Friday, December 31, 2010

ScotiaMocatta Sells Out Of Silver Bars

And an appropriate story to end 2010 with: ScotiaMocatta, one the world's biggest bullion banks, is now sold out of all silver bars.

If You Haven't Bought Silver Yet, Read This   

Bill Gross Telling Bloomberg To "Avoid Dollar Denominated Government Debt" Probably Means Bond Rout Is Over

When Nassim Taleb and Marc Faber say that US government debt is a suicide investment, one can be allowed some skepticism. After all, they are likely just talking their book. On the other hand, when the manager of the world's biggest bond fund, whose flagship fund Treasury holdings amount to almost $80 billion goes on Bloomberg and says to "avoid dollar-denominated government debt" better known as US Treasuries, and instead recommends viewers invest in "stable" currencies like the Peso, the BRL or the CAD, then you know the bottom in bonds is in. So in addition to dumping fixed rate bonds (which means Pimco will again be able to buy on the cheap ahead of QE3, which as Larry Meyer has by now likely advised Pimco is a sure thing), Gross also told Bloomberg that his other two strategies are to buy floating rate debt (over fixed), and lastly recommend credit spreads over interest rate duration risk. For those who find something troubling with a $1 trillion fixed income manager talking down his investments, and are still wondering whether or not QE3 is coming, we suggest putting one and one together. And while at it, they should also consider that Pimco now holds over $100 billion in MBS: a notional amount last held just as QE1 was announced.

Guest Post: Just Where Is The Equity In All Of This?


Precious metals will accelerate in 2011, Turk tells King World News


Gene Arensberg: New lows for gold-silver ratio


Why does NY Fed need all these private meetings with investment bankers?


Forever Stamps Tell Us Much

Energy, Agriculture, Gold And Silver Bullion--Protectors From The Coming Crisis   

Baby Boomers Retirements In Jeopardy

Happy New Year...2011

Read Ted Butler's Prophetic Letter Warning Of COMEX Silver Manipulation... In 1989

Gold Trading Closes: Returning 29.7% For the Year, Doubles S&P 2010 Performance


Goldman's 10 Questions (And Answers) For 2011

Posted: Dec 31 2010     By: Jim Sinclair      Post Edited: December 31, 2010 at 2:18 pm
Filed under: In The News
Dear CIGAs,
Snow is no a town with less than 3000 residents, I am the guy in the suit. clip_image001

Jim Sinclair’s Commentary
I received a great compliment from a former Forbes reporter who now works for the Times. He called to remind me that when he wrote an article about me on December 10th, 2001 I had told him gold would go to $1650 and that Bear Sterns would go broke on OTC derivatives.

Jim Sinclair’s Commentary
Have you subscribed? The meat is in the full reports and is much more than these one liners.
Here is how John Williams sees things.
- 2010: A Year of Depressed Economic Stagnation
- 2011: A Year of Increasing Economic and Systemic Difficulties
- Gold Outperforms Dow for Seventh Straight Year (2010)

"No. 342: Economic, Market and Systemic Outlook for 2011"

Jim Sinclair’s Commentary
In the spirit of recommending resources to you, consider the following.

GEAB N°50 is available! Global systemic crisis: Second half of 2011 – European context and US catalyst – Explosion of the Western public debt bubble
- Public announcement GEAB N°50 (December 16, 2010)
The second half of 2011 will mark the point in time when all the world’s financial operators will finally understand that the West will not repay in full a significant portion of the loans advanced over the last two decades. For LEAP/E2020 it is, in effect, around October 2011, due to the plunge of a large number of US cities and states into an inextricable financial situation following the end of the federal funding of their deficits, whilst Europe will face a very significant debt refinancing requirement (1), that this explosive situation will be fully revealed. Media escalation of the European crisis regarding sovereign debt of Euroland’s peripheral countries will have created the favourable context for such an explosion, of which the US “Muni” (2) market incidentally has just given a foretaste in November 2010 (as our team anticipated last June in GEAB No. 46 ) with a mini-crash that saw all the year’s gains go up in smoke in a few days. This time this crash (including the failure of the monoline reinsurer Ambac (3)) took place discreetly (4) since the Anglo-Saxon media machine (5) succeeded in focusing world attention on a further episode of the fantasy sitcom "The end of the Euro, or the financial remake of Swine fever" (6). Yet the contemporaneous shocks in the United States and Europe make for a very disturbing set-up comparable, according to our team, to the "Bear Stearn " crash which preceded Lehman Brothers’ bankruptcy and the collapse of Wall Street in September 2008 by eight months. But the GEAB readers know very well that major crashes rarely make headlines in the media several months in advance, so false alarms are customary (7)!

Jim Sinclair’s Commentary
Our friend Egon wishes everyone an interesting New Year, and a Happy one for those that are prepared.

We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments.  Thus most of these assets are also worth-less.
So the world financial system is a house of cards where each instrument’s false value is artificially supported by another instrument’s false value. The fuse of the world financial market time bomb has been lit.  There is no longer a question of IF it will happen but only WHEN and HOW.  The world lives in blissful ignorance of this. Stockmarkets remain strong and investors worldwide have piled into government bonds in a perceived flight to safety. Due to a century of money creation (and in particular since the 1970s) by governments and by the fractal banking system, investors believe that stocks, bonds and property can only go up. Understanding risk and sound investment principles has not been necessary in these casino markets with guaranteed payouts for anyone who plays the game. Maximum leverage and derivatives have in the last 10-15 years driven markets to unfathomable risk levels, with massive rewards for the participants.
In the meantime central banks are cranking up the printing presses but as Bernanke recently said quantitative easing is an “inappropriate” description of what should be called “securities purchases”!  Who is he kidding? What the Fed is buying has nothing to do with “securities”. There is no security whatsoever in the rubbish the Fed is purchasing. They are buying worthless pieces of paper with worthless pieces of paper. This is the Ponzi scheme of all Ponzi schemes.
Let us be very clear, this financial Shangri-La is now coming to an end. The financial system is broke, many western sovereign states are bankrupt and governments will continue to apply the only remedy they know which is issuing debt that will never ever be repaid with normal money.

Jim Sinclair’s Commentary
Unofficial problem bank list increases to 935 institutions. CIGA Rusty Bayonet wishes everyone a Happy New Years Eve!
Click here to view the list…

Posted: Dec 31 2010     By: Jim Sinclair      Post Edited: December 31, 2010 at 2:09 pm
Filed under: Jim's Mailbox

Jim Sinclair’s Commentary
CIGA Lew wishes all his CIGAs a happy New Year in this very interesting video.
Click here to watch the video…

Dear LT,
People forget the 10-20+ percent bear raids on gold that were the rule of the day years ago, the hammering of RGLD, the synthetic dollar short BS, Central bank selling and so on. They would do almost anything to shake us out of our positions…
You have again been the most charismatic leader in my opinion in the gold bull market!
You have also shown us by example how to control emotions and to remain rational so as not to screw things up.
I am wishing you the best in 2011 for health, happiness and prosperity to you and your family!
Your friend,

Jim Sinclair’s Commentary
CIGA Giancarlo in Joberg observes "This is like a frog in hot water!"

Bolivians protest fuel price hike Fri Dec 31, 2010 6:57AM
Thousands of demonstrators have taken to the streets across Bolivia to protest the recent jump in fuel prices in the country.
Protesters marched through the streets in capital La Paz and other cities across Bolivia on Thursday, demanding from the government of President Evo Morales to repeal the hike.
The demonstration in La Paz started peacefully but turned violent after police prevented protesters from entering the main plaza where the presidential palace is located, AP reported.

Petrol price could rise in January December 29 2010 at 01:04pm
The price of petrol could increase by 25 cents a litre next week on Wednesday due to the rise in the international price of oil since November 26, the latest calculations issued by the state-owned Central Energy Fund released on Wednesday showed.
From December 1, the price of petrol at the coast was set at R8.21 a litre and the inland price was established at R8.45 a litre.
The next change to the local petrol prices will be made on Wednesday, January 5, and will be based on the average over or under recovery in the petrol price from November 26 to December 30.

Fuel price rise adds to inflationary pressure 15 Dec, 2010, 02.03PM IST,REUTERS
MUMBAI: Moves by state-run oil retailers to raise petrol prices and the possibility that diesel will increase too make the Reserve Bank of India’s (RBI) fight against inflation more difficult and piles more pressure onto a beleaguered government.
Indian Oil Corp , Bharat Petroleum and Hindustan Petroleum will raise petrol prices by about 5.6 per cent this week due to surging global crude prices. Shares in the companies rose early on Wednesday.
The Reserve Bank of India meets this week to review its monetary policy in the light of still high inflation.

Here Comes The Drama CIGA Eric
Silver is clearly within a long-term secular up trend. This overrides any short-term technical targets. The silver ‘newbies’ entering the fray after an undisputed breakout will accelerate the trend. Acceleration implies y=x2 rather than y=mx+b. The addition of the crooked number next to the X will add drama for both sides of the trade.
The observation today, as it was months ago, is growing trend energy. This is illustrated by a dramatic surge in REV(E). A surge in REV(E) suggests accumulation. Markets that are under accumulation are difficult to control. This one is all about control.
Silver ETF (SLV): clip_image001


Don’t Interpret Trend Noise CIGA Eric
While experts interpret trend noise, they ignore the fact that cycles (TIME) anticipate price. The surge in trend energy, REV(E), suggests that yields on the long bond will continue rising when TIME is right.
30 Year Treasury Index Bear 3x ETF: clip_image002
Headline: Treasurys slip after unemployment, housing data
Treasury prices slipped a little further Thursday, pushing yields up, after reports showed fewer Americans filing for first-time jobless benefits than economists had forecast and pending home sales higher than predicted.
Analysts noted that most bond investors would treat the session as the last of the year, even though the market is open for a half-day Friday. That will mean a lot of position adjustments and so-called window dressing of portfolios for the end of the month and year, especially after wild swings this week, more than any meaningful indication of the how the data fit into investors’ longer-term outlook.

Growing Signs of Hyperinflation CIGA Eric
"Who is more foolish: the fool or the fool that follows him?"
Elimination of lower denomination coins and changing metal composition of coins are clear sign of hyperinflation across the globe. Yet, there is no shortage of experts warning the masses about the threat of deflation.
The threat of deflation is an illusion as the signs of hyperinflation are growing in size and frequency. The pain of monetary reality, however, prevents many from straying too from the comfort of the illusion.
Headline: Soaring metal prices ring death knell for 25p coins
The ubiquitous 25 paise coin will be history in six months’ time. Worried by the soaring metal prices, the government has decided to scrap all coins up to the denomination of 25 paise from June 30, 2011, making 50 paise the minimum denomination accepted in markets.
“From this date, these coins shall cease to be a legal tender for payment as well as on account. The minimum denomination coin acceptable for transaction will be 50 paise from that date,” said a finance ministry release on Thursday adding that the Reserve Bank of India will separately notify the procedure for calling in the coins.

Public to Private Transition: Identify & Adapt CIGA Eric
Identify and adapt or the markets will kick your ass in 2011.
Yet another transition from public to private sector (cycle) will catch many playing by the old rules.
Long-Term U.S. Corporate Bonds Total Return Index (LTCBTRI) to Long-Term U.S. Government Bonds Total Return Index (LTGBTRI): clip_image003

Will Silver Be Worth More Than Gold? Perspectives On A Coming Silver Shortage


Matterhorn Closes The Year In Style: "Hyperinflation Will Drive Gold To Unthinkable Heights"


Silver and Gold Raid/both metals hold up well


Venezuela devalues for second time this year


Davidowitz's Rant On Overt Optimism In The Retail Space And Malls Is Not Only On Point, But Has Been Preached At BoomBustBlog For 3 Years & Counting


Hugo Salinas Price: Thoughts about the manipulation of gold and silver prices


Debunking Krugman (Again): On The Shift From Net To Gross Income Tax Basis


Frontrunning: December 31

  • Commodities Beat Stocks, Bonds, Dollar in 2010 (Bloomberg) - translation: anything that can't be diluted does and will do better than things that can be diluted
  • How a mortgage clearinghouse became a villain in the foreclosure mess (WaPo)
  • Euro Imbalances Mean 80% Risk Bloc Will See Structural Overhaul, CEBR Says (BusinessWeek)
  • Estonia Prepares to Join the Euro Zone (WSJ)
  • Simon Johnson: Fresh Crises Loom in Europe and the U.S. (NYT)
  • That pesky CRE issue still refuses to go away: Commercial property loans pose new threat (FT)
  • Krugman on The New Voodoo and hypocrites (NYT)
  • Mises Institute on the Hypocrisy of Krugman (Mises)
  • Venezuela to Devalue its "Strong Bolivar" Currency (WSJ)

Thursday, December 30, 2010

Must See: Howard Davidowitz Destroys The Recovery Illusion, Debunks The Consumer Renaissance


Marc Faber: Treasurys Are A "Suicidal Investment"


As Irish ECB Borrowings Surge, The Country's Bank Run Picks Up Speed


Estonia Welcomes The Euro

Presented without commentary



Posted: Dec 30 2010     By: Dan Norcini      Post Edited: December 30, 2010 at 2:48 pm
Filed under: Trader Dan Norcini
Dear Friends,
Most of the emails I have received the past couple of weeks that are related to Jim’s prediction of $1,650 gold in January of 2011 have been gracious and have expressed heartfelt appreciation for Jim’s steady hand of guidance over the past 7 or so years. The deep admiration for Jim’s selfless giving of his years of experience in the financial realm, has shown through so many of these emails. It truly is an uplifting experience to read them. For those of you who have taken the time to do so, my sincere and heartfelt thanks.
Sadly, there are some who instead of focusing on the nearly flawless track record that Jim has secured over these past years in providing general price levels that would act as signposts along the way of this now decade long bull market in gold, have chosen to carp and criticize because gold is not within a $100 or so of Jim’s price prediction for next month. To those of you who are so small minded and so ungrateful for the many benefits that have been freely given to you by my dear friend, I can only say that perhaps you would be best served by going elsewhere for your regular reading on the state of the gold market. It is evident that some of you are far wiser than the rest of us and are much more in tune with the gold market than Jim can ever possibly hope to be.
I would also suggest that since the world is in such need of your acumen and wisdom, you start up your own web site and provide your commentary to all free of charge, all the while maintaining the cost of servicing that web site out of your own financial resources.
The rest of us mere mortals, whom will benefit from such knowledge that drips from your lips like ripe pomegranates, will then have the luxury of watching you put your money where your mouth is, AHEAD OF THE FACT.
Here is the truth – those of us who are professional traders make our living IN THE MARKET, not OFF OF THE MARKET. We have to possess the courage of our convictions and put our money on the line every single day. Sometimes we get it right; sometimes we don’t. The key to measuring success in this business however is not how we make out  on each individual trade but rather how we do on our collective trades. If we are right more often than wrong, we succeed and thrive. If not, we are soon gone and looking for a different profession. Those of you back seat drivers who are only brave enough to call a market after the fact would do well to remember that before becoming too full of yourselves.
Here is wishing all our readers, even the jerks, a Happy, Safe and Prosperous New Year. Thank you for the many kind words of encouragement and appreciation that we have received over the past year. I do not know what the year that lies ahead holds for all of us, but one thing I am certain of, the policies being advocated by the current Federal Reserve, and those being followed by the ECB and the BOJ for that matter, will not end well for anyone. If printing money into existence was the path to lasting prosperity, nations far wiser and of more duration than ours, would have long ago discovered it. History, unfortunately, is not on the side of such things.

Posted: Dec 30 2010     By: Jim Sinclair      Post Edited: December 30, 2010 at 6:02 pm
Filed under: In The News

Jim Sinclair’s Commentary
Illinois is akin to a trader who would seek a loan to meet a margin call. The loans is not going to do any good unless the underlying problem is fixed.
The Formula is still in charge everywhere and nothing is fixed. I would not lend those funds at 20%

Quinn Weighs $15 Billion Bond-Sale `Option’ to Close Illinois Budget Gap By Tim Jones and Darrell Preston – Dec 28, 2010 1:44 PM PT
Illinois Governor Pat Quinn is considering borrowing $15 billion to pay overdue bills and balance the biggest budget deficit in the state’s history.
The plan is among a range of proposals that Quinn is discussing with state lawmakers as they prepare to return to Springfield Jan. 3 for the final days of the legislative session, said Kelly Kraft, a Quinn spokeswoman.
Illinois faces a budget shortfall of at least $13 billion because of declining tax revenue. The state Senate in November didn’t have the votes to approve the borrowing of $3.7 billion to cover pension-fund contributions for the fiscal year that ends June 30.
“We are working on a variety of options,” Kraft said in an interview today. “Nothing has been finalized. We’re talking with legislators on both sides of the aisle. Our goal is to stabilize the budget.”
Senate President John Cullerton and House Speaker Michael Madigan declined through spokesmen to say if the bond sale would draw enough support to pass.

Posted: Dec 30 2010     By: Jim Sinclair      Post Edited: December 30, 2010 at 2:35 pm
Filed under: Jim's Mailbox
The Gloves Are Off
clip_image001The talking heads showed no hesitation about pushing fear and doubt for gold and silver in 2011 before the Christmas holiday. At the time silver was in the process of testing upper channel resistance as support. This unbelievably bullish technical setup, an outcome that I had flagged as extremely important in previous commentaries, is hardly the backdrop of doubt and fear.
Yet another example of why investors must develop their own “voice.” The game of money, based on doubt, fear, greed and misdirection, cannot be played on tips or earshot advice.
At one point, I said when upper channel resistance has become support in silver – “The glove come off.”
The gloves are off, people.
Silver ETF (SLV):
When a trend breaks a linear representation, it tends to goe higher-order into what is known as a plateau move.
Silver, London P.M. Fixed:

Mike Krieger's Macro Themes For 2011


A Happy 2011 And A Disillusioned Outlook For The New Year From Nic Lenoir



Part B...big stories of the day:


Gold 2011: "Old Normal" Returns

End Game: The Euro As a Concept Is Finished

2011 Year End Gold At $1,630...Sub $1,000... Or Entering A Diamond Top?


Chicago PMI Surges To 68.6 On Expectations Of 62.5, Highest Since July 1988


John Taylor Explains Why Off-The-Charts 2011 GDP Estimates Are Irrelevant, And Why Defaults Will Be Pervasive


Initial Claims Print At 388K, Far Lower Than Expectations Of 418K, Non-Seasonally Adjusted Claims Jump To 521K


Frontrunning: December 30

  • China Manufacturing Growth Slows as Policy Tightened (Bloomberg)
  • Why I Don't Believe In This Santa Rally (WSJ)
  • Who Is Ron Paul? (National Review)
  • A True 'Japan Inc.' Could be on the Way (WSJ)
  • Forecasters Warn UK Jobless Rate Set to Nudge 9% “ (FT)
  • Three Hedge Funds Got Inside Data From Consultant, U.S. Says (Bloomberg)
  • China To Enhance Regulating Property Market in 2011 (China Daily)
  • BP Facing New Legal Threat Over Gulf Spill (Independent)

One Minute News Summary


Today's Economic Events


Bailed Out Banks on Brink of Bankruptcy — Again

Borrow Like There's No Tomorrow 

The Debt Countdown Begins 

Rosenberg: Housing Double-Dip Straight Ahead

After Holiday Spree, Doubts About Economy Linger   

Two Charts Which Tell The Whole Story 


Wednesday, December 29, 2010

Gold and silver shorts losing control, Turk tells King World News


Shayne McGuire: Everything gold is new again


Hiding A Depression: How The US Government Does It

Ultimate Cost of 0% Money

After 33 Consecutive Weeks Of Outflows, ICI Reports First Inflow Into US Equity Funds As Bond Outflows Persist


Summary Of Key 2011 Head And Tail Winds


Posted: Dec 29 2010     By: Jim Sinclair      Post Edited: December 29, 2010 at 5:46 pm
Filed under: In The News

Jim Sinclair’s Commentary
Today’s conversation on mainstream media was focused on the US losing its AAA rating by June. That would mean Moody’s and Fitch have six months to live.

Jim Sinclair’s Commentary
To say business is improving is one hell of a stretch. To say statistically business conditions are MOPEd is closer to the truth.
John Williams of gives us the real numbers.

Home foreclosures jump in 3rd quarter: regulators By Dave Clarke
WASHINGTON | Wed Dec 29, 2010 1:02pm EST

WASHINGTON (Reuters) – U.S. home foreclosures jumped in the third quarter and banks’ efforts to keep borrowers in their homes dropped as the housing market continues to struggle, U.S. bank regulators said on Wednesday.
The regulators said one reason for the increase in foreclosures is that banks have "exhausted" options for keeping many delinquent borrowers in their homes through programs such as loan modifications.
Newly-initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from the same quarter a year ago, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) said in a quarterly mortgage report.
The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.
They said during a briefing that the numbers could send "mixed signals" about the health of the U.S. housing market.
Regulators also said a possible reason for the foreclosure uptick in the quarter was that a large pool of borrowers who were being considered for home retention programs but did not qualify moved through the system.

And Now, Here's The First 11 State Pension Funds That Will Run Out Of Money.

Outraged Yet? What if Fed Buys Munis?

Second Crisis Feared if Interest Rates Kept Low 

US Changes How It Measures Long-Term Unemployment  

silver and gold continue to rise


Forget Hugh Hendry... Ashton Kutcher Recommends You Panic, And Prepare For The Apocalpyse


Guest Post: Japan's Perpetual Motion Debt Machine


Breakfast with Jamie [Dimon]

Posted: Dec 29 2010     By: Jim Sinclair      Post Edited: December 29, 2010 at 4:04 pm
Filed under: In The News

Home Prices Drop Most in Largest Cities By AP / JANNA HERRON Tuesday, Dec. 28, 2010
(NEW YORK) — Home prices are dropping in the nation’s largest cities and are expected to fall through next year, as fewer people purchase homes and millions of foreclosures come on to the market.
The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday fell 1.3 percent in October from September.
All cities recorded monthly price declines. The last time that happened was in Feb. 2009.
Atlanta recorded the largest decline. Prices there fell 2.9 percent from a month earlier. Home prices in Washington dropped 0.2 percent in October, the second monthly decline after five straight increases.
Home prices in Dallas, Portland, Ore., Charlotte, N.C., Tampa, Fla. and Denver have fallen for four straight months.
The 20-city index has risen 4.4 percent from their April 2009 bottom. But it remains 29.6 percent below its July 2006 peak.

Jim Sinclair’s Commentary
It was the blizzard’s fault as we know it was snowing from California to Maine.

Christmas Week Retail Sales Fall 4.1% By Theresa McCabe 12/29/10 – 01:13 PM EST
NEW YORK (TheStreet) — Retail sales were down 4.1% during Christmas week as Dec. 26 fell on a Sunday and wasn’t included in the week’s sales.
Research firm ShopperTrak said that about $1 billion in sales that could have taken place on Dec. 26 and 27 were postponed due to the winter storm that caused many roads and airports in New York to shut down and created travel chaos throughout the Northeast.
The firm said that U.S. foot traffic on the day after Christmas was down 11.2% from last year because of the storm.
Data also showed that Dec. 23 was the season’s second biggest shopping day, coming in after Nov. 26, or Black Friday.

Jim Sinclair’s Commentary
It is simply massive fraud.

Sign of the Times – Foreclosure Report Rips Rubber-Stamp Notary Wednesday, December 29, 2010 12:53 PM
Source: The New York Post)trackingBy KAJA WHITEHOUSE

The face of New Jersey’s robo-signing scandal may be a Pennsylvania notary public who signed thousands of foreclosure documents in the Garden State even though he wasn’t licensed there.
Thomas Strain, who now heads the bankruptcy team at GMAC Mortgage Corp., has emerged as a key player in New Jersey’s foreclosure mess through a damning report that swayed the state’s top judge to crack down on rogue foreclosure filings by the nation’s largest mortgage lenders, including GMAC.
Earlier this month, New Jersey’s chief justice, Stuart Rabner, announced severe measures to halt abusive foreclosure practices in the state, including rubber-stamping documents without verifying their authenticity, known as robo-signing.
Among the measures, Rabner is requiring the nation’s six largest mortgage lenders, including Ally Financial’s GMAC, Citigroup, OneWest Bank and Wells Fargo, to prove their procedures are up to par at a hearing set for Jan. 19 – or risk having their foreclosure activities suspended in the state.
In announcing the measures, Rabner pointed to a report compiled by Legal Services of New Jersey, a non-profit in Edison, NJ, which mentions Strain in no less than four cases involving instances of robo-signing when Strain worked for Mount Laurel, NJ-based Full Spectrum Services prior to joining GMAC in 2009. The report also repeatedly mentions Strain’s former boss, Frank Hallinan, a lawyer with mortgage law firm Phelan, Hallinan and Schmeig.

Jim Sinclair’s Commentary
Let’s cut the crap. There is no way that the mountain of old derivatives making up now more than 90% of the OTC derivative population can be cleared.
There are no standards so therefore there can be no margin facility. Without that they cannot be cleared except a cartoon.
If the new CDS OTC derivatives are cleared it will without any doubt bust the clearing agent by early 2012. That is the reason for the pull out. Don’t listen to the MOPE.

Derivatives Clearing Group Decides Against Registration BY BEN PROTESS
The world’s largest clearinghouse for credit-default swaps, ICE Trust, has had second thoughts about registering with regulators, citing concerns over new rules devised to bring transparency to the $600 trillion derivatives market.
ICE Trust, a division of the Intercontinental Exchange, the big derivatives exchange, applied to be a derivatives clearing organization with the Commodity Futures Trading Commission in November. Last week, the company quietly withdrew its application.
In a Thursday letter to the commission, which was released on Tuesday, a lawyer for ICE Trust said the company changed its mind because of “significant changes proposed to” regulations for clearing organizations.
The gesture may be symbolic. In July, ICE Trust will automatically be granted status as a clearinghouse, under the Dodd-Frank financial overhaul law.
A spokesman for ICE declined to comment.
ICE, which has cleared more than $14 trillion of credit-default swaps since it started in 2009, said it had applied with the commission to bring its operations into compliance more quickly and to attract new customers before the rules went into effect in July. But the clearinghouse decided to hold off, owing to uncertainty around the process.

Jim Sinclair’s Commentary
The Green Hornet says oh my god!

Bailed-Out Banks Slip Toward Failure by Michael Rapoport
Monday, December 27, 2010

Number of Shaky Lenders Rises to 98 as Bad Loans Pile Up; Smaller Institutions Hit Hardest
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.
The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.
When TARP was created in the heat of the financial crisis, government officials said it would help only healthy banks. The depth of today’s problems for some of the institutions, however, suggests that a number of them were in parlous shape from the beginning.
Seven TARP recipients have already failed, resulting in more than $2.7 billion in lost TARP funds. Most of the troubled TARP recipients are small, plagued by wayward lending programs from which they might not recover. The median size of the 98 banks was $439 million in assets as of Sept. 30. The median TARP infusion for each was $10 million, federal filings show.

Jim Sinclair’s Commentary
Surprise, surprise as Turkey flexes its new politically perceived muscles.

Preference for Gold Savings Among Turks Surges, Hurriyet Says By Benjamin Harvey – Dec 28, 2010 10:59 PM PT
Preference for holding gold as a form of savings in Turkey surged to the highest level since at least 1998, Hurriyet newspaper reported, citing a Mastercard survey in the country.
Gold was the most-preferred savings vehicle among Turks, at 22 percent, followed by savings of Turkish lira “stuffed under the pillow” in second at 21 percent and bank deposits in third at 15 percent, Hurriyet said, citing Mastercard’s survey in 11 Turkish provinces. Foreign-currency savings were preferred by around 8 percent of the population, while bond purchases and stocks each accounted for 6 percent, it said.

Posted: Dec 29 2010     By: Jim Sinclair      Post Edited: December 29, 2010 at 2:10 pm
Filed under: Jim's Mailbox
Jim Sinclair’s Commentary
Words of mature wisdom from good Sir Richard (Russell).
Dear Friends,
December 27, 2010 — I have posted below the year-end price of gold starting with the year 2000, the first up-year of one of the greatest and least appreciated bull markets in history. Take in this series, you may never see it like again.
2000 — $273.60
2001 — $279.00
2002 — $348.20
2003 — $416.10
2004 — $438.40
2005 — $518.90
2006 — $638.00
2007 — $838.00
2008 — $889.00
2009 — $1118.40
2010 — ?
I’ve been around a long time, and I’ve studied many primary bull markets. And now I want to venture a few of my observations.
In markets, I have never seen a series like the above end with a whimper or a fizzle. The end or the wind-up of such a series usually arrives with an upside "explosion," as those who have failed to participate in the series finally rush in to join in the apparent endless advance. This is the wild and wooly speculative phase of a great bull market. Big bull markets don’t end with a sigh, they end in exhaustion.
(1) Most great primary bull markets last longer and carry farther than the majority of investors (even the bulls) expect.
(2) A great primary bull market is an expression of something changing in a very fundamental and meaningful way. Following a great bull market, the world is never quite the same.
His father, Congressman Howard Buffett, understood gold, but his son, Warren Buffett, does not understand gold.
Maybe this will help Warren. Why is gold the ultimate and timeless money?
Good money must have a number of unique characteristics.
(1) It must be durable, which is why we don’t use wheat or corn.
(2) It must be divisible, which is why we don’t use a Picasso painting or jade statues.
(3) It must be convenient, which is why we don’t use lead or copper or real estate.
(4) It must have value in itself, which is why we don’t use paper.
(5) It must be transportable, which means that large values must be contained in a small area (a gold coin weighing only one ounce can be worth far more than fifteen hundred dollars).
(6) It must have a long history of being accepted as a store of value. Gold was considered valuable as long as 5,000 years ago in the age of the Egyptians.
(7) It cannot "disappear" or be used up in manufacturing as is copper and even silver. Thus, the gold coin that you have in your hand may have been part of Cleopatra’s earrings centuries ago. Almost all the gold that has ever been discovered is still available in one form or another.
(8) It must not be the liability of any sovereign nation, nor should it require governmental law to make it money. For instance Gold requires capital, talent, risk, sweat and courage to recover or to accumulate.
Russell note — It’s possible that gem-quality diamonds can fit all the above characteristics but two. Diamonds are not divisible, nor do they have a long history of being stores of value.
Second note — The Washington-based IMF recently completed its promised sale of gold. It was rumored that the IMF would have to sell its gold on the open market. Not so. The fact is that central banks eagerly gobbled up the IMF’s gold. According to The Financial Times, the IMF sold its gold directly to the central banks of India — 300 tonnes, Sri Lanka — 10 tonnes, Bangladesh — another 10 tonnes, and Mauritius — two tonnes.
And why are these central banks trading paper for gold? After all, it’s the central banks that are creating the fiat paper. Why are they swapping their own beloved products for gold?
The latest anti-gold propaganda centers around the gold exchange traded funds. A full page article in Sunday’s New York Times implied that only with the advent of all the gold ETFs has gold boomed. The article implies that the ETFs (mainly GLD) allowed an ignorant public to buy gold, and that this is the reason for gold’s recent advances. The article did not explain why gold has risen yearly for almost a decade, even before gold ETFs were created. The Times article hinted that gold was in a bubble, and that it was a dangerous bubble. The article emphasized the 20-year gold bear market of 1980 to 1999.
For the first time, more gold is being taken for investment than is used in jewelry. Asians have been gold buyers for years, while Americans have accumulated dollars and are just beginning to learn about gold. Meanwhile, the ignorant media continues to publish "beware" articles about gold. Soros announces that gold is the "biggest bubble" in the area of commodities, but the Soros largest holding is in gold. Sound as though Soros wants to knock the price of gold down so he can buy more on the cheap.
These billionaire investors; they have no consciences. Hmm. maybe that’s why they’re billionaires.
Until Tuesday,

I had a few questions that I would like you to address if you can.
Several years ago you made the comment that the time would be coming when, if a person had the money, they could buy whatever they wanted for pennies on the dollar as people would be trying to sell whatever they had to pay off their debts. Is this still a likely future event or will hyper-inflation just cause the cost of things to sky-rocket and if you need something like a used car, etc. you should buy it now?
I have my portfolio divided between 2 different brokers.  Is it still critical to take the stocks out in certificate form?  I’m not so much worried about having a hold put on my account even for several months, I haven’t been trading my positions much anyway.  I’ve tried to get into mining companies that are performing well and I’m just holding what I have.  But I sure wouldn’t want to lose my positions.  What is the likelihood that one day I could find out that my positions are gone if they’re held in my broker account?
If things got that severe in the financial markets would you consider it to be more likely to happen during the second run up from $2500 to $10000 gold that Armstrong is predicting?
Is having the stock held in my name by the clearing house sufficient or should I be holding the actual certificate?
Are you still holding to the position that if we don’t see $1650 gold by Jan. 14th that it will be $3000-5000 in June?
Thank you for your time,
CIGA Steve

CIGA Steve,
Own gold then buy toys if you must. That is the way to buying for a value of peanuts in time.
Gold is properly defined as insurance. Everything gold is a gradient of insurance. Is it not wise to keep insurance close at hand? Many gold companies no longer issue paper certificates however.
My deep respect for Alf and Armstrong move me to say they will be right at some time in the not too distant future. $10,000 is a bit of a reach.
That is called direct registration and is the second best route to take.
I stand by what I have said recognizing that I may have made a fool out of myself in public. The fact that I said $1650 many years ago is no excuse if I am wrong on January 14th 2011 and gold is at $1550.
There is no gray, for a responsible person, in what you say.

“The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title.”
CIGA Everett

Dear Everett,
No fiat currency, by definition, holds that title.
Only gold is impervious to the madness of today’s financial world.

What Price is High Enough? CIGA Eric
One observation to Jim’s responses to various questions included below,
What price is high enough? The answer to that will reflect the state of confidence within the current monetary system. Confidence will be heavily influence by the extent of nominal debt destruction through direct and indirect default into 2016.
The trend in total credit market debt as a percentage of national income will influence confidence within the old monetary system. The liquidation process, if permitted, will help restore confidence. Of course, this is only the officially recognized credit market debt. Accounting "flexibility" hides a much larger burden.
Total Credit Market Debt As A% GDP: clip_image001
It doesn’t take much insight to recognize that the liquidation phase has only just begun. The termination of the blow off phase represents the initial stages of the Great debt revaluation. The Great debt revaluation as defined by the upward revision in the price of gold began in 2000.
How long the world attempt to exude confidence while looking the other way?
The economic gain for each dollar of debt created has slumped well below the Great Depression lows. The law of diminishing returns has begun to handcuff policy options.
Annual Gross Domestic Product (GDP) per Annual Total Credit Market Debt (TCMD):
Annual Income Growth per Debt Creation
It will be impossible to define the ultimate price target because mathematical equations cannot predict emotions.
The trend, however, remains up. A 5-handle looks extremely plausible. The final value, driven by emotions, will likely surprise even the bulls.
Gold, London P.M. Fixed: clip_image003
I had a few questions that I would like you to address if you can.
Several years ago you made the comment that the time would be coming when, if a person had the money, they could buy whatever they wanted for pennies on the dollar as people would be trying to sell whatever they had to pay off their debts. Is this still a likely future event or will hyper-inflation just cause the cost of things to sky-rocket and if you need something like a used car, etc. you should buy it now?
Own gold then buy toys if you must. That is the way to buying for a value of peanuts in time.
I have my portfolio divided between 2 different brokers. Is it still critical to take the stocks out in certificate form? I’m not so much worried about having a hold put on my account even for several months, I haven’t been trading my positions much anyway. I’ve tried to get into mining companies that are performing well and I’m just holding what I have. But I sure wouldn’t want to lose my positions. What is the likelihood that one day I could find out that my positions are gone if they’re held in my broker account?
Gold is properly defined as insurance. Everything gold is a gradient of insurance. Is it not wise to keep insurance close at hand?
However many gold companies no longer issue paper certificates.
If things got that severe in the financial markets would you consider it to be more likely to happen during the second run up from $2500 to $10000 gold that Armstrong is predicting?
My deep respect for Alf and Armstrong move me to say they will be right at some time in the not too distant future. However $10,000 is a reach.
Is having the stock held in my name by the clearing house sufficient or should I be holding the actual certificate?
That is called direct registration and is the second best route to take.
Are you still holding to the position that if we don’t see $1650 gold by Jan. 14th that it will be $3000-5000 in June?
When you make a statement only a woos wiggles away. I stand by what I have said recognizing that I may have made a fool out of myself in public. The fact that I said $1650 many years ago is no excuse if I am wrong on January 14th 2011 and gold is at $1550.There is no gray, for a responsible person, in what you say.

Thank you for your time,


International Forecaster December 2010 (#8) - Gold, Silver, Economy + More

Lease Rates Jump at Year End

Investing in Gold Ahead of the Chinese


S&P Withdraws Bank of America Short-Term Counterparty Rating At Firm's Request


In Last 2010 POMO, Fed Buys Back $2.4 Billion Of Just Auctioned Off 2 Year Bond, $5.4 Billion In Total

BlackRock Seeks To Become The Same Monopolistic Trade Internalizer For Stocks, As Goldman Is For Derivatives


NYSE November Margin Debt Rises To Fresh Post-Lehman High

The Year In Photos

Frontrunning: December 29

  • China Cuts Export Quotas for Rare Earths by 35% in First Round of Permits (Bloomberg)
  • China Likely to Set Up Rare Earth Trade Body (China Daily)
  • Austerity May Not Be Enough to Save the EU's Weakest Links (Independent)
  • European Borrowing Costs Eclipse US (FT)
  • A Fed-Induced Speculative Blowoff (Hussman)
  • To Dow 16,000...Then 6,000? (WSJ)
  • As in Sex, WikiLeaks Founder Tests Press Limits (Bloomberg)
  • BP Investor Lawsuit to Be Led by New York, Ohio Pension Funds (Bloomberg)
  • Dollar Trades Near 6-Week Low on Signs U.S. Recovery Is Uneven (Bloomberg)

VIsualizing The Coordinated Global Monetary Response


Roubini On The Chinese Liquidity Hangover


Guest Post: Oil Juggernaut Unleashed



Tuesday, December 28, 2010

Roubini: "It's Pretty Clear The Housing Market Has Already Double Dipped"


From Harvey Organ

Gold and silver break through resistance/Bonds falter badly


Emergency Food Kits & Supplies


Guest Post: Former Shell Oil Chief Predicts $5 Gas by 2012


How Allstate Used Sampling To Confirm BofA/Countrywide Lied About Virtually Everything When Selling Mortgages 


Video of Bernanke and Geithner Trying to Get the Economy Unstuck

Posted: Dec 28 2010     By: Dan Norcini      Post Edited: December 28, 2010 at 2:20 pm
Filed under: Trader Dan Norcini

Dear CIGAs,

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

Posted: Dec 28 2010     By: Dan Norcini      Post Edited: December 28, 2010 at 2:03 pm
Filed under: Trader Dan Norcini

Dear Friends,

Thanks to our diligent internet news sleuth, JB Slear, the following story is brought your way.
Tie this story about the fall in US home prices together with what is happening in the commodity sector and the long bond to see where this is headed.
Home prices are falling for one reason – lack of demand coupled with a growing supply due to the wave of foreclosure properties which are adding additional supply to the market.
The market interpreted today’s data release as evidence that the Fed’s $600 billion + QE policy would not be ending anytime soon. That brought another surge of fund related buying into the commodity sector with the result that the CCI (Continuous Commodity Index) has now kissed its former all time high made back in the summer of 2008 long goodbye. It shot above 622 and appears to be accelerating, even at the end of the year when we would normally expect to see profit taking in the sector by longs who have profited immensely in 2010.
I find it astonishing that fresh money is being committed to the sector as the calendar year winds down. This is highly unusual as this time of year is historically known as the time for book squaring. What it is telling us is that fund managers have no intention at this point of abandoning a strategy that has paid handsome dividends to them and will undoubtedly be looking to up their ante at the beginning of the New Year. Look for fresh highs early next year in the sector based on what is occurring in some of the various commodities. Sugar, after putting in a 30+ year high, has shot to yet another fresh high in today’s session. Soybeans registered a 26 month high. Ditto for corn. Copper is now trading at $4.30 a pound! Crude oil continues to hold above $90.
The bond market, after being fiddled with by the monetary authorities in the hopes of hoodwinking the public into believing that inflation pressures are subdued, promptly fell apart plunging a full point as participants are watching with great alarm the surge in the CCI.
This combination, soaring commodity prices which are certain to erode consumer disposable income, and plunging bond prices which are a prelude to higher long term interest rates, are certain to make it even more difficult for would-be home buyers to enter a real estate market already being plagued by a lack of demand. Throw in a good dose of higher gasoline prices at the pump and it becomes all too obvious what we can look forward to in the coming year. I guess we have all been naughty over the past year because it appears that Santa Ben and his band of elves at the Fed have brought us all a gigantic lump of coal.
Trader Dan

Dollar Weakens for 4th Day as U.S. Home Prices Declined More Than Forecast By Catarina Saraiva and Paul Dobson – Dec 28, 2010 7:30 AM MT
The dollar weakened for a fourth consecutive day against the euro as U.S. home prices declined more than forecast, bolstering the case for the Federal Reserve to maintain its program of debt purchases.
The dollar fell versus most of its 16 most-traded peers as the S&P/Case-Shiller Index of property values showed its first year-over-year drop since January. The franc rallied to a record against the U.S. currency amid optimism Switzerland’s growth will encourage its central bank to raise rates. The Canadian dollar strengthened to parity with its U.S. counterpart for the first time since Nov. 11.
“Housing is still obviously a concern,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “We’re still seeing a slight push up in risk.”
The dollar dropped 0.4 percent to $1.3213 per euro at 9:08 a.m. in New York, after earlier touching $1.3275, the weakest level since Dec. 17. The U.S. currency declined as much as 1.2 percent to 81.82 yen, its lowest level since Nov. 12.
The euro pared its gains against the dollar after the European Central Bank said it failed to fully neutralize the extra liquidity created by its bond purchases for a second time since the program began in May.

Posted: Dec 28 2010     By: Daniel Duval      Post Edited: December 28, 2010 at 2:18 pm
Filed under: In The News

Dear CIGAs,

Credit Suisse is forecasting the gold price of $1630 for 2011. Remember how dumb that sounded seven years ago?
I was called every name in the book by the shorts in gold at the $300 and $400 level.
The greatest compliment is imitation. It looks like the hoard of experts that were negative or nowhere to be found up to gold at $1000 are complimenting me like mad.
The real price Angel is $1764. There is no solid analytical way to get to $1650 so those guys are definitely complimenting me.
The Financial Gang is so full of rotten, selfish, amoral chumps.

Jim Sinclair’s Commentary
Not exactly dollar positive.

Boomers Turn 65 in January, Threaten to Bankrupt Medicare Written by Leigh Page | December 28, 2010
The baby boomer generation, which starts turning 65 on Jan. 1, threatens to bankrupt the Medicare program, according to a report by the Wisconsin Rapids Tribune.
As more boomers enter the program, Medicare spending will increase 5.8 percent a year, reaching $929 billion by 2020. When the last of the boomers turns 65 in 2030, the Medicare population will have nearly doubled from 47 million to 80 million.
The combination of more beneficiaries and medical inflation will be disastrous unless the system can be overhauled, an expert at the Commonwealth Fund said. Policymakers will have to figure out how to provide healthcare more efficiently.
Keeping boomers’ Medicare costs low should involve improving their healthcare before they qualify for Medicare, said an expert at National Institute on Aging. Most Americans ages 50-64 experience more than one chronic illness, such as arthritis, cancer, diabetes, heart disease, high blood pressure or high cholesterol. They need expert care because treating one condition could harmfully affect another.

Jim Sinclair’s Commentary
Peak oil and a weak US dollar underscores gold at $1650 or better.

$5 Gas In 2012, Ex Shell President Predicts
NEW YORK ( — The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.
In an interview with Platt’s Energy Week television, Hofmeister predicted gasoline prices will spike as the global demand for oil increases.

Jim Sinclair’s Commentary
The Green Hornet says that although this is under the radar of financial TV, this is one of the biggest dollar risks out there.

US cities at risk of bankruptcy Rhonda Pence, Press TV, Washington
Next to the housing crisis, some economists say cities declaring bankruptcy is the biggest threat to the U.S. economy in 2011 More than 100 cities could go bust in the new year derailing the economy in America.
In Michigan, a small city called Hamtramck says it only has funds to operate until March first. City officials have slashed money for boarding up abandoned houses, cutting grass and no money has been set aside to plow snow from the streets.
Communities across the country are in a similar situation and have cut city employees work weeks down to four-days and have eliminated parks and senior centers.
State officials are fearful if Hamtramck goes bankrupt, it will open the door for 30 other cities in Michigan to go down the same path, including Detroit.
Hamtramck has been more dependent on the auto industry than even Detroit, and with the property values going down, the cities tax base is collapsing.
49;29 without a doubt can if you have failure of one large state New York, Michigan , California it could significantly drag down the whole economy
The problem throughout most of the cities in the US is when money was rolling in , governments were very generous with benefits and pensions. but now the money has dried up and cities have legal obligations to pay up, or they will have to renegotiate contracts or file for bankruptcy.

Jim Sinclair’s Commentary
Class actions always settle before the miscreant has much to lose. Watch for a settlement that does not disclose squat.
Regardless, the proceedings are now bullish for silver.

Class action against Morgan, HSBC specifies silver manipulation mechanism By: Chris Powell, Secretary/Treasurer, GATA
– Posted 28 December, 2010

Dear Friend of GATA and Gold (and Silver):

A Chicago law firm yesterday announced another class-action lawsuit against J.P. Morgan Chase & Co. and HSBC Holdings PLC complaining of silver market manipulation. Interestingly, the lawsuit cites GATA’s silver market manipulation whistleblower Andrew Maguire and U.S. Commodity Futures Trading Commission member Bart Chilton, and specifies mechanisms by which Morgan and HSBC could manipulate the silver market through the use of silver exchange-traded funds.
The lawsuit complains:
"Before the Class Period began, JPMorgan had become the custodian and an authorized participant of the largest known concentration of silver bars, the iShares Silver ETF, which holds in excess of 340 million troy ounces of silver, a sum that equals an estimated 1/3 of the total present global supply of silver bullion. As a result, it had actual knowledge of the precise whereabouts of much of the world’s known silver bar supply.
"In approximately March 2008, JP Morgan acquired Bear Stearns, which held a very large short position in silver. With more of the total short position in silver concentrated in the hands of JP Morgan, it had a further motive to suppress prices.
"Upon information and belief, JP Morgan works together with HSBC, the other dominant player in the silver and precious metals markets. In July 2009, HSBC became the custodian of the SIVR ETF, which meant that it had physical access to and knowledge of the silver held by that trust. Notably, it named JP Morgan as one of the sub-custodians of the SIVR ETF.

Posted: Dec 28 2010     By: Jim Sinclair      Post Edited: December 28, 2010 at 1:56 pm
Filed under: Jim's Mailbox

Some signs of coming trouble:
-Reliance on stocks in retirement plans is greater than ever in the US; 42 percent of those workers now have 401(k).
-Mortgage debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000.
-Medical costs. Health care expenses are soaring, and the availability of retiree benefits is declining.

There are many more reasons why the US government cannot choose the austerity exit. QE and hyperinflation looks to be the only way to hide the awful truth.
Best regards,
CIGA Christopher

Baby boomers near 65 with retirements in jeopardyBy DAVE CARPENTER
CHICAGO – Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they’re hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.
The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s.
“The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early,” says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania.
There are several reasons to be concerned:
• The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

“U.S. notes and bonds have handed investors a 2.1 percent loss in December, paring the annual return to 5.7 percent, according to figures compiled by Bloomberg and the European Federation of Financial Analysts Societies. That’s the worst monthly performance among 26 sovereign indexes”
The worst?

Treasuries Fall Before $35 Billion Government Auction of Five-Year NotesBy Cordell Eddings and Daniel Kruger – Dec 28, 2010 9:14 AM PT
Treasuries dropped before the U.S. government sells $35 billion of five-year securities in the second of three note auctions this week totaling $99 billion.
U.S. debt maturing in more than a year was headed for the biggest monthly loss in the global government bond market on signs of economic recovery. The 10-year note yield increased the most in almost two weeks as a boost in holiday retail sales overshadowed an unexpected drop in U.S. consumer confidence and a decrease in home prices.
“The last auctions of the year face challenges with everyone on vacation and balance-sheet constraints,” said Joseph Leary, an interest-rate strategist in New York at Citigroup Inc., one of the 18 primary dealers obligated to participate in U.S. debt sales. “People are less willing to take risk unless we see more concession.”
The yield on the current five-year note increased seven basis points, or 0.07 percentage point, to 2.09 percent at 12:04 p.m. in New York, according to BGCantor Market Data. The price of the 1.375 percent security maturing in November 2015 fell 10/32, or $3.13 per $1,000 face amount, to 96 21/32.

Jim Sinclair’s Commentary
A day ago the US threatened China with a complaint at the WTO if they did not export rare earths liberally.
Note how afraid China is.

China shrinks rare earths export quotaCIGA Eric
What have you learned from China? They use the media to manipulate expectations to hide their true intentions. Gee, sounds like a familiar Western practice. China (unlike the West) is following a specific long-term plan. This makes them a respectable opponent in “the game”.
The talking heads that suggested that rare earth metals was not a short to intermediate supply problem for the West did an excellent job in misinforming the weak hands. The newswire is a tool. Those that cannot reason, or let others do their reasoning will be susceptible to the tools of the operators.
China is scaling back its exports next year of rare earth minerals used in high tech products, which could be an unpopular move with countries such as the United States and Japan.
Numbers released Tuesday by the Commerce Ministry show export quotas of the rare minerals will be down 11 percent next year as compared to the same period this year.

Herd Capitulation in Natural Gas?CIGA Eric
Could it be that the specs (hedge funds) and retail funds are being setup by the media tools of the operators? Those that recognize the tools play the game. Those that cannot recognize them also play but not very long.
Connect money continues to increase their net long positions as the headlines provide the intended ‘perspective’ for the weak hands.
Natural Gas ETF and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:clip_image001
While retail money remains relative bullish, their recent selling represents what I characterize as herd capitulation. In other words, how can I remain bullish when the experts/pros/talking heads remain so bearish? Any retail capitulation on the long side as connected money quietly repositions only sweetens the pot.
Natural Gas ETF and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:clip_image002
If there’s a technical trigger on this one, watch out.
Headline: Hedge Funds Bet Gas Will Fall in Warm New Year: Energy Markets
Hedge funds raised bearish natural gas bets by the most since October on forecasts that higher- than-normal temperatures in the first weeks of the New Year will reduce demand for the heating fuel.
The funds and other large speculators cut net-long positions, or wagers on rising prices, by 35 percent in the seven days ended Dec. 21, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the largest drop since Oct. 12.

Another Hole In The Bond Bubble As 30 Year Gets Reacquainted With Gravity


NYSE Short Interest Drops To Lowest In 2010


As Clearly Forecasted On BoomBustBlog, Housing Prices Commence Their Downward Price Movement In Search Of Equilibrium Scraping Depression Levels