Porter Stansberry: The next phase of the debt crisis is here
"The entire system of municipal finance is going to collapse."



Did you see the decline in the Dollar today?
Legendary Hedge Fund Manager Bill Fleckenstein Says No Bond Crash Without a Dollar Crash

US Debt -to-Deficit Difference Hits Fresh Record, As Treasury Continues To Issue 50% More Debt Than Needed To Fund Deficit

Where Krugman Went Wrong



Deustche Bank Raises a Boat Load of Captial to Buy the Insolvent!



Insider Selling Outpaces Buying By Over 650-To-1 In Past Week



3 Out Of 3 Analysts Agree: Basel III Will Guarantee Their Bonuses For 9 Years In A Row, As Banks Win Again

Up To 67% Of Phoenix Homes Are Underwater

Greek Protests Resume Now That Vacations Are Over

Jim Sinclair’s Commentary
John’s value to you is not only in his one liners, it is his in-depth discussion of these items and the connection of the dots that I find irreplaceable.
- Protracted Economic Downturn Re-Intensifies 
- Systemic Stability: "Tap-Dancing on a Land Mine" 
- Risks of U.S. Dollar Instability and Systemic-Salvation Efforts Pose Severe Inflation Threat
http://www.shadowstats.com/

In The News Today

Posted: Sep 13 2010     By: Jim Sinclair      Post Edited: September 13, 2010 at 1:04 pm
Filed under: In The News
Thought For The Morning

New bank reserve requirements is MOPE at the highest order.

1. The Basel agreement gives banks 9 years to comply with a 7% reserve level, practically nullifying the exercise.
2. Claims of the US already in compliance must be set along with the asset value of junk paper being decided by the banks that is free of any market consideration. That means the value of assets are grossly overstated in the reserve calculation.
3. Credit Default Derivatives, the flavor of the past 24 months, will NOT perform if called upon to at significant volume levels. They are wagers with insufficient funds behind them and no universal method to guarantee performance via financing.

Jim’s Mailbox

Posted: Sep 13 2010     By: Jim Sinclair      Post Edited: September 13, 2010 at 1:04 pm
Filed under: Jim's Mailbox
Eric,
In a sense this is a state monetizing its own (of a sort) debt. It is more funny money coming home to bite you. It is a can of debt being kicked down the road.
Jim
Harrisburg, Pennsylvania, Bond Default Averted With State Aid CIGA Eric
The back door printing press supports the Treasury auctions. The Treasury auctions support the Federal programs. The Federal programs include bailouts of the States. The States, in turn, bails out the local governments. The only catch is that the debt burden continues to grow as the real economy contracts. As long as source of the money providing increasing support to the Treasury auctions remains anonymous, the game is played as if all is well.
Pennsylvania’s capital city, Harrisburg, will get an advance on state aid to meet $3.3 million in bond payments due the day after tomorrow, averting what would have been the second-largest general-obligation default in the U.S. this year.
Source: businessweek.com
Thanks Bob!
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Jim Sinclair’s Commentary
Eliminate OTC derivatives or all else is meaningless.

Regulators meeting in Switzerland agree on new global rules to strengthen banks By Howard Schneider
Washington Post Staff Writer
Sunday, September 12, 2010
Regulators meeting in Basel, Switzerland, on Sunday agreed to take new steps to immunize the financial system from the sort of crisis that pushed the world into recession two years ago.
The new rules would make banks roughly double the amount of capital set aside as a buffer against possible losses, slash stockholder dividends and executive pay if that stockpile falls short, and limit lending during economic boom times. Combined, those measures are intended to shape the behavior of bank managers and investors in unexplored ways – trying, for example, to have them curb lending in good times in the hope that asset bubbles won’t give way to a costly bust.
The standards could have broad implications for the amount and cost of credit available around the world, as banks adjust their balance sheets and business plans to comply. Banks will have two years to meet the basic requirements proposed by the committee, though some of its provisions will not be implemented for up to eight years.
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