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Today at the Fed:
You really think this gang would get on the same page or be quiet.
St Louis Fed President Bullard’s comments on interest rates weighed on the dollar. Bullard said it was possible that the Fed will not raise rates until 2012 if the Fed waits as long as it did to raise rates after the last two recessions.
Jim Sinclair’s Commentary
Ok, so what’s your wager? Will this be settled or tried?
I will go with settled.
Bank of America, UBS, JPMorgan Sued Over Derivatives (Update1)
By Joel Rosenblatt
Nov. 17 (Bloomberg) — Bank of America Corp., UBS AG and JPMorgan Chase & Co. were sued by a California public utility over claims they rigged sales of municipal derivatives and shared illegal profits through kickbacks.
The lawsuit, filed by the Sacramento Municipal Utility District, is based on federal and state antitrust claims. It alleges Charlotte, North Carolina-based Bank of America and more than a dozen other banks conspired to pre-select winners of municipal derivative auctions, coordinated their pricing, and accepted kickbacks disguised as fees from co-conspirators.
The allegations resemble those made by a U.S. grand jury in New York last month, according to the lawsuit filed Nov. 12 in federal court in Sacramento. CDR Financial Products Inc. founder David Rubin and two employees of the Beverly Hills, California- based company were indicted for allegedly accepting kickbacks on investments sold to local governments. CDR is also named as a defendant in the Sacramento case.
The banks engaged in “allocating customers and markets for municipal derivatives, rigging the bidding process by which municipal bond issuers acquire municipal derivatives, and conspiring to manipulate the terms that issuers received,” according to the lawsuit.
The charges against Rubin and the CDR employees were the first to result from a more than three-year investigation into bid-rigging in the municipal bond market. The probe is continuing and has already drawn in some two dozen banks, insurers and local government advisers.
Jim Sinclair’s Commentary
Business on Wall Street is wonderful and everywhere else it is a nightmare.
Delinquencies, Foreclosures Soared in September
Published: Nov. 9, 2009
Delinquent Mortgages and, Foreclosures Soared in September
Today one out of every eight American homeowners with a mortgage (12.5 percent) is either in foreclosure or delinquent in their payments.
Record high rates of foreclosures and delinquencies in September are the latest bad news in the October 2009 Mortgage Monitor LPS, a leading provider of mortgage performance data and analytics.
The nation’s September 2009 foreclosure rate rose to 3.12 percent – a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans
in foreclosure, and more than 22 percent of loans reported as non-current.
LPS’ also found large "shadow" foreclosure and REO inventories─loans and properties stuck in the already clogged pipeline that have yet to complete foreclosure and come to market. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of foreclosures is on the way. Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.
Jim Sinclair’s Commentary
In the second great depression, gold companies went from relatively small to large dividend payouts. The same will happen in the third great depression.
Royal Gold Raises Common Stock Dividend 13% to $0.36 Per Share
November 18, 2009 10:00 AM Eastern Time
DENVER–(BUSINESS WIRE)–Royal Gold, Inc. (NASDAQ:RGLD ) (TSX:RGL), a leading precious metals royalty company, today announced that its Board of Directors increased the Company’s annual dividend for its shares of common stock from $0.32 to $0.36, payable on a quarterly basis of $0.09 per share. Royal Gold has steadily increased its annual dividend since it first issued a $0.05 annual payment for calendar year 2000.
Jim Sinclair’s Commentary
From the worthy subscription service www.shadowstats.com
- Annual October CPI-U Inflation -0.18% (+7.1% SGS)
Jim Sinclair’s Commentary
Soon to commonplace.
Employers to be hit with big fee jump for unemployment
Tuesday, November 17, 2009
PASCO COUNTY (Bay News 9) — Owning a small business can be difficult and starting soon local entrepreneurs will be dishing out a lot more cash to the government.
The annual fee employers pay to fund unemployment benefits is about to go up drastically.
The fee is jumping from $8.40 per employee to $100.30.
"That’ll have a huge burden on the small business man and woman — any business in the state of Florida — who are struggling right now," said state
Jim Sinclair’s Commentary
JB Slear says "With credit card companies reducing limits, and banks refusing to give loans, how is this even be taken seriously?"
Geithner Says Banks Have ‘Obligation’ to Lend More (Update1)
By Rebecca Christie
Nov. 18 (Bloomberg) — Treasury Secretary Timothy Geithner urged U.S. banks to boost lending to small businesses and consumers who still face “very challenging” credit conditions and rising unemployment.
“Banks bear some responsibility for the extent of the damage caused by the crisis,” Geithner said today at a small- business conference in Washington. “You carry a substantial obligation to help our communities get back on their feet.”
Bank of America Corp.’s total loan originations in September fell 6 percent to $53.6 billon from a month earlier and Wells Fargo & Co.’s new lending dropped 14 percent to $47.4 billion, a Treasury Department report two days ago showed. The monthly surveys show lending patterns by the biggest banks receiving government funds from the $700 billion Troubled Asset Relief Program.
As the Obama administration moves from “rescue” policies to what Geithner called the “repairing and rebuilding” phase, joblessness last month reached a 26-year high of 10.2 percent. The Treasury chief today said the administration is committed to doing more to help small businesses get credit needed to “grow and hire new workers.”
Goldman Sachs Group Inc. announced plans yesterday to join Warren Buffett to provide assistance to 10,000 small businesses in the U.S. The $500 million charitable effort aims to provide help ranging from counseling to obtaining funding. Buffett’s Berkshire Hathaway Inc. is the largest shareholder in New York- based Goldman Sachs.
Jim Sinclair’s Commentary
It is true. It is sad. The result will be the same but sooner.
Smith triumphs, Marx fails, Asia rises and the West declines.
Now do you understand the LONG TERM dollar problem? Do not give up your insurance.
China turns to Adam Smith
It won’t surprise you to learn that whereas in one hemisphere sales of Marx’s Communist Manifesto have rarely been stronger, the other is devouring Adam Smith like never before.
Published: 9:01PM GMT 16 Nov 2009
What is more unexpected is that it is China that has an appetite for the father of modern capitalism, while the West is rediscovering Marx.
Smith’s first masterpiece, theTheory of Moral Sentiments, has been translated into Chinese for the first time, and Chris Berry, professor at Glasgow University, where Smith wrote the book, will next week deliver lectures on it at Fudan University in Shanghai.
China’s Premier, Wen Jiabao, has said he often carries the work – which preceded his more famous work The Wealth of Nations – in his suitcase when he goes abroad. Prof Berry said the earlier book emphasised the importance “not only [of] their material prosperity but also their moral welfare”.
Jim Sinclair’s Commentary
Just to make it official…
Friction between Obama and Hu on yuan.
Despite repeated urging by President Obama of Chinese President Jintao to liberalize the yuan-dollar peg, the joint statement issued by the two leaders after today’s meeting made no mention of foreign exchange. Hu used the meeting to complain about recent U.S. trade measures that placed tariffs on Chinese exports of pipes and tyres. In its third-quarter report last week, China alluded to freeing up the yuan, but since then the bank has been chiding the U.S. about letting its loose money policies incite speculation against the greenback.
Jim Sinclair’s Commentary
This is the greatest ever disincentive for financial institutions to behave themselves.
If good banks must bail out bad banks, why be a good bank?
You have to believe that none can be this stupid.
Who should pay for ‘too-big-to-fail?‘
The House Financial Services Committee agreed to include in the proposed banking reform bill a provision to require banks and funds to make payments in advance to provide for companies deemed ‘too-big-to-fail,’ aimed at insuring taxpayers don’t wind up footing the bill when banks go bust. "Wall Street companies and executives should have to pay for their own mistakes," said Rep. Paul Hodes, D-N.H., the provision’s author. But the amount to be collected from the industry is to be capped at $200B. A similar bill making its way through Senate would permit bank regulators to use taxpayer funds to dismantle a failed institution, and later recoup those costs from the industry.
Jim Sinclair’s Commentary
For your information.
IRS divulges deal with Switzerland.
The Internal Revenue Service on Tuesday released the terms of its banking secrecy deal with Switzerland. The banks must reveal the names of U.S. depositors who do not file a W-9 form for three years. But the deal only applies to depositors who had more than CHF1M ($992,802) in their accounts at any time from 2001 through 2008, and which generated average annual revenue of more than CHF100,000 ($98,892) over three years. The deal dates from the time UBS (UBS) agreed to pay the U.S. government $780M to avoid prosecution on tax evasion charges. The deal was the result of protracted negotiations between the two countries.
Jim Sinclair’s Commentary
Regardless of PR hounds’ top calling and TA overbought indicators. do not sell your insurance.
Société Générale tells clients how to prepare for ‘global collapse’
Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.
By Ambrose Evans-Pritchard
Published: 6:12PM GMT 18 Nov 2009
In a report entitled "Worst-case debt scenario", the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.
Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years.
"As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.
Under the French bank’s "Bear Case" scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.
Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.
