In The News Today Posted: Feb 05 2010 By: Jim Sinclair Post Edited: February 5, 2010 at 8:29 pm
Filed under: In The News
Dear CIGAs,
The BBC made a special titled "The Last Days of Lehman Brothers," which is a must see.
Having seen this, ask yourself, what has changed? All of this disaster has been brought on by selling nothing for something and profiting in an infinite way.
That nothing for something is called OTC derivatives. The mountain of OTC derivatives, although the valuation method has been altered, is not only still there but has grown.
What has changed? Only an accounting rule by the FASB so that fair market valuations are no longer required. The liabilities of all these financial entities still far outweigh their assets. All that has changed is the ability to lie about it. If you can see the truth here, then you can see really nothing has changed.
A failure of an economic recovery and we are going directly back to the Last Days of Lehman with one exception. The next documentary will the last day of the majority of States of the USA.
Trichet will bail out those euro members so requiring it. The USA will bail out all failing States. The bigger argument today benefiting the US dollar will then bury it.
Nothing has changed. Nothing will change. The economic recovery is not. That which is not, cannot be sustainable.
Wake up, please. It is all smoke and mirrors. The West is screwed.
The dollar as a reserve currency is dying. The Chinese economy will be the world’s leading economy.


http://www.youtube.com/watch?v=Zmin3OZnC0w



Quote of the week David Berman – Globe Investor Market Blog
Best quote I’ve seen all week regarding the European debt crisis. From Erik Nilsson, an economist at Scotia Capital: “Let me get this straight: investors are getting out of the euro zone (2010 deficit/GDP 6.7 per cent; debt/GDP 88 per cent, according to OECD) because of its poor fiscal situation and flocking to the U.S. (10.7 per cent and 92 per cent, respectively).”
More…


The Next Leg Of The Housing Crisis In Five Simple Charts


Jim Sinclair’s Commentary
Dear Extended Family,
Bretton Woods is taking place in the Arctic up towards the top of the world, and now down under.
Markets fell on their respective asses, not for the reasons listed below, but for the MOPE about when the Fed will drain liquidity, Great Britain will cease QE, and maybe because of the experiments on whether the system can be drained.
Consider the repeated Fed statements on draining, repo tactics and the halt of down under rate increases. The answer is international liquidity injected cannot in any practical way be drained. The operative word is PRACTICAL.
Here comes the IMF as the one world central bank of central banks. It is sort of the fund of funds liquidity wise. Where is the next meeting, on the space station?
Why the ultimate secrecy? Because markets would go wild if the conversations were overheard concerning nothing has been fixed and the risks are now worse due to the paper over.
Look at the Last Days of Lehman video and watch the BBC special, because as you read it is being re-enacted today.
I doubt the results will be public Monday, but they are coming soon.
Secret summit of top bankers By George Lekakis and Fleur Leyden February 06, 2010
THE world’s top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.
Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.
Organized by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.
Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.
The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.
The arrival of the high-powered gathering coincided with a fresh meltdown on world share markets, sparked by renewed concerns about global growth and sovereign debt.
Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors.
More…


Jim Sinclair’s Commentary
This certainly fits with the Arctic G7 meetings to set their common policy for the weekend down under meeting of Central Bankers
Jim,
As usual Tett puts things in perspective. The cracks are appearing everywhere. Everyone is loaded to the eyeballs with junk debts. As the US is the biggest giant it may "fall" last, but fall it will, and probably not in the too distant future. As Tett says, "the day of reckoning is near". It is a global epidemic. All currencies decline… and there is only one monetary instrument they can all simultaneously decline against.
Best, CIGA Pedro
The race is on for Greece before the ECB exits By Gillian Tett Published: February 4 2010 18:24 Last updated: February 4 2010 18:24
A few years ago, Warren Buffett famously observed that it is only when the tide goes out, that you can see who is swimming naked.
It is a potent adage now. In recent months there has been much speculation about what might happen when central banks start to implement “exit strategies”.
Now we have a few clues. The Bank of England has just announced that it is freezing its quantitative easing programme, spurring debate about the outlook for gilts. However, to my mind, one of the most revealing sagas in relation to the exit strategy debate lies with the drama that has recently developed around the Greek debt world.
To most casual observers, it might seem as if the main reason why Greek bonds have recently tumbled in price is that investors have suddenly, and belatedly, woken up to the dire state of Greece’s fiscal problems.
But that tells only part of the tale: another factor that has also been hurting the Greek bond price is a subtle, albeit geeky, discussion that is quietly underway at the European Central Bank in relation to its collateral policy.
Back in the autumn of 2008, after the collapse of Lehman Brothers, the ECB loosened the rules which govern how banks can get central bank funds. In particular, it let banks use government bonds rated BBB or above in ECB money market operations, instead of merely accepting bonds rated A-, or more.
More…