Bill Black On Foreclosuregate: Calls For The Immediate Termination Of Bernanke, Geithner And Holder

In The News Today

Posted: Oct 25 2010     By: Jim Sinclair      Post Edited: October 25, 2010 at 3:47 pm
Filed under: In The News
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Thought For This Morning:
If a G20 meeting is a total bomb, all you have to do is blast over the airwaves that it was a great success. Joseph Goebbels would be proud.
Today’s gold market is about whether or not Bernanke will continue with QE.
Europe is opting for austerity by recognizing that no present politician will be re-elected. They wish Bernanke to do the same. There is no economic epiphany there.

Jim Sinclair’s Commentary
Here is a report from Seeking Alpha, the FT blog, on the G20 meeting that comes somewhat closer to the truth of what happened, which is nothing much.
It has holes such as how does the reduction of the IMF vote within the G20 make the IMF anything but closer to redundancy.
The barrage of MOPE today has never been witnessed ever before in my more than 50 years of market experience.

G-20 Presses On With Plan to Cool Currency Battles BY BOB DAVIS IN WASHINGTON AND EVAN RAMSTAD IN GYEONGJU, SOUTH KOREA
The Group of 20 nations are pursuing an accord to end battles over currencies that relies on goodwill and peer pressure rather than enforceable sanctions.
Under a deal hammered out this weekend at a meeting in Gyeongju, South Korea, finance ministers from big industrialized and developing economies agreed to try to maintain trade balances—which are both a reflection of and a determinant of exchange rates—at "sustainable levels." Unable to agree on a precise metric, as the U.S. proposed, the ministers agreed only to measure compliance by "indicative guidelines," still to be negotiated.
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Jim Sinclair’s Commentary
Here is another article closer to the truth about nothing happening at the G20 in favor of Western economies.

The G20 Communique – A Victory for Asia
Some thoughts on Saturday’s G-20 communique release:
Geithner’s suggestion regarding current Account Caps is something that no sovereign nation would ever agree to, at least not today. Asian nations want to allow their currencies to strengthen; however they are all wary about doing it on their own. The agreement/accord that is coming out is good in that Asian nations are agreeing to move together, and we think this is the key. Current Account targets as a percentage of GDP, while the primary reasoning behind the ‘Plaza’ Accord, are difficult to measure given the data suffers from a lag from country to country. No sovereign nation wants to set a target that will be debated and threatened by the U.S. Congress on a monthly or quarterly basis.
China has made it very clear that it will allow its currency to strengthen. However China is also wary of strengthening the yuan too far, too fast. It has seen what happened to Japan following the ‘Plaza’ Accord, and knows the ramifications of a one-off revaluation. Other Asian nations want to follow China’s lead. They also want to have an understanding on direction. This weekend’s accord gives all G-20 countries an understanding of the direction, and surety in the timing. The biggest fear in the market over the past few weeks has been a one-off revaluation, and the Asian reaction is a sensible one: Why should they shoulder the pain for the U.S. – a country that has consistently called for a strong dollar, and now realizes that has cost the export sector significantly. Asia relies on its exports to the U.S. and to China.
China and its neighbors see the need to strengthen their currencies to cool growth and to especially cool inflation. The knowledge that they are in this together and all have similar needs is a wonderful outcome from this meeting. Going forward they will all move together and allow their currencies to strengthen, over time resulting in a more balanced global economy. While it would be better for the U.S. if it was done overnight, for Asia it is better to be done at their own pace and over time. This saves them face, their economies and finally brings Asia together as a block – something that has been lacking up until today.
The agreement may look like a loss for global unity, but it actually bands Asia together for the first time. Now we have an Asia block, an European block, and the U.S. The U.S. will look to 2015 for an agreement on the Current Account issue. We believe that by 2015 the issue will be moot. Indeed, given that China strengthened the yuan by over 20% between June 2005 and June 2008, and we project that flexibility going forward, by 2015 the U.S. may be the Surplus country and Asia may be the deficit block.
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Jim Sinclair’s Commentary
Mistakes, like ignorance of the law?

Bank of America finds foreclosure mistakes: report
BANK OF AMERICA (BAC) for the first time acknowledged finding some mistakes in foreclosure files as it begins a review of 102,000 cases, reported The Wall Street Journal.
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Jim Sinclair’s Commentary
Our gold delivery man, JB Slear asks "What happened to all the laws protecting everyone from this?"
The simple answer JB is that Wall Street owns Washington. Laws of the land do not apply to those SOBs.

Dubious signatures, missing, inaccurate paperwork halt 4,450 city foreclosures BY Robert Gearty
Sunday, October 24th 2010, 4:00 AM
Thousands of foreclosures across the city are in question because paperwork used to justify the seizure of homes is riddled with flaws, a Daily News probe has found.
Banks have suspended some 4,450 foreclosures in all five boroughs because of paperwork problems like missing and inaccurate documents, dubious signatures and banks trying to foreclose on mortgages they don’t even own.
The city’s not alone. All 50 states are investigating foreclosure paperwork, evicted homeowners are hiring lawyers and buyers of foreclosed homes are fretting over the legality of their purchases.
Last week, New York’s top judge, Jonathan Lippman, began requiring all bank lawyers to sign a form vouching for the accuracy of their foreclosure paperwork.
That could have been a problem for one Long Island foreclosure that was being brought by GMAC Mortgage last year.
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Jim Sinclair’s Commentary
Becoming toxic waste? It is toxic waste.

Dollar at Risk of Becoming ‘Toxic Waste’: Charts Published: Monday, 25 Oct 2010 | 8:12 AM ET
The dollar’s slump could get far worse if the dollar index takes out last year’s low, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.
"If the (dollar index) takes out the low that was made roughly a year ago I really think that will not only encourage more sales, it will cause a little bit of minor panic," Griffiths said. "A year ago it was deemed too cheap, if it goes any lower than that it’s actually become toxic waste."
The dollar [.DXY  76.875    -0.595  (-0.77%)   ] resumed its recent downtrend Monday in the wake of a meeting of finance ministers from the Group of 20 nations at the weekend. The meeting failed to yield a definitive agreement on currencies, putting selling pressure on the greenback.
"The dollar is being trashed, we’ve actually had effectively devaluation of about 14 percent in the last two months," Griffiths said.
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Jim Sinclair’s Commentary
The blitz today of MOPE is beyond anything I have ever seen. The IMF is becoming yesterday’s news, losing its clout except for poor nations.
This is simply wrong. Somebody is scared to death of something.

Analysis: IMF power shift opens way for more breakthroughs By Lesley Wroughton
WASHINGTON | Sun Oct 24, 2010 7:12pm EDT
WASHINGTON (Reuters) – A G20 agreement to give emerging market countries more power in the International Monetary Fund opens the door for breakthroughs on easing global tensions over trade imbalances.
The surprise deal reached at weekend meetings of finance ministers from the Group of 20 in South Korea shifts IMF voting power to under-represented emerging countries like China, India, Brazil and Turkey.
Countries like the United States are betting that with greater representation emerging economies such as China will be more willing to address the trade distortions causing currency volatility and threatening increased protectionism.
The deal avoided a widening of the gulf between emerging and developed nations and a chaotic ending to a G20 meeting in which the United States failed to convince China and others to agree to targets to limit current account imbalances.
The IMF agreement also spares the G20 from losing credibility, opening the way for G20 heads of state, meeting in Seoul on November 11 and 12, to handle more politically difficult decisions on fixing the trade imbalance problem.
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Jim Sinclair’s Commentary
Your nose grows, your nose grow. They did not agree by leaving all key items voluntary or not agreed upon.
This is MOPE at a spiritual level.

G-20 powers agree to Geithner currency and trade plan By Howard Schneider
Saturday, October 23, 2010; 5:34 PM
Finance ministers from the world’s major nations agreed to a U.S.-brokered plan for easing tensions over exchange rates and world trade patterns, saying that a "fragile and uneven" economic recovery was at risk if top powers pursued conflicting policies or used the value of their currencies to gain an edge for their exports.
Aiming to head off what some have dubbed a developing "currency war," the statement from the finance leaders of the Group of 20 nations was a carefully worded bargain across a range of issues. It put China on the record as seeking to bring down its massive trade surplus and let its exchange rate fluctuate more. It also hinted that any move by the U.S. Federal Reserve to further ease monetary policy would be measured so as not to disrupt currency values or capital flows in emerging market nations.
Although the core ideas are not new ones for the G-20 – previous statements from the group have promised similar commitments to flexible exchange rates, for example – the accord crafted over two days of talks in South Korea represents a tangible step. The group agreed as it has before that "excessive imbalances" in trade and other relationships should even out over time – requiring countries such as China and Germany to rely less on exports for their economic growth – and the members pledged for the first time to submit to an agreed-upon procedure for measuring progress.
The methods of measurement are still to be developed, but the language marks a potential turning point as the G-20 struggles to ensure its agreement over broad principles translates into action. U.S. officials say they intend to push for more detail, including possible timeframes and numerical targets, as the work of the finance leaders is submitted for approval by the G-20 heads of state who gather in South Korea next month.
The plan envisions a greater role for the International Monetary Fund in overseeing whether exchange rates and trade balances are moving as intended. While the IMF has no power over any nation’s individual policies, the expectation is that the combination of agreed-upon goals and peer pressure could influence how nations behave. Changes to the IMF’s structure, including greater representation for emerging market nations, were also approved by the finance ministers in hopes of increasing the fund’s authority.
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Jim Sinclair’s Commentary
This is what currency induced cost push inflation looks like in its infancy.

McDonald’s Intends to Raise Prices BY PAUL ZIOBRO
McDonald’s Corp. plans to raise menu prices to blunt higher costs, including what would be its first such increase in the U.S. in more than a year—a time when the burger chain’s sales have thrived amid lower prices.
The company expects to increase prices in the U.S. and Europe amid projections that commodity costs will rise between 2% and 3% in 2011, Chief Financial Officer Peter Bensen said Thursday during a conference call after McDonald’s reported a 10% increase in third-quarter earnings and added that October sales appear strong.
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Jim Sinclair’s Commentary
This is no shock to those that have not cheaped out, having paid John at Shadowstats.com his meager fee.

60 Minutes Shock Report: National Unemployed and Underemployed 17.5%; California 22% by Larry O’Connor
In a report sure to cause consternation at the White House and in the offices of the Democratic Leadership in Congress, “60 Minutes” provided an in-depth report on the realities of the unemployment situation in America today.
When you take into account the underemployed as well as the unemployed, the national rate hits 17% and California a staggering 22%.
To put a face on the realities of the underemployed in America under Obamanomincs, reporter Scott Pelley spoke with a fiber-optics engineering manager who has been looking for work for over a year.  He just took a job working at a Target.   20% of the unemployed in America have college degrees.
According to the report, 1/3 of the unemployed have been out of work for over a year.  This hasn’t happenned since the Great Depression.
Airing one week before the mid-term elections, this report explains better than anything, exactly what is at stake for our country on November 2.
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Jim Sinclair’s Commentary

CIGA Paul-Henri correctly says “Just change the shields to US Marshals and the name of the bank to any of the International Investment Companies.

Jim’s Mailbox

Posted: Oct 25 2010     By: Jim Sinclair      Post Edited: October 25, 2010 at 3:09 pm
Filed under: Jim's Mailbox
The Myopic World of Asset Allocation Sees Only Stocks, Bonds, and Cash CIGA Eric
In a myopic world defined by stocks, bonds, and cash (usually short-term treasury bills), is easy to call equities top dog. I view this type of analysis as similar to purchasing of a used car without lifting the hood to inspect the engine.
If you lift the hood, you’ll notice many of the engine parts are missing. When stocks, bonds, and cash are properly defined in constant currency terms a few things are revealed: (1) Gold has and continues to be real top dog, (2) and repetition is the key to myopic analysis and misdirection.
Large Cap Stocks
Small Cap Stocks
US Long-Term High Grade Corporate Bonds
US Long-Term Government Bonds
US Short-Term Government Bills
Headline: For Many Market Strategists, Equities Are Top Dog Again
But in 2011, strategists expect the stock market to notch double-digit gains and recommend investors boost allocations to ride the wave, whether its lower-risk consumer staples stocks or global companies tapping into emerging market supply needs.
Source: finance.yahoo.com
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Greek strikes halt train services CIGA Eric
Greece like all nations within the Euro zone is limited by the rules of its construct. The preferred and historically consistent option of ongoing default through currency devaluation is an option. The option to pursue austerity measures is unlike to find acceptance from a society dependent on centralized assistance. Social and civil disobedience, unfortunately, will not alter the market forces driving the default of many Euro zone nations. As long as default through devaluation of previous issued debt is not an option, the markets will press the weaker nations until they either have no choice but to change the rules or force a withdrawal from the currency union.
All train services in Greece have been suspended after state railway employees launched a series of strikes against planned reforms.
The debt-laden country’s railways are €10-billion ($14-billion) in the red, and the government has announced plans to cut benefits and move excess personnel to other public sector jobs.
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Jim and Monty,
I think you might find the following article interesting…
Best wishes,
Dan

India Billionaires Go On Buying Spree in `Last Frontier’ Africa By Mehul Srivastava and Subramaniam Sharma – Oct 24, 2010 8:18 PM PT
Indian billionaire Ravi Ruia flew to Africa every month for the past 18 months, buying coal mines in Mozambique, half an oil refinery in Kenya and a call center in South Africa for his Essar Group.
This month, executives of his Essar Energy Plc. attended a conference hosted by Nigerian President Goodluck Jonathan to attract investors in the power grid. The officials, backed by $2 billion the company raised in an April listing on the London Stock Exchange, also mulled other “business opportunities” around Africa, the company said.
Ruia, who controls the $15 billion Essar Group with his older brother, Shashi, is not alone. Billionaire countrymen Sunil Mittal, chairman of India’s largest mobile phone provider, Bharti Airtel Ltd.; Adi Godrej, chairman of Godrej Consumer Products Ltd.; and Harsh Mariwala, founder of Marico Ltd., have fueled a $15.8 billion buying spree in Africa since January 2005.
“Africa looks remarkably similar to what India was 15 years ago,” said Firdhose Coovadia, director of Essar’s African operations. “We can’t lose this opportunity to replicate the low-cost, high-volume model we’ve perfected in India.”
‘Last Frontier’
Indian companies acquired or invested in at least 79 companies in Africa, chasing business in less crowded markets after growing in a home economy that expanded by an average 8.5 percent since April 2005.
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There’s Fear Behind the Curtain CIGA Eric
The blitz today of MOPE is beyond anything I have ever seen. Somebody is scared to death of something.
Jim
I agree with you Jim. The MOPE blitz is impressive. There are signs growing "economic roll-over" (see chart below) in more than a few series I follow. The solution is certain to be more quantitative easing (devaluation) at a time when global tensions continue to intensify as a result of it (see article below). I think that something is a sequences of events, both economic and social, beginning to unfold across the globe.
Eric

Chicago Fed National Activity Index (CNFAI) and S&P 500 Average:
Headline: China Said to Widen Its Embargo of Minerals
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
Source: nytimes.com
Source: chicagofed.org
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The Perfect No-Prosecution Crime

Posted: Oct 25 2010     By: Greg Hunter      Post Edited: October 25, 2010 at 1:12 pm
Filed under: USAWatchdog.com
(Courtesy of Greg Hunter’s of USAWatchdog.com)
Dear CIGAs,
Did you know that in the aftermath of the Savings and Loan (Thrifts) scandal there were more than a thousand felony convictions of financial elites?  The cost of the wrongdoing associated with the rip-off and closure of nearly 800 Thrifts cost taxpayers more than $160 billion.  The current sub-prime/mortgage-backed security scandal is 40 times bigger according to Economics professor William Black.  That means the size of the crime is $6.4 trillion by my calculation.   Can you guess how many indictments there have been on financial elites who created this enormous mess?  Zero, none, nada, zip.  Yes, not one single prosecution or conviction has been started of achieved. 
That is simply outrageous considering the width and breadth of the many crimes committed.  There was “rampant” mortgage fraud in the loan application process according to the FBI as far back as 2004.  (Click here to see one of many stories of the FBI warning of mortgage fraud)  There was real estate document fraud when the original Promissory Notes and loan documents were “lost.”  The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS).  No “note,” no security.  That is security fraud.  No security means the special IRS tax treatments for the MBS’s were fraudulently obtained.  That is IRS tax fraud.  Because there were no documents, the rating agencies fraudulently made up triple “A” ratings for the securities.  When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents.  That phony paperwork was and is being used to wrongfully remove homeowners from their property.  That is foreclosure fraud.
It appears to me the entire mortgage/securitization industry is one giant criminal enterprise.  And yet, last Wednesday, Housing and Urban Development Secretary Shaun Donovan said, “We have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.”  What!  Well, look a little harder Mr. HUD Secretary.  (Click here for the complete Reuters story with Donovan’s quote.)  Donovan did say the foreclosure fiasco is “shameful,” but that is not the same as a criminal prosecution now is it?  Where is U.S. Attorney General Eric Holder in all of this?  I guess he’s busy planning a lawsuit to stop California from making pot smoking a misdemeanor.  Holder is probably also very busy with continuing legal actions against Arizona’s immigration law.  I guess trillions of dollars in mortgage and securities fraud is just not enough of a legal priority for America!
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