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Dear CIGAs,
Here is our newest illustration for your enjoyment!
Jim Sinclair’s Commentary
This is the reason why there are no dogs on Wall Street but plenty with CIGAs.
Jim Sinclair’s Commentary
Here is Martin Armstrong’s latest.
Jim Sinclair’s Commentary
Intervention is mainly in the minds of the media.
$1.50 is but a speed bump on its way considerably higher.
Dollar Overwhelms Central Banks From Brazil to Korea
By Oliver Biggadike and Matthew Brown
Nov. 13 (Bloomberg) — Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle.
South Korea Deputy Finance Minister Shin Je Yoon said yesterday the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year to slow the appreciation of the won. Chile Finance Minister Andres Velasco said the same day that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its dollar-based savings overseas and slow the peso’s rally.
Governments are amassing record foreign-exchange reserves as they direct central banks to buy dollars in an attempt to stem the greenback’s slide and keep their currencies from appreciating too fast and making their exports too expensive. Half of the 10-best performers in the currency market this year came from developing markets, gaining at least 14 percent on average, according to data compiled by Bloomberg.
‘Slow the Advance’
“It looked for a while like the Bank of Korea was trying to defend 1,200, but it looks like they’ve given up and are just trying to slow the advance,” said Collin Crownover, head of currency management in London at State Street Global Advisors, which has $1.7 trillion under management.
Jim Sinclair’s Commentary
The USA is #1, debtor nation that is. A record 1st month Fiscal Year Federal Deficit?
That is not dollar bullish.
US starts fiscal 2010 with $176.36 bln Oct deficit
Thu Nov 12, 2009 3:47pm EST
(Adds economist reaction paragraphs 4-5, background 10-13)
WASHINGTON, Nov 12 (Reuters) – The U.S. government began fiscal 2010 with a record shortfall for the month of October, after posting a record $1.4 trillion budget gap for the 2009 budget year, the Treasury Department aid on Thursday.
The department, in its monthly budget statement, reported a $176.36 billion budget gap in October, the fifth largest deficit for any month. That exceeded both Wall Street analysts’ expectations for a $150 billion deficit, and the $155.5 billion gap in October 2008.
The report for October pointed to a growing gap between government spending and income at a time when a fragile economy is beginning to emerge from the steepest recession in 70 years.
"When the economy is in the deepest recession that we’ve had since the 1930s we need an increase in the federal deficit in order to jump start and help get the economy out of that recession," said Bill Hampel, chief economist for the Credit Union National Association in Washington.
"We’re in a very weak economy right now, but the deficit has made the economy stronger than it otherwise would have been, it is mitigating the recession," Hampel said.
Jim Sinclair’s Commentary
Spin is saying this reflects a US recovery. The truth is more dollar supply and a lower dollar market.
September Trade Deficit Surges to $36.5 Billion
Author: 123jump.com Staff
Last Update: 10:03 AM ET November 13 2009
Trade deficit in September increased to $36.5 billion from $30.8 billion in August on exports slightly edge up to$3.7 billion and imports edge lower to $128.3 billion. The goods deficit decreased to $47.6 billion and service surplus increased to $36.5 billion.
The following is the unedited transcript of the news release from U.S. Bureau of Economic Analysis, U.S. Department of Commerce Washington, DC
Goods and Services
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total September exports of $132.0 billion and imports of $168.4 billion resulted in a goods and services deficit of $36.5 billion, up from $30.8 billion in August, revised. September exports were $3.7 billion more than August exports of $128.3 billion. September imports were $9.3 billion more than August imports of $159.1 billion.
In September, the goods deficit increased $5.6 billion from August to $47.6 billion, and the services surplus was virtually unchanged at $11.1 billion. Exports of goods increased $3.5 billion to $90.3 billion, and imports of goods increased $9.1 billion to $138.0 billion. Exports of services increased $0.2 billion to $41.6 billion, and imports of services increased $0.2 billion to $30.5 billion.
In September, the goods and services deficit decreased $23.7 billion from September 2008. Exports were down $20.0 billion, or 13.2 percent, and imports were down $43.7 billion, or 20.6 percent.
Jim Sinclair’s Commentary
Look like a late realization of the Formula.
BEYOND CALIFORNIA: STATES IN FISCAL PERIL
Some of the same pressures that have pushed California toward economic disaster are wreaking havoc in a number of other states, with potentially damaging consequences for the entire country. Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin join California as the 10 most troubled states, according to a new report.
In "Beyond California: States in Fiscal Peril," researchers with the Pew Center on the States identified factors that have contributed significantly to California’s difficulties, then determined the degree to which other states are experiencing the same challenges. These factors are: loss of state revenues; the relative size of budget gaps; increasing joblessness; high foreclosure rates; legal obstacles to balanced budgets — specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.
The report identifies threads that cut across the 10 states and could point to vulnerabilities in others as they try to navigate their way out of the fiscal crisis:
A number of states on the list, including Florida, Michigan, Nevada and Oregon, have struggled in part because their economies have depended so heavily on a particular industry.
The severity of the recession has resulted in states across the country facing substantial gaps between what they collect in revenue and what they spend.
In most of the 10 states, including Arizona, California, Florida, Nevada and Oregon, lawmakers’ latitude to respond to the fiscal crisis by raising taxes or cutting spending is limited by their states’ constitutions, ballot measures passed by voters, or other statutory or legal impediments to change.
Several states on the list were unable to muster the political resolve to enact long-term fixes to their fiscal problems.
Jim Sinclair’s Commentary
Drain liquidity, if it was possible (which it is not) – NO.
Restraint on QE but credit TARP to the Federal Deficit – NO
Not use TARP funds in 2010 – NO
World Bank warns of more unemployment in 2010
Fri, 13 Nov 2009 10:31:19 GMT
The World Bank chief has predicted another tough year for the global economy, impending large-scale unemployment for wealthy nations.
Robert Zoellick on Friday outlined a list of potential drawbacks to a business forum held on the sidelines of an Asia-Pacific summit in Singapore.
Zoellick said that next year "is the year I am more concerned about."
He added that continuing high levels of unemployment, particularly in developed nations, would create second-wave effects for banks including defaults on consumer loans, credit cards and mortgages.
The US consumer, who has been the savior in previous downturns, can no longer be relied upon to drag the global economy out of the doldrums by returning to enthusiastic spending, he said.
Jim Sinclair’s Commentary
Only if BA finds a solution to their unfunded obligations to retired and retiring employees that exceed BA’s capitalization.
British Airways, Iberia Agree to $7 Billion Merger (Update3)
By Steve Rothwell
Nov. 13 (Bloomberg) — British Airways Plc agreed to a $7 billion merger with Spanish carrier Iberia Lineas Aereas de Espana SA, ending more than a year of talks on a tie-up aimed at fighting a slump in travel and closing the gap with competitors.
Under the all-share deal, British Airways investors will own about 55 percent of the business, to be led by Willie Walsh, the U.K. carrier’s chief executive, the companies said. The merger won’t be completed until late 2010 and can be called off by Iberia if BA fails to resolve pension-deficit issues.
British Airways needs a bigger network to compete with larger rivals Air France-KLM Group and Deutsche Lufthansa AG. The combination will meld the U.K. company’s web of U.S. routes with Iberia’s Latin America services, extending its leading position in the lucrative trans-Atlantic market and consolidating its status as Europe’s third-largest airline.
“BA and Iberia will be stronger together than they are alone, particularly in terms of their networks,” said Gert Zonneveld, an analyst at Panmure Gordon in London with a “hold” rating on British Airways. “The pension deficit shouldn’t be an obstacle to this because it’s built into the share price.”
According to a memorandum of understanding signed by the companies, British Airways investors will get one share in the combined entity for every existing share they hold and Iberia investors will get 1.0205 shares for each Iberia share.
Jim Sinclair’s Commentary
Here are three interesting stories for the Community.
Gold Price Soars But Output Tanks
Mariam Isa
13 November 2009
Johannesburg — Gold rallied briefly to a new record peak at 1122,85/oz yesterday, while platinum, palladium and rhodium all hit their highest levels in a year on a wave of speculative buying.
But SA’s gold production fell 9,3% in volume terms compared with September last year, official data showed yesterday.
In the first nine months of this year, total mining production fell 7,8%, compared with 6,4% in the corresponding period last year.
Iran to supply 5m new coins to gold market
Iran’s central bank plans to inject 5 million newly-minted gold coins into the domestic market in order to control rising gold coin prices, according to the official IRNA news agency.
At Thursday’s price of 2.8 million rials (about $280) for a standard gold coin in Iran, the total value of the planned intervention would amount to $1.4 billion, Irna reported on Thursday.
The price of gold coins in Iran has risen sharply in line with developments on international markets where gold bullion has risen 28 per cent this year to a record high $1,122.85 an ounce.
Paper promises, golden hordes
Nov 12th 2009
From The Economist print edition
TWO hundred metric tonnes of gold would occupy a cube of a little more than two metres on a side; it would fit into a small bedroom. But India’s purchase of that volume of gold from the IMF last month has had an outsize impact on the markets, helping push the price well above $1,100 a troy ounce.
For bullion bulls, the implication is clear: central banks no longer trust the creditworthiness of other governments. And if they have lost confidence, private investors should do the same. The next step in this chain of reasoning is to assume a stampede (or at least a quick trot) by other central banks into holding the yellow metal. Gluskin Sheff, a Canadian asset-management firm, suggests that if China followed India’s lead, bullion could hit $1,400 an ounce.
Jim Sinclair’s Commentary
Good morning Pakistan.
Bomber attacks Pakistani intelligence agency; 10 dead
By Faris Ali
PESHAWAR, Pakistan (Reuters) – A suicide car bomber attacked an office of Pakistan’s main intelligence agency in the northwestern city of Peshawar on Friday, killing 10 people and wounding 60, officials said.
The city, near the Afghan border, has been targeted several times since the army began an offensive against the Taliban in South Waziristan last month and militants stepped up retaliatory attacks.
A military spokesman said the bomber’s target was the office of the Inter-Services Intelligence (ISI) agency and the bomber detonated his explosives at a checkpost outside.
The attack came shortly before U.S. National Security Adviser Jim Jones began meetings with military and government leaders in Islamabad.
The United States, weighing options as it struggles to stabilize Afghanistan, says Pakistani action against militants in border enclaves is vital for its Afghan effort.
Jim Sinclair’s Commentary
Another welcome for a key US personality?
"The violence comes as Gen. James L. Jones, President Obama’s national security adviser, began a two-day visit to the Pakistani capital, Islamabad, for meetings with President Asif Ali Zardari and other senior Pakistani officials. On Friday morning, he met with the army chief, Gen. Ashfaq Parvez Kayani."
Militants Hit Pakistan Spy Agency
By SABRINA TAVERNISE and ISMAIL KHAN
Published: November 13, 2009
ISLAMABAD, Pakistan — Militants stepped up their fight against the Pakistani government on Friday, ramming a truck bomb into a regional office of the country’s main intelligence agency.
The early-morning blast destroyed a building at the intelligence compound in the northwestern city of Peshawar, killing at least 11 people and wounded more than 60, the authorities said, in what has become a grimly familiar cycle of violence. An attack on a police station in a different area left as many as six dead.
The violence comes as Gen. James L. Jones, President Obama’s national security adviser, began a two-day visit to the Pakistani capital, Islamabad, for meetings with President Asif Ali Zardari and other senior Pakistani officials. On Friday morning, he met with the army chief, Gen. Ashfaq Parvez Kayani.
Jim Sinclair’s Commentary
Here is an interesting and timely connection.
Pakistan is the world’s most dangerous geopolitical space.
Follow the Money: Possible Link Between Fort Hood Suspect and Pakistan
Friday, November 13, 2009
This is a rush transcript from "On the Record," November 12, 2009. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Disturbing question tonight. Was the suspected Fort Hood killer sending money to Pakistan to fund terrorism? We report, you decide. But there is new information tonight about Major Hasan’s money and where some of it may have been going. Congressman Pete Hoekstra joins us live. He is ranking Republican on the House Intelligence Committee.
Good evening, Congressman. And where — what’s — what do you — what can you tell us about this money, whether or not Major Hasan was sending money to Pakistan, and to whom in Pakistan?
REP. PETE HOEKSTRA, R – MICH.: Well, Greta, much like the news media over the last five or six days, I’ve been going to my sources because over the weekend, the intelligence community was unwilling to brief us as to what they knew. And from very reliable sources — you know, they told me that there are very solid leads that indicate that Hasan was having communications with individuals in Pakistan and may also have sent money into Pakistan.
Now, as with any other leads, you know, this may end up being a dry hole, but the sources that I’ve heard this from are relative — in the past, they’ve been very reliable.
VAN SUSTEREN: All right, there are different places you can send money to in Pakistan. You could send it to your relatives. You could send it to your friends. You can send it…
HOEKSTRA: That’s right.
VAN SUSTEREN: … to a — or you can send it to, you know, really bad people, rotten people who want to inflict harm on others. Have you been able — is there any indication which way this goes?
Jim Sinclair’s Commentary
At present, I agree.
Major rise in yuan very unlikely – newspaper
11.13.09, 05:25 AM EST 
![clip_image002[1]](http://jsmineset.com/wp-content/uploads/2009/11/clip_image0021.gif "clip_image002[1]"){kind=small}
BEIJING, Nov 13 (Reuters) – A state-run Chinese newspaper on Friday played down speculation of an imminent significant rise in the yuan, or renminbi.
‘Considering the pressures on the export sector, the chances of a major appreciation in the renminbi are very small,’ said the International Finance News, a Chinese-language newspaper issued by the publishers of the official People’s Daily.
Speculation that China might let the yuan resume its climb after a 16-month pause was prompted on Wedesday by a change in the long-standing wording used by the People’s Bank of China to describe its currency policy.
In its third-quarter monetary policy report, the central bank failed to refer to keeping the yuan ‘basically stable at a reasonable and balanced level’ when discussing the outlook for the exchange rate.
It was the first such omission since China’s landmark revaluation of the yuan and the launch of currency reforms in July 2005.
Jim Sinclair’s Commentary
As if we did not have enough problems on the shelf. Take a look at this one.
As Shipping Slows, Banks and Carriers Fear Loan Defaults
By LANDON THOMAS Jr.
Published: November 11, 2009
LONDON — When Eastwind Maritime, a medium-size carrier company, went bankrupt this summer, few banks in the United States took notice.
But in Europe, where banks hold over $350 billion of increasingly dubious shipping industry loans, the inability of Eastwind, which is based in New York,to handle its debt of more than $300 million set off an anxiety attack on lending desks across the Continent.
The collapse of Eastwind Maritime, analysts say, while small, could well be a harbinger of more carrier failures to come.
And for Europe’s struggling banks, already plagued by a toothless economic recovery and continuing losses in real estate, the emergence of yet another questionable category of loans adds to fears that many of them are lagging their counterparts in the United States in overcoming the financial crisis.
In Britain, for example, where the economy shrank a further 0.4 percent for the third quarter, the government had to put an additional £43 billion ($71 billion) into the Royal Bank of Scotland and Lloyds, both essentially under national control, because of continuing trouble with their real estate loans.
Jim Sinclair’s Commentary
Come on, move on is the approach of the Fed and Treasury.
TARP Fraud Probes Have Tripled Since April, Says Watchdog
First Posted: 11-13-09 10:35 AM | Updated: 11-13-09 10:38 AM
The watchdog charged with policing the massive government bailout says that he’s conducting 65 investigations of possible fraud in the program, more than triple the number of probes he opened six months ago.
Neil Barofsky, speaking at the Bloomberg Washington Summit on Thursday, added that the probes range from complicated securities transactions to mortgage-fraud cases.
He explained that half of the investigations were prompted by tips from insiders, victims or members of the public who called his office’s fraud hotline.
"When I first took office, I can’t tell you how many times I’d be having a sit-down and warning about potential fraud in the program and I would hear a response basically saying, ‘Oh, they’re bankers, and they wouldn’t put their reputations at risk by committing fraud,’" he said.
"I think we’ve done a good job of instilling a greater degree of skepticism that what comes from Wall Street isn’t necessarily the Holy Grail," he said.
Barosky, a former federal prosecutor who pursued white-collar criminals, said last April that he had opened 20 criminal probes and six audits into whether bailout funds were being ripped off or wasted.
Jim Sinclair’s Commentary
Of course it has to be bailed out.
Housing Agency’s Cash Reserves Down Sharply
By DAVID STREITFELD
Published: November 12, 2009
The Federal Housing Administration, the government agency whose loan-insurance programs have become a crucial source of support for the housing market, said on Thursday that its cash reserves had dwindled significantly in the last year as more borrowers defaulted on their mortgages.
The agency released an audit that spelled out the rapid deterioration of its finances. It is tightening loan standards in hopes it will not become another drain on the United States Treasury, but is reluctant to clamp down so much that it snuffs out the tentative recovery in housing.
How successfully the agency walks this tightrope could well determine whether the recovery gathers force, or whether home prices slide again — perhaps creating a fresh economic downturn.
As recently as a few weeks ago, the F.H.A. had said that even under the bleakest economic forecast, its cash cushion would quickly recover. On Thursday, it abandoned that position.
Jim Sinclair’s Commentary
Turkey is playing games way above its head.
Turkey ‘Would Not Say No’ to Storing Iran’s Uranium
Friday, November 13, 2009
ANKARA, Turkey — Turkey’s energy minister says if asked the country would not say no to temporarily storing Iran’s enriched uranium to help defuse a standoff over Western suspicions that Tehran is trying to build an atomic bomb.
Taner Yildiz said Friday there has been no such request yet but the issue is still being discussed. He says if asked "we would not say no." He says there is no problem in storing low-level enriched uranium here.
The idea that Turkey could play a role in the crisis was raised in an American television interview
by the head of the U.N. nuclear agency, who noted that Turkey, a Muslim country and a NATO member, has good relations with both neighboring Iran and the U.S.
Iranian President Mahmoud Ahmadinejad discussed the issue in Turkey on Monday
Jim Sinclair’s Commentary
There are good people everywhere.
14 Months Alone in Afghanistan? No Problem for this Pooch
By Kathy Ehrich Dowd | Friday, November 13, 2009 11:45 AM ET
Black labs are lovable, loyal and smart … and it turns out they are pretty adept at surviving in Afghanistan, too.
This week, a highly trained bomb-sniffing dog named Sabi was reunited with his Australian unit more than a year after he was separated from his handlers when insurgents stormed their barracks in the unstable Afghan province of Uruzgan, according to The Associated Press.
Nine soldiers were wounded in the Sept. 2008 battle, and afterwards, Sabi was nowhere to be found. Australian soldiers searched in vain for the dog for months, and had all but given up hope when a US soldier identified only as John recently discovered Sabi at an isolated patrol base elsewhere in Uruzgan. It’s unclear how Sabi spent the past 14 months, but officials believed someone cared for her because she appeared to be in good health and quickly responded to the US soldier’s commands.
Sabi returned to the Australians’ base in the province just before a visit from Australian Prime Minister Kevin Rudd on Wednesday, who seemed to bond with the sweet-looking canine. "Sabi is back home in one piece and is a genuinely nice pooch as well," Rudd told reporters.
Jim Sinclair’s Commentary
Samuelson never imagined the US would ship its manufacturing overseas and become a nation of paper pushing sociopaths lead by Darth Vader and his evil empire.
The downside of a weak dollar
Commentary: Inadvertently driving a bigger trade deficit
Nov. 13, 2009, 2:03 p.m. EST By MarketWatch
SAN FRANCISCO (MarketWatch) — The latest international trade numbers border on blasphemy.
For the generations of college kids who learned the ABCs of global economics from Paul Samuelson, a weak dollar is supposed to tip the balance of trade in favor of the nation’s exporters. So why is the trade deficit exploding?
The dollar has lost 16% of its value against six other major currencies since March. In one quarterly report after another, companies doing business abroad showed they padded their profits every time they converted sales in local currencies back into U.S. dollars — effectively enjoying the equivalent of a price hike without actually hiking prices.
The weaker greenback also gives American companies a competitive edge over the foreign rivals when bidding on big projects.
So why in the world did the U.S. trade deficit widen in September? Not just a little, either.
The Commerce Department reported Friday the deficit surged 18% to $36.5 billion from $30.8 billion in August, its biggest one-month jump since 1999.
Jim Sinclair’s Commentary
What a bag of worms this is.
If anything in this drama has the ability to disturb the social order here it is. How can an insurance agency have a deficit and anyone believe it can continue to guarantee anything?
Maybe the new head who ran a HEDGE FUND can sell derivatives to bail them out, or at least make it look like it is bailed out.
U.S. pension agency’s deficit widens to $22 billion
Bloomberg News
Nov. 13, 2009, 1:27PM
The Pension Benefit Guaranty Corp. said its deficit almost doubled to $22 billion in fiscal 2009 and its exposure to future losses from weak companies more than tripled.
The agency, which insures company pension plans, reported a $11.2 billion deficit for the end of fiscal 2008. The agency said it had a $33.5 billion deficit at mid-year 2009.
“Exposure to possible future terminations means that we could face much higher deficits in the future,” said Acting Director Vince Snowbarger. “We won’t fail to meet our obligations to retirees, but ultimately we need a long-term solution to stabilize the pension insurance program.”
The report shows that the agency’s potential exposure to future pension losses from financially weak companies increased to about $168 billion from $47 billion in fiscal year 2008.
Delphi Corp., the auto-parts maker, and Nortel Networks Corp.’s U.S. subsidiary are among the companies whose pensions PBGC took over this year.
The agency’s investment return rate was 13.2 percent.
The annual report to Congress classified 27 large pension plans with a total underfunding of $1.64 billion as probable losses on the PBGC balance sheet.
