June 23, 2011, at 9:12 pm
by Eric King in the category King World News |
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by Eric King in the category King World News |
Print This Post | Email This PostDear CIGAs,
With the price of gold and silver getting hit, stocks weakening and the US dollar strengthening, today King World News interviewed two of the greats, Jim Sinclair and John Hathaway, to get their take on the situation. Jim Sinclair stated, “Today was your first crack of confidence. When you’ve adopted an economic thesis, the management of perspective economics, the greatest risk you take is that perspective might turn. The announcement of the end of QE at the end of this month leaves open so many questions. So today was your first break in confidence that was across the board.”
Click here to read the entire interview on KingWorldNews.com…
The Chinese Government is Buying Up Economic Assets and Huge Tracts of Land All Over the U.S.
That the Fed's balance has hit another record high (and will do so for at least two more weeks) should come as a surprise to nobody. After all, when something is at a record and grows relentlessly, it is pretty safe to say next week will be another record. That said, there were several curious observations in this week's H.4.1 update. First and foremost is that the "other Fed assets" category just hit an all time high of $132.7 billion. This category, which is now larger than the GDP of Kuwait, is apparently so comprehensible and transparent to the hoards of FOMC precleared journalists, that for the second meeting in a row, nobody feels like asking a question about just what is contained in this asset class. We also hope that nobody attempts a correlation between the Other Fed Assets class and the S&P. Another notable thing is that as we suggested back in January, the amount of MBS prepays continues to drop and has slowed down to a trickle. Elsewhere, the Fed's excess reserves are once again back to chasing Bernanke's expanding asset class, with over $40 billion more in cumulative asset expansion since the start of QE Lite, than excess reserves. Lastly, looking at the Fed's custodial treasury holdings, there was another small decline in USTs held in proxy by the Fed: the first decline in 4 weeks, since the May 25 second biggest historic drop, discussed previously on Zero Hedge. Aside from these, it was smooth sailing for the Fed, where the average maturity of SOMA holdings declined just modestly from 61.6 to 61.5 months.
IMF Cuts US Growth Forecast, Warns of Crisis
Finally! Wisconsin may soon adopt nondiscretionary concealed carry permits.
Deadly force expansion passes Pennsylvania Senate.
With the price of gold and silver getting hit, stocks weakening and the US dollar strengthening, today King World News interviewed two of the greats, Jim Sinclair and John Hathaway, to get their take on the situation. Jim Sinclair stated, “Today was your first crack of confidence. When you’ve adopted an economic thesis, the management of perspective economics, the greatest risk you take is that perspective might turn. The announcement of the end of QE at the end of this month leaves open so many questions. So today was your first break in confidence that was across the board.”
Click here to read the entire interview on KingWorldNews.com…
China Formally Working With IMF To Avoid Eurozone Restructuring
Step aside IMF, China is now in the driver's seat. Officially.
The Chinese Government is Buying Up Economic Assets and Huge Tracts of Land All Over the U.S.
"Other Fed Assets" Hits Record $133 Billion, More Than The GDP Of Kuwait
Submitted by Tyler Durden on 06/23/2011 23:26 -0400That the Fed's balance has hit another record high (and will do so for at least two more weeks) should come as a surprise to nobody. After all, when something is at a record and grows relentlessly, it is pretty safe to say next week will be another record. That said, there were several curious observations in this week's H.4.1 update. First and foremost is that the "other Fed assets" category just hit an all time high of $132.7 billion. This category, which is now larger than the GDP of Kuwait, is apparently so comprehensible and transparent to the hoards of FOMC precleared journalists, that for the second meeting in a row, nobody feels like asking a question about just what is contained in this asset class. We also hope that nobody attempts a correlation between the Other Fed Assets class and the S&P. Another notable thing is that as we suggested back in January, the amount of MBS prepays continues to drop and has slowed down to a trickle. Elsewhere, the Fed's excess reserves are once again back to chasing Bernanke's expanding asset class, with over $40 billion more in cumulative asset expansion since the start of QE Lite, than excess reserves. Lastly, looking at the Fed's custodial treasury holdings, there was another small decline in USTs held in proxy by the Fed: the first decline in 4 weeks, since the May 25 second biggest historic drop, discussed previously on Zero Hedge. Aside from these, it was smooth sailing for the Fed, where the average maturity of SOMA holdings declined just modestly from 61.6 to 61.5 months.
Guest Post: The U.S. Monetary System And Descent Into Fascism An Interview With Dr. Edwin Vieira
Submitted by Tyler Durden on 06/23/2011 22:23 -0400"Given the current state of things, I'm sure there are a lot of people deliberately deciding to adopt a low profile, politically or socially. A lot of this has to do not so much with politics but what your neighbors or your coworkers will say about you, right? If you tell them something that is actually happening in the world, you will be labeled a conspiracy theorist; they’ll look at you as if you're crazy. But what about the activists? At a certain stage, the great mass of people will look around for leadership figures. When the economic crisis comes, they’re going to want someone to tell them how to get out of it. They’re not going to know the answers themselves. The question is, will there be activists, leadership figures, proposing the right solutions – and how soon will they come along?" Edwin Vieira
On The Mysterious Case Of The Phantom Stock Trades
Submitted by Tyler Durden on 06/23/2011 22:11 -0400Our friends at Themis Trading have put together another quite fascinating white paper which makes a disturbing observation: on an intraday basis, the widely watched market gauge indices such as the Dow Jones Industrial Avereage, the S&P 500, the Nasdaq and the Russell 1000, are based on less than 30% of all shares traded, therefore conveying incomplete trading data. The reason, which is intuitively known by all who follow the increasingly more fragmented and more compartmentalized into dark pools and other various ATS venues, market topology is that as Themis says: "the market has become increasingly dominated by trading volume from arbitraging index, ETF, and other derivative movements versus the underlying equities.... Nowadays, in a world of microsecond trading, these indexes have become phantoms - they reflect some trades involving their components, but not the majority of them." In other words it is becoming increasingly obvious why in a world of HFT, ETF, algo, ATS and everything else penetration, there is now a scramble between the legacy exchanges to merge. The alternative is a slow, painful death due to terminal obsolescence brought upon from unregulated trading venues, which often times see the alternative trading system operator have exclusive firewall and gateway privileges, where anything goes and where such obsolete constructs as Reg NMS are routinely ignored: after all how can the SEC possibly track down the billions of unique trades each and every day and catch all the transgressions. Themis provides a solution to this skewed motivation for all traders to increasingly vacate the actively regulated open exchanges: "indexes should be calculated based on every trade involving a component that crosses the consolidated tape, which includes trades from non-primary exchanges such as BATS, DirectEdge and NYSE Arca."
The Fed's atrocious predictive track record is nothing new: just recall the famous clip that put together all of his horrendous calls on the economy in the pre-credit bubble years. Everybody knows how those turned out (the clip can be found here). Well cut the guy some slack, Fed apologists may say: after all how many could possibly foresee the X-sigma events that marked the 2008 market crash. Fair enough (and the answer to that question is many, but that is the topic of another post). So, in order to keep it apples to apples, from the stand of a post "Great Financial Crash", instead we have compiled the FOMC projections from the last 6 Fed meetings, in terms of GDP, unemployment and inflation projections: the three key metrics that the Fed tracks and attempts to estimate. We present the results below. They are quite self-explanatory.
Charting The Fed's Abysmal Recent Predictive Track Record
Submitted by Tyler Durden on 06/23/2011 20:56 -0400The Fed's atrocious predictive track record is nothing new: just recall the famous clip that put together all of his horrendous calls on the economy in the pre-credit bubble years. Everybody knows how those turned out (the clip can be found here). Well cut the guy some slack, Fed apologists may say: after all how many could possibly foresee the X-sigma events that marked the 2008 market crash. Fair enough (and the answer to that question is many, but that is the topic of another post). So, in order to keep it apples to apples, from the stand of a post "Great Financial Crash", instead we have compiled the FOMC projections from the last 6 Fed meetings, in terms of GDP, unemployment and inflation projections: the three key metrics that the Fed tracks and attempts to estimate. We present the results below. They are quite self-explanatory.
DOE Announces Details Of Strategic Petroleum Reserve Firesale
Submitted by Tyler Durden on 06/23/2011 18:46 -0400Following the earlier general announcement that the SPR would sell 30 MM barrels of oil a lot of questions were left unanswered, such as what kind of crude will be sold, where will it be sold from, and at what price. The wait for answers is now over: The DOE has just released all the missing data. Per Reuters: "Under the terms of the U.S. sale that were issued by the department, the government does not plan to stagger the sale of the oil and will offer all 30 million barrels in one bid sale. The department will offer "sweet" crude oil from three of the reserve's storage sites: Bryan Mound and Big Hill in Texas and West Hackberry in Louisiana. The oil will have a base price of $112.78 a barrel, a spokeswoman for the SPR said." Which does not however mean that this is the price at which the oil will be sold: "Traders can bid above or below the "Base Reference Price" of $112.78, which is derived from the last five days of trading of Light Louisiana Sweet crude oil, as assessed by energy pricing agency Argus. Companies will submit their bids for the oil through a special department website. Delivery of the oil to the winning companies would take place over the month of August. Winning companies would pay for their oil during the month after the crude is delivered." Which simply means that China will convert quite a bit of America's trade deficit from dollars into oil.
Jim Sinclair’s Commentary
New Jersey Legislature Approves Deep Cuts in Benefits to Public Workers By RICHARD PÉREZ-PEÑA
Published: June 23, 2011
TRENTON — New Jersey lawmakers on Thursday approved a broad rollback of benefits for 750,000 government workers and retirees, the deepest cut in state and local costs in memory, in a major victory for Gov. Chris Christie and a once-unthinkable setback for the state’s powerful public employee unions.
The Assembly passed the bill 46 to 32, as Republicans and a few Democrats defied raucous protests by thousands of people whose chants, vowing electoral revenge, shook the State House. Leaders in the State Senate said their chamber, which had already passed a slightly different version of the bill, would approve the Assembly version on Monday. Mr. Christie, a Republican, was expected to sign the measure into law quickly.
In a statement released after the vote, Mr. Christie said, “We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system.”
The legislation will sharply increase what state and local workers must contribute for their health insurance and pensions, suspend cost-of-living increases to retirees’ pension checks, raise retirement ages and curb the unions’ contract bargaining rights. It will save local and state governments $132 billion over the next 30 years, by the administration’s estimate, and give the troubled benefit systems a sounder financial footing, mostly by shifting costs onto workers.
While states around the country have moved to pare labor costs and limit the power of unions, the move is all the more striking here, in a Democratic-leaning state where Democrats control both houses of the Legislature and union membership is among the highest in the country. Most Democratic legislators opposed the benefits reductions, but their leaders voted in favor of the changes, exposing deep, longstanding rifts in the party that lawmakers say could weaken it in coming elections.
More…
Mining Firms Get More Tax Waivers Wednesday, 22 June 2011 22:37
By Damas Kanyabwoya
The Citizen Reporter
Dodoma. The government has offered more tax concessions to mining companies despite growing concerns that the country is not earning its fair share from minerals and other resources exploited by multinationals.In the Finance Bill 2011, the government also made further tax revisions by increasing excise duty on kerosene from Sh52 to Sh400.30 per litre and decreasing the traffic notification fee from the proposed Sh50,000 to Sh30,000.
Finance and Economic Affairs Pereira deputy minister Ame Silima proposed when tabling the Bill in Parliament that mining firms that had signed mineral development agreements with the government before July 1, 2009 be given VAT special relief, which is also to be offered to mining exploration companies on commodities and services required for exploration.
The 2009/10 Budget limited VAT special relief to prospecting and exploration companies. The government in the same year abolished excise duty exemption on petroleum products granted to mining companies.
The five-year development plan endorsed by Parliament last week, which is supposed to guide the budget process from this year to 2016, calls for an increase in mining taxes and royalties, but the government has done the opposite in the Finance Bill 2011.
The proposal immediately drew the condemnation of MPs, who said the government had not learnt from past mistakes.
Opposition Chief Whip Tundu Lissu said it was incomprehensible that the government was considering offering mining companies more tax exemptions despite the fact that it was receiving less than it should from the firms.
Earnings from gold exports totalled about $1.5 billion (Sh2.25 trillion) last year, but the government received only about $32 million (Sh48 billion) in royalties and taxes.
“Will this government ever learn? The mining revenue and legislation review committees that the same government appointed over the years confirmed the fact that the mining industry is not a win-win situation. Why should we offer more exemptions now?” the Singida East MP (Chadema) queried.
The London-based Society for International Development said in its recent report that mining companies earned $5 billion (Sh7.5 trillion) in ten years, but the government got less than $300 million (Sh450 billion) in the same period.
Mr Geoffrey Zambi (Mbozi East-CCM) said the government was losing colossal sums in revenue from tax exemptions to mining companies, adding that it was wrong to offer more concessions.
Mr Moses Machali (Kasulu-NCCR-Mageuzi) accused the government of double standards by scrapping VAT special relief to non-profit NGOs while offering the same to profit making mining companies, “whose contribution to the economy is almost negligible”.
“I need an explanation why we have decided to tax non-profit organisations that serve the society in various ways and offer waivers to the big mining companies from rich countries,” he said.
Mr Silima said the increase in tax on kerosene was aimed at curbing fuel adulteration, which has denied the government billions of shillings in revenue and eroded Tanzania’s competitiveness as a reliable transit trade route.
But Mr Zambi criticised the proposal, saying it amounted to surrendering to fuel adulterers.
The government also reduced excise duty on diesel from Sh314 to Sh215 per litre to reduce transportation and manufacturing costs as announced by Finance and Economic Affairs minister Mustafa Mkulo on Tuesday when responding to MPs’ views on the Budget.
The adjustments mean that the price of a litre of diesel will fall from an average of Sh2,005 to Sh1,600, while petrol will retail for Sh1,790, down from Sh2,015. However, the price of a litre of kerosene has risen to Sh1,680 from Sh1,557.
The government concurred with MPs that the Sh50,000 traffic offences notification fee proposed in the Budget was too high and lowered it to Sh30,000. However, the Opposition said this was still too high, and proposed that the fee remains unchanged at Sh20,000.
The government also proposed that tax be charged on advertisements aired by pay-television companies based outside the country to level the playing field with locally based digital television companies.
The VAT refund period has also been reduced from one year to six months due to the speeding up of VAT payments through the use of electronic fiscal devices. Firms and individuals and Tanzania Revenue Authority will be charged interest on delayed VAT payments and refunds. The interest rates will be in accordance with “the Bank of Tanzania discount rates at the beginning of the year.”
The government, however, has given the TRA commissioner general the powers to waive interest, a proposal that was strongly opposed by MPs during debate on the Bill.The chairman of the Finance and Economic Affairs, Dr Abdallah Kigoda (Handeni-CCM), said granting such powers to one person was likely to prompt allegations of abuse or corruption when a decision to exempt interest was controversial or disputable.
“Decisions to grant interest exemptions should be made by a special committee, and not one person,” Dr Kigoda said.
The government also re-introduced VAT exemptions on household consumables such as food, clothes and soap to orphanages and other institutions caring for orphans and children from poor families. The exemptions were scrapped in the Budget proposals early this month. However, the abolishment of VAT special relief exemptions to NGOs stays.
Link to article…
The Economic Collapse blog posted a good summary of the US national debt situation. Here is a key quote: "If we do raise the debt ceiling, that will 'kick the can down the road' a little bit farther. However, world financial markets will still crash eventually and our eventual economic nightmare will be even worse. Well, can't we just 'inflate our way' out of debt? No, unfortunately things are just not that easy. If we try to inflate our way out of debt, interest rates will likely rise just as quickly as inflation does, and that would be absolutely catastrophic."
June 23, 2011, at 9:04 pm
by Jim Sinclair in the category In The News | Print This Post | Email This Post
by Jim Sinclair in the category In The News |
Print This Post | Email This PostThe issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks. –John Dalberg Lord Acton
Jim Sinclair’s Commentary
Let’s see how this goes down with the Sheeplez. The average guy pays for the sins of the Banksters.
You haven’t seen anything yet.
Published: June 23, 2011
TRENTON — New Jersey lawmakers on Thursday approved a broad rollback of benefits for 750,000 government workers and retirees, the deepest cut in state and local costs in memory, in a major victory for Gov. Chris Christie and a once-unthinkable setback for the state’s powerful public employee unions.
The Assembly passed the bill 46 to 32, as Republicans and a few Democrats defied raucous protests by thousands of people whose chants, vowing electoral revenge, shook the State House. Leaders in the State Senate said their chamber, which had already passed a slightly different version of the bill, would approve the Assembly version on Monday. Mr. Christie, a Republican, was expected to sign the measure into law quickly.
In a statement released after the vote, Mr. Christie said, “We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system.”
The legislation will sharply increase what state and local workers must contribute for their health insurance and pensions, suspend cost-of-living increases to retirees’ pension checks, raise retirement ages and curb the unions’ contract bargaining rights. It will save local and state governments $132 billion over the next 30 years, by the administration’s estimate, and give the troubled benefit systems a sounder financial footing, mostly by shifting costs onto workers.
While states around the country have moved to pare labor costs and limit the power of unions, the move is all the more striking here, in a Democratic-leaning state where Democrats control both houses of the Legislature and union membership is among the highest in the country. Most Democratic legislators opposed the benefits reductions, but their leaders voted in favor of the changes, exposing deep, longstanding rifts in the party that lawmakers say could weaken it in coming elections.
More…
Mining Firms Get More Tax Waivers Wednesday, 22 June 2011 22:37
By Damas Kanyabwoya
The Citizen Reporter
Dodoma. The government has offered more tax concessions to mining companies despite growing concerns that the country is not earning its fair share from minerals and other resources exploited by multinationals.In the Finance Bill 2011, the government also made further tax revisions by increasing excise duty on kerosene from Sh52 to Sh400.30 per litre and decreasing the traffic notification fee from the proposed Sh50,000 to Sh30,000.
Finance and Economic Affairs Pereira deputy minister Ame Silima proposed when tabling the Bill in Parliament that mining firms that had signed mineral development agreements with the government before July 1, 2009 be given VAT special relief, which is also to be offered to mining exploration companies on commodities and services required for exploration.
The 2009/10 Budget limited VAT special relief to prospecting and exploration companies. The government in the same year abolished excise duty exemption on petroleum products granted to mining companies.
The five-year development plan endorsed by Parliament last week, which is supposed to guide the budget process from this year to 2016, calls for an increase in mining taxes and royalties, but the government has done the opposite in the Finance Bill 2011.
The proposal immediately drew the condemnation of MPs, who said the government had not learnt from past mistakes.
Opposition Chief Whip Tundu Lissu said it was incomprehensible that the government was considering offering mining companies more tax exemptions despite the fact that it was receiving less than it should from the firms.
Earnings from gold exports totalled about $1.5 billion (Sh2.25 trillion) last year, but the government received only about $32 million (Sh48 billion) in royalties and taxes.
“Will this government ever learn? The mining revenue and legislation review committees that the same government appointed over the years confirmed the fact that the mining industry is not a win-win situation. Why should we offer more exemptions now?” the Singida East MP (Chadema) queried.
The London-based Society for International Development said in its recent report that mining companies earned $5 billion (Sh7.5 trillion) in ten years, but the government got less than $300 million (Sh450 billion) in the same period.
Mr Geoffrey Zambi (Mbozi East-CCM) said the government was losing colossal sums in revenue from tax exemptions to mining companies, adding that it was wrong to offer more concessions.
Mr Moses Machali (Kasulu-NCCR-Mageuzi) accused the government of double standards by scrapping VAT special relief to non-profit NGOs while offering the same to profit making mining companies, “whose contribution to the economy is almost negligible”.
“I need an explanation why we have decided to tax non-profit organisations that serve the society in various ways and offer waivers to the big mining companies from rich countries,” he said.
Mr Silima said the increase in tax on kerosene was aimed at curbing fuel adulteration, which has denied the government billions of shillings in revenue and eroded Tanzania’s competitiveness as a reliable transit trade route.
But Mr Zambi criticised the proposal, saying it amounted to surrendering to fuel adulterers.
The government also reduced excise duty on diesel from Sh314 to Sh215 per litre to reduce transportation and manufacturing costs as announced by Finance and Economic Affairs minister Mustafa Mkulo on Tuesday when responding to MPs’ views on the Budget.
The adjustments mean that the price of a litre of diesel will fall from an average of Sh2,005 to Sh1,600, while petrol will retail for Sh1,790, down from Sh2,015. However, the price of a litre of kerosene has risen to Sh1,680 from Sh1,557.
The government concurred with MPs that the Sh50,000 traffic offences notification fee proposed in the Budget was too high and lowered it to Sh30,000. However, the Opposition said this was still too high, and proposed that the fee remains unchanged at Sh20,000.
The government also proposed that tax be charged on advertisements aired by pay-television companies based outside the country to level the playing field with locally based digital television companies.
The VAT refund period has also been reduced from one year to six months due to the speeding up of VAT payments through the use of electronic fiscal devices. Firms and individuals and Tanzania Revenue Authority will be charged interest on delayed VAT payments and refunds. The interest rates will be in accordance with “the Bank of Tanzania discount rates at the beginning of the year.”
The government, however, has given the TRA commissioner general the powers to waive interest, a proposal that was strongly opposed by MPs during debate on the Bill.The chairman of the Finance and Economic Affairs, Dr Abdallah Kigoda (Handeni-CCM), said granting such powers to one person was likely to prompt allegations of abuse or corruption when a decision to exempt interest was controversial or disputable.
“Decisions to grant interest exemptions should be made by a special committee, and not one person,” Dr Kigoda said.
The government also re-introduced VAT exemptions on household consumables such as food, clothes and soap to orphanages and other institutions caring for orphans and children from poor families. The exemptions were scrapped in the Budget proposals early this month. However, the abolishment of VAT special relief exemptions to NGOs stays.
Link to article…
The Economic Collapse blog posted a good summary of the US national debt situation. Here is a key quote: "If we do raise the debt ceiling, that will 'kick the can down the road' a little bit farther. However, world financial markets will still crash eventually and our eventual economic nightmare will be even worse. Well, can't we just 'inflate our way' out of debt? No, unfortunately things are just not that easy. If we try to inflate our way out of debt, interest rates will likely rise just as quickly as inflation does, and that would be absolutely catastrophic."
IMF Cuts US Growth Forecast, Warns of Crisis
Finally! Wisconsin may soon adopt nondiscretionary concealed carry permits.
Deadly force expansion passes Pennsylvania Senate.
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