Gonzalo Lira On The Second Leg Down Of America's Death Spiral

 

Wall Of Worry Redux: 24 Statistics Confirming America's Decline

 

Grayson Calling For Prosecution Of Banks Engaging In Criminal Foreclosure Activities

 

Jim Sinclair’s Commentary
Here is a brilliant suggestion. Just make larger packages of demonic financial junk at a marked up price and write more OTC derivatives on it.
God protect us from the Banksters. They are going to stuff the remaining functional pension funds.
The plan should be called Re-Relics

Bank of America Re-Remics Cut Mortgage Debt as Basel Rules Loom 2010-10-14 04:01:00.12 GMT
By Miles Weiss and David Mildenberg
Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.
The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.
With bank stocks mired near historic lows in relation to book value, firms such as Bank of America and JPMorgan Chase & Co. are searching for alternative ways to meet rules set by global regulators since the 2008 financial crisis. By turning junk-rated securities into investment-grade bonds, Bank of America will need to hold less capital under rules agreed to by the Basel Committee on Banking Supervision.
“The larger banks are going to do anything and everything they can to create capital other than issuing stock,” said Matthew Pieniazek, president of Darling Consulting Group Inc., a Newburyport, Massachusetts, firm that provides asset-liability management advice to banks. “The most punitive way of raising capital is by issuing highly dilutive common equity in the current marketplace.”
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Jim Sinclair’s Commentary
How dare they! You have to be kidding.
Pension funds have been the round file of Wall Street for a long time.

`How Dare You Take My Pension’ Becomes Refrain as Voters Consider Cutbacks By Ben Elgin and Chad Terhune – Oct 13, 2010 7:45 PM PT
If anyone fits the profile of a San Francisco Democrat, it’s Jeff Adachi. In 2004, the elected public defender volunteered to officiate at ceremonies for same- sex couples during the city’s short-lived attempt to legalize gay marriage.
This year, though Adachi is running unopposed, he is drawing the scorn of fellow Democrats for embracing a new controversy: He spearheaded a November ballot proposition that would force city workers to pay more of their rising pension and health-care costs.
“How dare you!” Leland Yee, a Democratic state senator from San Francisco, thundered into the microphone as about 100 workers rallied Oct. 5 against the measure in California’s fourth-largest city. “How dare you take it off the backs of city workers!”
As public-pension costs soar — U.S. taxpayers face as much as $3 trillion in unfunded state retirement liabilities, according to a study by the University of Rochester and Northwestern University — they’re igniting political fights across the country. In California alone, voters in nine cities and counties will decide next month whether to curb benefits for current or retired police officers, firefighters, librarians and janitors.
Beyond November, the question of government pensions threatens to become a defining policy issue of the coming decade, Bloomberg Businessweek reports in its Oct. 18 issue.
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Jim Sinclair’s Commentary
The MOPE is that this problem is purely a complication of the foreclosure process. The truth is this problem is directly in the OTC derivative mortgage debt securities, which measures it is in the multi trillions of dollars.

Foreclosure mess gets uglier. A total of 288,345 properties were foreclosed upon in the July-September quarter, up from nearly 270,000 in Q2 and the highest quarterly tally since the real estate market started to tank in 2006. Complicating matters, many of the foreclosures may eventually be challenged in court as fallout from the robo-signing scandals gains momentum and attorneys general across the nation launch an investigation into banks’ foreclosure practices. Decisions by some major banks to temporarily halt foreclosures may end up simply dragging the process out, rather than achieving any substantial improvements in the deteriorating situation. (More: Fannie and Freddie get dragged in to the mess)



Jim Sinclair’s Commentary
Longs of gold, rejoice! The financial Times has published tad bearish article #2.
I would say now we can look for a follow through on the rise in the near future.

Gold at record levels as traders await easing By Javier Blas, Commodities Editor
Published: October 14 2010 11:54 | Last updated: October 14 2010 11:54
Gold prices hit a nominal record on Thursday as investors poured into precious metals amid US dollar weakness and expectations that the Federal Reserve, the US central bank, will embark on another round of monetary easing.
Bullion led a broad-based rally in commodities, with base metals and energy rising sharply. The Reuters-Jefferies CRB index, a basket of raw materials, rose to a two-year high, above 300 points, up 12.4 per cent since January.
Spot bullion in London hit $1,387.10 a troy ounce, up 1.2 per cent on the day, and 26.5 per cent up since January. In real terms – adjusted for inflation – gold prices are, however, a long way from their high above $2,300 an ounce set in 1980.
“Gold’s climb is not showing any signs of slowing: $1400 is now being eyed as a short-term target, which seems easily achievable as long as the dollar continues to fall across the board,” said Edel Tully, precious metals strategist at UBS in London.
Ms Tully increased her one-month forecast for bullion to $1,425 an ounce.
The rally in gold helped other precious metals, with silver hitting a 30-year high of $24.90 per troy ounce, up 3.9 per cent. Platinum and palladium also rose.
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Jim Sinclair’s Commentary
This is the means by which those international entities holding 30 Year Treasury Bonds, affected by QE, see the need to sell them. If they are attached at the hip to US Treasuries, they will move to short dated bonds.
Pimco Sells Treasuries Amid Doubts of QE Effectiveness By Jungmin Hong and Frances Yoon – Oct 14, 2010
Oct. 14 (Bloomberg) — Pacific Investment Management Co., which runs the world’s biggest bond fund, said it sold Treasuries on expectations a second round of debt purchases by the Federal Reserve will have limited impact.
“The market is very clearly anticipating that the Fed is going to act,” Douglas Hodge, chief operating officer, said in an interview at the World Knowledge Forum in Seoul today. “The challenge right now is the breadth of policy measures that can be taken by the U.S. is rather limited.”
The Fed purchased $300 billion of Treasuries in 2009 under a policy known as quantitative easing, or QE, and traders are preparing for another round of buying they’ve dubbed QE2. Hodge’s comments come as some investors voice concern that record-low Treasury yields will curtail demand for U.S. bonds as the Fed acts to spur economic growth.
“Even if the QE process is large and rates decline further, in our view we’re approaching the end of the bond market rally,” Hodge said. “From where we sit, it’s very hard to suggest there’s going to be that kind of price appreciation that we’ve seen in bonds over the last 12 to 24 months.”
Pimco Chief Executive Mohamed A. El-Erian has said the minutes of the Fed’s September policy meeting show the central bank will increase its Treasury purchases on Nov. 3 at the end of its next meeting.
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