Mortgage Backed CDOs Hit The Fan

Posted: Oct 05 2010     By: Jim Sinclair      Post Edited: October 5, 2010 at 12:04 pm
Filed under: General Editorial
Dear CIGAs,
It is all over. Gold is going to and through $1650.
The people who know it has hit the fan are the OTC derivative manufacturers and distributors. They are the buyers of gold in huge tonne chucks in the cash market.
QE to infinity is absolutely in the cards.
Yesterday I emailed all of you who are on the free JSMineset email list concerning the Kentucky RICO civil suits that speak clearly and directly to the fact that securitized (collateralized) debt on mortgages is a can of worms with many mortgages having no paperwork, lost paperwork or paperwork that has been duplicated many times in many collateral debt instruments.
Goldman is now being sued over collateral debt obligations, those items I have referred to as without good collateral.
The you know what has hit the fan and Gold is being bought by the devils themselves. The ill gotten gains of OTC derivatives are taking cash gold from producers and markets by the tonne.
Gold is going right through $1650, an opinion I have held publicly for more than 8 years, on or before January 14th, 2011.

Goldman Sachs Sued Over German Bank’s $37 Million Loss on CDO By Edvard Pettersson and Patricia Hurtado – Oct 4, 2010 10:01 PM MT
Goldman Sachs Group Inc., which served as the placement agent for a collateralized debt obligation named Davis Square Funding VI, was sued by Landesbank Baden-Wuerttemberg over its $37 million loss on the investment.
The CDO held 95 percent residential mortgage-backed securities, of which 33 percent were subprime and 46 percent were “midprime,” the German bank said in a complaint filed yesterday in federal court in Manhattan. TCW Group Inc., the investment adviser on the CDO, was also sued by the bank.
When Goldman sold the investments to a Luxembourg affiliate of LBBW in March 2006, they were represented as “safe, secure, and nearly risk free,” according to the complaint. At the same time, Goldman senior executives privately observed that “it was game over” for subprime lenders and were reducing their exposure to the mortgages, LBBW said.
“Goldman knew at the highest levels of its organization that its representations to LBBW Luxemburg that the notes merited triple-A ratings and were high grade were blatantly false,” the Stuttgart-based bank said. “Goldman committed fraud and, or, was negligent in marketing and selling the notes to LBBW Luxemburg.”
More…

The Foreclosure Fraud Crisis

Posted: Oct 05 2010     By: Jim Sinclair      Post Edited: October 5, 2010 at 12:39 pm
Filed under: General Editorial

Dear CIGAs,
This can easily put gold up in excess of $100 in a day. I have seen gold rise $150 in a day for much less in 1980.
The key element here is that securitized collateralized debt has little good collateral. This is what the emergency meeting at the New York Fed in 2008 was all about.
I have told you about that meeting multiple times since 2008.
This is the greatest fraud in the history of man. The you know what has hit the fan.

An Exchange On Securitized Debt Obligations Between Jim and Yra

Posted: Oct 05 2010     By: Jim Sinclair      Post Edited: October 5, 2010 at 2:45 pm
Filed under: General Editorial
Jim Sinclair’s Commentary
The following is an exchange between Yra Harris and I on the securitized debt obligations of home mortgages.

Yra Harris:
The Kentucky court issue is just another case. Two years ago a federal court ruled against a Deutshe Bank foreclosure claim on the same grounds. To blow my own horn, in the book "Inside the House of Money" I was interviewed and warned that this securitization was going to be a major issue. Greed blinds those who only see short term green.

Jim Sinclair:
Agreed, but Kentucky is a Rico action and class action suit. That is why it is so important.

Yra Harris:
Yes that is true, but it is interesting at the same time that JP Morgan and Bank of America step back from foreclosures

Jim Sinclair:
That is because the entire thing is a bag of worms. That is the collateral for securitized debt obligations based on just these same mortgages.
This is huge, simply huge.

Yra Harris:
For that is how Wall Street has truly raped Main Street.

Jim Sinclair:
Yes and think of all the public pensions stuffed with this crap

Jim Sinclair:
The RICO (organized crime) statute in a civil suit is usually used to force a settlement. If the banks lose under RICO they sacrifice ALL their assets.
The key to RICO in a civil suit is to prove a PATTERN. Listen to the video posted today and the pattern screams at you.
The only logical settlement here is to void the foreclosure. Keep in mind this is a class action. It could sign up 100,000 complaints if that is desired by the attorneys.
This suit, if successful, will be repeated all over the US.
The Deutsch Bank suit occurred in a vacuum without the PR this is going to get in publications like the New York Post and Rolling Stone.
Each time that happens an item of collateral on the securitized debt publicly dies. That is why this is dynamite that people will realize very soon. This is one reason gold is up hard today.
The guys that made securitized debt are buying gold by the ton because they know what it means in the form it has surfaced yesterday.
They are in touch with many major producers.

Broad Dollar Index Chart From Trader Dan

Posted: Oct 05 2010     By: Dan Norcini      Post Edited: October 5, 2010 at 2:21 pm
Filed under: Trader Dan Norcini
Dear Friends,
It has been some time now since I have sent up a chart of the Broad Dollar Index. Those of you who have been with the site for a long while might recall that it was a regular chart around here. After the Dollar rally began in late 2008 as the Yen carry trade unwind commenced it was not necessary to post this particular measurement of the Dollar as the USDX was giving us a fairly good representation of how it was faring on the Foreign Exchange markets.
With the recent collapse of the greenback however, it might be helpful to view the Dollar compared to a much broader basket of currencies than comprises those that go into making the USDX (26 versus 6 for the USDX). Not only is the Dollar falling in value against the major currencies, it is also falling in value against the lesser known or traded global currencies as well. In short, it is in serious trouble especially now that it has decidedly broken its support level of last year near the 101 level.
Should it breach 95, it will be quite an alarming development as things could easily get out of hand in a real hurry.
Click chart to enlarge today’s Broad Dollar Index action in PDF format with commentary from Trader Dan Norcini



Trader Dan’s Commentary
The Comex perma bears are about to experience one helluva bull ride…



In The News Today

Posted: Oct 05 2010     By: Jim Sinclair      Post Edited: October 5, 2010 at 11:50 am
Filed under: In The News
Thought For The Morning
All the mean emails from hedge fund managers and gold shorts calling me a pinhead telling me there isn’t a snowball’s chance in Hell of gold trading at $1650 on or before January 14th 2011 seem to have stopped.
The truth is if it does, I am joining a Franciscan Monastery for the mute.
Jim Sinclair’s Commentary
The US dollar says to Gold:



Jim Sinclair’s Commentary
CIGA Pabst at the Lunguya, Tanzania seminar suggests that this illustrious speaker might be given consideration for a position writing for JSMineset. Clearly he has a similar mindset and means of presentation.

Jim Sinclair’s Commentary
A recent documentary in late March, 2010 on the History Channel noted that all of these containers are shipped back to China EMPTY.




Jim Sinclair’s Commentary
The Gold market is global. The Comex gold market is regional.
Regional gold is about to get overrun by global demand.

Barclays: Indian, Thai Physical Demand For Gold Strong Published on October 05, 2010 08:55:00 IST
By Allen Sykora
(Kitco News) — The strengthening dollar has exerted some pressure on gold so far Monday, but Barclays cites news reports suggesting Indian demand remains “robust” during a seasonally strong period and due to a strong rupee, while Thai demand is “strong” on concerns prices could rise further.
Barclays describes coin sales as “healthy” so far this year. It notes U.S. Mint sales, in terms of ounces sold, through September are higher for the year to date, although they slowed in September.
Meanwhile, Barclays cites news reports showing Perth Mint demand was up 25% on year in September.
More…




Jim Sinclair’s Commentary
US states are broke right now, insuring QE to infinity.

Illinois Pays More Than Mexico as Cash-Strapped States Sell Bonds Overseas By William Selway – Oct 5, 2010 12:01 AM ET
Illinois capital-markets director John Sinsheimer and Citigroup Inc. bankers took a globe-girdling trip from the U.K. to China in June to persuade investors that the state’s $900 million of Build America Bonds were a bargain.
The seven-country visit worked. The state sold one-fifth of the federally subsidized securities abroad the next month, tapping investors who are the fastest-growing source of borrowed cash for U.S. municipalities. Illinois, with the lowest credit rating of any state from Moody’s Investors Service, dangled yields higher than Mexico, which defaulted on debt in 1982, and Portugal, which costs more to insure against missed payments.
“U.S. states are among the cheapest sovereign credits in the world,” said Patrick Brett, a Citigroup banker who marketed the Illinois securities overseas. “You’re actually picking up a good amount of spread for arguably better credits relative to equivalently rated corporates and sovereigns.”
International ownership of U.S. municipal bonds jumped 37 percent in the first half of the year from the end of 2009 to $83 billion, a Sept. 17 Federal Reserve report shows. Spurring the growth are Build America Bonds, created by President Barack Obama’s economic stimulus program to finance public-works projects. More than $140 billion of the debt has been sold in the 17-month-old market. About a quarter may have been bought overseas through June, saidMatt Fabian, an analyst with Concord, Massachusetts-based Municipal Market Advisors Inc.
“The more types of investors you have, the better the overall market,” said Fabian, based in Westport, Connecticut.
More…




Jim Sinclair’s Commentary
This is the stuff that put $1650 in the bag.

Commodities Rally Still Strong, Gold Will Hit $2,000: Rogers Published: Monday, 4 Oct 2010 | 5:12 PM ET
The huge rally in gold is expected to continue—with $2,000 an ounce well within sight over the next decade, well-known commodities investor Jim Rogers told CNBC.
Gold will be among the premier plays in commodities, which stand to benefit whether the economy rebounds or not, said Rogers, creator of the Rogers International Commodity Index.
"Gold is going to go a lot higher over the next decade. It may slow down for a while because it’s run up so dramatically here in the last few weeks. But gold’s going to be much higher," Rogers said. "Adjusted for inflation it should be well over $2,000 now. When I say something like it’s going to 2,000 in 10 years it’s not a very dramatic statement given the state of the world. I’m sure it’s a given."
Rogers said one reason gold will continue to gain is because of what he called the failed policies of the Federal Reserve, its Chairman Ben Bernanke, as well as Treasury Secretary Geithner and other government officials. He said their efforts to prop up the economy have made things worse, not better.
"They’ve all been dead wrong, totally unadulterated wrong," he said. "Unemployment is higher now than it was before. Everything is worse instead of better. Let people go bankrupt. Let the system clean out and start over."
More…



THE FEDERAL RESERVE is SELLING PAPER GOLD and BUYING PHYSICAL GOLD


Gold and Silver - It Could Well Be a Whole New Ballgame! 

Up 22% In Sep