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Jim Sinclair’s Commentary
The score for this Friday is 4 broken banks so far at 8 PM this evening.
Bank Closing Information – November 6, 2009
These links contain useful information for the customers and vendors of these closed banks.
Gateway Bank of St. Louis, St. Louis, MO
Prosperan Bank, Oakdale, MN
Home Federal Savings Bank, Detroit, MI
United Security Bank, Sparta, GA
Jim Sinclair’s Commentary
You can’t play both sides.
Turkey’s final decision will not be in the interest of the EU.
Sudan leader’s planned visit sparks Turkey-EU row
Fri Nov 6, 2009 8:48am EST
ANKARA (Reuters) – Turkey’s President Abdullah Gul accused the European Union on Friday of "interfering" after the bloc asked Ankara to reconsider a decision to invite indicted Sudanese President Omar Hassan al-Bashir to an Islamic summit.
The exchange underscores the risk for EU candidate Turkey that Bashir’s plans to attend Monday’s summit in Istanbul of the Organization of the Islamic Conference (OIC), in defiance of an warrant from the International Criminal Court (ICC), could escalate into a diplomatic crisis with Brussels.
Muslim Turkey has not ratified the 2002 Rome Statute that established the ICC, but it is under pressure to do so to bring it closer to EU standards.
Turkey, which has deepened commercial and energy ties with Sudan, has announced it has no plans to arrest Bashir, who was indicted by the ICC in March for crimes against humanity and war crimes in Sudan’s Darfur region.
In a diplomatic note seen by Reuters, Brussels asked Turkey to reconsider its invitation to Bashir to attend the OIC summit.
Jim Sinclair’s Commentary
Huffington does not think much of the new legislation on OTC derivatives, nor does anyone that really understands these weapons of mass financial destruction.
New Bill Would Keep Public In The Dark About Threats To Financial System
First Posted: 11- 6-09 01:45 PM | Updated: 11- 6-09 05:02 PM
Members of Congress and the general public may not be told of "potential emerging threats to the stability of the financial system," thanks to a Thursday vote by a House panel shepherding the bill that’s supposed to end "too big to fail."
An amendment offered by Rep. Gregory Meeks (D-N.Y.) and unanimously approved by a voice vote in the House Financial Services Committee specifically deletes a provision in the Financial Stability Improvement Act of 2009.
The two draft versions of the bill originally called for the proposed overseer of threats to the entire financial system to prepare an annual report to Congress describing, among other things, "significant financial market developments and potential emerging threats to the stability of the financial system."
But on Thursday, Meeks’ amendment deleted that language and instead compels the council to describe:
"Significant financial and regulatory developments, including insurance and accounting regulations and standards, and assesses the impact of those developments on the stability of the financial system."
Jim Sinclair’s Commentary
Who knows, maybe this unmitigated gall, as Dr. Bob calls it, will cure our Wall Street problem. Let’s hope so.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Jim Sinclair’s Commentary
Actually it is not so subtle.
Central banks lead subtle shift away from dollar
Tue Nov 3, 2009 4:31pm EST
By Steven C. Johnson – Analysis
NEW YORK (Reuters) – Central banks with trillions of dollars in reserves that are already stepping up euro and yen purchases will likely continue doing so in coming years, driven by worries over the stability of the greenback.
A record U.S. budget gap and the rise of dynamic developing economies like China suggest the dollar, down over 20 percent since 2002 on a trade-weighted basis, has further to fall.
Of course, the dollar comprises some two-thirds of global reserves and will remain dominant in most holdings, as attempts to dump it would destroy the value of central bank portfolios.
But with the speed of reserve accumulation increasing after a crisis-induced lull late last year, policy makers can choose to park more new cash in euros and yen without having to sell existing dollar assets.
"I think 2009 will be remembered as a watershed moment for currencies," said Neil Mellor, strategist at BNY Mellon, which has some $20 trillion in assets under custody. "I don’t think there will be an imminent move, but it is quite clear there’s a plan to shift reserves to a more balanced portfolio."
Jim Sinclair’s Commentary
This move by the Saudis was as much to break a building bear price manipulation as it is a move away from the US dollar.
Venezuela Reviews Oil Pricing Change
By DAN MOLINSKI and BRIAN BASKIN
PORLAMAR, Venezuela — Venezuela’s oil minister applauded Saudi Arabia’s decision to move away from West Texas Intermediate crude benchmark pricing for oil sold in the U.S., and said his country may do something similar.
"We support (Saudi Arabia) in its decision … a very important decision," Rafael Ramirez said on the sidelines of an oil conference.
Argus Media said last week that Saudi Aramco, the state-owned oil company, would in January switch to using its Argus Sour Crude Index as a pricing benchmark for oil sold in the U.S., instead of West Texas Intermediate. The abandonment of WTI, the longtime standard, for Argus’s five-month-old index by the world’s biggest oil exporter instantly sparked speculation that other major producers would follow.
Asked whether Venezuela may adopt the Argus pricing as well, Mr. Ramirez said, "I don’t have information right now, but let’s just say we are actively reviewing it."
Venezuela was the third-biggest exporter of oil to the U.S. in August, sending one million barrels a day, according to the U.S. Energy Information Administration. Saudi Arabia was fifth, sending 745,000 barrels a day. Combined, the two countries supplied about 9% of U.S. oil demand that month.
Dear Readers,
Calls are overwhelming me today. Sometimes four at a time are coming in as people call all my numbers.
My cell phones are dancing across my desk with vibrate on high.
Everything you need to know is here. Please understand if I am driven nuts I cannot be that good to you.
Respectfully,
Jim
Jim Sinclair’s Commentary
Here is your by subscription handle on data reality.
- Annual Payroll Loss Rivals End of World War II Production Shutdown
- Unemployment Jumps to 10.2% (22.1% SGS)
- Systemic Liquidity Problems Still Intensifying
- Fed Continues to Explode Monetary Base
No. 256: Updated General Outlook, Employment/Unemployment, Money Supply"
http://www.shadowstats.com
Jim Sinclair’s Commentary
Keep this headline at hand as Market Watch will need it as gold trades at $1224, $1650 and on to Alf’s numbers.
Gold taps new record as U.S. joblessness hits 10%
Nov. 6, 2009, 11:36 a.m. EST
By Nick Godt, MarketWatch
NEW YORK (MarketWatch) — Gold futures barreled to a new record high above $1,100 an ounce on Friday, as news that the U.S. unemployment rate topped 10.2% in October boosted expectations the Federal Reserve will keep interest rates near zero well into next year, pressuring the dollar.
Gold for December delivery, the most active futures contract, rose as high as $1,100.50 an ounce on the New York Mercantile Exchange. It gained up to $1,101.90 an ounce in electronic trade. It recently gained $5.20, or 0.5%, to $1,094.50 an ounce.
Industrial metals, such as copper, however, moved lower. Copper, sometimes called "the metal with a Phd in economics," fell 1 cent, or 0.4%, to $2.94 a pound.
"With unemployment at 10%, the implications for Fed policy is that they have their hands tied and cannot defend the dollar," said Joe Foster, manager of the Van Eck International Investors Gold Fund.
"We’re going to see lots of new records going forward," he said. "By year end, it wouldn’t surprise me to [see gold] test $1,200 and then $1,300 by early next year before we see some consolidation."
The U.S. economy shed 190,000 jobs last month, lifting the unemployment rate above the 10% mark for the first time in 26 years, the Labor Department said. The report also revised statistics for September and August.
Jim Sinclair’s Commentary
Even though people remain blissfully ignorant, the Iran/Turkey/Pakistan/Israel situation has the potential of changing the form of geopolitics for your lifetime.
Iran tested advanced nuclear warhead design – secret report
Exclusive: Watchdog fears Tehran has key component to put bombs in missiles
guardian.co.uk, Thursday 5 November 2009 20.45 GMT
The UN’s nuclear watchdog has asked Iran to explain evidence suggesting that Iranian scientists have experimented with an advanced nuclear warhead design, the Guardian has learned.
The very existence of the technology, known as a "two-point implosion" device, is officially secret in both the US and Britain, but according to previously unpublished documentation in a dossier compiled by the International Atomic Energy Agency (IAEA), Iranian scientists may have tested high-explosive components of the design. The development was today described by nuclear experts as "breathtaking" and has added urgency to the effort to find a diplomatic solution to the Iranian nuclear crisis.
The sophisticated technology, once mastered, allows for the production of smaller and simpler warheads than older models. It reduces the diameter of a warhead and makes it easier to put a nuclear warhead on a missile.
Documentation referring to experiments testing a two-point detonation design are part of the evidence of nuclear weaponisation gathered by the IAEA and presented to Iran for its response.
The dossier, titled "Possible Military Dimensions of Iran’s Nuclear Program", is drawn in part from reports submitted to it by western intelligence agencies.
Jim Sinclair’s Commentary
Yeah sure, now find the real one.
About that advanced nuclear warhead tech, no problem if you like to glow in the dark.
ElBaradei: Inspectors found nothing worrying in Iran
Thu, 05 Nov 2009 22:18:41 GMT
The International Atomic Energy Agency (IAEA) chief says that UN inspectors have found "nothing to be worried about" in Iran’s latest nuclear facility.
"The idea was to use it as a bunker under the mountain to protect things," Mohamed ElBaradei told the Thursday print of the New York Times, pointing to Iran’s Fordo nuclear facility, some 160 kilometers southwest of Tehran.
"It’s a hole in a mountain," the IAEA chief said.
Nuclear inspectors had visited the newly constructed nuclear facility in October.
The IAEA is expected to declare details of the inspection in its next report due in mid-November.
Jim Sinclair’s Commentary
India is always preparing for war with Pakistan, but China as well?
India is preparing for possible war with China and Pakistan
October 31, 8:25 PM
Sahit Muja
Tensions have flared between both China and India militaries along their disputed 2,175 mile-long border, with both sides alleging more frequent troop incursions in recent weeks. China is upset when the Indian prime minister recently visit the disputed region. China considers an Indian-occupied piece of it’s own Tibetan Autonomous Region, has added flames to the fire.
China of course already deeply resents the fact that the top Tibetan leader, and several hundred thousand exiled Tibetans, are allowed to reside in India.
India’s Maoist rebels are now present in 20 states and have evolved into a potent and lethal insurgency. In the last four years, the Maoists have killed more than 900 Indian security officers. Indian leaders are now preparing to deploy nearly 70,000 paramilitary officers to hunt down the guerrillas.The Maoists, however, do not want to secede or be absorbed. Their goal is to topple the system.
India’s rapid economic growth has made it an emerging global power but also deepened stark inequalities in society. Maoists accuse the government of trying to push tribal groups off their land to gain access to raw materials and have sabotaged roads, bridges and even an energy pipeline.
India is preparing the military for possible war with China and Pakistan. India and Russia have agreed two military pacts, including a 10-year deal on weapons, aircraft, and maintenance contracts potentially worth at least $5 billion, Indian defense officials said. India plans to spend $30 billion over the next five years to buy modern weapons systems and attack planes.
Jim Sinclair’s Commentary
Most, if not all tier one and tier two gold shares are up to their respective asses in short of product derivatives as it was used to finance new production.
If not on the company books the short of product derivatives are hidden in the development/production loan indenture. All are subject to a contract agreement that acts exactly like a margin call even if not named a margin call.
Meanwhile China, devoid of any derivatives, continues to suck up world minerals.
Where is North America’s head at? Probably the same place as where they are up to in short of product derivatives.
This is not limited to gold and silver entities but also exists in base metals.
U.S. is losing control of the world’s natural wealth to China
October 25, 11:31 AM
China has an insatiable appetite for the world’s natural resources to sustain an economic boom that powers ahead despite the global downturn.
The quest for raw materials is the central goal of the country’s foreign policy. And virtually every natural resource imaginable is found just over the border.
Russian far East have large reserves of natural gas, oil, diamonds and gold, while millions of square miles of birch and pine provide supplies of timber.
All this amounts to an astonishing combination. A densely packed country trying to keep its economy roaring ahead by laying its hands on natural resources, living alongside a largely empty region with huge mineral wealth and fewer inhabitants every year.
Russia and China might operate a tactical alliance, but there is already tension between them over the Far East. Moscow is wary of large numbers of Chinese settlers moving into this region, bringing timber and mining companies in their wake.
Jim Sinclair’s Commentary
Iraq had no WMDs, but they do have a lot of oil.
You think the US has any intentions of leaving Iraq’s oil supplies defenceless? Do you really believe Iraq will ever be strong enough to protect a SUPERGIANT oil deposit against Iran?
Maybe discovering oil in your country is NOT good news. It certainly wasn’t for the Nigerian people. It will not be for Sudan’s outback.
ExxonMobil-led consortium nets ’supergiant’ Iraq oil field
Group wins bid to develop west Qurna as baghdad signs up slew of big contracts
Friday, November 06, 2009
Ahmed Rasheed and Muhanad Mohammed
BAGHDAD: An ExxonMobil-led consortium has beaten rival Russian, French and Chinese groups to bag initial rights to develop Iraq’s West Qurna field, the Oil Ministry said, adding momentum to Iraq’s bid to unlock its oil riches. With reserves of 8.7 billion barrels, West Qurna is among the prized Iraqi fields eyed by Western oil majors as they face flat or lower output at home and stiff competition from Chinese and Indian oil companies in bidding for oilfields elsewhere.
“The consortium led by ExxonMobil, which includes Shell, won the contract to develop West Qurna Phase One oilfield,” Oil Ministry spokesman Asim Jihad said.
The initial deal was signed in Baghdad on Thursday but needs Cabinet approval before it can be finalized.
The 20-year contract is part of a raft of deals Iraq is close to formalizing in a bid to catapult itself to the world’s third largest oil producer after decades of war and economic decline.
There is no guarantee that Iraq’s next government – to be elected in January – will honor the deals, but it injects optimism into prospects for Iraq’s battered oil sector and a second oil bid-round in December, after a lacklustre June auction.
Jim Sinclair’s Commentary
The best comment this morning on the unemployment and discouraged workers report was that it is a "Rear View Mirror report, a lagging figure."
The US dollar is NOT a safe haven no matter what F-TV tells you.
Jim Sinclair’s Commentary
Curtain QE and drain liquidity? Who are they kidding.
Unemployment in U.S. Jumps to 10.2%, Payrolls Fall (Update2)
By Timothy R. Homan
Nov. 6 (Bloomberg) — The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero.
Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The jobless rate gained from 9.8 percent in September and exceeded 10 percent for the first time since 1983.
Stock futures slid and Treasury notes gained on concern the emerging economic recovery will cool as American consumers retrench. Fed policy makers this week said the economy will probably “remain weak for a time” and reiterated a pledge to keep borrowing costs low for an “extended period.”
“The rise in the unemployment rate is very ugly,” Ethan Harris, chief U.S. economist at Bank of America Merrill Lynch, said in an interview with Bloomberg Television in New York. “This is a big backward step to get this high of an unemployment number this early in the recovery.”
Futures on the Standard & Poor’s 500 Stock Index fell 0.8 percent to 1,054.70 at 8:55 a.m. in New York. Treasuries rose, pushing the yield on the 10-year note down to 3.47 percent from 3.53 percent yesterday.
Jim Sinclair’s Commentary
Note how none of these cases find their way to court. Now ask yourself, why?
It is not kick backs.
JPMorgan Ends SEC Alabama Swap Probe for $722 Million (Update2)
By Martin Z. Braun and William Selway
Nov. 4 (Bloomberg) — JPMorgan Chase & Co. agreed to a $722 million settlement with the U.S. Securities and Exchange Commission to end a probe into sales of derivatives that helped push Alabama’s most populous county to the brink of bankruptcy.
JPMorgan will give Jefferson County, Alabama, $50 million, pay a $25 million penalty and cancel $647 million in fees the county faced to unwind the transactions, according to an SEC news release. In addition, the agency charged two former JPMorgan employees for their roles in an “unlawful payment scheme” that allowed them to win bond and interest-rate swap business with the county.
The settlement comes a week after Larry Langford, the former president of the Jefferson County Commission and Birmingham mayor, was convicted for accepting $235,000 in designer clothes, Rolex watches and cash from an Alabama banker who JPMorgan paid almost $3 million to help arrange the swaps associated with a refinancing of the county’s sewer debt.
“It’s a good day for us,” said Jefferson County Commission President Bettye Fine Collins. “Finally, we’re seeing some movement. We have been victimized by our creditors.”
Jim Sinclair’s Commentary
Daddy, please increase my allowance for my bad report card!
Fannie’s Draws From Emergency Treasury Fund Reach $60 Billion
By Dawn Kopecki
Nov. 6 (Bloomberg) — Fannie Mae, the mortgage buyer seized by regulators, plans to tap emergency U.S. capital for a fourth time this year, bringing its draws of taxpayer money to $60 billion as the company sees no immediate end to its losses.
Fannie Mae will seek $15 billion in Treasury Department financing after posting an $18.9 billion third-quarter net loss, according to a Securities and Exchange Commission filing late yesterday. The Washington-based company, which posted $101.6 billion in losses over the previous eight quarters, has already tapped $44.9 billion from the $200 billion emergency lifeline.
“They’re going to need that $200 billion in capital, if not more, when this thing’s all said and done,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
The Treasury Department is also holding up an agreement Fannie Mae reached in the third quarter to sell about $2.6 billion in low-income housing tax credits, the company said. The company may have to write down the value of the credits and take a charge if it can’t find a use for the credits.
Losses will continue and the company remains “dependent on the continued support of Treasury to continue operating,” Fannie Mae said in the filing. The company said any profit it does make would be eaten up by $6.1 billion in annual dividend payments owed on the Treasury borrowings, a cost that exceeded its annual net income for five of the past seven years.
U.S. Jobless Rate Hit 10.2% in October, Highest in 26 Years, as Employers Cut Payrolls by 190,000
By JAVIER C. HERNANDEZ
Published: November 6, 2009
For Americans who wake up each morning thinking about their job hunt, Friday’s unemployment report offered little reassurance that their search would soon pay off, even as the broader economy showed signs of strengthening.
The United States economy shed 190,000 jobs in October, and the unemployment rate reached a 26-year high of 10.2 percent, up from 9.8 percent in September, the Department of Labor said Friday in its monthly economic appraisal.
While the pace of job losses has slowed significantly since the peak of the recession last winter, the unemployment rate, which measures the number of people actively seeking work, continues to climb, and economists do not foresee relief until well into next year.
“There’s no doubt that the slashing and burning of jobs has abated quite a lot,” said Allen L. Sinai, the founder of Decision Economics, a research firm. “The economy is recovering, but it is a very soft recovery.”
The biggest losses came in the construction, manufacturing and retailing sectors. Health care companies added 29,000 jobs to their payrolls, and the number of temporary workers grew by 34,000 — a significant gain that could indicate employers are beginning to expand their businesses again.
