Bailed-out banks slip toward failure

 

+74% later, Wall St. Journal notices silver only to try to talk it down

 

Reader Threatens To Sue Fed After Losses Incurred By Going Long Inverse Leveraged ETFs

 

In The News Today

Posted: Dec 27 2010     By: Jim Sinclair      Post Edited: December 27, 2010 at 2:41 pm
Filed under: In The News


Jim Sinclair’s Commentary
If A&P was taken over by Stop and Shop what would the new entity’s name be?

1,000 In N.J. Could Lose Jobs After A&P Bankruptcy December 24, 2010 9:47 AM
WOODBRIDGE, N.J. (AP) — More than 1,000 workers at a grocery distributor in New Jersey could lose their jobs in February in the wake of a bankruptcy filing by supermarket giant A&P.
Officials with Woodbridge Logistics say they filed notice earlier this month with state regulators warning that it may have to shut down six warehouses and lay off 1,114 employees in February.
The company distributed items for A&P and Pathmark stores across New Jersey. But the operator of those chains, Great Atlantic & Pacific Tea Co., filed for Chapter 11 bankruptcy protection earlier this month.
A Woodbridge Logistics spokesman says the Montvale-based operator’s bankruptcy is one of “myriad pressures” facing the distributor.
Woodbridge Logistics operates warehouses in New Brunswick, North Brunswick, Dayton and three locations in Woodbridge.
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Jim Sinclair’s Commentary
If misleading accounting blessed by the FASB was not the industry practice, practically all would be broke. In fact they are.

Bailed-Out Banks Slip Toward Failure
Number of Shaky Lenders Rises to 98 as Bad Loans Pile Up; Smaller Institutions Hit Hardest BY MICHAEL RAPOPORT
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 …
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Jim’s Mailbox

Posted: Dec 27 2010     By: Jim Sinclair      Post Edited: December 27, 2010 at 2:38 pm
Filed under: Jim's Mailbox

Hi Jim and Dan,
I hope you both had a great Christmas.
I keep mentioning to my readers that we may be in the early stages of a significant drought in the plains area. The first impact will be the winter wheat crop, followed by beans and corn if the pattern continues into the spring.
Cost-push inflation is going to be horrible as is. Imagine the impact of crop failure too. Yikes!
Have a great week!
CIGA Craig

Hi Craig,
Thanks for the map. I have also been following that situation very closely. Not only are we dealing with some potential here in the US for dryness issues, but Argentina is running very hot and dry right now as corn enters its critical pollination phase. Soybeans also are at a stage where they too are affected in terms of both size and pod filling.
It looks like the grain and bean situation has the potential to put more pressure to the upside on food prices. As you say, a combination of monetary issues and fundamentals could get ugly very quickly.
Happy New Year,
Trader Dan


Jim,
China is a heavy investor in Brazil, mostly in strategic sectors like oil or land. Lately they have bought stakes in Brazilian electricity distribution businesses for close to $1 billion.
Why would China do this except for diversifying from its dollar holdings?
Best regards,
CIGA Christopher

China Spends Close to US$ 1 Billion Buying Power Plants in Brazil Monday, 27 December 2010 03:27
Electric power in Brazil Beijing-based State Grid Corp. of China completed the purchase of seven electricity distribution businesses in Brazil for US$ 989 million, announced the Chinese government this past week.
Beijing-based State Grid will run electricity transmission services in the southeast of Brazil and supply power to Brazilian capital Brasília, São Paulo and Rio de Janeiro, according to a statement at the website of the Chinese government’s state-owned Assets Supervision and Administration Commission.
China’s biggest electricity network operator agreed in May to buy controlling stakes in seven power transmission units in Brazil from Elecnor SA, Abengoa SA, Isolux Ingenieria SA and Cobra Instalações e Serviços SA.
Latin America’s biggest economy is attracting local and overseas investors to develop its energy infrastructure to meet power demand as its GDP expands more than 7%.
State Grid has obtained a 30-year right to transmit power to the southeastern region of Brazil, the statement said. The electricity distribution businesses will generate annual profit of about US$ 110 million, according to the statement.
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