallout being worse than anyone can estimate.
The Third Seal may well have been broken by Wall Street.
Fannie Seeks $15 Billion in U.S. Aid After Ninth Straight Loss
By Dawn Kopecki
Nov. 5 (Bloomberg) — Fannie Mae, operating under a federal conservatorship, said it will seek $15 billion in aid from the U.S. Treasury as its ninth straight quarterly loss once again drove the mortgage-finance company’s net worth below zero.
A third-quarter net loss of $18.9 billion, or $3.47 a share, pushed the company to request its fourth draw on a $200 billion lifeline from the government, Washington-based Fannie Mae said in a filing today with the Securities and Exchange Commission.
Fannie Mae, which posted $101.6 billion in losses over the previous eight quarters, has already taken $44.9 billion in federal aid since April. Its shares, which peaked at $87.81 in December 2000, closed at $1.12 today in New York Stock Exchange composite trading.
Jim Sinclair’s Commentary
Not the best way to deal with your banker.
US slaps duties on Beijing steel pipe imports
By Sarah O’Connor in Washington
Published: November 6 2009 00:17 | Last updated: November 6 2009 00:17
The US hit China with another big trade action on Thursday as it slapped preliminary anti-dumping duties on $2.6bn worth of Chinese pipe imports.
The commerce department’s decision to impose duties of up to 99 per cent on imports of some steel pipes is the latest in a string of trade spats between over tyres, cars and chickens. It comes less than a fortnight before President Barack Obama’s first visit to China.
The ruling will affect more imports by value than Mr Obama’s recent move to impose duties on Chinese tyres, which sparked an international row in which Beijing accused the US of “rampant protectionism”.
The decision was a victory for steel companies, including US Steel Corporation, that petitioned for the duties in April. The United Steelworkers union said the decision was “an overdue message for thousands of American laid-off workers that trade laws are being enforced”. It says nearly half the domestic industry’s workers have been laid off.
Jim Sinclair’s Commentary
Turkey today.
Turkey: Sudanese president welcome to visit, shouldn’t fear arrest
By ASSOCIATED PRESS
A Turkish Foreign Ministry official said Sudan’s indicted president is free to attend a meeting of Islamic nations in Turkey despite an international arrest warrant against him.
Sudanese President Omar al-Bashir, wanted by the International Criminal Court for war crimes and crimes against humanity, is expected to arrive in Istanbul this weekend to attend a meeting of the Organization of Islamic Conference.
The official said Thursday that Turkey is not a party to the International Criminal Court and has no obligation or intention to arrest Bashir. She spoke on condition of anonymity because she was not authorized to speak to media.
Iranian President Mahmoud Ahmadinejad and Afghan President Hamid Karzai are also expected to attend the meeting next Monday.
Jim Sinclair’s Commentary
The march to gold has begun.
When the COT takes on governments it loses.
Buy whatever China is buying has been a formula for success over the past few years. India was simply quicker on the draw this round and front ran the Chinese while they were waiting for a bargain.
Gold will go to $1224, $1650 and then on to Alf’s numbers.
Sri Lanka c.bank buying gold to diversify reserves
11.05.09, 04:55 AM EST
NEW DELHI, Nov 5 (Reuters) – Sri Lanka’s central bank has been buying gold for the past five or six months as it diversifies its reserves amid volatile markets, the bank’s governor said in an interview on Thursday.
‘We have been fairly strong accumulators of gold reserves over the past few months,’ Sri Lanka Central Bank Governor Ajith Nivard Cabraal told Reuters in a telephone interview from the southern Indian city of Chennai.
‘We haven’t stopped yet,’ he added, declining to quantify how much gold the central bank had bought or how much of the more than $4.8 billion of the country’s reserves were in gold.
‘Many countries are today diversifying. They are also looking at intrinsic value of their reserves, so gold would be a natural candidate for that kind of reserve accumulation,’ he said.
Jim Sinclair’s Commentary
You think it might be a little late to figure this out?
Apparently the Formula did not get much respect.
Allstate Sells Municipals as Governments Run Deficits (Update3)
By Jamie McGee and William Selway
Nov. 5 (Bloomberg) — Allstate Corp., the largest publicly traded U.S. home and auto insurer, is paring its municipal-bond holdings because state and local governments are “not in great shape,” Chief Executive Officer Thomas Wilson said.
“We’ve just recently begun to reduce our exposure to municipals because we are uncomfortable with some of the fiscal practices of some of the government entities,” Wilson said yesterday in an interview after the Northbrook, Illinois-based company reported a third-quarter profit. “If you look at their balance sheets or income statements and put it in financial terms, they are not in great shape.”
Allstate cut its municipal holdings 8.3 percent to $22.1 billion in the third quarter as tax-exempt yields plunged to a 42-year low and governments struggled to maintain budgets amid the recession. State tax collections declined by 16.6 percent in the three months through June from the year-earlier period, the largest quarterly decline since at least 1963, the Nelson A. Rockefeller Institute of Government said in a report last month.
Officials “haven’t adjusted their spending, so they are running deficits,” Wilson said. “When we look at the risk- return profile we don’t think we are being paid enough to take that risk today.”
Within its municipal portfolio, Allstate is reducing holdings of health-care debt and zero-coupon bonds, Chief Investment Officer Judith Greffin said today in a conference call with analysts and investors.
Jim Sinclair’s Commentary
Simply put, India front ran China.
India Shows Hedge-Fund Savvy With Huge Gold Buy: William Pesek
Commentary by William Pesek
Nov. 5 (Bloomberg) — Barack Obama and Timothy Geithner must be as annoyed as they are bewildered.
Didn’t India get the memo? Developing nations are supposed to keep their excess cash in Treasuries, the U.S. president and his Treasury secretary are no doubt thinking. Gold? That relic of the past that doesn’t pay interest or dividends and can’t be eaten? A fool’s game best left to the dinosaurs out there.
India is going its own way with a $6.7 billion gold purchase. The transaction turned heads in markets. It should do the same in capitals from Beijing to Washington.
India’s 200 metric-ton deal wasn’t huge considering how much gold central banks hold. It’s the symbolism that matters as the U.S. struggles to keep the dollar’s slide orderly and panic- free. Consider India the vanguard of central banks more aggressively diversifying reserves away from U.S. assets.
As markets brace for that inevitability, here are four things we can conclude from India’s gold rush.
One, the dollar’s plight just got worse. Mounting U.S. debt is bumping up against a dismal employment picture, a toxic mix that may get the attention of credit-rating companies. This U.S. recovery looks to be a uniquely jobless one, complicating things for a president already grappling with two unpopular wars.
Jim Sinclair’s Commentary
Non sustainable and without any practical method of exit. This is quite dollar negative.
It is what the final pillar is of the Gold Bull market.
U.S. to Sell $81 Billion in Long-Term Debt Next Week (Update2)
By Rebecca Christie
Nov. 4 (Bloomberg) — The U.S. Treasury Department said it plans to sell a record $81 billion in its quarterly auctions of long-term debt next week and will replace the inflation- protected 20-year bond with a reintroduced 30-year security.
The Treasury will auction $40 billion in three-year notes on Nov. 9, $25 billion in 10-year notes Nov. 10 and $16 billion in 30-year bonds Nov. 12. The amounts were in line with the median forecast of $80 billion in a Bloomberg News survey of nine analysts.
The U.S. is headed for a second straight year of budget deficits exceeding $1 trillion, and the country’s legal limit on debt may be reached next month. Treasury debt-management director Karthik Ramanathan told bond market participants this week to expect another year of government debt sales of $1.5 trillion to $2 trillion, minutes of the meeting showed today.
“Treasury debt managers will continue to remain aggressive in managing financing needs while minimizing potential market implications,” the Treasury said in a statement in Washington.
